2. Management
Management is a set of activities
directed at an organization’s
resources with the aim of
achieving organizational goals in
an efficient and effective manner
3. Management
Activities include the four
functions of management
Planning (and decision making)
Organizing
Leading
Controlling
5. Management in Organizations
Inputs from the environment
• Human resources
• Financial resources
• Physical resources
• Information resources
Planning
and decision
making
Leading
Organizing
Controlling
Goals attained
• Efficiently
• Effectively
7. The Management Process
Organizing
Determining how
best to group
activities and
resources
Controlling
Monitoring
and correcting
ongoing activities
to facilitate goal
attainment
Planning and
Decision Making
Setting the organiza-
tion’s goals and
deciding how best
to achieve them
Leading
Motivating members
of the organization
to work in the best
interests of the
organization
Figure 1.2
8. The Basic Functions of
Management
A Circular Process
Planning and Decision Making
Organizing
Leading
Controlling
12. Steps in Scientific
Management
Develop a science
for each element of
the job to replace old
rule-of-thumb methods
Scientifically select
employees and then
train them to do the job
as described in step 1
Supervise employees
to make sure they
follow the prescribed
methods for performing
their jobs
Continue to plan
the work, but use
workers to get the
work done
21 43
Figure 1.3
14. Weber’s Theory of
Bureaucracy
Division of labor
Reliance on rules and regulations
Hierarchy of authority
Employment based on expertise
Inflexible
Rigid
Impersonal
15. The Behavioral Management
Perspective
Placed much more emphasis on
individual attitudes and behaviors and on
group processes in organizations.
Recognized the importance of behavioral
processes in organizations
Hugo Munsterberg
Mary Parker Follet
Elton Mayo
17. Human Relations
Movement
Grew out of the Hawthorne studies.
Proposed that workers respond primarily
to the social context of work, including
social conditioning, group norms,
and interpersonal dynamics.
Assumed that the manager’s
concern for workers would lead to
increased worker satisfaction and
improved worker performance.
18. Behavioral Management
Perspective
Abraham Maslow
Advanced a theory that employees are
motivated by a hierarchy of needs that they
seek to satisfy.
Douglas McGregor
Proposed Theory X and Theory Y concepts
of managerial beliefs about people
and work.
19. Maslow’s Hierarchy of Needs
Five levels
Physiological – hunger, thirst, shelter, sex
Safety – security and protection
Social – affection, interpersonal relationships
Esteem – self-respect, achievement status
Self-actualization – achieving full potential
Usually thought in the form of a pyramid
20. Maslow’s Hierarchy of Needs
S
A
Esteem Needs
Social Needs
Security Needs
Physiological Needs
24. Theory X – Theory Y
Think of these theories as a continuum
Theory X Theory Y
Employees fall somewhere in between the two ends
25. The Behavioral Management
Perspective
Contemporary behavioral science in
management – emerged because of the
too simplistic descriptions of work
behavior by the human relations
theorists.
Organizational behavior takes a holistic
view of behavior, including individual,
group, and organization processes
26. Organizational Behavior
Important topics in organizational
behavior research:
Job satisfaction and job stress
Motivation and leadership
Group dynamics and organizational politics
Interpersonal conflict
The structure and design of organizations
27. The Quantitative Management
Perspective
Focuses on decision making, economic
effectiveness, mathematical models, and
the use of computers in organizations
Management science
Operations management
28. The Quantitative Management
Perspective
Contributions
Developed sophisticated quantitative techniques to assist
decision making
Models have increased our awareness of complex
organizational processes and have aided in the planning and
controlling processes
Limitations
Cannot fully explain or predict behavior
Mathematical sophistication may come at the expense of other
important skills
Models may require unrealistic or unfounded assumptions
29. Contemporary Management
Theory
The Systems Perspective
A system is an interrelated set of elements
functioning as a whole. An organization as a
system is composed of four elements:
Inputs (material and/or human resources)
Transformation processes (technical and
managerial processes)
Outputs (products and services)
Feedback (reactions from the environment)
30. The Integrated Systems Model
FeedbackFeedback
InputsInputs
From theFrom the
environment:environment:
HumanHuman
MaterialMaterial
FinancialFinancial
InformationInformation
ProcessingProcessing
TransformationTransformation
process:process:
TechnologyTechnology
Operating systemsOperating systems
AdministrativeAdministrative
systemssystems
Control systemsControl systems
OutputsOutputs
Into theInto the
environmentenvironment
ProductProduct
ServicesServices
Profit/lossProfit/loss
Employee behaviorEmployee behavior
InformationInformation
31. Systems Perspective
Synergy
Subsystems are more successful working
together than working alone. The whole,
working together, is greater than the sum
of its parts.
