M A N AG E M E N T F U N DA M E N TA L S I N T R O D U C T ...bms.lk/download/GDM_Tutorials/batch-38/week 03/Management... · Administrative Principles : Henri Fayol & Max Weber

M A N A G E M E N T F U N D A M E N T A L SI N T R O D U C T I O N T O M A N A G E M E N T

G R A D U A T E D I P L O M A I N M A N A G E M E N T

M A N A G I N G I NT U R B U L E N T T I M E S

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INTRODUCTION TO ORGANISATIONS• A group of people working together to over a period of time to achieve a common goal or an

objective.


CLASSIFICATION OF ORGANISATIONS

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Organisations

Objective

Profit

Non Profit

Size

Large

Small

Ownership

Private

Public

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WHAT IS MANAGEMENT?

• Manager : Someone who get things done with the aidof people and other resources.

• Management : Attainment of organisational goals inan effective and efficient manner through planning,organising, leading and controlling organisationalresources.


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WHAT MANAGERS DO?


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MANAGEMENT PROCESS

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Planning

Organising

Leading

Controlling

Resources•Human•Financial•Raw Materials•Technology•Information

Performance•Attain goals•Products•Services•Efficiency•Effectiveness

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MANAGEMENT FUNCTIONS• Planning : Planning means identifying goals for future, organisational performance and deciding

on the tasks and use of resources needed to attain them.

• Organising : Organising involves assigning tasks, grouping tasks in to departments, delegating

authority and allocating resources across the organisation.

• Leading : Use influence to motivate employees to achieve organisational goals.

• Controlling : Monitoring employees’ activities, determining whether the organisation is on target

towards its goal, and making corrections necessary.


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MANAGEMENT TYPES• Vertical

– Top management are responsible for the entire organisation : President, chairperson, executive

directory, chief executive officer (CEO) etc.

– Middle managers are responsible for business units : Departmental head, Divisional head, Manager of

quality control etc.

– First line managers are responsible for production of goods and services : Supervisor, line manager,

section chief, office manager etc.

• Horizontal

– Functional managers are responsible for departments that perform specific tasks : advertising, sales,

finance, human resources etc.

– General managers are responsible for several departments16/06/2016 GDM 401 PB: HDM

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LEVELS OF MANAGEMENT

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MANAGERIAL SKILLS

• Three categories of skills: Conceptual skills, Human skills and Technical skills.

• The degree of these skills may vary.

• The application of management skills change as manager moves up the hierarchy.

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MANAGERIAL SKILLS CONTD.

• Technical skills: Ability to use tools, techniques and

specialised knowledge.

• Human relations skills (Inter personal skills): Ability to work

effectively with people.

• Conceptual skills: Ability to see the organisation as a whole

and solve problems to benefit the total system.


RELATIONSHIP OF SKILLS TO MANAGEMENT


WHEN SKILLS FAIL

• Unethical behaviour

• During turbulent times, managers must apply their skills

• Common management failures:

– Not listening to customers

– Misinterpreting signals from marketplace

– Not building teams

– Inability to execute strategies

– Failure to comprehend and adapt to change

– Poor communication and interpersonal skills


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INNOVATIVE MANAGEMENT FOR THE NEW WORKPLACE

• Rapid environmental shifts:

– Technology

– Globalisation

– Shifting social values


MANAGERIAL ROLES

• A role is a set of expectations for a managers’ behaviour

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Informational Interpersonal Decisional

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MANAGERIAL ROLES CONTD.

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Informational• Monitor• Disseminator• Spokesperson

Interpersonal• Figurehead• Leader• Liaison

Decisional• Entrepreneur• Disturbance handler• Resource allocator• Negotiator

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Role Activity Examples

Monitor Seek and acquire work related information Scan/read trade press, periodicals,

reports; attend seminars and training;

maintain professional contacts

Disseminator Communicate/ disseminate information to others within

the organization

Send memos and reports; informs

staff and subordinates of decisions

Spokesperson Communicate/transmit information to others outside the

organization

Pass on memos, reports and

informational materials; participate in

conferences/ meetings

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Figurehead Perform social and legal duties, act as symbolic leader Greet visitors, sign legal documents,

attend ribbon cutting ceremonies,

host receptions etc.

