SENIOR OUTCOMES SEMINAR

(BU385)

Management

What is Management?

A set of activities

planning and decision making, organizing,

leading, and controlling

Directed at an organization’s resources

human, financial, physical, and information

With the aim of achieving organizational

goals in an efficient and effective

manner.

Basic Purpose of Management

EFFICIENTLYUsing resources wisely andin a cost-effective way

EFFECTIVELYMaking the right decisions and

successfully implementing them

What is a Manager?

� Someone whose primary responsibility is to carry out the

management process.

� Someone who plans and makes decisions, organizes, leads, and controls:

human, financial, physical, and information resources.

The Management Process

� Planning and Decision Making� Setting an organization’s goals and selecting a course of action from a set of alternatives to achieve them.

� Organizing� Determining how activities and resources are grouped.

� Leading � The set of processes used to get organizational members to work together to advance the interests of the organization.

� Controlling � Monitoring organizational progress towards goals.

Fundamental Management Skills

� Management Skill Mixes at Different Organizational Levels

An Integrative Framework of Management Perspectives

Systems Approach

• Recognition of internal

interdependencies

• Recognition of

environmental influences

Contingency Perspective

• Recognition of the situational

nature of management

• Response to particular

characteristics of situation

Classical

Management

Perspectives

Methods for

enhancing

efficiency and

facilitating planning,

organizing, and

controlling

Behavioral

Management

Perspectives

Insights for moti-

vating performance

and understanding

individual behavior,

groups and teams,

and leadership

Quantitative

Management

Perspectives

Techniques for

improving decision

making, resource

allocation, and

operations

Effective and efficient management

Classical Management Perspective

� Scientific Management

� Concerned with improving the

performance of individual workers (i.e., efficiency).

� Grew out of the industrial revolution’s

labor shortage at the beginning of the

twentieth century.

� Administrative Management

� A theory that focuses on

managing the total organization.

Scientific Management

� Frederick Taylor (1856–1915)

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

Classical Management Perspective

� Administrative Management Theory

� Focuses on managing the whole organization rather than individuals.

� Henri Fayol (1845–1925)

� Was first to identify the specific management functions of planning, organizing, leading, and controlling.

� Max Weber (1864–1920)

� His theory of bureaucracy is based on a rational set of guidelines for structuring organizations.

Behavioral Management Perspective

� Behavioral Management

� Emphasized individual attitudes and

behaviors, and group processes, and recognized the importance of

behavioral processes in the workplace.

� Hawthorne Studies (1927–1932)

� Mayo: founder of human relations

The Hawthorne Studies (1927–1932)

� Conducted by Elton Mayo and associates at Western Electric

� Illumination study —workplace lighting adjustments affected both the control and the experimental groups of production employees.

� Group study—implementation 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.”

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 manager’s

concern for workers would lead to

increased worker satisfaction and improved worker performance.

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.

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

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.

� Operations Management

� Practical application of management science to efficiently manage the

production and distribution of products and services.

The Systems Perspective of Organizations

Inputs from the

environment:

material inputs,

human inputs,

financial inputs, and

information inputs

Transformation

process: technology,

operating systems,

administrative

systems, and

control systems

Outputs into

the environment:

products/services,

profits/losses,

employee behaviors,

and information

outputs

Feedback

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.

Decision Making and the Planning Process

� The Planning Process

Strategic goals Strategic plans

Tactical goals

Operational goals Operational plans

The organization’s mission

The Environmental Context

• Purpose • Premises • Values • Directions

Tactical plans

Kinds of Goals

� By Level

� Mission statement is a statement of an organization’s fundamental purpose.

� Strategic goals are goals set by and for top management of the organization that address broad, general issues.

� Tactical goals are set by and for middle managers; their focus is on how to operationalize actions to strategic goals.

� Operational goals are set by and for lower-

level managers to address issues associated with tactical goals.

SWOT Analysis

�Strengths

�Weaknesses

�Opportunities

�Threats

Mission

An organization’s fundamental purpose

Best Strategies

SWOT AnalysisTo formulate strategies that support the mission

Those that support the mission and• exploit opportunities and strengths

• neutralize threats• avoid (or correct) weaknesses

Internal AnalysisStrengths(distinctivecompetencies)

Weaknesses Threats

External AnalysisOpportunities

Managing Diversification

� BCG Matrix

� A method of evaluating businesses relative to the growth rate of their market and the organization’s share of the market.

� The matrix classifies the types of businesses that a diversified organization can engage as:

• “Dogs” have small market shares and no growth prospects.

• “Cash cows” have large shares of mature markets.

• “Question marks” have small market shares in quickly growing markets.

• “Stars” have large shares of rapidly growing markets.

Organizational Structure

� The Nature of Organizing

� Job Specialization

� Grouping Jobs: Departmentalization

� The Bureaucratic Model of Organization

Design

� Situational Influences on Organization

� Core Technology

� Environment

� Organization Size and Life Cycle

Alternatives to Specialization

� Job Rotation

� Systematically moving employees from one job to another. Most frequent use today is as a training device for skills and flexibility.

� Job Enlargement

� An increase in the total number of tasks workers perform.

� Job Enrichment

� Increasing both the number of tasks the worker does and the control the worker has over the job.

Establishing Reporting Relationships

� Chain of Command

� A clear and distinct line of authority among the positions in an organization.

� Unity of Command

• Each person within an organization must have a clear reporting relationship to one and only one boss.

� Scalar Principle

• A clear and unbroken line of authority must extend from the bottom to the top of the organization.

Work-Related Attitudes

� Job Satisfaction or Dissatisfaction

� An attitude that reflects the extent to which an individual is gratified or fulfilled by his or her work.

� Job Satisfaction and Work Behaviors

� Job satisfaction is influenced by personal, group, and organizational factors.

