certification study group section 1
TRANSCRIPT
Certification Study Group
Principles and Theories of Management
Management Management is a set of
activities directed at an organization’s resources with the aim of achieving organizational goals in an efficient and effective manner
Management
Activities include the four functions of management Planning (and decision making) Organizing Leading Controlling
Management
Resources include: Human Financial Physical Information
Management in Organizations
Inputs from the environment• Human resources• Financial resources• Physical resources• Information resources
Planningand decision
making
Leading
Organizing
Controlling
Goals attained• Efficiently• Effectively
Important Definitions
Top Managers Middle Managers First-line Managers Operative Employees
The Management Process
OrganizingDetermining how
best to groupactivities and
resources
ControllingMonitoring
and correctingongoing activitiesto facilitate goal
attainment
Planning andDecision Making
Setting the organiza-tion’s goals and
deciding how bestto achieve them
LeadingMotivating membersof the organizationto work in the best
interests of theorganization
Figure 1.2
The Basic Functions of Management A Circular Process
Planning and Decision Making
Organizing
Leading
Controlling
Skills and the Manager
Fundamental Management Skills
Management Skill Mixes at Different Organizational Levels
Classical Management Perspective
Scientific Management Frederick Taylor The Gilbreths Henry Gantt
Steps in Scientific Management
Develop a sciencefor each element ofthe job to replace oldrule-of-thumb methods
Scientifically selectemployees and thentrain them to do the jobas described in step 1
Supervise employeesto make sure theyfollow the prescribedmethods for performingtheir jobs
Continue to plan the work, but use workers to get the work done
21 43
Figure 1.3
The Classical Management Perspective
Administrative Management – focuses on managing the total organization Henry Fayol Lyndal Urwick Max Weber
Weber’s Theory of Bureaucracy
Division of labor Reliance on rules and regulations Hierarchy of authority Employment based on expertise Inflexible Rigid Impersonal
The Behavioral Management Perspective
Placed much more emphasis on individual attitudes and behaviors and on group processes in organizations.
Recognized the importance of behavioral processes in organizations Hugo Munsterberg Mary Parker Follet Elton Mayo
Behavioral ManagementPerspective
Elton Mayo – Hawthorne Studies
Illumination study Group study
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.
Maslow’s Hierarchy of Needs
Five levels Physiological – hunger, thirst, shelter, sex Safety – security and protection Social – affection, interpersonal
relationships Esteem – self-respect, achievement status Self-actualization – achieving full potential
Usually thought in the form of a pyramid
Maslow’s Hierarchy of Needs
SA
Esteem Needs
Social Needs
Security Needs
Physiological Needs
Theory X and Theory Y Theory X Assumptions
People do not like work and try to avoid it. 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.
Source: Douglas McGregor, The Human Side of Enterprise, Copyright © 1960 by McGraw-Hill. Reprinted by permission of The McGraw-Hill Companies.
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 rewards when they reach their objectives.
Source: Douglas McGregor, The Human Side of Enterprise, Copyright © 1960 by McGraw-Hill. Reprinted by permission of The McGraw-Hill Companies.
Theory X and Theory Y Theory Y Assumptions
People seek both seek responsibility 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.
Source: Douglas McGregor, The Human Side of Enterprise, Copyright © 1960 by McGraw-Hill. Reprinted by permission of The McGraw-Hill Companies.
Theory X – Theory Y
Think of these theories as a continuum
Theory X Theory Y
Employees fall somewhere in between the two ends
The Behavioral Management Perspective
Contemporary behavioral science in management – emerged because of the too simplistic descriptions of work behavior by the human relations theorists.
Organizational behavior takes a holistic view of behavior, including individual, group, and organization processes
Organizational Behavior 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
The Quantitative Management Perspective
Focuses on decision making, economic effectiveness, mathematical models, and the use of computers in organizations Management science Operations management
The Quantitative Management Perspective
Contributions Developed sophisticated quantitative techniques to
assist decision making Models have increased our awareness of complex
organizational processes and have aided in the planning and controlling processes
Limitations Cannot fully explain or predict behavior Mathematical sophistication may come at the expense
of other important skills Models may require unrealistic or unfounded
assumptions
Contemporary Management Theory
The Systems Perspective A system is an interrelated set of
elements functioning as a whole. An organization as a system is composed of four elements:
Inputs (material and/or human resources) Transformation processes (technical and
managerial processes) Outputs (products and services) Feedback (reactions from the environment)
The Integrated Systems Model
FeedbackFeedback
InputsInputsFrom theFrom theenvironment:environment:HumanHumanMaterialMaterialFinancialFinancialInformationInformation
ProcessingProcessingTransformationTransformationprocess:process:TechnologyTechnologyOperating systemsOperating systemsAdministrative Administrative systemssystemsControl systemsControl systems
OutputsOutputsInto the Into the environmentenvironmentProductProductServicesServicesProfit/lossProfit/lossEmployee behaviorEmployee behaviorInformationInformation
Systems Perspective
Synergy Subsystems are more successful
working together than working alone. The whole, working together, is greater than the sum of its parts.
Entropy A natural process leading to system
decline which can be avoided through
organizational change and renewal.
Contemporary Management Issues & Challenges Downsizing Diversity and the New Workforce Information Technology New Ways of Managing Globalization Ethics and Social Responsibility Managing for Quality Service Economy
Certification Study Group
The Functions of Management
The Functions of Management A Circular Process
Planning
Organizing/Staffing
Leading/Directing
Controlling
Plans
Strategic
Tactical
Operational
Mission Statement
Written explanation of company aims What goods and services the company will
offer What market the company will serve Company belief vision Statement about employee treatment may be
included
Written explanation of company aims What goods and services the company will
offer What market the company will serve Company belief vision Statement about employee treatment may be
included
Mission Statement & Objectives
Objectives - The ends or results desired by the organization and are derived from the organization’s mission.
