Management of Modern Organizations Uncovered Principles and Theories

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Management of Modern Organizations Uncovered Principles and Theories of Management Eng. R. L. Nkumbwa

Management of Modern Organizations Uncovered Principles and Theories of Management Eng. R. L. Nkumbwa Copperbelt University

Management n Management is a set of activities directed at an organization’s resources with

Management n Management is a set of activities directed at an organization’s resources with the aim of achieving organizational goals in an efficient and effective manner

Management n Activities include the four functions of management Planning (and decision making) n

Management n Activities include the four functions of management Planning (and decision making) n Organizing n Leading n Controlling n

Management n Resources include: Human n Financial n Physical n Information n

Management n Resources include: Human n Financial n Physical n Information n

Management in Organizations Planning and decision making Organizing Inputs from the environment • Human

Management in Organizations Planning and decision making Organizing Inputs from the environment • Human resources • Financial resources • Physical resources • Information resources Goals attained • Efficiently • Effectively Controlling Leading

Important Definitions n n Top Managers Middle Managers First-line Managers Operative Employees

Important Definitions n n Top Managers Middle Managers First-line Managers Operative Employees

The Management Process Planning and Decision Making Setting the organization’s goals and deciding how

The Management Process Planning and Decision Making Setting the organization’s goals and deciding how best to achieve them Controlling Monitoring and correcting ongoing activities to facilitate goal attainment Organizing Determining how best to group activities and resources Leading Motivating members of the organization to work in the best interests of the organization Figure 1. 2

The Basic Functions of Management A Circular Process Planning and Decision Making Organizing Controlling

The Basic Functions of Management A Circular Process Planning and Decision Making Organizing Controlling Leading

Skills and the Manager

Skills and the Manager

Fundamental Management Skills n Management Skill Mixes at Different Organizational Levels

Fundamental Management Skills n Management Skill Mixes at Different Organizational Levels

Classical Management Perspective n Scientific Management n n n Frederick Taylor The Gilbreths Henry

Classical Management Perspective n Scientific Management n n n Frederick Taylor The Gilbreths Henry Gantt

Steps in Scientific Management 1 Develop a science for each element of the job

Steps in Scientific Management 1 Develop a science for each element of the job to replace old rule-of-thumb methods 2 Scientifically select employees and then train them to do the job as described in step 1 3 Supervise employees to make sure they follow the prescribed methods for performing their jobs 4 Continue to plan the work, but use workers to get the work done Figure 1. 3

The Classical Management Perspective n Administrative Management – focuses on managing the total organization

The Classical Management Perspective n Administrative Management – focuses on managing the total organization n Henry Fayol Lyndal Urwick Max Weber

Weber’s Theory of Bureaucracy n Division of labor n Reliance on rules and regulations

Weber’s Theory of Bureaucracy n Division of labor n Reliance on rules and regulations n Hierarchy of authority n Employment based on expertise n Inflexible n Rigid n Impersonal

The Behavioral Management Perspective n n Placed much more emphasis on individual attitudes and

The Behavioral Management Perspective n n Placed much more emphasis on individual attitudes and behaviors and on group processes in organizations. Recognized the importance of behavioral processes in organizations n n n Hugo Munsterberg Mary Parker Follet Elton Mayo

Behavioral Management Perspective n Elton Mayo – Hawthorne Studies n Illumination study n Group

Behavioral Management Perspective n Elton Mayo – Hawthorne Studies n Illumination study n Group study

Human Relations Movement n n n Grew out of the Hawthorne studies. Proposed that

Human Relations Movement n n n Grew out of the Hawthorne studies. Proposed that workers respond primarily to the social context of work, including social conditioning, group norms, and interpersonal dynamics. Assumed that the manager’s concern for workers would lead to increased worker satisfaction and improved worker performance.

Behavioral Management Perspective n Abraham Maslow n n Advanced a theory that employees are

Behavioral Management Perspective n Abraham Maslow n n Advanced a theory that employees are motivated by a hierarchy of needs that they seek to satisfy. Douglas Mc. Gregor n Proposed Theory X and Theory Y concepts of managerial beliefs about people and work.

Maslow’s Hierarchy of Needs n n Five levels n Physiological – hunger, thirst, shelter,

Maslow’s Hierarchy of Needs n n Five levels n Physiological – hunger, thirst, shelter, sex n Safety – security and protection n Social – affection, interpersonal relationships n Esteem – self-respect, achievement status n Self-actualization – achieving full potential Usually thought in the form of a pyramid

Maslow’s Hierarchy of Needs SA Esteem Needs Social Needs Security Needs Physiological Needs

Maslow’s Hierarchy of Needs SA Esteem Needs Social Needs Security Needs Physiological Needs

Theory X and Theory Y n Theory X Assumptions n n n People do

Theory X and Theory Y n Theory X Assumptions n n n People do not like work and try to avoid it. Managers have to control, direct, coerce, and threaten employees to get them to work toward organizational goals. People prefer to be directed, to avoid responsibility, and to want security; they have little ambition. Source: Douglas Mc. Gregor, The Human Side of Enterprise, Copyright © 1960 by Mc. Graw-Hill. Reprinted by permission of The Mc. Graw-Hill Companies.

