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Share via. Copy Link. Powered by Social Snap. Copy link. Copy Copied. Principles of Management Book. The most important contributor in this field was Frederick W. However, current management practice is not restricted to scientific management practices alone.
Elements of scientific management still used include: 1. Using time and motion studies 2. Hiring best qualified workers 3. Henri Fayol and Max Weber were the two most prominent proponents of the general administrative approach. Fayol focused on activities common to all managers. He described the practice of management as distinct from other typical business functions.
He stated 14 principles of management which are as follows: 1. Division of Work 2. Authority 3. Discipline 4. Unity of Command 5. Unity of Direction 6. Subordination of individual interest to group interest 7. Remuneration 8. Centralization 9. Scalar Chain Order Equity Stability Initiative Espirit de corps Max Weber was a German sociologist who developed a theory of authority structures and described organizational activity based on authority relations.
He described the ideal form of organization as a bureaucracy marked by division of labor, a clearly defined hierarchy, detailed rules and regulations, and impersonal relationships Some current management concepts and theories can be traced to the work of the general administrative theorists.
Some bureaucratic mechanisms are necessary in highly innovative organizations to ensure that resources are used efficiently and effectively. This approach includes applications of statistics, optimization models, information models, and computer simulations.
The relevance of quantitative approach today is that it has contributed most directly to managerial decision making, particularly in planning and controlling.
The availability of sophisticated computer software programs has made the use of quantitative techniques more feasible for managers. Organizational behavior OB research has contributed much of what we know about human resources management and contemporary views of motivation, leadership, trust, teamwork, and conflict management. Their ideas served as the foundation for employee selection procedures, motivation programs, work teams, and organization-environment management techniques.
The Hawthorne Studies were the most important contribution to the development of organizational behavior. After Harvard professor Elton Mayo and his associates joined the study as consultants, other experiments were included to look at redesigning jobs, make changes in workday and workweek length, introduce rest periods, and introduce individual versus group wage plans.
The researchers concluded that social norms or group standards were key determinants of individual work behavior. Although not without criticism concerning procedures, analyses of findings, and the conclusions , the Hawthorne Studies stimulated interest in human behavior in organizational settings.
In the present day context behavioral approach assists managers in designing jobs that motivate workers, in working with employee teams, and in facilitating the flow of communication within organizations. The behavioral approach provides the foundation for current theories of motivation, leadership, and group behavior and development. A system is a set of interrelated and interdependent parts arranged in a manner that produces a unified whole. The two basic types of systems are open and closed.
A closed system is not influenced by and does not interact with its environment. An open system interacts with its environment. Using the systems approach, managers envision an organization as a body with many interdependent parts, each of which is important to the well-being of the organization as a whole. Managers coordinate the work activities of the various parts of the organization, realizing that decisions and actions taken in one organizational area will affect other areas.
The systems approach recognizes that organizations are not self-contained; they rely on and are affected by factors in their external environment. The contingency approach to management is a view that the organization recognizes and responds to situational variables as they arise.
Globalization: Organizational operations are no longer limited by national borders. Managers throughout the world must deal with new opportunities and challenges inherent in the globalization of business. Ethics: Cases of corporate lying, misrepresentations, and financial manipulations have been widespread in recent years.
Ethics education is increasingly emphasized in college curricula today. Organizations are taking a more active role in creating and using codes of ethics, ethics training programs, and ethical hiring procedures. Workforce diversity: It refers to a workforce that is heterogeneous in terms of gender, race, ethnicity, age, and other characteristics that reflect differences.
Entrepreneurship: It is the process whereby an individual or group of individuals use organized efforts to pursue opportunities to create value and grow by fulfilling wants and needs through innovation and uniqueness, no matter what resources the entrepreneur currently has. Three important themes stand out in this definition: a. The pursuit of opportunities b. Innovation c. Growth Entrepreneurship will continue to be important to societies around the world.
Managing in an E-Business World: E-business electronic business is a comprehensive term describing the way an organization does its work by using electronic Internet-based linkages with its key constituencies in order to efficiently and effectively achieve its goals. Knowledge Management and Learning Organizations: Change is occurring at an unprecedented rate. Knowledge management involves cultivating a learning culture where organizational members systematically gather knowledge and share it with others in the organization so as to achieve better performance.
