Management Concepts - Summary - lectures 1 - 11 PDF

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Historical Foundations Of Management

24/11/2015 7:56 PM

Theories: • •

Are an organised way of thinking about a subject Can help define concepts about the subject

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Organise definitions so that they do not contradict one another Try to explain and predict on the basis of their concepts

• Can take emotion out of issues • Are used unconsciously by most of us HINT: authors of theories - remember Classical approach to management: Underlying assumption that people are rational. Scientific management: Fredrick Taylor (USA) the father of scientific mgt – advocating methods to define the “one best way” for a job to be done. • Right person on the job with correct tools/ equipment • •

Having a standardised method of doing the job Providing an economic incentive to the worker

Frank and Lillian Scientific management emphasises careful selection and training of workers, and supervisory support 4 Guiding action principles: 1. Develop for every job a ‘science’ that includes standardised work processes and conditions 2. Carefully select workers with right abilities 3. 4. Todays use of scientific mgt: • •

Time and motion studies Train workers to perform at their best

Train supervisors to support workers so they can perform jobs to the best of their abilities • Design incentives based on output •

Administrative Theorists – Henry Fayol (French)

1. Foresight – complete a plan of action. 2. Organisation – provide and mobilise resources. 3. Command – lead, select and evaluate workers. 4. Coordination – fit diverse efforts together. 5. Control – making sure things happen according to plan. Fayol’s 14 Principles: HINT 14 principles in quiz (remember below 3 at least) Including… •

The scalar chain principle: there should be a clear/ unbroken line of communication from top à฀ bottom of organisation

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The unity of command principle: each person should receive

orders from only one boss • The unity of direction principle: One person should be in charge of all activities that have the same performance objective Bureaucracy - Max Weber (german) An “ideal rational and efficient form of organisation founded on logic, order and legitimate authority. • •

Clear division of labour Clear hierarchy of authority

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Formal rules and procedures Impersonality Careers based on merit

Behavioural approaches to management:

Hawthorne Studies:

Elton Mayo – Harvard professor from Aust. Conducts studies of job design. Showed that people’s feeling and relationships with co-workers, and the ‘work group’, should be important to management – contributed to the human relations movement in management. The Hawthorne effect: the tendency of people singled out for special attention to perform as expected. Douglas McGregor: X/Y attitude to employees •

X approach is one where managers see workers as irresponsible, lazy and needing control, only monetary incentives and fear

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Y where manager sees workers as naturally seeking to make an effort and seek responsibility; rewards should be intrinsic to job.

Mary Parker Follet: Social – reality • Organisations as ‘communities’ where individuals combine their talents for a greater good • Making every employee an owner creates feelings of collective responsibility

Role of Quantitative approaches: • Management science (or operations research): Describes the application of mathematical techniques to analyse and solve management problems. • Mathematical forecasting: Makes future projections that are useful in the planning process. • Inventory modeling: Helps control inventories by mathematically establishing how much to order and when

The contingency approach: Matching responses to the unique problems and opportunities posed by different situations • •

There is no one universal cure for solving a problem A contingency approach is logical because organisations and even units within the same organisation are diverse in size, goals, work and the like.

Lecture 3: Planning - Function of Management24/11/2015 7:56 Report Link to organisational theories Recommendation/ solutions: • • •

Create opportunities for free agents to meet Clear organisation structure and communication plan Create an online knowledge management system which free

agents log all necessary information in for future access • Build a robust virtual network system to control data for the organisation Have a hook at the beginning of report and explain clearly 4 functions of management- apply to case identify and look at different interpretations take function of management, apply it, reason through and come to conclusion relate facts of case to management function “problem statement is comprehensive/ relevant to the case and refers insightfully to the relevant functions of management” • 5 journal articles

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1 definition of the problem, then journal articles as evidence (use both points of view) and apply solution

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avoid bullet points but use simple explanation have “provide conclusions/ recommendations for mgt. which are

comprehensive or creative with inspired actionable outcomes” • could be multiple solutions, conclusion summarises report

PLANNING The process of setting objectives and determining how to accomplish them. Involves deciding exactly what you want to accomplish and the best way to go about it. Objectives: •

Specific results someone wishes to achieve – the plan is the specialised objectives which lets you achieve the goal

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May relate to the individual, a group or the whole organisation

Steps in the systematic planning process:**exam 1. Define your objectives

2. Determine where you stand in relation to objectives 3. Develop premises (logic) regarding future conditions: Opportunities/ threat 4. Analyse and choose among alternative actions 5. Implement the plan and evaluate the results SMART Objectives:**exam Specific Measurable Actionable Reasonable Timetabled Types of plans used by managers: • • •

Short range plans= cover one year or less Lower manager make sure people do the work Top

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Strategic plans: define long term needs and set action directions

for the organisation • Tactical plans: Developed and used to implement strategic plans. They tend to be intermediate term plans that specify how the organisations resources can be utilised Situations may arise that require adjustments to solve problems or exploit opportunities, in order to advance the overall strategy Book - “Maverick by Ricardo Semler” Forecasting: Making assumptions about what will happen in the future. • Qualitative forecasting uses expert opinions to predict the future •

Quantitative forecasting uses mathematical and statistical analysis of data banks to predict future events

Participatory planning: includes the people who will be affected by plans and/or whose help is needed to implement them.