Entropy
A natural process leading to system
decline which can be avoided through
organizational change and renewal.
32. Contemporary Management
Issues & Challenges
Downsizing
Diversity and the New Workforce
Information Technology
New Ways of Managing
Globalization
Ethics and Social Responsibility
Managing for Quality
Service Economy
36. Written explanation of company aims
What goods and services the company will offer
What market the company will serve
Company belief vision
Statement about employee treatment may be
included
Written explanation of company aims
What goods and services the company will offer
What market the company will serve
Company belief vision
Statement about employee treatment may be
included
Mission Statement & Objectives
Objectives - The ends or results desired by the organization
and are derived from the organization’s mission.
37. Plans Are Classified on Their
Scope
Strategic
Tactical
Operational
Plans become
more specific as
they move
from strategic to
operational Contingency
40. Managers As Decision Makers
Decision making – the process of
recognizing a problem or opportunity
and creating a solution
A decision is a choice
between alternatives
41. Steps in the Decision
Making Process
Recognize and
define the
decision situation
Develop
options
Analyze
options
Implement
the decision
Monitor the
consequences
Select the
best option
43. Steps in the Rational
Decision-Making Process
Step Detail Example
1. Recognizing and
defining the decision
situation
Some stimulus indicates
that a decision must be
made. The stimulus may be
positive or negative.
A plant manager sees that
employee turnover has
increased by 5 percent.
2. Identifying alterna-
tives
Both obvious and creative
alternatives are desired. In
general, the more important
the decision, the more
alternatives should be
considered.
The plant manager can
increase wages, increase
benefits, or change hiring
standards.
3. Evaluating alterna-
tives
Each alternative is evalu-
ated to determine its
feasibility, its
satisfactoriness, and its
consequences.
Increasing benefits may not
be feasible. Increasing
wages and changing hiring
standards may satisfy all
conditions.
44. Steps in the Rational
Decision-Making Process
Step Detail Example
4. Selecting the best
alternative
Consider all situational
factors, and choose the
alternative that best fits the
manager’s situation.
Changing hiring standards will
take an extended period of time
to cut turnover, so increase
wages.
5. Implementing the
chosen
alternative
The chosen alternative is
implemented into the
organizational system.
The plant manager may need
permission from corporate
headquarters. The human
resource department establishes
a new wage structure.
6. Following up and
evaluating the
results
At some time in the future,
the manager should ascertain
the extent to which the
alternative chosen in step 4
and implemented in step 5
has worked.
The plant manager notes that, six
months later, turnover has
dropped to its previous level.
45. Evaluating Alternatives in the
Decision-Making Process
Is the alternative
feasible?
Eliminate from
consideration
Is the alternative
satisfactory?
Are the alternative’s
consequences
affordable?
Retain for further
consideration
Yes Yes Yes
Eliminate from
consideration
Eliminate from
consideration
No No No
Figure 4.3
47. Types of Decisions
Programmed Decisions
A structured decision or one that occurs frequently
Have well established and understood solutions
Nonprogrammed Decisions
An unstructured decision, which occurs less
frequently than a programmed decision
Involves complex, important, and nonroutine
problems or opportunities
48. Decision-Making Conditions
Level of ambiguity and chances of making a bad decision
Lower HigherModerate
Certainty UncertaintyRisk
The decision
maker faces
conditions of...
51. Rational Perspectives on
Decision Making
The Classical Model of Decision Making
When faced with a
decision situation,
managers should. . .
. . . and end up with
a decision that best
serves the interests
of the organization.
• obtain complete
and perfect information
• eliminate uncertainty
• evaluate everything
rationally and logically
52. Behavioral Aspects of Decision
Making
The Administrative Model of Decision
Making
When faced with a
decision situation
managers actually…
. . .and end up with a
decision that may or may
not serve the interests
of the organization.
