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© 2008 Weihrich & Cannice Chapter 1. Management: Science, Theory, and Practice 1

MANAGEMENT: A GLOBAL AND ENTREPRENEURIAL PERSPECTIVE by Weihrich, Cannice, and Koontz

Management: Science, Theory, and Practice

Chapter

1

© 2008 Weihrich and Cannice 2 Chapter 1. Management: Science, Theory, and Practice

After studying this chapter, you should be able to:

1. Explain the nature and purpose of management2. Understand that management applies to all kinds of organization and to

managers at all organizational levels3. Recognize that the aim of all managers is to create a "surplus“4. Identify the trends in information technology and globalization5. Explain the concepts of productivity, effectiveness, and efficiency6. Describe the evolution of management and some recent contributions

to management thought7. Describe the various approaches to management8. Show how the management process approach draws from other

approaches9. Realize the managing requires a systems approach10. Define the managerial functions of planning, organizing, staffing,

leading, and controlling11. Understand how the book is organized


Definition of Management: Its Nature and Purpose

• Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims.


The Functions of Management

• The five managerial functions around which managerial knowledge are organized: planning, organizing, staffing, leading, controlling.


The External Environment

• The external elements that affect operations can be grouped into:

– Economic factors

– Technological factors

– Social factors

– Ecological factors

– Political/legal factors – Ethical factors


Enterprise

• A business, government agency, hospital, university, or any other type of organization.


Managerial Functions at Different Organizational Levels

• All managers carry out managerial functions, but the time spent for each function may differ.


Fig. 1-1 Time Spent in Carrying Out Managerial Functions


Managerial Skills and the Organizational Hierarchy

The four skills required of administrators:

• Technical skills

• Human skills

• Conceptual skills

• Design skills


Fig. 1-2 Skills and Management Levels


The Goals of All Managers and Organizations

• The aim of all managers should be to create a surplus. Thus, managers must establish an environment in which people can accomplish group goals with the least amount of time, money, materials, and personal dissatisfaction.


Characteristics of Excellent Companies (Peters & Waterman)

• Oriented toward action• Learned about the needs of their customers• Promoted managerial autonomy and entrepreneurship• Achieved productivity by paying close attention to the

needs of their people• Driven by a company philosophy often based on the

values of their leaders• Focused on the business they knew best• Had a simple organization structure with a lean staff• Were centralized as well as decentralized, depending on

appropriateness


The Most Admired Companies in Americalisted in Fortune’s March 6, 2006 issue were

• 1. General Electric• 2. FedEx• 3. Southwest Airlines• 4. Proctor & Gamble• 5. Starbucks• 6. Johnson & Johnson• 7. Berkshire Hathaway• 8. Dell• 9. Toyota Motor• 10. Microsoft.


Adapting to Changes in the 21st Century

• To be successful in the 21st Century, companies must take advantage of the new information technology—especially the Internet—and globalization.

• M-commerce is mobile or wireless commerce.


Entrepreneurship

• Entrepreneurship is a creative process that is centered in the notion of identifying market opportunities and unmet needs. It is building solutions that meet these needs and bring value to customers


Five Fast Growing Technology Companies in America, 2006

• 1. Celgene (Medical)

• 2. Red Hat (Software)

• 3. Apple Computer (Electronics)

• 4. SanDisk (Electronics)

• 5. ValueClick (Business Services)


Productivity

• The output-input ratio within a time period with due consideration for quality.


Definitions of Effectiveness and Efficiency

• Productivity implies effectiveness and efficiency in individual and organizational performance.

• Effectiveness is the achievement of objectives.

• Efficiency is the achievement of the ends with the least amount of resources (time, money, etc.).


Managing: Science or Art?

• Managing as practice is an art; the organized knowledge underlying the practice may be referred to as a science.


