Chapter 1Chapter 1

•ManagementManagement

Why Do We Have Organizations?

Why Do We Have Organizations?

To Accomplish Something = Goal

It Takes More Than 1 PersonCEOCEO

FunctionalChemicalsFunctionalChemicals

Master-batchesMaster-batches

FineChemicals

FineChemicals

EuropeEurope

Asia/PacificAsia/

Pacific

SoapsSoaps

ProcessChemicals

ProcessChemicals

ElectricMaterialsElectric

Materials

SpecialtySpecialty

1.

2.

What Is An Organization?What Is An Organization?

An organization is a group of individuals who work together toward common goals.

An organization is a group of individuals who work together toward common goals.

The process of administering and coordinating resources effectively

and efficiently in an effort to achieve the goals of the

organization.

MANAGEMENTMANAGEMENT

MANAGEMENTMANAGEMENT

EFFECTIVENESSLong term measure of how well an organization achieves its objectives

EFFICIENCYShort term measure of how well an organization uses it resourcesGOALA desired future states that contributes to the fulfillment of the organization's mission

MISSION = Reason for existenceMISSION = Reason for existence

EFFECTIVENESSLong term measure of how well an organization achieves its objectives

EFFICIENCYShort term measure of how well an organization uses it resourcesGOALA desired future states that contributes to the fulfillment of the organization's mission

Effectiveness & EfficiencyEffectiveness & Efficiency

Effectiveness is achieved when the organization pursues appropriate goals. This means “doing the right thing.”

Efficiency is achieved by using fewer inputs (e.g., people, money) to generate a given output. This means “doing things right.”

PlanningPlanningPlanningPlanning

ControllingControllingControllingControlling

OrganizingOrganizingOrganizingOrganizing

LeadingLeadingLeadingLeading

OrganizationalOrganizationalgoalsgoals

The Four Functions of Management

The Four Functions of Management

Assessing the management environment to set future objectives and map out activities necessary to achieve those objectives.

determines how the firm’s human, financial, physical, informational, and technical resources are arranged and coordinated to perform tasks to achieve desired goals.

Who?What?

When?

How?

Are we doing

what we said we

would?

measures performance, compares it to objectives,

implements necessary changes, and monitors progress.

Where do we want to

go?

How are we going to

get there?

energizes people to contribute their best individually and in cooperation with other people.

Top-levelTop-level

ManagersManagers

Top-levelTop-level

ManagersManagers

Middle ManagersMiddle ManagersMiddle ManagersMiddle Managers

First-line ManagersFirst-line ManagersFirst-line ManagersFirst-line Managers

Operational EmployeesOperational EmployeesOperational EmployeesOperational Employees

Levels of ManagementLevels of Management

Operational

Tactical

Strategic

Harcourt Brace & Company.

Management Levels in the Organizational Hierarchy

Management Levels in the Organizational Hierarchy

CEO

VP Admin

Corp Head

Business Unit Head

Gen. Mgr. Administrator

Dept. Manager

Product Line Mgr Info Srvcs Mgr

Functional Head

Production Supervisor MIS Supervisor

Nonmanagerial EmployeesLine Jobs Staff Jobs

Top Managers

Middle Managers

First-Line Managers

Management as a set of skills: (continued)Management as a set of skills: (continued)

• Four major categories of skills will help you become a good manager:

– Strategizing Skills

– Task-Related Skills

– People-Related Skills

– Self-Awareness Skills

Skills for Managerial SuccessSkills for Managerial SuccessStrategic Skills

• Environmental assessment scanning

• Strategy formulation• Mapping strategic

intent and defining mission

• Strategy implementation

• Human resource congruency

Task Skills• 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

Skills for Managerial Success (continued)

Skills for Managerial Success (continued)

People Skills• Delegating• Influencing• Motivating• Handling conflict• Win-win negotiating• Networking• Communicating

– Verbal --Nonverbal• Listening• Cross-cultural

management• Heterogeneous

teamwork

Self-Awareness Skills• Personal adaptability• Understanding personal

biases• Internal locus of control

Evolution of Management

Thought

Evolution of Management

Thought

The Evolution of Management Thought

The Evolution of Management Thought

Early Early Management Management

ThoughtThought

Contemporary Contemporary Management Management PerspectivesPerspectives

Behavioral Behavioral PerspectivePerspective

Classical Classical PerspectivePerspective

Classical PerspectiveClassical Perspective

The oldest formal viewpoints of management, it includes the following approaches:

