Chapter 1: Introduction to Management

What are management and organization?

Who are managers and what do they do?
History of Management & Scientific Management
General Administrative Theories
Quantitative Approach & Organizational Behavior
Managerial Competency
Management And Organization

• Management is the process of planning, organizing leading and

controlling resources within an entity with the overall aim of
achieving its objectives.

• The organizational management of a business needs to be able to make

decisions and resolve issues in order to be both effective and
beneficial.
Where Do Managers Work?

Organization – A deliberate arrangement of people assembled to accomplish

some specific purpose (that individuals independently could not accomplish
alone).
Common Characteristics of Organizations

• Have a distinct purpose (goal)

• Are composed of people
• Have a deliberate structure
Characteristics of Organizations
 Why Are Managers Important?

• Organizations need their managerial skills and abilities more than

ever in these uncertain, complex, and chaotic times. (Environment)

• Managerial skills and abilities are critical in getting things done.

• The quality of the employee/supervisor relationship is the most

important variable in productivity and loyalty
 Who Are Managers?

Manager - Someone who coordinates and oversees

the work of other people so that organizational goals
can be accomplished
Levels of Management
Classifying Managers
• First-Line Managers - Individuals who manage the work of non-managerial
employees. They typically are involved with producing the organization’s
products or servicing the organization’s customers. For example, supervisors,
shift manager, district manger, departmental managers or office manger etc.

• Middle Managers - Individuals who manage the work of first-line managers.

They are found between the lowest and top levels of the organization. For
example, regional manager, project manager, store manager or division
manager etc.

• Top Managers - Individuals who are responsible for making organization-wide

decisions and establishing plans and goals that affect the entire organization.
For example, executive vice president, president, managing director, CEO etc.
 What Do Managers Do?
• Management involves coordinating and overseeing the work activities of
others so that their activities are completed efficiently and effectively.

• Management is an individual or a group of individuals that accept

responsibilities to run an organization. They Plan, Organize, Direct and
Control all the essential activities of the organization.

• Management does not do the work themselves. They motivate others to do the
work and co-ordinate (i.e. bring together) all the work for achieving the
objectives of the organization.
Efficiency and Effectiveness in Management
Management functions

• Planning: Defining goals, establishing strategy, and developing plans to

coordinate activities.

• Organizing: Determining what needs to be done, how it will be done,

and who is to do it

• Leading: Motivating, leading and any other actions involved in dealing

with people

• Controlling: Monitoring activities to ensure that they are accomplished

as planned.
Four functions of Management
Managerial roles of management
Mintzerg’s managerial Roles.

• Interpersonal roles: Figurehead, Leader, Liaison

• Informational Roles: Monitor, Disseminator, Spokesperson

• Decisional Roles: Entrepreneur, Disturbance handler, Resource

allocator, Negotiator
Katz’s managerial skills
Skills and their relations with level of managers
 Some other managerial skills

• Delegating effectively (making sure work gets done right)

• Being an effective communicator

• Thinking critically

• Managing work load/time

• Identifying clear roles for employees

• Creating an environment of openness, and challenges

 How the manager’s job is changing

• Changing technology (Digitization)

• Changing security threats

• Increased Emphasis on Organizational and Managerial ethics

• Increased Competitiveness
University of Management
Why study management
Rewards and Challenges of Being a Manager
Rewards Challenges

Create a work environment in which organizational members can Do hard work

work to the best of their ability

Have opportunities to think creatively and use imagination May have duties that are more clerical than managerial

Help others find meaning and fulfillment in work Have to deal with a variety of personalities

Support, coach, and nurture others Often have to make do with limited resources

Work with a variety of people Motivate workers in chaotic and uncertain situations

Receive recognition and status in organization and community Blend knowledge, skills, ambitions, and experiences of a diverse work group

Play a role in influencing organizational outcomes Success depends on others’ work performance

Receive appropriate compensation in the form of salaries, bonuses, blank

and stock options

Good managers are needed by organizations blank

History of Management

• Early Management (Ancient Management) – Egypt (pyramids) and China

(Great Wall)

• Adam Smith The Wealth of Nations in 1776: Division of labor (job

specialization) – The breakdown of jobs into narrow and repetitive tasks

• Industrial Revolution
• Substituted machine power for human labor
• Created large organizations in need of management
 Classical Approach

• Classical approach – First studies of management, which emphasized

rationality and making organizations and workers as efficient as possible.

• Fredrick Winslow Taylor

• The “father” of scientific management

• Scientific management – An approach that involves using the scientific

method to find the “one best way” for a job to be done.
 Taylor’s Scientific Management Principles

1. Develop a science for each element of an individual’s work to replace

the old rule-of-thumb method.

2. Scientifically select and then train, teach, and develop the worker.

3. Heartily cooperate with the workers to ensure that all work is done in
accordance with the principles of the science that has been developed.