Quality Management: Quality management is a philosophy of management that is driven by continual improvement and response to customer needs and expectations. Managers must realize that organizational culture and organizational environment have important implications for the way an organization is managed. The omnipotent view of management maintains that managers are directly responsible for the success or failure of an organization.
The influence that managers do have is seen mainly as a symbolic outcome. According to the symbolic view, the actual part that management plays in the success or failure of an organization is minimal. Reality suggests a synthesis; managers are neither helpless nor all powerful. Organizational culture is the shared values, principles, traditions, and ways of doing things that influence the way organizational members act.
This definition implies: Individuals perceive organizational culture based on what they see, hear, or experience within the organization. Organizational culture is shared by individuals within the organization. Organizational culture is a descriptive term. It describes, rather than evaluates. Innovation and risk taking the degree to which employees are encouraged to be innovative and take risks b.
Attention to detail the degree to which employees are expected to exhibit precision, analysis, and attention to detail c. Outcome orientation the degree to which managers focus on results or outcomes rather than on the techniques and processes used to achieve those outcomes d. People orientation the degree to which management decisions take into consideration the effect on people within the organization e.
Team orientation the degree to which work activities are organized around teams rather than individuals f. Aggressiveness the degree to which people are aggressive and competitive rather than easygoing and cooperative g.
Stability the degree to which organizational activities emphasize maintaining the status quo in contrast to growth Strong versus Weak Cultures Strong cultures are found in organizations where key values are intensely held and widely shared. A culture has increasing impact on what managers do as the culture becomes stronger.
Most organizations have moderate-to-strong cultures. Culture is transmitted and learned by employees principally through stories, rituals, material symbols, and language. Societal values, customs, and tastes can change, and managers must be aware of these changes. In a dynamic environment, components of the environment change frequently. If change is minimal, the environment is called a stable environment. If the number of components and the need for sophisticated knowledge is minimal, the environment is classified as simple.
If a number of dissimilar components and a high need for sophisticated knowledge exist, the environment is complex. As uncertainty is a threat to organizational effectiveness, managers try to minimize environmental uncertainty. Chapter 4 Managing in a Global Environment Managers in all types and sizes of organizations must constantly monitor changes and consider the particular characteristics of their own location as they plan, organize, lead, and control in this dynamic environment.
Managers might have one of three perspectives or attitudes toward international business 1. A polycentric attitude is the view that the managers in the host country the foreign country where the organization is doing business know the best work approaches and practices for running their business.
A geocentric attitude is a world-oriented view that focuses on using the best approaches and people from around the globe.
Important features of the global environment include regional trading alliances and different types of global organizations. Regional Trading Alliances Regional trading alliances are reshaping global competition. Competition is no longer limited to country versus country, but region versus region.
The European Union EU is a union of 25 European nations created as a unified economic and trade entity a. The primary motivation for the creation of the EU in February was to allow member nations to reassert their position against the industrial strength of the United States and Japan. The EMU consists of three stages for coordinating economic policy.
Twelve member states of the European Union have entered the third stage of the EMU, in which participating countries share a single currency, the euro. Two additional counties may join the EU by the year Eliminating barriers to free trade tariffs, import licensing require- ments, customs user fees has resulted in a strengthening of the economic power of all three countries. Colombia, Mexico, and Venezuela signed an economic pact eliminating import duties and tariffs in FTAA was to have been in effect no later than , but has not yet become operational; its future is still undetermined.
In the future, the Southeast Asian region promises to be one of the fastest-growing and increasingly influential economic regions of the world. Membership consists of countries and 32 observer governments as of January The WTO appears to play an important role even though critics are vocal and highly visible. Different Types of Global Organizations Business has been conducted internationally for many years Multinational corporations did not become popular until the mids.
Global organizations can be classified in the following categories: 1. The term multinational corporation MNC is a broad term that refers to any and all types of international companies that maintain operations in multiple countries. A transnational corporation TNC , sometimes called a borderless organization, is a type of international company in which artificial geographical barriers are eliminated.
