Fundamentals of Management

Fundamentals of
MANAGEMENT
Core Concepts & Applications
Griffin
Third Edition
Chapter 1
Understanding the Managers Job

Copyright 2003 Houghton Mifflin Company. All rights reserved.
PowerPoint Presentation by Charlie Cook
Chapter Outline
An Introduction to Management
Kinds of Managers
Basic Management Functions
Fundamental Management Skills
The Science and the Art of Management
The Evolution of Management

The Importance of Theory and History
The Historical Context of Management
The Classical Management Perspective
Copyright by Houghton Mifflin Company. All rights reserved.
12
Chapter Outline (contd)

The Evolution of Management (contd)
The Behavioral Management Perspective
The Quantitative Management Perspective
Contemporary Management Thought

The Systems Perspective
The Contingency Perspective
Contemporary Management Issues and Challenges
13
Learning Objectives
After studying this chapter, you should be able
to:
Define management, describe the kinds of managers
found in organizations, and briefly explain the four
basic management functions.
Justify the importance of history and theory to
management and explain the evolution of
management thought.
Discuss contemporary management issues and
challenges.
14
What is Management?
A set of activities
planning and decision making, organizing, leading, and
controlling
directed at an organizations resources

human, financial, physical, and information
with the aim of achieving organizational goals

in an efficient and effective
manner.
15
Basic Purpose of Management
EFFICIENTLY
Using resources wisely and
in a cost-effective way
And
EFFECTIVELY
Making the right decisions and
successfully implementing them
16
Efficiency
versus
Effectiveness
Source: Van Fleet, David D., Contemporary Management, Second

Edition. Copyright 1991 by Houghton Mifflin Company. Used with
permissions.
17
Figure 1.2 Balancing Effectiveness

and Efficiency
1-8
What is a Manager?
Someone whose primary responsibility is to
carry out the management process.
Someone who plans and makes decisions,
organizes, leads, and controls
human, financial, physical,
and information resources.
19
Kinds of Managers by Level and Area

Levels of Management
Top managers
Middle managers
th
er
O
re
so
ur
Ad
ce
s
m
in
is
tr
at
io
n
ns
H
Areas of Management
um
an
pe
ra
ti o
ar
ke
ti n
g
Fi
na
nc
e
First-line managers
Figure 1.1
110
Kinds of Managers by Level

Top Managers
The relatively small group of executives who manage the
organizations overall goals, strategy, and operating
policies.
Middle Managers
Largest group of managers in organizations who are
primarily responsible for implementing the policies and
plans of top managers. They supervise and coordinate
the activities of lower-level managers.
First-Line Managers
Managers who supervise and coordinate the activities of
operating employees.
111
Kinds of Managers by Area

Marketing Managers
Work in areas related to getting consumers and clients
to buy the organizations products or services.
Financial Managers
Deal primarily with an organizations financial
resources.
Operations Managers
Concerned with creating and managing the systems
that create organizations products and services.
112
Kinds of Managers by Area (contd)

Human Resource Managers
Involved in human resource planning, recruiting and
selection, training and development, designing
compensation and benefit systems, formulating
performance appraisal systems.
Administrative Managers
Generalists who are familiar with all functional areas of
management and who are not associated with any
particular management specialty.
Other Kinds of Managers

Specialized managerial positions directly related to the
needs of the organization.
113
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
114
The Management Process

Planning and
Decision Making
Setting the organizations 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
115
The Management Process (contd)

Planning and Decision Making
Setting an organizations goals and selecting a course
of action from a set of alternatives to achieve them.
Organizing
Determining how activities and resources are grouped.
Leading
The set of processes used to get organizational
members to work together to advance the interests of
the organization.
Controlling
Monitoring organizational progress towards goals.
116
Skills and the

Manager
117

Technical
Skills necessary to accomplish or understand the
specific kind of work being done in an organization.
Interpersonal
The ability to communicate with, understand, and
motivate both individuals and groups.
Conceptual
The managers ability to think in the abstract.
Diagnostic
The managers ability to visualize the most appropriate
response to a situation.
118
Fundamental Management Skills (contd)