Theory X and Theory Y n Theory Y Assumptions n n n People do

Theory X and Theory Y n Theory Y Assumptions n n n People do not dislike work; work is a natural part of their lives. People are internally motivated to reach objectives to which they are committed. People are committed to goals to the degree that they receive rewards when they reach their objectives. Source: Douglas Mc. Gregor, The Human Side of Enterprise, Copyright © 1960 by Mc. Graw-Hill. Reprinted by permission of The Mc. Graw-Hill Companies.

Theory X and Theory Y n Theory Y Assumptions n n n People seek

Theory X and Theory Y n Theory Y Assumptions n n n People seek both seek responsibility and accept responsibility under favorable conditions. People can be innovative in solving problems. People are bright, but under most organizational conditions their potentials are underutilized. Source: Douglas Mc. Gregor, The Human Side of Enterprise, Copyright © 1960 by Mc. Graw-Hill. Reprinted by permission of The Mc. Graw-Hill Companies.

Theory X – Theory Y Think of these theories as a continuum Theory X

Theory X – Theory Y Think of these theories as a continuum Theory X Theory Y Employees fall somewhere in between the two ends

The Behavioral Management Perspective n n Contemporary behavioral science in management – emerged because

The Behavioral Management Perspective n n Contemporary behavioral science in management – emerged because of the too simplistic descriptions of work behavior by the human relations theorists. Organizational behavior takes a holistic view of behavior, including individual, group, and organization processes

Organizational Behavior n Important topics in organizational behavior research: n n n Job satisfaction

Organizational Behavior n Important topics in organizational behavior research: n n n Job satisfaction and job stress Motivation and leadership Group dynamics and organizational politics Interpersonal conflict The structure and design of organizations

The Quantitative Management Perspective n Focuses on decision making, economic effectiveness, mathematical models, and

The Quantitative Management Perspective n Focuses on decision making, economic effectiveness, mathematical models, and the use of computers in organizations n n Management science Operations management

The Quantitative Management Perspective n Contributions n n n Developed sophisticated quantitative techniques to

The Quantitative Management Perspective n Contributions n n n Developed sophisticated quantitative techniques to assist decision making Models have increased our awareness of complex organizational processes and have aided in the planning and controlling processes Limitations n n n Cannot fully explain or predict behavior Mathematical sophistication may come at the expense of other important skills Models may require unrealistic or unfounded assumptions

Contemporary Management Theory n The Systems Perspective n A system is an interrelated set

Contemporary Management Theory n The Systems Perspective n A system is an interrelated set of elements functioning as a whole. An organization as a system is composed of four elements: n n Inputs (material and/or human resources) Transformation processes (technical and managerial processes) Outputs (products and services) Feedback (reactions from the environment)

The Integrated Systems Model Inputs From the environment: Human Material Financial Information Processing Outputs

The Integrated Systems Model Inputs From the environment: Human Material Financial Information Processing Outputs Transformation process: Into the environment Technology Operating systems Administrative systems Control systems Product Services Profit/loss Employee behavior Information Feedback

Systems Perspective n Synergy n n Subsystems are more successful working together than working

Systems Perspective n Synergy n n Subsystems are more successful working together than working alone. The whole, working together, is greater than the sum of its parts. Entropy n A natural process leading to system decline which can be avoided through organizational change and renewal.

Contemporary Management Issues & Challenges n n n n Downsizing Diversity and the New

Contemporary Management Issues & Challenges n n n n Downsizing Diversity and the New Workforce Information Technology New Ways of Managing Globalization Ethics and Social Responsibility Managing for Quality Service Economy

Functions of Management Revisted

Functions of Management Revisted

The Functions of Management A Circular Process Planning Organizing/ Staffing Controlling Leading/Directing

The Functions of Management A Circular Process Planning Organizing/ Staffing Controlling Leading/Directing

Plans Mission Statement Strategic Tactical Operational

Plans Mission Statement Strategic Tactical Operational

Mission Statement & Objectives Œ Ž Written explanation of company aims What goods and

Mission Statement & Objectives Œ Ž Written explanation of company aims What goods and services the company will offer What market the company will serve Company belief vision Statement about employee treatment may be included Objectives - The ends or results desired by the organization and are derived from the organization’s mission.