• use incomplete and
imperfect information
• are constrained by
bounded rationality
• tend to satisfice
53. Bounded rationality
Satisficing
Coalition
Intuition
Escalation of Commitment
Risk Propensity
The Administrative Model
Important Behavioral Concepts
54. Ethics and Decision Making
Components of managerial ethics:
Relationships of the firm to employees
Employees to the firm
The firm to other economic agents
55. Group and Team Decision
Making in Organizations
The most common method of group
and team decision making are:
Interacting groups
Delphi groups
Nominal groups.
56. Group Decision Making
Advantages
More information &
knowledge are available
More alternatives are
likely to be generated
More acceptance of the
final decision is likely
Enhanced
communication of the
decision may result
Disadvantages
The process takes
longer, so it is more
costly
Compromise decisions
due to indecisiveness
may emerge
One person may
dominate the group
Groupthink may occur
58. Managing Group and Team
Decision-Making Processes
Be aware of the pros and
cons of having a group
or team make a decision.
Set deadlines for when
decisions must be made.
Avoid problems with
dominance by managing
group membership.
Hold a follow-up meeting
to recheck the decision.
Have each group
member individually and
critically evaluate all
alternatives.
As a manager, do not
make your position
known too early.
Appoint a group member
to be a “devil’s
advocate.”
Promoting the Effectiveness of Group and
Team Decision Making:
Notas do Editor
Top Managers – a group of people responsible for establishing an organization’s overall goals objectives and developing policies to achieve those objectives
Middle Managers – next level down, manage other managers. They are responsible for establishing and meeting specific departmental or unit goals.
First-line Managers – oversee the work of operative employees – often have job titles like foremen, supervisor. The majority of their work is direct supervision of their employees.
Operative Employees – employees who physically produce an organization’s goods or services by working on specific tasks
Planning & Decision Making – determine courses of action. Planning - defining goals, establishing an overall strategy to achieve the goals, developing a comprehensive set of plans to integrate and coordinate activities. Decision making – selecting a course of action from alternatives
Organizing – grouping activities in some logical fashion - the division of labor, determining what tasks are to be done, who does them, how tasks are grouped
Leading – the set of processes used to get people to work together to advance the interests of the organization - directing, motivating, communicating and resolving conflicts
Controlling – monitoring/measuring an organizations performance, comparing results to plans – ensures the organization is effectively and efficiently achieving its goals
Technical Skills – ability to accomplish or understand tasks relevant to the organization
Interpersonal Skills – ability to communicate understand, and motivate other people, individually and in groups
Conceptual Skills – the ability to understand the the big picture, ability to analyze and diagnose the overall workings of the organization and its environment
Diagnostic Skills – the ability to recognize the symptoms of a problem then determine a way to fix it
Communication Skills – ability to both effectively convey ideas and information to others and to receive ideas and information from others
Decision-making Skills - the ability to correctly recognize and define problems and opportunities and then select appropriate courses of action
Time Management Skills – the ability to prioritize work, to work efficiently, and to delegate appropriately
Scientific Management – focuses on ways to improve individual performance – focused on efficiency
Grew out of the industrial revolution’s labor shortage at the beginning of the twentieth century.
Frederick Taylor:
Father of Scientific Management
Replaced the old rule-of-thumb method.
Believed in selecting, training, teaching and developing workers.
Used time study, standards planning, exception rule of management, slide-rules, instruction cards, incentives, etc.
Frank and Lillian Gilbreth
Reduced number of movements in bricklaying, resulting in increased output of 200%
Henry Gantt
Developed other techniques, including the Gantt chart, to improve working efficiency through planning/scheduling
Henri Fayol
Wrote General and Industrial Management
Helped to systematize the practice of management
First to describe management as planning, organizing, leading, and controlling
Max Weber
Theory of bureaucracy is based on a rational set of guidelines for structuring organizations
Lyndall Urwick
Integrated scientific management with the work of Fayol and other administrative management theorists
Hugo Munsterberg – advocated that psychologists could make valuable contributions to management theory
Mary Parker Follet – recognized the human element in the work place
Elton Mayo – Hawthorne Studies
Illumination study - Controlled lighting in one room of workers but not another – compared results – when the results increased in the varied lighting room also increased in the control group
Increase in productivity came because both groups were receiving attention
Group study – found workers did not work as fast as they could on a piece rate system,
Performed at a level set informally by the group
rate busters: over-producing workers
chiselers: under-producing workers
Conclusion was that individual and social processes played a role in shaping employee attitudes and behavior at work
Management Science – focuses on the development of mathematical models.