Communication
The managers abilities both to convey ideas and
information effectively to others and to receive ideas and
information effectively from others.
Decision-Making
The managers ability to recognize and define problems
and opportunities correctly and then to select an
appropriate course of action to solve the problems and
capitalize on opportunities.
Time-Management
The managers ability to prioritize work, to work
efficiently, and to delegate appropriately.
119

Management Skill Mixes at Different
Organizational Levels
120
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.
121
The Importance of Theory and History

Why Theory?
A theory is a conceptual framework for organizing
knowledge and providing a blueprint for action.
Management theories, used to build organizations, are
grounded in reality. Most managers develop their own
theories about how they should run their organizations.
Why History?
An awareness and understanding of important historical
developments in management are also important to
contemporary managers in furthering the development
of management practices and in avoiding the mistakes
of others in the past.
122
The Historical Context of Management

Management Through the Ages
D Greeks
C Babylonians
G Venetians
B Egyptians
E Romans
A Sumerians
3000 B.C.
2500 B.C.
F Chinese
2000 B.C.
1500 B.C.
1000 B.C.
500 B.C.
A.D.500
A.D.1000
A.D.1500
A Used written rules and regulations for governance
E Used organized structure for communication and control
B Used management practices to construct pyramids
F Used extensive organization structure for government

agencies and the arts
C Used extensive set of laws and policies for governance

D Used different governing systems for cities and state
G Used organization design and planning concepts to

control the seas
123
Early Management Pioneers

Robert Owen (17711858)
British industrialist who was one of the first managers
to recognize the importance of human resources and
the welfare of workers.
Charles Babbage (17921871)

English mathematician who focused on creating
efficiencies of production through the division of labor,
and the application of mathematics
to management problems.
124
An Integrative Framework
of Management Perspectives
Systems Approach
Recognition of internal
interdependencies
Recognition of
environmental influences
Classical
Management
Perspectives
Methods for
enhancing
efficiency and
facilitating planning,
organizing, and
controlling
Contingency Perspective
Recognition of the situational
nature of management
Response to particular
characteristics of situation
Behavioral
Management
Perspectives
Insights for motivating performance
and understanding
individual behavior,
groups and teams,
and leadership
Quantitative
Management
Perspectives
Techniques for
improving decision
making, resource
allocation, and
operations
Effective and efficient management
125
Classical Management Perspective

Scientific Management
Concerned with improving the performance of
individual workers (i.e., efficiency).
Grew out of the industrial revolutions labor shortage
at the beginning of the twentieth century.
Administrative Management
A theory that focuses on
managing the total organization.
126
Scientific Management
Frederick Taylor (18561915)
Replaced old methods of how to do work with
scientifically-based work methods to eliminate
soldiering, where employees deliberately worked at a
pace slower than their capabilities.
Believed in selecting, training, teaching, and
developing workers.
Used time studies of jobs, standards planning,
exception rule of management, slide-rules, instruction
cards, and piece-work pay systems to control and
motivate employees.
127
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
128
Scientific Management Pioneers

Frank and Lillian Gilbreth
Both developed techniques and strategies for
eliminating inefficiency.
Frank reduced the number of
movements in bricklaying, resulting
in increased output of 200%.
Lillian made substantive contributions
to the fields of industrial psychology
and personnel management.
129
Classical Management Perspective (contd)

Administrative Management Theory
Focuses on managing the whole organization rather
than individuals.
Henri Fayol (18451925)

Was first to identify the specific management functions
of planning, organizing, leading, and controlling.
Lyndall Urwick (18911983)

Integrated the work of previous management theorists.
Max Weber (18641920)

His theory of bureaucracy is based on a rational set of
guidelines for structuring organizations.
130
Classical Management PerspectiveToday

Contributions
Laid the foundation for
later developments.
Identified important
management
processes, functions,
and skills.
Focused attention on
management as a valid
subject of scientific
inquiry.
Limitations
More appropriate
approach for use in
traditional, stable,
simple organizations.
Prescribed universal
procedures that are not
appropriate in some
settings.
Employees are viewed
as tools rather than as
resources.
131
Behavioral Management Perspective

Behavioral Management
Emphasized individual attitudes and behaviors, and
group processes, and recognized the importance of
behavioral processes in the workplace.
Hugo Munsterberg (18631916)

A German psychologist, considered the father of
industrial psychology, who advocated the practice of
applying psychological concepts to employees
selection and motivation industrial settings.
Mary Parker Follett (1868 1933)