Plans Are Classified on Their Scope Strategic Plans become more specific as they move

Plans Are Classified on Their Scope Strategic Plans become more specific as they move from strategic to operational Tactical Operational Contingency

Management & Planning Levels Top Tactical Strategic Middle Supervisory Operational

Management & Planning Levels Top Tactical Strategic Middle Supervisory Operational

Decision Making Unveiled

Decision Making Unveiled

Managers As Decision Makers n Decision making – the process of recognizing a problem

Managers As Decision Makers n Decision making – the process of recognizing a problem or opportunity and creating a solution A decision is a choice between alternatives

Steps in the Decision Making Process Recognize and define the decision situation Develop options

Steps in the Decision Making Process Recognize and define the decision situation Develop options Analyze options Select the best option Implement the decision Monitor the consequences

Decision Making Process Recognizing Evaluate Identifying Alternatives Implement decision Evaluate Alternatives Select Alternative

Decision Making Process Recognizing Evaluate Identifying Alternatives Implement decision Evaluate Alternatives Select Alternative

Steps in the Rational Decision-Making Process

Steps in the Rational Decision-Making Process

Steps in the Rational Decision-Making Process

Steps in the Rational Decision-Making Process

Evaluating Alternatives in the Decision-Making Process Is the alternative feasible? Yes Is the alternative

Evaluating Alternatives in the Decision-Making Process Is the alternative feasible? Yes Is the alternative satisfactory? Yes Are the alternative’s consequences affordable? No No No Eliminate from consideration Yes Retain for further consideration Figure 4. 3

The Classical Model Rational Decision-making Process Steps A Circular Process 1 6 2 5

The Classical Model Rational Decision-making Process Steps A Circular Process 1 6 2 5 3 4

Types of Decisions n Programmed Decisions n A structured decision or one that occurs

Types of Decisions n Programmed Decisions n A structured decision or one that occurs frequently n Have well established and understood solutions n Nonprogrammed Decisions n An unstructured decision, which occurs less frequently than a programmed decision n Involves complex, important, and nonroutine problems or opportunities

Decision-Making Conditions The decision maker faces conditions of. . . Certainty Risk Uncertainty Level

Decision-Making Conditions The decision maker faces conditions of. . . Certainty Risk Uncertainty Level of ambiguity and chances of making a bad decision Lower Moderate Higher

Distinguishing Between Decision Making Conditions There are different kinds of conditions in which to

Distinguishing Between Decision Making Conditions There are different kinds of conditions in which to make a decision. Source: Barney, Jay B. and Ricky W. Griffin. The Management of Organizations. Copyright © 1992 by Houghton Mifflin Company. Used with permissions.

Decision-Making Conditions n n n Decision Making Under Certainty Decision Making Under Risk Decision

Decision-Making Conditions n n n Decision Making Under Certainty Decision Making Under Risk Decision Making Under Uncertainty

Rational Perspectives on Decision Making n The Classical Model of Decision Making • obtain

Rational Perspectives on Decision Making n The Classical Model of Decision Making • obtain complete When faced with a and perfect information decision situation, • eliminate uncertainty managers should. . . • evaluate everything rationally and logically . . . and end up with a decision that best serves the interests of the organization.

Behavioral Aspects of Decision Making The Administrative Model of Decision Making • use incomplete

Behavioral Aspects of Decision Making The Administrative Model of Decision Making • use incomplete and When faced with a decision situation managers actually… imperfect information • are constrained by bounded rationality • tend to satisfice . . . and end up with a decision that may or may not serve the interests of the organization.

The Administrative Model Important Behavioral Concepts n Bounded rationality n Satisficing n n Coalition

The Administrative Model Important Behavioral Concepts n Bounded rationality n Satisficing n n Coalition Intuition Escalation of Commitment Risk Propensity

Ethics and Decision Making n Components of managerial ethics: n n n Relationships of

Ethics and Decision Making n Components of managerial ethics: n n n Relationships of the firm to employees Employees to the firm The firm to other economic agents

Group and Team Decision Making in Organizations n The most common method of group

Group and Team Decision Making in Organizations n The most common method of group and team decision making are: n n n Interacting groups Delphi groups Nominal groups.

Group Decision Making Advantages Disadvantages More information & knowledge are available The process takes

Group Decision Making Advantages Disadvantages More information & knowledge are available The process takes longer, so it is more costly More alternatives are likely to be generated More acceptance of the final decision is likely Enhanced communication of the decision may result Better decisions Compromise decisions due to indecisiveness may emerge One person may dominate the group Groupthink may occur

Groupthink A situation that occurs when a group or team’s desire for consensus and

Groupthink A situation that occurs when a group or team’s desire for consensus and cohesiveness overwhelms its desire to reach the best possible decision. n Source: Gregory Moorhead, Group & Organizations Studies (Vol. 7, No. 4), pp. 429 -444. Copyright © 1982 by Sage Publications, Inc. Reprinted by permission of Sage Publications, Inc.

Managing Group and Team Decision-Making Processes Promoting the Effectiveness of Group and Team Decision

Managing Group and Team Decision-Making Processes Promoting the Effectiveness of Group and Team Decision Making: n n Be aware of the pros and cons of having a group or team make a decision. Set deadlines for when decisions must be made. Avoid problems with dominance by managing group membership. Hold a follow-up meeting to recheck the decision. n n n Have each group member individually and critically evaluate all alternatives. As a manager, do not make your position known too early. Appoint a group member to be a “devil’s advocate. ”