Scientific Management

Focuses on the productivity of the individual

worker

Administrative Management

Focuses on the functions of management

Bureaucratic Management

Focuses on the overall

organizational system

Frederick W. Taylor Henri Fayol Max Weber

Scientific ManagementScientific Management

• Frederick W. Taylor (1865-1915)– Father of “Scientific Management.– Taylor was convinced that there was “one best

way” to perform every task.– Taylor attempted to define “the one best way”

to perform every task through systematic study and other scientific methods.

Taylor’s Four Principles of Scientific Management

Taylor’s Four Principles of Scientific Management

1. Scientifically study each part of a task and develop the best method of performing the task.

2. Carefully select workers and train them to perform the task by using the scientifically developed method.

3. Cooperate fully with workers to ensure that they use the proper method.

4. 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.

Scientific ManagementScientific Management

• Frank Gilbreth– Specialized in time and motion studies to

determine the most efficient way to perform tasks.

– Used the new medium of motion pictures to examine the work of bricklayers.

– Identified 17 work elements (such as lifting and grasping) and called them therbligs.

Scientific ManagementScientific Management

• Lillian Gilbreth– Was a strong proponent of better working

conditions as a means of improving efficiency and productivity.

– Wrote an entertaining book about raising her family entitled “Cheaper by the Dozen.”

Administrative ManagementAdministrative Management

• Focuses on the managers and the functions they perform– This approach to management is most closely

identified with Henri Fayol (1841-1925).– Fayol was the first to recognize that successful

managers had to understand the basic managerial functions.

Administrative ManagementAdministrative Management

• Henri Fayol– Developed a set of 14 general principles of

management. – His managerial functions of planning, leading,

organizing, and controlling are routinely used in modern organizations.

Bureaucratic ManagementBureaucratic Management

• Focuses on the overall organizational system and is based upon firm rules, policies, and procedures; a fixed hierarchy; and a clear division of labor– Max Weber (1864-1920), a German sociologist

and historian, is most closely associated with bureaucratic management.

Bureaucratic ManagementBureaucratic Management

• Max Weber– Envisioned a system of management that would

be based upon impersonal and rational behavior.

– Conceptualized the approach to management referred to as bureaucracy.

• Division of labor

• Hierarchy of authority

• Rules and procedures

• Impersonality

• Employee selection and promotion

Behavioral PerspectiveBehavioral Perspective

• Behavioral Perspective– Followed the classical perspective– Acknowledged the importance of human

behavior in shaping management style– Associated with the following scholars:

• Mary Parker Follett

• Elton Mayo

• Douglas McGregor

• Chester Barnard

Behavioral PerspectiveBehavioral Perspective

• Mary Parker Follett– Concluded that a key to effective management

was coordination.– Felt that managers needed to coordinate and

harmonize group effort rather than force and coerce people.

– Believed that management is a continuous, dynamic process.

– Felt that the best decisions would be made by people who were closest to the situation.

Behavioral PerspectiveBehavioral Perspective

• Elton Mayo– Conducted the famous Hawthorne Experiments.– Concluded that productivity increased because

someone was “paying attention” to the workers.– Mayo’s work represents the transition from

scientific management to the early human relations movement.

Behavioral PerspectiveBehavioral Perspective

• Douglas McGregor– Proposed the Theory X and Theory Y styles of

management.– Theory X managers perceive that their

subordinates have an inherent dislike of work and will avoid it if at all possible.

– Theory Y managers perceive that their subordinates enjoy work and that they will gain satisfaction from performing their jobs.

Contemporary Management PerspectivesContemporary Management Perspectives

• Systems Theory

• Contingency Theory

• Total Quality Management

• The Learning Organization

Systems TheorySystems Theory

• Views the organization as a system of interrelated parts that function in a holistic way to achieve a common purpose.