These models help the organization to try out various activities with the use of a computer.
Modeling can help managers locate the best way to do things and save money and time
Operations Management – is an applied form of management science that helps organizations develop techniques to produce their products and services more efficiently
Planning – defining goals, establishing an overall strategy to achieve the goals, developing a comprehensive set of plans to integrate and coordinate activities
Organizing – the division of labor, determining what tasks are to be done, who does them, how tasks are grouped, who reports to whom, when decisions are made Organizing is the structuring of resources and activities to accomplish objectives in an efficient and effective manner.
Managers organize by reviewing plans and determining what activities are necessary to implement them.
Managers divide the work into small units and assign it to specific individuals or groups.
Staffing is hiring people to carry out the work of the organization.
Leading/Directing – directing, motivating, communicating and resolving conflicts
Especially important to lower-level managers
Controlling – monitoring/measuring an organizations performance, comparing results to plans, if needed correcting actual performance Linked very closely to planning
The process of evaluating results to objectives Involves monitoring and measuring
Plans, organization, staffing, and leading may be changed on the basis of results from the controlling process
Planning
The process of determining the organization’s objectives and deciding how to accomplish them
Plans are derived from the organization’s mission, which describes its fundamental purpose and basic philosophy.
Set guideposts by which managers define standards that the organization should accomplish
Include areas such as profitability, customer service, and employee satisfaction
Strategic – those plans that establish the long range objectives and overall strategy or course of action by which a firm fulfills its mission
Tactical – shorter range plans designed to implement activities and objectives specified by strategic plans
Operational – short-term plans that specify what actions individuals, work groups, or departments need to accomplish in order to achieve the tactical plan and ultimately the strategic plan
Crisis management or contingency planning refers to plans for dealing with potential disasters such as product tampering, oil spills, fire, earthquake, computer virus, or airplane crash
Generally cover two elements: maintaining business throughout a crisis and communicating with the public, employees, and officials about the problem and the company’s response
Seeks to resume/restore operations as quickly and smoothly as possible after a crisis
Decision Making Under Certainty
A condition in which the decision maker knows with reasonable certainty what the alternatives are and what conditions are associated with each alternative.
Decision Making Under Risk
A condition in which the availability of each alternative and its potential payoffs and costs are all associated with risks.
Decision Making Under Uncertainty
A condition in which the decision maker does not know all the alternatives, the risks associated with each, or the consequences of each alternative.
Most managers think of themselves as rational decision makers
Many experts argue that managers should try to be as rational as possible in making decisions
When faced with a decision situation, managers actually…
Use incomplete and imperfect information
Are constrained by bounded rationality
Tend to satisfy immediate concerns
...and end up with a decision that may not serve the interests of the organization
Bounded rationality
Decision makers are limited by their values and unconscious reflexes, skills, and habits
Satisficing
The tendency to search for alternatives only until one is found that meets some minimum standard of sufficiency
Coalition
A political force in decision making which consists of an informal alliance of individuals or groups formed to achieve a goal.
Intuition
An innate belief about something without conscious consideration.
Escalation of Commitment
A decision maker is staying with a decision even when it appears to be wrong.
Risk Propensity
The extent to which a decision maker is willing to gamble when making a decision.
Individual ethics (personal beliefs about right and wrong behavior) combine with the organization’s ethics to create managerial ethics.
Ethics are clearly related to decision making in a number of ways.
A managers belief in right and wrong can directly affect their decision.
Thus each decision one makes indeed has an ethical component that will affect their decision as does politics and risk propensity.
Interacting groups or teams
are the most common form of decision-making groups which consists of an existing group or newly formed team interacting and then making a decision.
Delphi groups
are sometimes used for developing a consensus of expert opinion from a panel of experts who individually contribute through a moderator.
Nominal groups
are a structured technique designed to generate creative and innovative ideas through the individual contributions of alternatives that are winnowed down through a series of rank-ordering of the alternatives to reach a decision.