Plans Are Classified on Their Scope
Strategic
Tactical
Operational
Plans become more specific as
they movefrom strategic to operational Contingency
TopTop
MiddleMiddle
SupervisorySupervisory
StrategicStrategic
TacticalTactical
OperationalOperational
Management & Planning Levels
Certification Study Group
Decision Making
Managers As Decision Makers Decision making – the process of
recognizing a problem or opportunity and creating a solution
A decision is a choice
between alternatives
Steps in the DecisionMaking Process
Recognize anddefine thedecision situation
Developoptions
Analyzeoptions
Implementthe decision
Monitor theconsequences
Select thebest option
Decision Making ProcessRecognizing
IdentifyingAlternatives
EvaluateAlternatives
Select Alternative
Implementdecision
Evaluate
Steps in the Rational Decision-Making Process
Step Detail Example
1. Recognizing and defining the decision situation
Some stimulus indicates that a decision must be made. The stimulus may be positive or negative.
A plant manager sees that employee turnover has increased by 5 percent.
2. Identifying alterna-tives
Both obvious and creative alternatives are desired. In general, the more important the decision, the more alternatives should be considered.
The plant manager can increase wages, increase benefits, or change hiring standards.
3. Evaluating alterna-tives
Each alternative is evalu-ated to determine its feasibility, its satisfactoriness, and its consequences.
Increasing benefits may not be feasible. Increasing wages and changing hiring standards may satisfy all conditions.
Steps in the Rational Decision-Making Process
Step Detail Example
4. Selecting the best alternative
Consider all situational factors, and choose the alternative that best fits the manager’s situation.
Changing hiring standards will take an extended period of time to cut turnover, so increase wages.
5. Implementing the chosen alternative
The chosen alternative is implemented into the organizational system.
The plant manager may need permission from corporate headquarters. The human resource department establishes a new wage structure.
6. Following up and evaluating the results
At some time in the future, the manager should ascertain the extent to which the alternative chosen in step 4 and implemented in step 5 has worked.
The plant manager notes that, six months later, turnover has dropped to its previous level.
Evaluating Alternatives in theDecision-Making Process
Is the alternative
feasible?
Eliminate from
consideration
Is the alternative
satisfactory?
Are the alternative’s
consequences
affordable?
Retain for further
considerationYes Yes Yes
Eliminate from
consideration
Eliminate from
consideration
No No No
Figure 4.3
Rational Decision-making Process Steps
The Classical Model
1
2
3
4
5
6
A Circular Process
Types of Decisions
Programmed Decisions A structured decision or one that occurs
frequently Have well established and understood
solutions Nonprogrammed Decisions
An unstructured decision, which occurs less frequently than a programmed decision
Involves complex, important, and nonroutine problems or opportunities
Decision-Making Conditions
Level of ambiguity and chances of making a bad decision
Lower HigherModerate
Certainty UncertaintyRisk
The decisionmaker facesconditions of...
Distinguishing Between Decision Making Conditions
Source: Barney, Jay B. and Ricky W. Griffin. The Management of Organizations. Copyright © 1992 by Houghton Mifflin Company. Used with permissions.
There are different kinds of conditions in which to make a decision.
Decision-Making Conditions Decision Making Under Certainty Decision Making Under Risk Decision Making Under Uncertainty
Rational Perspectives onDecision Making
The Classical Model of Decision Making
The Classical Model of Decision Making
When faced with a
decision situation,
managers should. . .
. . . and end up with
a decision that best
serves the interests
of the organization.
• obtain complete
and perfect information
• eliminate uncertainty
• evaluate everything
rationally and logically
Behavioral Aspects of Decision Making
The Administrative Model of Decision Making
The Administrative Model of Decision Making
When faced with a
decision situation
managers actually…
. . . and end up with a
decision that may or may
not serve the interests
of the organization.
• use incomplete and
imperfect information
• are constrained by
bounded rationality
• tend to satisfice
Bounded rationality Satisficing Coalition Intuition Escalation of Commitment Risk Propensity
The Administrative Model
Important Behavioral Concepts
Ethics and Decision Making Components of managerial ethics:
Relationships of the firm to employees
Employees to the firm The firm to other economic agents
Group and Team Decision Making in Organizations The most common method of
group and team decision making are: Interacting groups Delphi groups Nominal groups.
Group Decision Making
Advantages More information & knowledge are available
More alternatives are likely to be generated
More acceptance of the final decision is likely
Enhanced communication of the decision may result
Better decisions
DisadvantagesThe process takes longer, so it is more costly
Compromise decisions due to indecisiveness may emerge
One person may dominate the group
Groupthink may occur
Groupthink
Source: Gregory Moorhead, Group & Organizations Studies (Vol. 7, No. 4), pp. 429-444. Copyright © 1982 by Sage Publications, Inc. Reprinted by permission of Sage Publications, Inc.
A situation that occurs when a group or team’s desire for consensus and cohesiveness overwhelms its desire to reach the best possible decision.
Managing Group and Team Decision-Making Processes
Be aware of the pros and cons of having a group or team make a decision.
Set deadlines for when decisions must be made.
Avoid problems with dominance by managing group membership.
Hold a follow-up meeting to recheck the decision.
Have each group member individually and critically evaluate all alternatives.
As a manager, do not make your position known too early.
Appoint a group member to be a “devil’s advocate.”
Promoting the Effectiveness of Group and Team Decision Making: