Chapter 1

Understanding the Managers Job

Learning Objectives
After studying this chapter, you should be able to:
1.

2.

3.

Define management, describe the kinds of managers found in organizations, and briefly explain the four basic management functions. Justify the importance of history and theory to managers and explain the evolution of management thought. Identify and discuss key contemporary management perspectives represented by the systems and contingency perspectives and identify the major challenges and opportunities faced by managers today.

Chapter Outline
An Introduction to Management

Kinds of Managers Basic Management Functions Fundamental Management Skills The Science and the Art of Management

The Evolution of Management

The Importance of History and Theory The Historical Context of Management The Classical Management Perspective

Chapter Outline (contd)

The Evolution of Management (contd)

The Behavioral Management Perspective The Quantitative Management Perspective

Contemporary Management Thought

The Systems Perspective The Contingency Perspective Contemporary Management Challenges and Opportunities

What is Management?
A set of activitiesplanning and decision making, organizing, leading, and controlling directed at an organizations resources human, financial, physical, and information with the aim of achieving organizational goals in an efficient and effective manner.

Kinds of Managers by Level and Area

Kinds of Managers by Level

Top Managers The relatively small group of executives who manage the organizations overall goals, strategy, and operating policies. Middle Managers Largest group of managers in organizations Implement top managements policies and plans. Supervise and coordinate lower-level managers activities. First-Line Managers Managers who supervise and coordinate the activities of operating employees.

Kinds of Managers by Area

Marketing Managers

Work in areas related to getting consumers and clients to buy the organizations products or services.
Deal primarily with an organizations financial resources. Concerned with creating and managing the systems that create organizations products and services.

Financial Managers

Operations Managers

Kinds of Managers by Area

Human Resource Managers Involved in human resource processes Planning, recruiting and selection, training and development, designing compensation and benefit systems, formulating performance appraisal systems.

Administrative Managers Serve as generalists in functional areas and are not associated with any particular management specialty.
Other Kinds of Managers Assigned as specialists in positions directly related to the needs of the organization.

The Management Process

The Management Process

Planning and Decision Making Setting an organizations goals and selecting a course of action from a set of alternatives to achieve them. Organizing Determining how activities and resources are grouped.

Leading Getting organizational members to work together to advance the interests of the organization.
Controlling Monitoring organizational progress towards goals.

Fundamental Management Skills

Technical

Skills necessary to accomplish or understand the specific kind of work being done in an organization.

Interpersonal

The ability to communicate with, understand, and motivate both individuals and groups. The managers ability to think in the abstract.
The managers ability to visualize the most appropriate response to a situation.

Conceptual

Diagnostic

Fundamental Management Skills (contd)

Communication The managers abilities both to convey ideas and information effectively to others and to receive ideas and information effectively from others. Decision-Making The managers ability to recognize and define problems and opportunities correctly and then to select an appropriate course of action to solve the problems and capitalize on opportunities. Time-Management The managers ability to prioritize work, to work efficiently, and to delegate appropriately.

Management: Science or Art?

The Science of Management Assumes that problems can be approached in rational, logical, objective, and systematic ways. Requires technical, diagnostic, and decision-making skills and techniques to solve problems. The Art of Management Decisions are made and problems solved using a blend of intuition, experience, instinct, and personal insights. Requires conceptual, communication, interpersonal, and time-management skills to accomplish the tasks associated with managerial activities.

The Importance of Theory and History

Why Theory? Provides a conceptual framework for organizing knowledge and providing a blueprint for action. Management theories, used to build organizations, are grounded in reality. Most managers develop their own theories about how they should run their organizations. Why History? An awareness and understanding of historical developments in management are important. Furthers the development of management practices. Avoiding the mistakes made by others in the past.

Early Management Pioneers

Robert Owen (17711858)

British industrialist who was one of the first managers to recognize the importance of human resources and the welfare of workers.

Charles Babbage (17921871)

English mathematician who focused on creating efficiencies of production through the division of labor and the application of mathematics to management problems.
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Classical Management Perspective

Scientific Management

Concerned with improving the performance of individual workers (i.e., efficiency). Grew out of the industrial revolutions labor shortage at the beginning of the twentieth century.

Administrative Management

A theory that focuses on managing the total organization rather than individuals.

Scientific Management
Frederick Taylor (18561915)

Replaced old methods of how to do work with scientifically-based work methods.

Eliminated soldiering, where employees deliberately worked at a pace slower than their capabilities.

Believed in selecting, training, teaching, and developing workers. Used time studies of jobs, standards planning, exception rule of management, slide-rules, instruction cards, and piece-work pay systems to control and motivate employees.

Steps in Scientific Management

Scientific Management Pioneers

Frank and Lillian Gilbreth Both developed techniques and strategies for eliminating inefficiency. Frank reduced the number of movements in bricklaying, resulting in increased output of 200%. Lillian made substantive contributions to the fields of industrial psychology and personnel management.

Classical Management Perspective

Administrative Management Theory Focuses on managing the whole organization rather than individuals. Henri Fayol (18411925) Was first to identify the specific management functions of planning, organizing, leading, and controlling. Lyndall Urwick (18911983) Integrated the work of previous management theorists. Max Weber (18641920) His theory of bureaucracy is based on a rational set of guidelines for structuring organizations.

