PRINCIPLES OF MANAGEMENT

ADVANCED CERTIFICATE IN MANAGEMENT STUDIES

INTRODUCTION

• Andrew Tucker

• B Com LLB

• 20 years experience in the workplace• Managed law firm

• Managed start-up

• Managed corporate division - +/- 800 staff

STUDY GUIDE

• Introduction to management

• Evolution of management theory

• Management environment

• Management process

• Contemporary management issues

INTRODUCTION TO MANAGEMENT

THE NATURE OF MANAGEMENT

• The fundamental functions of a manager link up in a specific sequence to form a process, which comprises, planning, organising, leading and controlling.• (Smit et al, 2011:6)

FOCUS AREA

• See definitions on page 15• Levels of management on page 16

LEVELS OF MANAGEMENT

THE “NEW” ORGANISATION VS THE “OLD”

KEY MANAGEMENT CHALLENGES• Globalisation• Technological advancement• Transformation of the workplace• Managing diversity• Increased power and demands of customers• Intellectual capital and learning• Roles and expectations of workers• HIV/Aids

EVOLUTION OF MANAGEMENT THEORY

FROM ANCIENT EGYPT TO 2015 …………………• Why study management theory?• To develop a holistic understanding of the discipline

and professional competence• What is theory?• See page 45

• Factors influencing the development of management theory

FROM JUST NOW TO NOW

• The Classical Management School• Scientific Management• Administrative Management

• The Human Relations School• The Quantitative Management Approach• Contemporary management• Systems Theory• Contingency Theory• Total Quality Management• Learning Organisation• Re-Engineering

TIMELINE

THE CLASSICAL MANAGEMENT SCHOOLScientific Management

• Focus: To increase productivity of the worker

• Proponents: Fredrick Taylor – increase specialisation & division of labour, four principles to increase efficiency Frank & Lillian Gilbreth – focus on simplification by analysis, identification of better methods & re-organise individual actionsHenry Gantt – pay bonus to those who beat daily target, scheduling chart

• Downside: neglected the human side which led to worker distrust

Administrative Management• Focus: to increase productivity of the

organisation

• Proponents: Henri Fayol – process approach – identified 14 principles and the five basic functions of managementMax Weber – bureaucratic management – hierarchy governed by lines of authority

• Downside: rigid and slow to change, undermines creativity, inflexible

THE HUMAN RELATIONS APPROACH• Focus: the needs of the worker• Proponents: Elton Mayo – when workers given special attention productivity

improves, peer pressure is more powerful than management demands, managers must consider workers family situationMary Parker Follet – the worker knows the most about their job and should contribute to analysisDouglas McGregor – Theory X – managers believe workers lazy & Theory Y – managers create climate for workers to performChester Barnard – align the workers goals with the organisations goals, identified three functions of executive management

• Downside: Human nature is complex – difficult to generalise

QUANTITATIVE MANAGEMENT APPROACH

• Focus: increase productivity through use of quantitative techniques to efficiently use organisations resources

• Tools and Techniques used: Linear programming, PERT/CPM, Regression analysis

• Downside: relies on mathematical & statistical models & methods not always understood by managers or workers. Ignores the human element

CONTEMPORARY APPROACHES

Systems Theory• Previous theories have two major

shortcomings – ignores influence of the environment & focus on one area to exclusion of others

• System approach – organisation is a unified system composed of interrelated elements – synergy

Contingency Theory• Managerial action must be

appropriate to the situation• Advantage is that it is flexible &

allows for use of a combination of approaches

• Disadvantage is that it requires managers to be skilled in application of all the different approaches

CONTEMPORARY APPROACHESChaos Theory

• The organisation is dynamic – events can rarely be controlled

• “orderly disorder” (Tetenbaum, 1998)

• Characterised by knowledge sharing, teamwork, innovation & creativity, diversity, strong core values

• Managements role to destabilise the system, build resilience to change, manage transition

Other Theories• Total Quality management (TQM)

• Prevent mistakes

• Six Sigma

• Reduce waste, produce better, faster & cheaper

• Learning Organisation

• Promote dialogue, lifelong learning, sharing

• Re-engineering

• Redesign process to increase customer value & cut cost

THE MANAGEMENT ENVIRONMENT

THE MANAGEMENT ENVIRONMENT

• Micro environment• Organisation itself over which management has control

• Market / Task environment• Industry environment

• Macro environment• Outside of the market environment

PORTERS FIVE

FORCES

THE MANAGEMENT PROCESS

THE FOUR FUNCTIONS

• Planning• Leading• Organising• Controlling

THE AREAS OF MANAGEMENT

• Financial

• Marketing

• Human resources

• Operations

• Purchasing

MANAGEMENT AND LEADERSHIP

CONTEMPORARY MANAGEMENT ISSUES

CONTEMPORARY ISSUES

• Decision making• Motivation• Communication• Groups and Teams

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