� Satisfied employees are absent from work less often, make positive contributions, and stay with the organization.

� Dissatisfied may experience stress which disrupts coworkers.

Work-Related Attitudes

� Job Satisfaction and Work Behaviors

� High levels of job satisfaction do not

necessarily lead to high job performance.

Work-Related Attitudes

� Organizational Commitment

� An attitude that reflects an individual’s identification with and attachment to an organization.

� Organizational Commitment and Work

Behaviors

� Employee commitment strengthens with an individual’s age, years with the organization, sense of job security, and participation in decision making.

� Committed employees have highly reliable habits, plan a longer tenure with the organization.

Motivation

� The Nature of Motivation

� Content Perspectives on Motivation

� The Need Hierarchy Approach

� The Two-Factor Theory

� Individual Human Needs (nAch, nAff)

� Process Perspectives on Motivation

� Expectancy Theory

� Equity Theory

� Goal-Setting Theory

Process Perspectives on Motivation

� Porter-Lawler Extension of Expectancy Theory

Intrinsic

rewards

(outcomes)

PerformancePerceived

equitySatisfaction

Extrinsic

rewards

(outcomes)

Figure 10.5Source: Edward E. Lawler III and Lyman W. Porter, “ The Effect of Performance on Job Satisfaction,”

Industrial Relations, October 1967, p. 23. Used with permission of the University of California.

Popular Motivational Strategies

� Empowerment and Participation

� Empowerment

• The process of enabling workers to set their own work goals, make decisions, and solve problems within their sphere of influence.

� Participation

• The process of giving employees a voice in making decisions about their work.

� Areas of Participation for Employees

•Making decisions about their jobs.

• Participating in decision making about broader issues of product quality.

Using Reward Systems toMotivate Performance

� Designing Effective Reward Systems

� Reward system must meet an

individual’s needs.

� Rewards should compare favorably with other organizations.

� Distribution of rewards must be perceived to be equitable.

� Reward system must recognize different needs.

Using Reward Systems toMotivate Performance

� Popular Approaches to Rewarding Employees

� Traditional systems

• Fixed hourly or monthly rate.

� Merit systems

• Employees get different pay raises at the end of the year based on overall job performance.

� Incentive systems

• Employees get different pay amounts at each pay period in proportion to what they do (e.g., piece-rate pay plans).

Using Reward Systems toMotivate Performance

� Popular Approaches (cont’d)

� Profit sharing plans

• Provides bonus based to corporate profits.

� Gainsharing

• All group members get bonuses when performance targets are exceeded.

� Lump sum bonuses

• One-time reward, not an increase in base.

� Pay-for-knowledge

• Pay the individual rather than the job.

Leadership

� The Nature of Leadership

� The Meaning of Leadership

� Leadership Versus Management

� Power and Leadership

� The Search for Leadership Traits

� Leadership Behaviors

� Michigan Studies

� Ohio State Studies

� Leadership Grid

� Situational Approaches to Leadership

� LPC Theory

Leadership

� Situational Approaches to Leadership (cont’d)

� Path-Goal Theory

� The Leader-Member Exchange Approach

� Related Perspectives on Leadership

� Substitutes for Leadership

� Charismatic Leadership

� Transformational Leadership

Types of Power in Organizations

Source: Van Fleet, David D., and Tim Peterson, Contemporary Management, Third Edition. Copyright © 1994 by Houghton Mifflin Company. Used with permission.

The Nature of Leadership

�Power and Leadership

�Power: ability to affect the behavior of others.

•Legitimate power is granted through the

organizational hierarchy.

•Reward power is the power to give or withhold

rewards.

•Coercive power is the capability to force compliance by means of psychological, emotional, or physical

threat.

•Referent power is the personal power that accrues to

someone based on identification, imitation, loyalty, or charisma.

•Expert power is derived from the possession of

information or expertise.

Groups

� Groups and Teams in Organizations

� Types of Groups and Teams

� Why People Join Groups and Teams

� Stages of Group and Team Development

� Characteristics of Groups and Teams

� Role Structures

� Behavioral Norms

� Cohesiveness

� Formal and informal Leadership

Groups and Teams in Organizations

� Functional Group

� A permanent group created to accomplish a number of organizational purposes within an indefinite time horizon.

� Informal or Interest Group

� A group created by its own members for purposes that may or may not be relevant to organizational goals.

� Task Group

� A group created by the organization to accomplish a relatively narrow range of purposes within a stated time horizon.

Groups and Teams in Organizations

� Team

� A group of workers who function as a

unit, often with little or no supervision, to carry out work-related tasks,

functions, and activities.

� Sometimes are called self-managed

teams, cross-functional teams, or high performance teams.

Stages of Group Development(Tuchman)

Source: Van Fleet, David D., and Tim

Peterson, Contemporary Management,

Third Edition. Copyright © 1994 by

Houghton Mifflin Company. Used with

permission.

Characteristics of Teams

� Role

� The part an individual plays in helping

the group reach its goals.

• Task-specialist—role concentrating on getting the group’s tasks accomplished.

• Socioemotional role—providing social and emotional support to others on the team.

Characteristics of Teams

� Cohesiveness� The extent to which members are loyal and committed to the group; the degree of mutual attractiveness within the group.

� Factors That Influence Group Cohesiveness

Factors That Increase

Cohesiveness

Factors That Reduce

Cohesiveness

Intergroup competition

Personal attraction

Favorable evaluation

Agreement on goals

Interaction

Group size

Disagreement on goals

Intragroup competition

Domination

Unpleasant experiences

Interpersonal and Intergroup Conflict

� The Nature of Organizational Conflict

Conflict

High

Low

Low High

Optimal level of conflict

Perform

ance