Recognized the importance of the role of human
behavior in the workplace.
132
Key Managerial Roles (Minsterberg)
Source: Van Fleet, David D., Contemporary Management, Second Edition. Copyright 1991 by Houghton Mifflin Company. Used with permissions.
133
Figure 1.5 Mintzbergs Managerial

Roles (a)
Interpersonal
roles
Source: Adapted from Henry Mintzberg, Managerial Work: Analysis from Observation, Management
Science, 18 (October 1971): B97-B110.
1-34

Roles (b)
1-35

Roles (c)
1-36
The Hawthorne Studies (19271932)

Conducted by Elton Mayo and associates at
Western Electric
Illumination studyworkplace lighting adjustments
affected both the control and the experimental groups
of production employees.
Group studyimplementation of piecework incentive
plan caused production workers to establish informal
levels of acceptable individual output.
Over-producing workers were labeled rate busters and
under-producing workers were considered chiselers.
Interview programconfirmed the importance of
human behavior in the workplace.
137

(contd)
Human Relations Movement
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 managers
concern for workers would lead to
increased worker satisfaction and
improved worker performance.
138
The Human
Relations View
of Management
Source: Van Fleet, David D., Contemporary
Management, Second Edition. Copyright
1991 by Houghton Mifflin Company. Used
with permissions.
139

(contd)
Abraham Maslow
Advanced a theory that employees are motivated by a
hierarchy of needs that they seek to satisfy.
Douglas McGregor
Proposed Theory X and Theory Y concepts
of managerial beliefs about people
and work.
140
Theory X and Theory Y

Theory X Assumptions
People do not like work and try to avoid it.
People do not like work, so 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 McGregor, The Human Side of Enterprise, Copyright 1960

by McGraw-Hill. Reprinted by permission of The McGraw-Hill Companies.
Table 1.1
141
Theory X and Theory Y (contd)

Theory Y Assumptions
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.
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 McGregor, The Human Side of Enterprise, Copyright 1960
by McGraw-Hill. Reprinted by permission of The McGraw-Hill Companies.
Table 1.1 (contd)

142
Organizational Behavior
A contemporary field focusing on behavioral
perspectives on management.
Draws on psychology, sociology, anthropology,
economics, and medicine.
Important topics in organizational behavior

research:
Job satisfaction and job stress
Motivation and leadership
Group dynamics and organizational politics
Interpersonal conflict
The structure and design of organizations
143

Today
Contributions
Provided important insights into motivation, group
dynamics, and other interpersonal processes.
Focused managerial attention on these critical
processes.
Challenged the view that employees are tools and
furthered the belief that employees are valuable
resources.
144

Today (contd)
Limitations
Complexity of individuals makes behavior difficult to
predict.
Many concepts not put to use because managers are
reluctant to adopt them.
Contemporary research findings are not often
communicated to practicing managers in an
understandable form.
145
Quantitative Management Perspective

Quantitative Management
Emerged during World War II to help the Allied forces
manage logistical problems.
Focuses on decision making, economic effectiveness,
mathematical models, and the use of computers to
solve quantitative problems.
146

(contd)
Management Science
Focuses on the development of representative
mathematical models to assist with decisions.
Operations Management
Practical application of management
science to efficiently manage the
production and distribution
of products and services.
147

Today
Contributions
Developed sophisticated quantitative techniques to
assist in decision making.
Application of models has
increased our awareness
and understanding of
complex processes and
situations.
Has been useful in the
planning and controlling
processes.
148

Today (contd)
Limitations
Quantitative management cannot fully explain or
predict the behavior of people in organizations.
Mathematical sophistication may come at
the expense of other managerial skills.
Quantitative models may require
unrealistic or unfounded assumptions,
limiting their general applicability.
149
The Systems Perspective of Organizations
Inputs from the

environment:
material inputs,
human inputs,
financial inputs, and
information inputs
Transformation
process: technology,
operating systems,
administrative
systems, and
control systems
Outputs into
the environment:
products/services,
profits/losses,
employee behaviors,
and information
outputs
Feedback
Figure 1.4
150
Integrating Perspectives for Managers