• Systems theory concepts that affect management thinking:– Open and closed systems– Subsystems– Synergy– Equifinality

The Basic Elements of a System

The Basic Elements of a System

InputsInputs TransformationProcess

TransformationProcess

FeedbackFeedback

OutputsOutputs

Environment

SIMPLE SYSTEMSIMPLE SYSTEM

Battery

wires (communication

network)

ClosedSystem

OpenSystem

BASIC COMPONENTS OF ANY SYSTEM

System has an objective which can be accomplished by interaction of the system

sub-units

An energy source to “drive” system

An energy conversion process to “produce” the objective Transformation

ProcessA communication network between system

units

Contingency PerspectiveContingency Perspective

• A view that proposes that there is no one best approach to management for all situations.

• Asserts that managers are responsible for determining which managerial approach is likely to be most effective in a given situation.

• This requires managers to identify the key contingencies in a given situation.

The Contemporary ManagerSlide 1 of 2

The Contemporary ManagerSlide 1 of 2

• The New Manager Profile– Managers will no longer think of themselves as

“the boss,” but will view themselves as sponsors, team leaders, or internal consultants.

ORGANIZATION The Pyramid The Web or Network

FOCUS Internal External

STYLE Structured Flexible

SOURCE OF STRENGHT Stability Change

STRUCTURE Self-sufficiency Interdependencies

RESOUCES Atoms-physical assetsBits-information

OPERATIONS Vertical integration Virtual integration

PRODUCTS Mass production Mass customization

REACH Domestic Global

DATA: BUSINESS WEEK

CHARACTERISTIC 20TH CENTURY 21ST CENTURY

What a Difference a Century Can Make

Contrasting views of the corporation:

What a Difference a Century Can Make

Contrasting views of the corporation:

What a Difference a Century Can Make

Contrasting views of the corporation:

What a Difference a Century Can Make

Contrasting views of the corporation:

FININCIALS Quarterly Real time

INVENTORIES Months Hours

STRATEGY Top-down Bottom-up

LEADERSHIP Dogmatic Inspirational

WORKERS Employees Employees/free agents

JOB EXPECTIONS Security Personal growth

MOTIVATION To compete To build

IMPROVEMENTS Incremental Revolutionary

QYALITY Affordable best No compromise

DATA: BUSINESS WEEK

CHARACTERISTIC 20TH CENTURY 21ST CENTURY

The Contemporary ManagerThe Contemporary Manager

• Competencies of Tomorrow’s Managers– The great communicator– The team player– The technology master– The problem solver– The foreign ambassador– The change maker– The 21st-century leader

That’s it for todayThat’s it for todayThat’s it for todayThat’s it for today

Chapter 3Chapter 3

Social Responsibility and Ethics

Social Responsibility and Ethics

Ethics and Ethics and social social responsibiresponsibility are lity are concerns concerns of all of all members members of an of an oranizatiooranizationn

EthicsEthics

• Ethics– principles that explain what is right or

wrong, good or bad, and what is appropriate or inappropriate in various settings

• Ethical Behavior– Behavior that is morally accepted as good or

right as opposed to bad or wrong.

Right & Wrong

Governs behavior

Three Domains of Human Action

Domain of Codified Law

(Legal Standard)

Domain ofEthics

(Social Standard))

Domain ofFree Choice

(Personal Standard)

Amount of

Explicit ControlHigh Low

Ethics

• Lies between the domains of codified law and free choice

• No specific laws

• Based on shared principles and values

• Obedience is to unenforceable norms and standards

• Disagreements and dilemmas about proper behavior often occur.

Business EthicsBusiness Ethics

The application of the general ethical rules to business behavior.

Provide standards or guidelines for the conduct and decision making of employees and managers

Codes of Conduct

Codes of Ethics

Ethics?Ethics?

• People operate under different ethical value systems depending on their:

–Personal experiences–Religious background–Education–Family background

Approaches for Ethical Dilemmas

Approaches for Ethical Dilemmas

• Utilitarianism– A means of making decisions based on

what is good for the greatest number of people.

• Individualism– The degree to which a society values

individual self-interest over group needs and goals.

– Individual self-interest should be promoted as long as it does not harm others.

Approaches for Ethical Dilemmas

Approaches for Ethical Dilemmas

• Rights approach– A means of making decisions based on the

belief that each person has fundamental human rights that should be respected and protected.

• Justice approach– An approach to decision making

based on treating all people fairly and consistently when making business decisions.