Stages of Internationalization An organization that goes international typically progresses through three stages. Companies that go international may begin by using global sourcing also called global outsourcing. In this stage of going international, companies purchase materials or labor from around the world, wherever the materials or labor are least expensive. Beyond the stage of global sourcing, each successive stage to become more international involves more investment and risk.
In the next stage, companies may go international by exporting making products domestically and selling them abroad or importing acquiring products made abroad and selling the products domestically. Both exporting and importing require minimal investment and risk.
In the early stages of going international, managers may also use licensing giving another organization the right to make or sell its products using its technology or product specifications or franchising giving another organization the right to use its name and operating methods After an organization has done international business for a period of time, managers may decide to make more of a direct investment in international markets by forming a strategic alliance, which is a partnership between an organization and a foreign company partner s.
In a strategic alliance, partners share resources and knowledge in developing new products or building production facilities.
A joint venture a specific type of strategic alliance may be undertaken to allow partners to form a separate, independent organization for some business purpose.
Managers may decide to make a direct investment in a foreign country by establishing a foreign subsidiary, in which a company sets up a separate and independent production facility or office. Establishing a foreign subsidiary involves the greatest commitment of resources and the greatest risk of all of the stages in going international. Managing in a global environment entails the following challenges.
The Legal-Political Environment: The legal-political environment does not have to be unstable or revolutionary to be a challenge to managers. The Economic Environment: The economic environment also presents many challenges to foreign-based managers, including fluctuations in currency rates, inflation, and diverse tax policies.
In a market economy, resources are primarily owned by the private sector. In a command economy, all economic decisions are planned by a central government.
The Cultural Environment: Countries have different cultures, just as organizations do. National culture is the values and attitudes shared by individuals from a specific country that shape their behavior and their beliefs about what is important.
A framework developed by Geert Hofstede serves as a valuable framework for understanding differences between national cultures. Hofstede studied individualism versus collectivism. Individualism is the degree to which people in a country prefer to act as individuals rather than as members of groups. Collectivism is characterized by a social framework in which people prefer to act as members of groups and expect others in groups of which they are a part such as a family or an organization to look after them and to protect them.
Another cultural dimension is power distance, which describes the extent to which a society accepts the fact that power in institutions and organizations is distributed unequally. Uncertainty avoidance describes a cultural measure of the degree to which people tolerate risk and unconventional behavior.
Hofstede identified the dimension of achievement versus nurturing. Achievement is the degree to which values such as assertiveness, the acquisition of money and material goods, and competition prevail. Nurturing emphasizes sensitivity in relationships and concern for the welfare of others.
Long-term and short-term orientation. People in countries having long-term orientation cultures look to the future and value thrift and persistence. Short-term orientation values the past and present and emphasizes a respect for tradition and social obligations. The increased threat of terrorism, economic interdependence of trading countries, and significant cultural create a complicated environment in which to manage.
Successful global managers need to have great sensitivity and understanding. Managers must adjust leadership styles and management approaches to accommodate culturally diverse views. Chapter 5 Social Responsibility and Managerial Ethics This chapter discusses issues involving social responsibility and managerial ethics and their effect on managerial decision making. Both social responsibility and ethics are responses to a changing environment and are influenced by organizational culture Managers regularly face decisions that have dimensions of social responsibility.
Social Obligations to Responsiveness to Responsibility: Social obligation occurs when a firm engages in social actions because of its obligation to meet certain economic and legal responsibilities. Social responsiveness is seen when a firm engages in social actions in response to some popular social need. Purposes of Shared Values are: 1 They act as guideposts for managerial decisions and actions. Factors That Affect Employee Ethics 1. Stages of Moral Development.
Research confirms three levels of moral development. Each level has two stages. The majority of adults are at Stage 4. The higher the stage an employee reaches, the more likelihood that he or she will behave ethically. Individual Characteristics: A person joins an organization with a relatively entrenched set of values. Values are basic convictions about what is right and wrong.
