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Part One: Overview

Chapter 1: Management and
Its Evolution

Chapter 2: Managing in a
Global Environment

Chapter 1
Management and Its Evolution

Management Challenges

After reading this chapter, you should be able to:
Specify the roles of the various individuals, teams, and managers responsible for managerial activities within the firm. Understand the four major functions of management, and how individuals, teams, and managers carry them out. Identify the general skills needed to carry out managerial responsibilities. Appreciate early management thought as a foundation for classical, behavioral, and contemporary management perspectives.
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. 1-3

Management Challenges (continued)

Explain the major elements of classical and behavioral management perspectives. Describe the significance of the Hawthorne studies and their application to the human relations approach to management. Explain the key components of systems theory and contingency theory. Describe the basic concepts of the learning organization approach.
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. 1-4

Inc. Copyright © 2002 by The McGraw-Hill Companies. Successful organizations know how to manage people and resources efficiently to accomplish organizational goals and to keep those goals in tune with changes in the external environment. 1-5 . All rights reserved.The performance of organizations depends to a large extent on how their resources are allocated and their ability to adapt to changing conditions.

and made poor investment decisions. Inc. and technology. A firm with with excellent goals would fail if it hired the wrong people. Copyright © 2002 by The McGraw-Hill Companies. All rights reserved. relied on outdated technology. physical plant. lost key contributors. 1-6 .Management in the New Millennium    A firm can be efficient by making the best use of people. money. It is ineffective if its goals do not provide a sustained competitive advantage.

the term management referred only to individuals responsible for making resource allocation decisions and with the formal authority to direct others. Copyright © 2002 by The McGraw-Hill Companies.Management in the New Millennium (continued)  Traditionally. All rights reserved. Inc. 1-7 .

1-8 . Inc. All rights reserved.Levels of management: Strategic Managers Tactical Managers Operational Managers Copyright © 2002 by The McGraw-Hill Companies.

Inc. 1-9 .  Developing the company’s goals  Focus on long-term issues  Emphasize the growth and overall effectiveness of the organization  Concerned primarily with the interaction between the organization and its external environment.Strategic Managers  The firm’s senior executives with overall responsibility for the firm. All rights reserved. Copyright © 2002 by The McGraw-Hill Companies.

All rights reserved. 1-10 .Tactical Managers  Responsible for translating the general goals and plans developed by strategic managers into specific objectives and activities. Inc.  Shorter time horizon  Coordination of resources  These are middle managers Copyright © 2002 by The McGraw-Hill Companies.

1-11 . All rights reserved. Directly involved with non-management employees  Implementing the specific plans developed with tactical managers. Inc.  This is a critical role to the organization.  Operational managers are the link between management and non-management staff Copyright © 2002 by The McGraw-Hill Companies.Operational Managers   Lower-level managers who supervise the operations of the organization.

The Four Management Functions Planning Organizing Leading Controlling Copyright © 2002 by The McGraw-Hill Companies. Inc. 1-12 . All rights reserved.

All rights reserved. and management should be coordinated to support the firm’s mission. To be effective. teams. Copyright © 2002 by The McGraw-Hill Companies.Planning:   The management function that assesses the management environment to set future objectives and map out activities necessary to achieve those objectives. Inc. 1-13 . the objectives of individuals.

and technical resources are arranged and coordinated to perform tasks to achieve desired goals. The deployment of resources to achieve strategic goals. financial. informational. All rights reserved. Inc. 1-14 . physical. Copyright © 2002 by The McGraw-Hill Companies.Organizing:   The management function that determines how the firm’s human.

All rights reserved. This involves:  Clearly communicating organizational goals  Inspiring and motivating employees  Providing an example for others to follow  Guiding others  Creating conditions that encourage management of diversity Copyright © 2002 by The McGraw-Hill Companies. 1-15 . Inc.Leading:   The management function that energizes people to contribute their best individually and in cooperation with other people.

1-16 . compares it to objectives. Inc. All rights reserved. and monitors progress. Copyright © 2002 by The McGraw-Hill Companies. Many of these issues involve feedback or identifying potential problems and taking corrective action. implements necessary changes.Controlling:   The management function that measures performance.

Because most managerial tasks are unique. 1-17 . there is seldom one best way to approach them. All rights reserved. ambiguous.Management as a set of skills:  The four basic management functions require a set of skills to be carried out properly.  Copyright © 2002 by The McGraw-Hill Companies. and situation-specific. Inc.

Inc.Management as a set of skills: (continued)  Four major categories of skills will help you become a good manager:  Strategizing Skills  Task-Related Skills Skills Skills  People-Related  Self-Awareness Copyright © 2002 by The McGraw-Hill Companies. All rights reserved. 1-18 .

1-19 . Inc. All rights reserved.Strategizing Skills  Strategizing involves the ability to see “the big picture” to:  Focus on key objectives without getting mired in details  Sense what is happening inside and outside the company  Respond in an appropriate and timely fashion Copyright © 2002 by The McGraw-Hill Companies.

including:  Time  Organizational structure  Financial resources  People Copyright © 2002 by The McGraw-Hill Companies. 1-20 . All rights reserved. Inc.Task-Related Skills   Involve the ability to define the best approach to accomplish personal and organizational objectives. They include consideration of all resources.

All rights reserved. Inc. 1-21 . Copyright © 2002 by The McGraw-Hill Companies.Task-Related Skills (continued)  They also involve the ability to:  Prioritize  Remain flexible to make changes if necessary  Ensure that value is being created  In contemporary organizations. task-related skills are demanded of most employees from factory workers to top executives.

