Principles of Management

Lecture 2

Who Are Managers?

• Manager

– Someone who works with and through other people by coordinating and integrating their work activities in order to accomplish organizational goals.

Classifying Managers

• First-line Managers – Are at the lowest level of management and

manage the work of non-managerial employees.

• Middle Managers – Manage the work of first-line managers.

• Top Managers – Are responsible for making organization-wide

decisions and establishing plans and goals that affect the entire organization.

Managerial Levels

What Is Management?

• Managerial Concerns

– Efficiency

• “Doing things right” – Getting the most output for the least inputs

– Effectiveness

• “Doing the right things” – Attaining organizational goals

Effectiveness and Efficiency in Management

What Do Managers Do?

• Functional Approach – Planning

• Defining goals, establishing strategies to achieve goals, developing plans to integrate and coordinate activities.

– Organizing • Arranging work to accomplish organizational goals.

– Leading • Working with and through people to accomplish goals.

– Controlling • Monitoring, comparing, and correcting the work.

Management Functions

What Do Managers Do? (cont’d)

• Management Roles Approach

– Interpersonal roles

• Figurehead, leader, liaison

– Informational roles

• Monitor, disseminator, spokesperson

– Decisional roles

• Disturbance handler, resource allocator, negotiator

What Do Managers Do? (cont’d)

• Skills Approach

– Technical skills

• Knowledge and proficiency in a specific field

– Human skills

• The ability to work well with other people

– Conceptual skills

• The ability to think and conceptualize about abstract and complex situations concerning the organization

Skills Needed at Different Management Levels

Conceptual Skills

• Using information to solve business problems

• Identifying of opportunities for innovation

• Recognizing problem areas and implementing solutions

• Selecting critical information from masses of data

• Understanding of business uses of technology

• Understanding of organization’s business model

Communication Skills

• Ability to transform ideas into words and actions

• Credibility among colleagues, peers, and subordinates

• Listening and asking questions

• Presentation skills; spoken format

• Presentation skills; written and/or graphic formats

Effectiveness Skills

• Contributing to corporate mission/departmental objectives

• Customer focus

• Multitasking: working at multiple tasks in parallel

• Negotiating skills

• Project management

• Reviewing operations and implementing improvements

Effectiveness Skills (cont’d)

• Setting and maintaining performance standards internally and externally

• Setting priorities for attention and activity

• Time management

Interpersonal Skills

• Coaching and mentoring skills

• Diversity skills: working with diverse people and cultures

• Networking within the organization

• Networking outside the organization

• Working in teams; cooperation and commitment

How The Manager’s Job Is Changing

• The Increasing Importance of Customers – Customers: the reason that organizations exist

• Managing customer relationships is the responsibility of all managers and employees.

• Consistent high quality customer service is essential for survival.

• Innovation – Doing things differently, exploring new territory, and

taking risks • Managers should encourage employees to be aware of and

act on opportunities for innovation.

Changes Impacting

the Manager’s Job

Managers vs. Leaders

Managers

• Focus on things

• Do things right

• Plan

• Organize

• Direct

• Control

• Follows the rules

Leaders

• Focus on people

• Do the right things

• Inspire

• Influence

• Motivate

• Build

• Shape entities

Common Activities

• Planning

• Organizing

• Directing

• Controlling

Planning

Manager

• Planning

• Budgeting

• Sets targets

• Establishes detailed steps

• Allocates resources

Leader

• Devises strategy

• Sets direction

• Creates vision

Organizing

Manager

• Creates structure

• Job descriptions

• Staffing

• Hierarchy

• Delegates

• Training

Leader

• Gets people on board for strategy

• Communication

• Networks

Directing Work

Manager

• Solves problems

• Negotiates

• Brings to consensus

Leader

• Empowers people

• Cheerleader

Controlling

Manager

• Implements control systems

• Performance measures

• Identifies variances

• Fixes variances

Leader

• Motivate

• Inspire

• Gives sense of accomplishment

Planning

Budgeting

Organizing

Staffing

Guiding

Controlling

Reassuring

Monitoring

Objectives Roles & Responsibilities

Predictability

Order

Consistency

Zero Deviations

Stable Performance

Short-Term Results

The Difference: John Kotter on Managers

Seeing

Visioning

Strategizing

Risking

Enrolling

Delegating

Inspiring

Performing

Objectives Roles & Responsibilities

Vision

Strategies

Challenge

Risk

Action

Leaders

Movement

Energy

Passion

Change

The Difference: John Kotter on Leaders

What Is An Organization?