4. Divide work and responsibility almost equally between management

and workers. Management does all work for which it is better suited
than the workers.
Frank and Lillian Gilbreth

• Frank and his wife, Lillian, a psychologist, studied work to eliminate inefficient
hand-and-body motions. The Gilbreth also experimented with the design and
use the proper tools and equipment for optimizing work performance.

• The Gilbreths were among the first researchers to use motion pictures to study
hand-and-body motion. They invented a device called a micro chronometer that
recorded a worker’s motions and the amount of times spent doing each motion

• The Gilbreths also devised a classification scheme to label 17 basic hand

motions (such as search, grasp, hold), which they called therbligs (Gilbreth
spelled backward, with the ‘th’ transposed). This scheme gave the Gilbreths a
more precise way of analyzing a worker’s exact hand movements.
 General Administrative Theory

• General administrative theory – An approach to management that

focuses on describing what managers do and what constitutes good
management practice.

• (Henri Fayol)Principles of management – Fundamental rules of

management that could be applied in all organizational situations and
taught in schools

• He first identified the functions of management: planning, organizing,

commanding, coordinating and controlling
 Fayol’s 14 Principles of Management
1. Division of work. Specialization increases output by making employees more
efficient.
2. Authority. Managers must be able to give orders, and authority gives them this
right.
3. Discipline. Employees must obey and respect the rules that govern the organization.
4. Unity of command. Every employee should receive orders from only one superior.
5. Unity of direction. The organization should have a single plan of action to guide
managers and workers.
6. Subordination of individual interests to the general interest. The interests of any
one employee or group of employees should not take precedence over the interests
of the organization as a whole.
7. Remuneration. Workers must be paid a fair wage for their services.
 Fayol’s 14 Principles of Management
8. Centralization. This term refers to the degree to which subordinates are
involved in decision making.
9. Scalar chain. The line of authority from top management to the lowest ranks
is the scalar chain.
10.Order. People and materials should be in the right place at the right time.
11.Equity. Managers should be kind and fair to their subordinates.
12.Stability of tenure of personnel. Management should provide orderly
personnel planning and ensure that replacements are available to fill vacancies.
13.Initiative. Employees allowed to originate and carry out plans will exert high
levels of effort.
14.Esprit de corps. Promoting team spirit will build harmony and unity within
the organization.
General Administrative Theory

• Max Weber was a German sociologist who studied organizations.

Writing in the early 1900s, he developed a theory of authority
structures and relations based on an ideal type of organization he
called a bureaucracy.

• Bureaucracy – A form of organization characterized by division of

labor, a clearly defined hierarchy, detailed rules and regulations, and
impersonal relationships
 Behavioral Approach

• Organizational behavior (OB) – The study of the actions of people at work.

• Early OB Advocates

• Robert Owen

• Hugo Munsterberg

• Mary Parker Follett

• Chester Barnard
Hawthorne Studies.
• As part of the Scientific Management regime, companies routinely studied the effects of
the physical environment on their workers. For example, they varied the lighting to find
the optimum level of light for maximum productivity. They piped in music, varied the
temperature, tried different compensation schemes, adjusted the number of working hours
in a day, etc.

• The Hawthorne studies were carried out by the Western Electric company at their
Hawthorne plant in the 1920's. Initially, the study focused on lighting.

•   Two things emerged from the initial studies: (1) the experimenter effect, and (2) a social
effect. The experimenter effect was that making changes was interpreted by workers as a
sign that management cared, and more generally, it was just provided some mental
stimulation that was good for morale and productivity. The social effect was that it
seemed that by being separated from the rest and being given special treatment, the
experimentees developed a certain bond and companionship that also increased
productivity.
The Hawthorne Studies
 The Quantitative Approach
• Quantitative approach – The use of quantitative techniques to improve decision
making

• It involves applying statistics, optimization models, information models, computer

simulations and other quantitative techniques to management activities.

• Linear programming, for instance, is a technique that managers use to improve

resource allocation decisions. Work Scheduling can be more efficient as a result of
critical-path (CPM) scheduling analysis. The economic order quantity(EOQ)
model helps managers determine optimum inventory level.

• Total Quality Management (TQM) – A philosophy of management that is driven

by continuous improvement and responsiveness to customer needs and expectations
 What Is Quality Management?
1. Intense focus on the customer. The customer includes outsiders who buy the organization’s
products or services and internal customers who interact with and serve others in the organization.
2. Concern for continual improvement. Quality management is a commitment to never being
satisfied. “Very good” is not good enough. Quality can always be improved.
3. Process focused. Quality management focuses on work processes as the quality of goods and
services is continually improved.
4. Improvement in the quality of everything the organization does. This relates to the final
product, how the organization handles deliveries, how rapidly it responds to complaints, how
politely the phones are answered, and the like.
5. Accurate measurement. Quality management uses statistical techniques to measure every critical
variable in the organization’s operations. These are compared against standards to identify
problems, trace them to their roots, and eliminate their causes.
6. Empowerment of employees. Quality management involves the people on the line in the
improvement process. Teams are widely used in quality management programs as empowerment
vehicles for finding and solving problems.
 Contemporary Approaches

• System – A set of interrelated and interdependent parts arranged in a manner

that produces a unified whole.

