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Chapter

Management and Its Evolution

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 Learning Objectives
After reading this chapter, you should be able to:

 Understand the roles played by individuals, teams,

and managers in carrying out company activities.
 Practice the four major functions of management
 Recognize the interpersonal, informational, and
decisional roles played by top level managers.
 Apply the general skills needed to carry out
managerial responsibilities.
 Integrate the major elements from the various
perspectives of management theory.

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 The performance of organizations depends to
a large extent on how their resources are
allocated and their ability to adapt to changing
conditions.
Successful organizations know how to
manage people and resources efficiently to
accomplish organizational goals and to keep
those goals in tune with changes in the
external environment.

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 Management in the New Millennium

A firm can be efficient by making the

best use of people, money, physical
plant, and technology.

 Itis ineffective if its goals do not provide

a sustained competitive advantage.

A firm with excellent goals would fail if

it hired the wrong people, lost key
contributors, relied on outdated
technology, and made poor investment
decisions.

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 Levels of management
Strategic Managers

Tactical Managers

Operational Managers

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 Strategic Managers
 The firm’s senior executives with
overall responsibility for the firm.
 Developing the company’s goals
 Focus on long-term issues
 Emphasize the growth and overall
effectiveness of the organization

 Concerned primarily with the

interaction between the
organization and its external
environment.
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 Tactical Managers
Responsible for translating the
general goals and plans
developed by strategic
managers into specific
objectives and activities.
Shortertime horizon
Coordination of resources

These are middle managers

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 Operational Managers
 Lower-level managers who supervise the
operations of the organization.

 Directly involved with non-management

employees
 Implementing the specific plans
developed with tactical managers.
 This is a critical role to the organization.
 Operational managers are the link
between management and non-
management staff

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 Management Functions

Planning Organizing

Leading Controlling

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 Planning
 The management function that
assesses the management
environment to set future objectives
and map out activities necessary to
achieve those objectives.

 To be effective, the objectives of

individuals, teams, and
management should be coordinated
to support the firm’s mission.

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

 The deployment of resources to

achieve strategic goals.

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 Leading
 The management function that
energizes people to contribute their
best individually and in cooperation
with other people.
 This involves:
 Clearly communicating organizational goals
 Inspiring and motivating employees
 Providing an example for others to follow
 Guiding others
 Creating conditions that encourage management
of diversity

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 Controlling
 The management function that
measures performance, compares it
to objectives, implements necessary
changes, and monitors progress.

 Many of these issues involve

feedback or identifying potential
problems and taking corrective
action.

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 Management as a set of roles
 Day-to-day management activities are routine,
orderly, and rational.

 These include:
Interpersonal roles - communication with superiors,
peers, subordinates, and people from outside the
organization.
Information Roles - obtaining, interpreting, and giving
out information.
Decisional Roles - choosing among competing
alternatives.

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 Management as a set of skills
 The four basic management functions require a set
of skills to be carried out properly.

 Because most managerial tasks are unique,

ambiguous, and situation-specific, there is seldom
one best way to approach them.

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 Management as a set of skills

 Four major categories of skills will help you become a good

manager:
 Strategic Skills - the ability to see “the big picture”, focus on
key objectives without getting mired in details, and having a sense
what is happening inside and outside the company.
 Task-Related Skills - the ability to define the best approach to
accomplish personal and organizational objectives. They include
consideration of all resources, including time, organizational
structure, financial resources, and people. They also involve the
ability to prioritize, remain flexible to make necessary changes,
and ensure that value is being created

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 Management as a set of skills

 People-Related Skills - getting work done through others and

with others. Include the ability to delegate tasks, share
information, resolve conflicts, be a team player, and work with
people from very different backgrounds
 Self-Awareness Skills - Being aware of your personal
characteristics can help you adapt to others and can help you
understand why you react to them the way you do. These skills
can help you to avoid rushed judgments, appreciate the nuances of
particular situations, size up opportunities, capitalize on your
personal strengths, and avoid situations in which you are likely to
fail.

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 Skills for Managerial Success
Strategic Skills
 Environmental assessment
scanning
 Strategy formulation
 Mapping strategic intent and
defining mission
 Strategy implementation
 Human resource congruency
McGraw-Hill
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
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 Skills for Managerial Success (continued)

People Skills Self-Awareness Skills

 Delegating  Personal adaptability
 Influencing  Understanding personal biases
 Motivating  Internal locus of control
 Handling conflict
 Win-win negotiating
 Networking
 Communicating
 Verbal
 Nonverbal
 Listening
 Cross-cultural management
 Heterogeneous teamwork

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 The Evolution of Management Thought

Early Management Classical Perspective

Thought

Contemporary
Management Perspectives Behavioral Perspective

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 Early Management Thought
 Early ideas about management strategy
 Sun Tzu, The Art of War

 Early ideas about leadership

 Nicolò Machiavelli, The Prince

 Early ideas about the design and organization of work

 Adam Smith, The Wealth of Nations
 division of labor

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 The Operational Perspective
 Scientific Management
 Frederick W. Taylor
 Quantitative Management
 Ford W. Harris
 Quality Management
 Walter A. Shewhart
 Bureaucratic Management
 Max Weber
 Administrative Management
 Henri Fayol

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 Taylor’s Four Principles of Scientific Management

 Scientifically study each part of a task and develop the best

method of performing the task.

 Carefully select workers and train them to perform the task

by using the scientifically developed method.

 Cooperate fully with workers to ensure that they use the

proper method.

 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.

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 Key Characteristics of Weber’s Ideal
Bureaucracy
 Specialization of labor

 Formal rules and procedures

 Impersonality

 Well-defined hierarchy

 Career advancement based on merit

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 Fayol’s 14 Principles of Management

 Division of work  Centralization

 Authority  Scalar chain
 Discipline  Order
 Unity of command  Equity
 Unity of direction  Stability and tenure
 Subordination of  Initiative
individual interest to the  Esprit de corps
general interest
 Remuneration

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 Behavioral Perspective
 The behavioral perspective acknowledges that
psychological and social processes of human behavior
can result in improvements in productivity and work
satisfaction.
 The Hawthorne effect - when a manager shows concern for
employees, their motivation and productivity levels are likely
to improve.
 Human Relations Approach - the relationship between
employees and a supervisor is a vital aspect of management.
 Employee motivation
 Leadership style

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 Hawthorne Effect

The discovery that paying special

attention to employees motivates them to
put greater effort into their jobs.
(from the Hawthorne management studies, performed from 1924 –
1932 at Western Electric Company’s plant near Chicago)

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 Maslow’s Hierarchy of
Needs

Self-Actualization

Need for Self Esteem

Need for Social Relations

Need for Security

Physical Needs

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 McGregor’s Theory X and Theory Y

 Leaders and managers who hold Theory X

assumptions believe that employees are inherently lazy
and lack ambition.
A negative perspective on human behavior.

 Leaders and managers who hold Theory Y

assumptions believe that most employees do not
dislike work and want to make useful contributions to
the organization.
A positive perspective on human behavior.

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 Contemporary Management Perspectives

 Systems Theory

 Contingency Theory

 The Learning Organization Perspective

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 Systems 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

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 Contingency Theory
 States that there is no “one best way” to manage an
organization.
 Because what works for one organization may not work for
another
 Situational characteristics (contingencies) differ
 Managers need to understand the key contingencies that
determine the most effective management practices in a given
situation

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 The Learning Organization
 The management approach based on an
organization anticipating change faster than its
counterparts to have an advantage in the market
over its competitors.

 There are two ways organizations can learn:

 Experimental learning
 External learning

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