• An Organization Defined

– A deliberate arrangement of people to accomplish some specific purpose

• Common Characteristics of Organizations

– Have a distinct purpose (goal)

– Composed of people

– Have a deliberate structure

Characteristics of Organizations

The Changing Organization

Universal Need for Management

Planning

• Identifying and selecting appropriate goals and courses of action for an organization. – The planning function determines how effective

and efficient the organization is and determines the strategy of the organization.

• Three Steps in the Planning Process: – Deciding which goals to pursue.

– Deciding what courses of action to adopt.

– Deciding how to allocate resources.

Management Key Concepts

• Organization – People working together and coordinating their

actions to achieve specific goals.

• Goal/objective – A desired future condition that the organization seeks

to achieve.

• Strategy – A cluster of decisions about what goals to pursue,

what actions to take, and how to use resources to achieve goals.

Organizing

• Structuring working relationships in a way that allows organizational members to work together to achieve organizational goals.

• Organizational Structure – A formal system of task and reporting relationships

that coordinates and motivates organizational members.

– Creating organizational structure: • Grouping employees into departments according to the

tasks performed. • Laying out lines of authority and responsibility for

organizational members.

Leading

• Articulating a clear vision to follow, and energizing and enabling organizational members so they understand the part they play in attaining organizational goals.

– Leadership involves using power, influence, vision, persuasion, and communication skills.

– The outcome of leadership is highly motivated and committed organizational members.

Controlling

• Evaluating how well an organization is achieving its goals and taking action to maintain or improve performance. – Monitoring individuals, departments, and the

organization to determine if desired performance standards have been reached.

– Taking action to increase performance as required.

– The outcome of control is the ability to measure performance accurately and to regulate the organization for efficiency and effectiveness.

Relative Amount of Time That Managers Spend on the Four Managerial Functions

Figure 1.4

Being a Manager

Brevity

High Variety Fragmentation

Managerial Problems

Compensation to be a manager

Managerial Skills

• Conceptual Skills – The ability to analyze and diagnose a situation and

distinguish between cause and effect.

• Human Skills – The ability to understand, alter, lead, and control

the behavior of other individuals and groups.

• Technical Skills – The specific knowledge and techniques required

to perform an organizational role.

What should be the right thing?

How can we do better?

Skill Types Needed by Managerial Level

Challenges for Management in a Global Environment

• Increasing Number of Global Organizations.

• Building a Competitive Advantage.

• Maintaining Ethical Standards.

• Managing a Diverse Workforce.

• Utilizing IT and E-commerce.

Building a Competitive Advantage

• Increasing Efficiency – Reducing the quantity of resources used to produce

goods and services.

• Increasing Quality – Introducing Total Quality Management (TQM) to

improve quality.

• Increasing Speed, Flexibility, and Innovation – Adapting to bring new products to market faster.

• Increasing Responsiveness to Customers – Empowering employees to deal with customers.

Building Blocks of Competitive Advantage

Figure 1.5

Maintaining Ethical Standards • Factors Influencing Behaviors:

– External pressures from stockholders/stakeholders for increased organizational financial performance.

– Internal pressures from top management to lower-level managers to increase the organization’s competitive performance and profitability.

– Societal, cultural, and environment demands on the organization.

Hurt somebody unintendedly vs. illegally

MANAGEMENT FUNCTIONS

PLANNING

ORGANIZING

STAFFING LEADING

CONTROLLING

MANAGEMENT FUNCTIONS

• Planning • Predetermining a course of action

• Organizing

• Arranging the relationships among work units

• Staffing

• Selecting and training people for positions

• Leading

• Create an atmosphere that will motivate people

• Controlling

• Measuring/evaluating performance toward planned objectives

Universality of Management

• The concept and activities of MANAGEMENT applies to

– all levels of management,

– as well as to all type of organizations.

• It is needed wherever

– People work together

– Strive to achieve a goal

Universality of Management

Types of Organizations

• For-Profit-Organizations

• Not-For-Profit-Organizations

• Governmental Organizations

– Non-Governmental Organizations

PROFIT=REVENUE-COST

Time spent in carrying out managerial functions

Why do we need Organizations/Management?