• Closed system – Systems that are not influenced by and do not interact with
their environment.

• Open system – Systems that interact with their environment.

Organization as an Open System
 The Contingency Approach

• Management is not ( and cannot be) based on simplistic principles to be applied in

all situations. Different and changing situations require managers to use different
approaches and techniques.

• Contingency approach – A management approach that recognizes organizations

as different, which means they face different situations (contingencies) and require
different ways of managing.
 Popular Contingency Variables
Organization Size. As size increases, so do the problems of coordination. For instance, the type
of organization structure appropriate for an organization of 50,000 employees is likely to be
inefficient for an organization of 50 employees.

Routineness of Task Technology. To achieve its purpose, an organization uses technology.

Routine technologies require organizational structures, leadership styles, and control systems that
differ from those required by customized or no routine technologies.

Environmental Uncertainty. The degree of uncertainty caused by environmental changes

influences the management process. What works best in a stable and predictable environment
may be totally inappropriate in a rapidly changing and unpredictable environment.

Individual Differences. Individuals differ in terms of their desire for growth, autonomy,
tolerance of ambiguity, and expectations. These and other individual differences are particularly
important when managers select motivation techniques, leadership styles, and job designs.
Review Learning Objectives
1. Explain why managers are important to organizations.
• Organizations need their managerial skills and abilities in uncertain, complex, and
chaotic times.
• Managers are critical to getting things done in organizations.
• Managers contribute to employee productivity and loyalty.
2. Tell who managers are and where they work.
• Managers coordinate and oversee the work of other people so that organizational
goals can be accomplished.
• Managers work in an organization, which is a deliberate arrangement of people
to accomplish some specific purpose.
3. Describe the functions managers.
• Management involves coordinating and overseeing the efficient and effective
completion of others’ work activities.
• The four functions of management include planning, organizing, leading, and
controlling.
4. Describe the roles managers.
Mintzberg’s managerial roles include:
• Interpersonal, involve people and other ceremonial/symbolic duties (figurehead, leader,
and liaison).
• Informational, collecting, receiving, and disseminating information (monitor,
disseminator, and spokesperson).
• Decisional, making choices (entrepreneur, disturbance handler, resource allocator, and
negotiator).

5. Describe the skills managers.

Katz’s managerial skills include
• Technical (job-specific knowledge and techniques)
• Human (ability to work well with people)
• Conceptual (ability to think and express ideas).
6. Describe the factors that are reshaping and redefining the manager’s job.
Managers must be concerned with:
• Customer service because employee attitudes and behaviors play a big role in customer
satisfaction
• Social media because these forms of communication are becoming important and valuable
tools in managing
• Innovation because it is important for organizations to be competitive.
• Sustainability as business goals are developed

7. Explain the value of studying management.

• The universality of management – Managers are needed in all types and sizes of
organizations
• The reality of work – You will manage or be managed
• Significant rewards and challenges
Review Learning Objectives (History)
1. Describe some early management examples.
• Early examples of management practice in the construction of the Egyptian pyramids.
• Adam Smith’s Wealth of Nations argued the benefits of division of labor.
• In the industrial revolution where it became more economical to manufacture in
factories than at home.
2. Explain the various theories in the classical approach.
• Frederick W. Taylor studied manual work using scientific principles.
• The Gilbreths’ studied efficient hand-and-body motions.
• Fayol believed the functions of management were common to all business endeavors.
• Fayol developed 14 principles of management.
• Weber described an ideal type of organization he called a bureaucracy.
3. Discuss the development and uses of the behavioral approach.
• Early OB advocates believed that people were the most important asset of the
organization and should be managed accordingly.
• The Hawthorne Studies dramatically affected management beliefs about the role of
people in organizations.
4. Describe the quantitative approach.
• The quantitative approach involves applications of statistics, optimization models,
information models, and computer simulations to management activities.
• Total quality management—a management philosophy devoted to continual
improvement and responding to customer needs and expectations—also makes use of
quantitative methods to meet its goals.
5. Explain the various theories in the contemporary approach.
• The systems approach says that an organization takes in inputs (resources) from the
environment and transforms them into outputs that are distributed into the environment.
• The contingency approach says that organizations are different, face different situations,
and require different ways of managing.