Values are broad and cover a wide variety of issues. Individuals who score high on ego strength are likely to resist impulses to act unethically and are likely do what they think is right. Locus of control is a personality attribute that measures the degree to which people believe they control their own fate. Individuals with an internal locus of control think that they control their destiny, while persons with an external locus of control are less likely to take personal responsibility for the consequences of their behavior and are more likely to rely on external forces.
Externals believe that what happens to them is due to luck or chance. A third factor influencing managerial ethics is structural variables. The existence of structural variables such as formal rules and regulations, job descriptions, written codes of ethics, performance appraisal systems, and reward systems can strongly influence ethical behavior.
An organizational culture most likely to encourage high ethical standards is one that is high in risk tolerance, control, and conflict tolerance. A strong culture exerts more influence on managers than does a weak one.
However, in organizations with weak cultures, work groups and departmental standards strongly influence ethical behavior. Finally, the intensity of an issue can affect ethical decisions. Six characteristics determine issue intensity a. Greatness of harm b. Consensus of wrong c. Probability of harm d. Immediacy of consequences e. Proximity to victim f. Concentration of effect Improving Ethical Behavior Organizations can take a number of actions to cultivate ethical behavior among members.
In addition, decision rules can be developed to guide managers in handling ethical dilemmas in decision making. Job goals are usually a key issue in the performance appraisal process. Performance appraisals should include this dimension, rather than focusing solely on economic outcomes. At the least, ethics training should increase awareness of ethical issues.
Social Entrepreneurship: A social entrepreneur is an individual or organization who seeks out opportunities to improve society by using practical, innovative, and sustainable approaches.
Social impact management: Managers are increasingly expected to act responsibly in the way they conduct business. Managers using a social impact management approach examine the social impacts of their decisions and actions. When they consider how their actions in planning, organizing, leading and controlling will work in light of the social context within which business operates, managers become more aware of whether they are leading in a responsible manner.
Decision making is such an important part of all four managerial functions that decision making is said to be synonymous with managing. The Decision-Making Process A decision is a choice made from two or more alternatives.
The decision-making process is a set of eight steps that include the following: Identifying a problem: A problem is a discrepancy between an existing state and a desired state of affairs. In order to identify a problem, a manager should be able to differentiate the problem from its symptom; he should be under pressure to taken action and must have the authority and resources to take action. Identifying decision criteria: Decision criteria are criteria that define what is relevant in a decision.
Allocating weights to the criteria: The criteria identified in the previous step of the decision-making process may not have equal importance. So he decision maker must assign a weight to each of the items in order to give each item accurate priority in the decision. Developing alternatives: The decision maker should then identify viable alternatives that could resolve the problem. Analyzing alternatives: Each of the alternatives are then critically analyzed by evaluating it against the criteria established in Steps 2 and 3.
Selecting an alternative: The next step is to select the best alternative from among those identified and assessed. If criteria weights have been used, the decision maker would select the alternative that received the highest score in Step 5.
Implementing the alternative: The selected alternative is implemented by effectively communicating the decision to the individuals who would be affected by it and their commitment to the decision is acquired.
Evaluating decision effectiveness: The last step in the decision-making process is to assess the result of the decision in order to determine whether or not the problem has been resolved. Managers can make decisions on the basis of rationality, bounded rationality, or intuition.
Rational decision making. Managerial decision making is assumed to be rational—that is, making choices that are consistent and value-maximizing within specified constraints. A rational manager would be completely logical and objective. The assumptions of rationality can be met if the manager is faced with a simple problem in which 1 goals are clear and alternatives limited, 2 time pressures are minimal and the cost of finding and evaluating alternatives is low, 3 the organizational culture supports innovation and risk taking, and 4 outcomes are concrete and measurable.
Bounded rationality. Intuitive decision making. Managers also regularly use their intuition. Intuitive decision making is a subconscious process of making decisions on the basis of experience and accumulated judgment. Although intuitive decision making will not replace the rational decision-making process, it does play an important role in managerial decision making.
Types of Problems and Decisions Managers encounter different types of problems and use different types of decisions to resolve them. Problems can be structured problems or unstructured problems and decisions can be programmed decisions or nonprogrammed decisions.
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