Strategic Management

Chapter One

Introduction to Organisations and Management

What is an organisation?

 Deliberate arrangement of people to accomplish some specific purpose

– Characteristics of Organisations
 Have a distinct purpose
– Expressed in terms of a goal or a set of goals
 Are composed of people
 Have some deliberate structure
– Enables people to do their work
– Ensures members work relationships are clarified
o Open and flexible: no clear and precise job
duties
o Traditional: clearly defined rules, regulations
and job descriptions
 Organisations are changing because the world around them is changing
– Some contemporary organisations are structured in a flatter
network structure
 Less hierarchical
 Open communication systems
 Flexible work arrangements
 Employee work teams
 Supplier alliances
– The changing world
 Quest for more sustainable organisational practices
 Increased dependence e-business models and approaches
 Spread of technology
 Increased globalisation
 Changing employee expectations

Who are managers?

 Managers coordinate and oversee the work of other people so that

organisational goals can be accomplished
– Not about personal achievement
– Help others to do work and achieve
 Non-managerial employees: work directly on a job and have no one
reporting to them
 Traditionally structured organisation
 – Top Managers
 Managers at or near the top level of the organisation
 Responsible for making organisation-wide decisions
 Establish goals and plans that affect the entire organisation
– Middle Managers
 Managers between the fist-line ad top level of the
organisation
 Manage the work of first-line managers
 Aka regional supervisor, dean, department head
– First-line Managers
 Managers at the lowest level of the organisation
 Manage the work of non-managerial employees who are
directly involved in the production or creation of the
organisation’s products
 Aka supervisors

What is management?

 Coordinating and overseeing the work activities of others so that their

activities are completed efficiently and effectively
– Efficiency: getting the most output from the least amount of input,
doing things right (not wasting resources)
 Managers are concerned with the efficient use of resources
(money, time, people)
– Effectively: doing those work activities that help the organisation
to reach its goals; doing the right things
 Concerned with the attainment of organisational goals (the
end result)

What do managers do?

 Functions (POLC)
– Functions method is a way of conceptualising the managers role
– Provides a way of classifying the many acitivites carried out by a
manager
– Henri Fayol proposed that managers perform 5 functions:
planning, organising, commanding, coordinating and controlling
– These have now been condensed to 4:
 Planning: defining goals, establishing strategies and
developing plans
– Necessary to know where the company is going and
the plan as to how it is going to get there
 Organising: arranging and structuring work
– How the organisations goals will be achieved
– Structural arrangements
– What tasks need to be done, who is going to do the,
how the tasks are grouped, who reports to who
  Leading: working with and through people
– Motivate subordinates
– Train and hire employees
– Resolve group work conflicts
– Select the most effective communication channel
– Deal with employee behaviour
 Controlling: evaluating whether things are going as
planned
– Actual performance must be compared with
previously set goals
 Roles (IID)
– Henry Mintzberg – what managers do can be grouped into 10
unrelated roles
– Which are then grouped into 3 categories:
 Interpersonal
– Managerial roles that involve people and other
duties that are ceremonial and symbolic in nature
o Figurehead: dean handing out diplomas at
graduations
o Leader: hiring, training, motivating,
disciplining employees
o Liaison: contacting external sources that
provide the manager with information
 Informational
– Involves receiving, collecting and disseminating
information
o Monitor: getting information from outside the
organisation by reading and talking with
others
 Learn of change’s in consumer want
and what competitors might be
planning etc.
o Disseminator: acting as a channel of
information to organisational members
o Spokesperson: representing the organisation
to outsiders
 Decisional: entrepreneur, disturbance handler, resource
allocator, negotiator
– Revolve around making decisions
o Entrepreneurs: initiate and oversee new
projects that will improve their organisation’s
performance
o Disturbance Handlers: take corrective action
in response to unforeseen problems
o Resource allocators: responsible for
allocating human, physical and monetary
resources
 o Negotiators: discuss and bargain with groups
to gain advantages for their own unit
 ***** AN EVALUATION*****
– Managers regardless of the type of organisation or level in the
organisation usually perform similar roles
 The emphasis managers give to various roles changes with
their organisational level
– Higher level: disseminator, figurehead, negotiator,
liaison, and spokesperson
– Leader is more important for lower level manager
– Functions vs. Roles
 Functions method is more useful for conceptualising
manager’s job
 Many of the roles align with the functions
– Resource allocation is part of planning
– Interpersonal roles are part of leading
o Not all roles fit into functions
 As all managers do some work that is
not purely managerial
 Skills (THC)
– Robert Katz – managers needed 3 competencies
 Technical
– Knowledge and proficiency in a specialised field
o Job specific knowledge and techniques
needed to perform specific tasks
– First-line and middle-managers
o Employees with excellent technical skills
often get promoted to first-line managers
 Human
– The ability to work well with other people
individually and in a group
– Important at all levels
o Be aware of own attitudes, assumptions and
beliefs
o Be sensitive to subordinates perceptions,
needs and motivations
– Get the best out of people through ability to:
o Communicate
o Motivate
o Lead
o Inspire enthusiasm
o Inspire trust
 Conceptual
– The ability to think and conceptualize about abstract
and complex situations
o ‘Helicopter perspective’ – see the
organisation as a whole
 o Understand relationship between different
sub-units
o Visualise how the organisation fits into its
broader environment
– More important at higher levels
 **the importance of these skills differs depending on managerial level
 **** AN EVALUATION****
– must be willing to upgrade skills constantly