The Evolution of Management Thought & Patterns of Management Analysis

• Frederick Taylor and Scientific Management

• Fayol, the Father of Modern Operational Management Theory

• Elton Mayo and F. Roethlisberger and the Hawthorne Studies

• Recent Contributors to Management Thought, including Peter Drucker


Taylor's Principles of Scientific Management

1. Replacing rules of thumb with science (organized knowledge)

2. Obtaining harmony in group action, rather than discord

3. Achieving cooperation of human beings, rather than chaotic individualism

4. Working for maximum output, rather than restricted output

5. Developing all workers to the fullest extent possible for their own and their company's highest prosperity


Fayol, the Father of Modern Management Theory

• Authority and responsibility. Authority is a combination of official and personal factors.

• Unity of Command. Employees should receive orders from one superior only.

• Scalar Chain. A "chain of superiors" from the highest to the lowest ranks should be short‑circuited when to follow it scrupulously would be detrimental.

• Esprit de Corps. This is the principle that "in union there is strength.”


Elton Mayo and F. Roethlisberger and the Hawthorne Studies.

• In general, the improvement in productivity was due to such social factors as morale, satisfactory interrelationships between members of a work group (a "sense of belonging"), and effective management—a kind of managing that would understand human behavior, especially group behavior, and serve it through such interpersonal skills as motivating, counseling, leading, and communicating.


Recent Contributors to Management Thought

• Peter F. Drucker

• Keith Davis

• W. Edwards Deming

• Joseph M. Juran

• Laurence Peter

• William Ouchi

• Thomas Peters and Robert Waterman


The Managerial Roles Approach (Mintzberg)

• 3 interpersonal roles

• 3 informational roles

• 4 decision roles


Patterns of Management Analysis: A Management Theory Jungle?

1. The empirical, or case, approach 2. The managerial roles approach 3. The contingency, or situational, approach 4. The mathematical, or "management

science," approach 5. The decision theory approach 6. The reengineering approach 7. The systems approach


Patterns of Management Analysis — cont.

8. The sociotechnical systems approach

9. The cooperative social systems approach

10. The group behavior approach

11. The interpersonal behavior approach

12. McKinsey's 7‑S framework

13. The total quality management approach

14. The management process, or operational, approach


Fig. 1-4 The Management Process, or Operational Approach


The Management Process, or Operational, Approach

• This approach draws together the pertinent knowledge of management by relating it to the managerial job—what managers do.

• It tries to integrate the concepts, principles, and techniques that underlie the task of managing.


Fig. 1-5 A Basic Input-Output Model


The Five Managerial Functions

• Planning

• Organizing

• Staffing

• Leading

• Controlling


Definition of Planning

• Selecting missions and objectives and the actions to achieve them, which requires decision making.


Definition of Organizing

• Organizing involves establishing an intentional structure of roles for people to fill in an organization.


Definition of Staffing

• Staffing involves filling, and keeping filled, the positions in the organization structure.


Definition of Leading

• Leading is influencing people so that they will contribute to organization and group goals.


Definition of Controlling

• Controlling is measuring and correcting individual and organizational performance to ensure that events conform to plans


The Systems Model of Management and Organization of This Book

• Discussion of Figure 1-6 in the textbook Management: A Global and Entrepreneurial Perspective, by Weihrich, Cannice and Koontz


Fig. 1-6 Systems Approach to Management


KEY IDEAS AND CONCEPTS FOR REVIEW

• Management• Managerial functions• Managerial skills in the

organizational hierarchy• The goal of all managers• Characteristics of excellent and

most admired companies• Three major trends: Advances in

technology, globalization, and entrepreneurship

• Productivity, effectiveness, and efficiency

• Managing: science or art?• Major contributors to

management thought

• Contributors to scientific management

• Fayol’s operational management theory

• Mayo and Roethlisberger• Recent contributors to

management thought• Management theory jungle• Managerial roles approach• Management process, or

operational, approach• Systems approach to the

management process• Five managerial functions

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