Leader Direct and motivate subordinates, select and train

employees

Include almost all interactions with

subordinates

Liaison Establish and maintain contacts within and outside the

organization

Business correspondence,

participation in meetings with

representatives of other divisions or

organizations.

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Entrepreneur Identify new ideas and initiate improvement projects Implement innovations; plan for the

future

Disturbance

handler

Deals with disputes or problems and takes

corrective action

Settle conflicts between subordinates;

Choose strategic alternatives; Overcome

crisis situations

Resource allocator Decide where to apply resources Draft and approve of plans, schedules,

budgets; set priorities

Negotiator Defends business interests Participates in and directs negotiations

within team, department, and

organisation

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T H E E V O L U T I O N O FM A N A G E M E N T

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During 1776, using the pin

industry

Discussed about the

economic advantage that

could be generated through

division of labour or job

specialization.

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Late 18th century and beginning

of 19th century Industrial

Revolution

Human Capital was substituted

by machinery

Large organizations required

formal theories to run the

organizations

CLASSICAL PERSPECTIVE

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INTRODUCTION TO CLASSICAL PERSPECTIVE

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Early on the 20th Century

Focusses on making the organisation efficient as possible

Scientific Management : Frederick Winslow Taylor &

Frank and Lillian Gilbreth

Administrative Principles : Henri Fayol & Max Weber

SCIENTIFIC MANAGEMENT: TAYLOR 1856-1915

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SCIENTIFIC MANAGEMENT CONTD.

• Developed during late 1800s by FrederickWinslow Taylor.

• Frederick Taylor is known as the father of thescientific management.

• Proposed that employees could be retooledlike machineries to enhance productivity.

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SCIENTIFIC MANAGEMENT CONTD.

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Criticisms

• Did not appreciate the social

context of work and higher needs

of workers.

• Did not acknowledge variance

among individuals.

• Tended to regard workers as

uninformed and ignored their

ideas and suggestions.

Contributions

• Demonstrate the importance of

compensation for performance.

• Initiated the careful study of

tasks and job.

• Demonstrated the importance of

personnel selection and training.

General approach• Developed standard method for

performing each job.• Selected workers with

appropriate abilities for each job• Trained workers in standard

method• Supported workers by planning

work and eliminatinginterruptions.

• Provided wage incentives toworkers for increased output

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GENERAL ADMINISTRATIVE THEORY

• Focused more on what managers do and what constitute good management practice.

• Focused on all levels of managers whereas Taylor focused only on first line managers.

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ADMINISTRATIVE PRINCIPLES

• Contributor : Henry Fayol

• Focus :– Management is a common endeavour to all businesses.

– Fundamental rules of management that could be applied to all organisational situations.

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14 ADMINISTRATIVE PRINCIPLES• Division of work : Specialization increases output by making employees more efficient.

• Authority : Managers must be able to give orders, and authority gives them the right.

• Discipline : Employees must obey and respect the rules that govern the organisation.

• Unity of command : Every employee should receive orders from only one superior.

• Unity of direction : The organisation should have a single plan of action to guide managers and workers.

• Subordination of individual interest to the general interest : The interest of any one employee or group of

employees should not take precedence over the interest of the organization as a whole.

• Remuneration : Workers must be paid a fair wage for their service.

• Centralization : This term refers to the degree to which subordinates are involved in decision making.

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14 ADMINISTRATIVE PRINCIPLES CONTD.

• Scalar chain : The line of authority from top management to the lowest ranks is the scalar chain.

• Order : People and materials should be in the right place at the right time.

• Equity : Managers should be kind and fair to their subordinates

• Stability of tenure of personnel : Management should provide orderly personnel planning and

ensure that replacements are available to fill vacancies.

• Initiative : Employees are allowed to originate and carry out plans will exert high levels of effort.

• Esprit de corps : Promoting team spirit will build harmony and unity within the organization.

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BUREAUCRATIC ORGANISATIONS

• Introduced by Max Weber (1864-1920) : German sociologist

• He developed a theory of authority structures and relations based

on an ideal type of organisation he called a bureaucracy – a form of

organisation characterized by division of labour, a clearly defined

hierarchy, detailed rules and regulations and impersonal

relationships.