Ethical ResponsibilitiesDo What is Right

• Not necessarily codified into law• May not serve the firm's direct economic

interests• To be ethical organization decision makers

should:Act with equity, fairness, and impartialityRespect the rights of individualsTreat individuals differently only when

relevant to the organization's goals.

StakeholdersStakeholders

Stakeholders are all those who are affected by or can affect the activities of the firm.

The Stakeholder View of the Firm

The Stakeholder View of the Firm

Primary Stakeholders

Suppliers

Employees Customers

Owners

Secondary Stakeholders

Environmental Group

Consumer Group

Media ACLU

Local Community

Group

Other Special Interest Groups

Organization

The Premises of the Social Responsibility Debate

The Premises of the Social Responsibility Debate

• Social contract– An implied set of rights and obligations that are

inherent in social policy and assumed by business.

• Moral agent– The obligation of a business to act honorably

and to reflect and enforce values that are consistent with those of society.

Three Perspectives of Social Responsibility

Three Perspectives of Social Responsibility

• Economic Perspective– The responsibility of business is to make a

profit within the “rules of the game.”– Organizations cannot be moral agents. Only

individuals can serve as moral agents.

• Public Responsibility– Businesses should act in a way that is consistent

with society’s view of responsible behavior, as well as with established laws and policies.

Three Perspectives of Social Responsibility

Three Perspectives of Social Responsibility

• Social Responsiveness– Business should proactively seek to contribute

to society in a positive way.– Organizations should develop an internal

environment that encourages and supports ethical behavior at an individual level.

Ways In Which Organizations Foster Business Ethics

Ways In Which Organizations Foster Business Ethics

• Whistleblowing– A whistleblower is someone who exposes

organizational misconduct or wrongdoing to the public.

TaskTaskTaskTask

Managing Organizational Culture and

Change

Chapter 4Chapter 4

Organizational Culture

Organizational Culture

A system of shared values, assumptions, beliefs, and norms that

unite the members of an organization.

Parts Unwritten

•“the way things are done around here.”affects how employees

feel and act and the type of employee hired

specific to each firm

Organizational Culture and its Effects

Organizational Culture and its Effects

Effects everything

Huge

Functions performed by organizational culture:

Functions performed by organizational culture:

• Employee Self-Management– Sense of shared identity– Generation of commitment

• Stability– Sense of continuity– Satisfies need for predictability, security, and

comfort

Functions performed by organizational culture: (continued)

Functions performed by organizational culture: (continued)

• Socialization– Internalizing or taking organizational values as

one’s own

• Implementation Support of the Organization’s Strategy– If strategy and culture reinforce each other,

employees find it natural to be committed to the strategy

Core Core ValuesValues

Espoused Espoused ValuesValues

Visible Visible CultureCulture

Levels of Corporate Levels of Corporate CultureCulture

See, hear, feelOffice layout

Symbols dress

Not readily observed

Perceived by how managers explain actions

What they say

Widely shared

Operate unconsciouslyBasic assumptions:

purpose of lifehuman nature

Creating and Sustaining Organizational Culture

Creating and Sustaining Organizational Culture

Cultural Symbols

Rituals and Ceremonies

Company Heroes

Stories

LanguageLeadershipPolicies and

Decisions

Characteristics of Culture at Walt

Disney

Characteristics of Culture at Walt

Disney

Disney culture

Shared Things

Shared Behavior

Shared Sayings

Shared Feelings

Disney uniformsDisney uniforms Good MickeyGood Mickey

SmilingSmiling PridePride

Baseball Team Culture

• High-risk decision making & fast feedback

• Talent, innovation, performance valued and rewarded

• Movie production, advertising, and software development.

Club Culture• Loyalty, commitment, and fitting in• Values age & experience. Rewards

seniority• Members start young and stay• Promote from within, progress slowly• Individuals tend to be generalists and

may have vast experience• Commercial banks and the military.

Academy Culture• Specific track & gain high

expertise• Employees rarely cross

divisions• Hires young recruits• Long, slow, steady climb in

organization• Universities and large

corporations.

Fortress Culture

• In an environmental survival situation

• Textile firms and savings and loans• Offers little job security or

opportunity for professional growth as companies restructure and downsize to fit the new environment.