• PRODUCTIVITY

▫ Output/Input

• EFFICIENCY

▫ To get the most output from the least amount of input

▫ Scarce resources -> efficient use -> eliminate waste

▫ DOING THINGS RIGHT

• EFFECTIVENESS

▫ To get/reach aimed goals

▫ DOING RIGHT THINGS

EFFICIENCY VS. EFFECTIVENESS

Managerial Skills

• Technical Skills Knowledge and proficiency in a specific field

• Human Skills

The ability to work well with other people

• Conceptual & Design Skills

The ability to think and conceptualize about abstract and complex situations concerning the organization

Skills versus Management Levels

Managerial Roles

– Roles are specific actions or behaviors expected of a manager.

– Mintzberg identified 10 roles grouped around interpersonal relationships, the transfer of information, and decision making.

Managerial Roles

• Interpersonal Roles • Figurehead

The manager performs ceremonial and symbolic duties as the head of the organization, greetings visitors or signing papers.

• Leader

fosters a proper work atmosphere, directs and motivates subordinates, train, advice, influence.

• Liaison

develops and maintains a network of external contacts to gather information, such as business correspondences, participation in meetings with representatives of other divisions or organizations.

Managerial Roles

• Informational Roles • Monitor

gathers internal and external information relevant to the organization; scan periodicals, news, reports, attend seminars.

• Disseminator

communicates factual and value based information to subordinates; sends memos and reports, inform staff

• Spokesperson

represents the unit to outsiders, communicates to the outside world on performance and policies, transmit information to outsiders through speeches, reports, memos, participates in conferences/meetings and report progress

Managerial Roles

• Decisional Roles • Entrepreneur

designs and initiates change in the organization, identify areas of business development.

• Disturbance handler

deals with unexpected events and operational breakdowns, takes corrective action, resolves conflicts among subordinates

• Resource allocator

controls and authorizes the use of organizational resources, decides who gets resources, scheduling, budgeting, setting priorities

• Negotiator

participates in negotiation activities with other organizations and individuals, represents the unit during negotiation of union contracts, sales, purchases, budgets

Management Levels in the Organizational Hierarchy

What is it Like to Be a Manager?

The manager’s job is diverse

Managerial tasks can be characterized into characteristics and roles

Most managers enjoy activities such as leading others, networking and leading innovation

Managers dislike controlling subordinates, handling paperwork and managing time pressure

Individual Performer to Manager

Management and the New Workplace

The Transition to a New Workplace

Today’s best managers give up their command-and-control mind-set to focus on coaching and providing guidance, creating organizations that are fast, flexible, innovative, and relationship-

oriented.

Management: Science or Art?

• The Science of Management – Assumes that problems can be approached using

rational, logical, objective, and systematic ways. – Requires technical, diagnostic, and decision-making

skills and techniques to solve problems.

• The Art of Management – Decisions are made and problems solved using a

blend of intuition, experience, instinct, and personal insights.

– Requires conceptual, communication, interpersonal, and time-management skills to accomplish the tasks associated with managerial activities.

Interpersonal

roles

Source: Adapted from Henry Mintzberg, “Managerial Work: Analysis from Observation,” Management Science, 18 (October 1971): B97-B110.

Mintzberg’s Managerial Roles (a)

Source: Adapted from Henry Mintzberg, “Managerial Work: Analysis from Observation,” Management Science, 18 (October 1971): B97-B110.

Mintzberg’s Managerial Roles (b)

Source: Adapted from Henry Mintzberg, “Managerial Work: Analysis from Observation,” Management Science, 18 (October 1971): B97-B110.

Mintzberg’s Managerial Roles (c)

What is Management ???

• Is the process of using what you have

{ RESOURCES }, to do what you want to do …. {GOALS}

Resources {Assets}

7 categories of resources:

People

Money

Time

Work Procedures

Energy

Materials

Equipment

The Open-Systems View

• Open System – A system that takes resources for its external

environment and converts them into goods and services that are then sent back to that environment for purchase by customers.

– Inputs: the acquisition of external resources.

– Conversion: the processing of inputs into goods and services.

– Output: the release of finished goods into the environment.

2–70

The Organization as an Open System

Other System Considerations

• Closed system

– A system that is self-contained and thus not affected by changes occurring in its external environment.

– Often undergoes entropy and loses its ability to control itself, and fails.

• Synergy

– Performance that results when individuals and departments coordinate their actions

• Performance gains of the whole surpass the sum of the performance of the individual components.