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BUREAUCRATIC ORGANISATIONS

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Division of laborwith Clear definitions of

authority and responsibility

Positions organizedin a hierarchy of authority

Personnel are selectedand promoted based

on technicalqualifications

Administrative actsand decisions recorded

in writing

Managers subject toRules and procedures

that will ensure reliablepredictable behavior

Management separatefrom the ownershipof the organization

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HUMANISTIC PERSPECTIVE/BEHAVIOURAL APPROACH

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HUMANISTIC PERSPECTIVE: EARLY ADVOCATES

• Mary Parker Follett and Chester Barnard

• Understand human behaviors, needs, and attitudes in the workplace

• Importance of people rather than engineering techniques: contrast to scientific

management

• Empowerment: facilitating instead of controlling

• Recognition of the informal organisation

• Introduced acceptance theory of authority

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HUMANISTIC PERSPECTIVE: HUMAN RELATIONSMOVEMENT

• Effective work comes from within the

employee

• Human relations is the key variable in

increasing performance

• Employees performed better when

managers treated them positively

• Combine motivation with job design

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Elton Mayo conducted theexperiment in Western Electric

Hawthorne, Illinois plant in 1982

Based on Hawthorne Studies:Money does not cause increased

output.Human relations increased

output

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HUMANISTIC PERSPECTIVE: BEHAVIOURALSCIENCE APPROACH

• Use scientific methods which combines sociology, psychology, anthropology, economics

and other social sciences disciplines to develop theories on human behavior in an

organisation.

• Organisational Development – field that uses behavioral sciences to improve the

organisation

• Other strategies based on behavioral science:

– Matrix Organisations

– Self-Managed Teams

– Corporate Culture

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QUANTITATIVE PERSPECTIVE

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Standing in a long, snacking line with impatient children isn’t a parent’s idea of a good time. The Walt Disney Company

used quantitative techniques to develop FASTPASS, a sophisticated computerized system that spares parents the ordeal

for the most popular rides. Disney theme parks have machines that issue coupons with a return time that’s been

calculated based on the number of people standing in the actual line, the number who have already obtained passes, and

each rider’s capacity.

QUANTITATIVE PERSPECTIVE

• Emerged after WW II

• Applied mathematics, statistics and other quantitative techniques to managerial problems.

• Subsets of the quantitative approach

– Operations research – mathematical modelling

– Operations management – specialised in physical production of goods and services

– Information technology –reflected in management information systems

– Emerged systems such as linear programming, quality management, capital asset

pricing model, work scheduling, EOQ etc.

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RECENT TRENDS

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Systems thinking

Contingency view

Total quality management Page 50

01. SYSTEMS THINKING• A system is a set of interrelated parts that function as a whole to achieve a common purpose.

• Closed systems : Not influenced by and do not interact with the environment.

• Open systems : Influenced by and do interact with their environment.

• Organisations are made up of interdependent factors such as individual goals, attitude, motives,

formal structures, goals and authority.

• Systems thinking ensures:

– Managers’ coordinate work activities in the various parts of the organisation.

– That decisions and actions in one organisational area will affect other areas

– That organisations are not self contained and they will rely on the environment for essential

inputs and as outlets to absorb their outputs.

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02. CONTINGENCY VIEW

• Successful resolution of organizational problems is thought to depend on managers’

identification of key variations in the situation at hand

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03.TOTAL QUALITY MANAGEMENT

• Father of quality is known as Edwards Deming

• Focuses on delivering better quality to the customers through high quality

values through every activity within a company.

• Elements of quality management;

– Focus on the customer

– Continuous improvement

– Process focussed

– Accurate measurement

– Empowerment of employees

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INNOVATIVE MANAGEMENT: THINKING FOR ACHANGING WORLD

• Management ideas trace their roots to historical

perspectives

• New ideas continue to emerge to meet the changing

needs and difficult times

• The shelf life of trends is getting shorter and new ideas

peak in fewer than three years

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MANAGING THE TECHNOLOGY DRIVENWORKPLACE

• Customer Relationship Management – technology used to build relationships with customers

• Outsourcing – contracting functions or activities to other organisations to cut costs

• Supply Chain Management – managing supplier and purchaser relationships to get goods to

consumers

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THANK YOU!16/06/2016 GDM 401 PB: HDM

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M A N AG E M E N T F U N DA M E N TA L S I N T R O D U C T ...bms.lk/download/GDM_Tutorials/batch-38/week 03/Management... · Administrative Principles : Henri Fayol & Max Weber