Systems Perspective
A system is an interrelated set of elements functioning
as a whole.
Open system
An organizational system that interacts with its
environment.
151
Integrating Perspectives for Managers

(contd)
Closed system
An organizational system that does not interact with its
environment.
Subsystems
A system within another system.
Their importance is due to their
interdependence on each other
within the organization.
152

Synergy
Subsystems are more successful working together in
a cooperative and coordinated fashion than working
alone.
The whole system (subsystems working together as
one system) is more productive and efficient than the
sum of its parts.
153

(contd)
Entropy
A normal process in which an organizational system
declines due to failing to adjust to change in its
environment
Entropy can be avoided and
the organization re-energized
through organizational change
and renewal.
154

Universal Perspectives
Include the classical, behavioral, and quantitative
approaches.
An attempt to identify the one best way to manage
organizations.

Suggests that each organization is unique.
The appropriate managerial behavior for
managing an organization depends
(is contingent) on the current
situation in the organization.
155
The Contingency Perspective (contd)
Source: Van Fleet, David D., Contemporary Management, Second Edition. Copyright 1991 by Houghton Mifflin Company. Used with permissions.
156
Contemporary Management Issues

and Challenges
Acute labor shortages in high-technology job
sectors and an oversupply of less skilled labor
An increasingly diverse and globalized workforce
The need to create challenging, motivating, and
flexible work environments
The effects of information technology on how
people work
The complex array of new ways of structuring
organizations
157
Contemporary Management Issues

and Challenges (contd)
Increasing globalization of product and service
markets
The renewed importance of ethics and social
responsibility
The use of quality as the basis for competition
The shift to a predominately service-based
economy
158
Exhibit 110 The Changing Organization
2007 Prentice Hall, Inc. All rights reserved.
159

Fundamentals of Management

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Fundamentals of

Core Concepts & Applications

Understanding the Managers Job

PowerPoint Presentation by Charlie Cook

The Evolution of Management

Copyright by Houghton Mifflin Company. All rights reserved.

Chapter Outline (contd)

Contemporary Management Thought

Copyright by Houghton Mifflin Company. All rights reserved.

Copyright by Houghton Mifflin Company. All rights reserved.

directed at an organizations resources

with the aim of achieving organizational goals

Copyright by Houghton Mifflin Company. All rights reserved.

Basic Purpose of Management

Copyright by Houghton Mifflin Company. All rights reserved.

Source: Van Fleet, David D., Contemporary Management, Second

Copyright by Houghton Mifflin Company. All rights reserved.

Figure 1.2 Balancing Effectiveness

Copyright by Houghton Mifflin Company. All rights reserved.

Kinds of Managers by Level and Area

Kinds of Managers by Level

Kinds of Managers by Area

Copyright by Houghton Mifflin Company. All rights reserved.

Kinds of Managers by Area (contd)

Other Kinds of Managers

Inputs from the environment

Copyright by Houghton Mifflin Company. All rights reserved.

The Management Process

The Management Process (contd)

Skills and the

Copyright by Houghton Mifflin Company. All rights reserved.

Fundamental Management Skills

Fundamental Management Skills (contd)

Fundamental Management Skills

Copyright by Houghton Mifflin Company. All rights reserved.

Management: Science or Art?

The Art of Management

Copyright by Houghton Mifflin Company. All rights reserved.

The Importance of Theory and History

The Historical Context of Management

A Used written rules and regulations for governance

E Used organized structure for communication and control

B Used management practices to construct pyramids

F Used extensive organization structure for government

C Used extensive set of laws and policies for governance

Copyright by Houghton Mifflin Company. All rights reserved.

G Used organization design and planning concepts to

Early Management Pioneers

Charles Babbage (17921871)

Copyright by Houghton Mifflin Company. All rights reserved.

Effective and efficient management

Copyright by Houghton Mifflin Company. All rights reserved.

Classical Management Perspective

Copyright by Houghton Mifflin Company. All rights reserved.

Copyright by Houghton Mifflin Company. All rights reserved.

Steps in Scientific Management

Scientific Management Pioneers

Copyright by Houghton Mifflin Company. All rights reserved.

Classical Management Perspective (contd)

Henri Fayol (18451925)

Lyndall Urwick (18911983)

Max Weber (18641920)

Classical Management PerspectiveToday