Classical Management Perspective Today

Contributions Laid the foundation for later developments. Identified important management processes, functions, and skills. Focused attention on management as a valid subject of scientific inquiry. Limitations More appropriate approach for use in traditional, stable, simple organizations. Prescribed universal procedures that are not appropriate in some settings. Employees are viewed as tools rather than as resources.

Behavioral Management Perspective

Behavioral Management Emphasized individual attitudes and behaviors, and group processes, and recognized the importance of behavioral processes in the workplace. Hugo Munsterberg (18631916) A German psychologist, the father of industrial psychology, who advocated applying psychological concepts to employees selection and motivation industrial settings. Mary Parker Follett (18681933) Recognized the importance of the role of human behavior in the workplace.

The Hawthorne Studies (19271932)

Conducted by Elton Mayo and associates at

Western Electric

Illumination studyworkplace lighting adjustments affected both the control and the experimental groups of production employees. Group studyimplementation of piecework incentive plan caused production workers to establish informal levels of acceptable individual output. Over-producing workers were labeled rate busters and under-producing workers were considered chiselers. Interview programconfirmed the importance of human behavior in the workplace.

Behavioral Management Perspective

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 managers concern for workers would lead to increased worker satisfaction and improved worker performance.

Behavioral Management Perspective

Abraham Maslow (1908-1970)

Advanced a theory that employees are motivated by a hierarchy of needs that they seek to satisfy.

Douglas McGregor (1906-1964)

Proposed Theory X and Theory Y concepts of managerial beliefs about people and work.

Theory X and Theory Y

Theory X Assumptions

People do not like work and try to avoid it. People do not like work, so managers have to control, direct, coerce, and threaten employees to get them to work toward organizational goals. People prefer to be directed, to avoid responsibility, and to want security; they have little ambition.

Theory X and Theory Y

Theory Y Assumptions People do not dislike work; work is a natural part of their lives. People are internally motivated to reach objectives to which they are committed. People are committed to goals to the degree that they receive personal rewards when they reach their objectives. People will both seek and accept responsibility under favorable conditions. People can be innovative in solving problems. People are bright, but under most organizational conditions their potentials are underutilized.

Organizational Behavior
A contemporary field focusing on behavioral

perspectives on management.

Draws on psychology, sociology, anthropology, economics, and medicine.

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

Behavioral Management Perspective Today

Contributions

Provided important insights into motivation, group dynamics, and other interpersonal processes. Focused managerial attention on these critical processes. Challenged the view that employees are tools and furthered the belief that employees are valuable resources.

Behavioral Management Perspective Today

Limitations

Complexity of individuals makes behavior difficult to predict. Many concepts not put to use because managers are reluctant to adopt them. Contemporary research findings are not often communicated to practicing managers in an understandable form.

Quantitative Management Perspective

Quantitative Management

Emerged during World War II to help the Allied forces manage logistical problems. Focuses on decision making, economic effectiveness, mathematical models, and the use of computers to solve quantitative problems.

Quantitative Management Perspective

Management Science

Focuses on the development of representative mathematical models to assist with decisions. Practical application of management science to efficiently manage the production and distribution of products and services.

Operations Management

Quantitative Management Perspective Today

Contributions

Developed sophisticated quantitative techniques to assist in decision making. Application of models has increased our awareness and understanding of complex processes and situations. Has been useful in the planning and controlling processes.

Quantitative Management Perspective Today

Limitations Quantitative management cannot fully explain or predict the behavior of people in organizations. Mathematical sophistication may come at the expense of other managerial skills. Quantitative models may require unrealistic or unfounded assumptions, limiting their general applicability.

The Systems Perspective of Organizations

Integrating Perspectives for Managers

Systems Perspective

A system is an interrelated set of elements functioning as a whole. An organizational system that interacts with its environment.

Open system

Integrating Perspectives for Managers

Closed system

An organizational system that does not interact with its environment.

A system within another system. Their importance is due to their interdependence on each other within the organization.

Subsystems

The Systems Perspective

Synergy

Subsystems are more successful working together in a cooperative and coordinated fashion than working alone. The whole system (subsystems working together as one system) is more productive and efficient than the sum of its parts.

The Systems Perspective

Entropy

A normal process in which an organizational system declines due to failing to adjust to change in its environment Entropy can be avoided and organization reenergized through organizational change and renewal.

The Contingency Perspective

Universal Perspectives Include the classical, behavioral, and quantitative approaches. An attempt to identify the one best way to manage organizations. The Contingency Perspective Suggests that each organization is unique. The appropriate managerial behavior for managing an organization depends (is contingent) on the current situation in the organization.

Contemporary Management Challenges

Increasing globalization of the economy

An increasingly diverse and globalized workforce

The importance of ethics and social responsibility The use of quality as the basis for competition,

increasing productivity, and lowering costs The shift to a predominately service-based economy The changing attitudes and priorities of the workforce The need to create challenging, motivating, and flexible work environments The effects of information technology on how and where people will work in organizations