1-22 . All rights reserved. Inc.People-Related Skills   Involve getting work done through others and with others. People skills include the ability to:  Delegate tasks  Share information  Resolve conflicts  Be a team player  Work with people from very different backgrounds Copyright © 2002 by The McGraw-Hill Companies.

1-23 . All rights reserved. Inc.Self-Awareness Skills  Being aware of your personal characteristics can help you adapt to others.  Avoid rushed judgments  Appreciate the nuances of particular situations  Size up opportunities  Capitalize on your personal strengths  Avoid situations in which you are likely to fail Copyright © 2002 by The McGraw-Hill Companies.  To also help you understand why you react to them the way you do.

Inc. All rights reserved. .Skills for Managerial Success Strategic Skills  Task Skills       Environmental assessment scanning Strategy formulation Mapping strategic intent and defining mission Strategy implementation Human resource congruency      Setting and prioritizing objectives Developing plan of action and implementation Responding in a flexible manner Creating value Working through the organizational structure Allocating human resources Managing time efficiently 1-24 Copyright © 2002 by The McGraw-Hill Companies.

1-25 .Skills for Managerial Success (continued) People Skills     Self-Awareness Skills         Delegating Influencing Motivating Handling conflict Win-win negotiating Networking Communicating  Verbal  Nonverbal Listening Cross-cultural management Heterogeneous teamwork  Personal adaptability Understanding personal biases Internal locus of control Copyright © 2002 by The McGraw-Hill Companies. Inc. All rights reserved.

Inc. All rights reserved.The Evolution of Management Thought Early Management Thought Classical Perspective Contemporary Management Perspectives Behavioral Perspective Copyright © 2002 by The McGraw-Hill Companies. 1-26 .

The Prince  Early ideas about the design and organization of work  Adam Smith. The Wealth of Nations of labor 1-27  division Copyright © 2002 by The McGraw-Hill Companies. Inc. . The Art of War  Early ideas about leadership  Nicolò Machiavelli.Early Management Thought  Early ideas about management strategy  Sun Tzu. All rights reserved.

All rights reserved.Classical Perspective  Scientific Management  Frederick W. Inc. Taylor  Bureaucratic Management  Max Weber Fayol  Administrative Management  Henri Copyright © 2002 by The McGraw-Hill Companies. 1-28 .

Inc. 2. 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. 1-29 . 3.Taylor’s Four Principles of Scientific Management Scientifically study each part of a task and develop the best method of performing the task. All rights reserved. 4. 1. Carefully select workers and train them to perform the task by using the scientifically developed method. Copyright © 2002 by The McGraw-Hill Companies.

1-30 . Inc. All rights reserved.Key Characteristics of Weber’s Ideal Bureaucracy      Specialization of labor Formal rules and procedures Impersonality Well-defined hierarchy Career advancement based on merit Copyright © 2002 by The McGraw-Hill Companies.

Equity 12. Centralization Scalar chain 10. Unity of direction 6. Remuneration 14. Order 11.Fayol’s 14 Principles of Management 1. Authority 3. Division of work 2. Stability and tenure 13. Discipline 4. All rights reserved. 9. Esprit de corps Copyright © 2002 by The McGraw-Hill Companies. 1-31 . Subordination of 8. Initiative individual interest to the general interest 7. Unity of command 5. Inc.

1-32 . Inc. All rights reserved.Behavioral Perspective   The Hawthorne Studies Human Relations Approach  Employee motivation Maslow Abraham  Leadership Douglas style McGregor Copyright © 2002 by The McGraw-Hill Companies.

Inc.Hawthorne Effect: The discovery that paying special attention to employees motivates them to put greater effort into their jobs. 1-33 . (from the Hawthorne management studies. performed from 1924 – 1932 at Western Electric Company’s plant near Chicago) Copyright © 2002 by The McGraw-Hill Companies. All rights reserved.

1-34 .Maslow’s Hierarchy of Needs Self-Actualization Need for Self Esteem Need for Social Relations Need for Security Physical Needs Copyright © 2002 by The McGraw-Hill Companies. All rights reserved. Inc.

Copyright © 2002 by The McGraw-Hill Companies.  Leaders and managers who hold Theory Y assumptions believe that most employees do not dislike work and want to make useful contributions to the organization. Inc. All rights reserved.McGregor’s Theory X and Theory Y  Leaders and managers who hold Theory X assumptions believe that employees are inherently lazy and lack ambition.  A negative perspective on human behavior. 1-35 .  A positive perspective on human behavior.

Contemporary Management Perspectives     Systems Theory Contingency Theory Total Quality Management The Learning Organization Copyright © 2002 by The McGraw-Hill Companies. 1-36 . All rights reserved. Inc.

1-37 .Systems Theory   Views the organization as a system of interrelated parts that function in a holistic way to achieve a common purpose. All rights reserved. Systems theory concepts that affect management thinking:  Open and closed systems  Subsystems  Synergy  Equifinality Copyright © 2002 by The McGraw-Hill Companies. Inc.

Inc.  Because what works for one organization may not work for another  Situational characteristics (contingencies) differ  Managers need to understand the key contingencies that determine the most effective management practices in a given situation Copyright © 2002 by The McGraw-Hill Companies.Contingency Theory  States that there is no “one best way” to manage an organization. All rights reserved. 1-38 .

Copyright © 2002 by The McGraw-Hill Companies. 1-39 .Total Quality Management (TQM)   An organization-wide approach that focuses on quality as an overarching goal. Inc. All rights reserved. The basis of this approach is the understanding that all employees and organizational units should be working harmoniously to satisfy the customer.

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. All rights reserved. 1-40 . Inc. There are two ways organizations can learn:  Experimental learning  External learning Copyright © 2002 by The McGraw-Hill Companies.