Is the Managers Job Universal?

 Organisational Level
– All managers plan, organise, lead and control
 The time they give to each function depends on their
organisational level
 The differences are of degree and emphasis not of function
 Organisational Type
– Although there are distinctions between the management of profit
and non-profit organisations…
 There are many similar tasks that managers have to do in
both types of organisations
– Both have to be effective and efficient
– More difficult to measure the performance of a non-profit
organisation
 Organisational Size:
– Small business = an independently owned and operated, profit-
seeking enterprise with fewer than 20 employees
– Perform essentially the same activities
– However, there are some differences in degree and emphasis on
roles and functions
 The managers role of spokesperson in a small business is
the most important role
  Entrepreneurial role is least important for large
organisations
 Less formal role in small than in large
 Cross-national Transferability
– There are some major differences in managerial practices in
different countries
 In this area the managers job is less universal
 However, with increased globalisation these differences are
likely to diminish gradually in the near future

How is the manager’s job changing?

 Changes impacting manager’s job

– Changing technology
– Increased security threats
– Increased emphasis on ethics
– Increased competitiveness
– Increased environmental concern
 Importance of customers
– Delivering consistent high-quality service is essential to success
– Must create customer-responsive organisation where employees
are friendly and courteous, accessible, knowledgeable and prompt.
– Employee attitudes and behaviour play a huge role in customer
satisfaction
 Importance of innovation
– Doing things differently, exploring new territory and taking risks
– Create an environment in which employees felt free to innovate
 Importance of sustainability
– Eco-efficiency: the concept of creating more goods and services
while using fewer resources and creating less waste and pollution
– Eco-effectiveness: a strategy for business growth and prosperity
that generates ecological, social and economic value
– Corporate sustainability: widening corporate responsibility to
respond strategically to a wide range of environmental and
societal challenges
 Integrating economic, environmental and social
opportunities into its business strategy
 Associated with financial and marketplace success

What value does the market place put on managers?

 Good managerial skills are a scarce commodity and salary packages are one
measure of the value that organisations place on them
 Management salaries reflect the market forces of supply and demand
 Increased shareholder pressure is putting pressure on what has been seen
by some as excessively generous remuneration packages

Why Study Management?

 Universality of management – there is a universal need for management

– The reality that management is needed in al types and sizes of
organisations, at all organisational levels, in all organisational
areas and in organisations in all countries around the globe.
 Reality of work – either manage or be managed
– Insight into the way boss behaves and internal workings of
organisations
 Managing yourself – take greater control of yourself
– Changes in organisational life are placing increased emphasis on
individual control and responsibility
 Working from home, self managed teams
 Challenges and rewards of being a manager
– Have to deal with a variety pf personalities and make do with
limited resources
– Your success depends on others’ work performance
– Opportunity to think creatively and use your imagination
– Help others find meaning and fulfilment in work
– Receiving recognition and status in organisation and community