Lecture 4 (week 5): Organising

24/11/2015 7:56 PM

- focus on organising for report • • •

need to organise people/ physical items need good organizational structure to move forward need to be prepared to re-organise yourself and update as more

business technology becomes available • how you divide your business into departments Contingency: a back up plan more or less Potential of diversification Organising •

Arranging and structuring work to accomplish the organisation’s goals

The process of creating an organisation’s structure, which is the formal arrangement of jobs within an organisation • When managers develop or change an organisation’s structure •

they are engaged in organisational design

Organisational Structure: • The way in which various parts of an organisation are formally arranged

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The system of tasks, workflows, reporting relationships and communication channels that link the work of diverse individuals

and groups • Structure must be handled in a contingency fashion: as environments and situations change, structures must often change too • Organisational chart: structure of the organisation in its official state Informal structure: • A shadow organisation made up of the unofficial, but often critical, working relationships between organisational members • Who talks to who regardless of formal relationships • Informal learning is increasingly recognised as an important resource for organisational development Departmentalisation: The grouping of work positions into formal teams or departments which are linked in a coordinated fashion within the larger organisation. The three major types of organisation structure are: • •

The functional structure The divisional structure

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The matrix structure

Functional structures – people with similar skills and performing similar tasks are formally grouped together into work units. Major advantages of functional structures: • Economies of scale • High quality technical problem solving •

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In-depth training and skills within functions

Divisional structures – groups together people working on the same product, in the same area, with similar customers, or involved in the same processes. Major types of divisional approaches: • Product • Geographical, customer • Process structures Common in complex organisations.

• Product structures: group together jobs and people working on a single product or service. Geographical structures: group together people and jobs performed in the same location. Customer structures: group together people and jobs that serve the same customers or clients. Work process: Group of tasks related to one another that collectively create something of value to a customer. Process structures: group jobs and activities that are part of the same processes. Adaptive Organisations:

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Min. flow of bureaucratic features; encourage worker empowerment and teamwork

Organic designs: • Decentralised, with fewer rules/ procedures, open divisions of labour, wide spans of control and more personal coordination • Creating structures that best serve a company’s mission and objectives

• THEORY OF THE WEEK: Structure follows strategy - Alfred Chandler – 5 organisational design contingencies *watch Lenovo vid Workplace organising trends “Google’s structure” • Informal • •

Free food gets people talking to each other Flatter horizontal organisational structure

Lecture 5 (week 6): Foundations Of Control24/11/2015 7:56 PM Organising and control for assignment Control Provides: • A measure of what is happening • •

Check those measurements against some defined object Determine whether the business is on track

Appropriate controls can help identify specific performance gaps and areas for improvement • Give responsibility to someone, not a task •

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Need control but too many will de-humanize employees

Control is final link in the mgt functions o Only way managers know wether organisational goals are being met

Steps in the control process 1. Establish objectives and standards • Performance objectives should represent key results to be achieved (KPI) • Output standards measure performance results in terms of quantity, quality, cost or time • Input standards measure work efforts that go into a performance task 2. Measure actual performance • Measure

i. How we measure: ii. What we measure is probably more critical to the control process than how we measure iii. Control criteria – employee satisfaction or turnover and absenteeism rates, budgets 3. Compare results with objectives and standards • Acceptable range of variation A historical comparison uses past performances as a benchmark for evaluation • A relative comparison uses the performance achievements of •

others as the evaluation standard • An engineering comparison uses standards that are set scientifically 4. Take corrective action management by exception focuses managerial attention on substantial differences between actual and desired performance • Two types of exceptions may be encountered: •

i. problem situations ii. opportunity situations. •

An after-action review formally examines results to identify lessons learned in a completed project or special operation

Feedforward control: Takes place before activity commences – prevents anticipated problems Concurrent control: control is enacted while the work is being performed Feedback control: Takes place after a work activity is done Clan control: Influences behaviour through norms and expectations set by the organisational culture Market control: Based on customer wants. 4 P’s

Theory of the week: Balanced Scorecard approach to management:

A balanced scorecard Tallies organisational performance in financial, customer service, internal process, and innovation and learning areas. How should we appear to our shareholders? How should we appear to our customers? At what internal business processes should we excel? How will we sustain our ability to change and improve?

Critical Evaluation and Referencing 1.

Lecture 6 (week 7) - Leading

24/11/2015 7:56 PM

What is the nature of leadership? • • •

Not giving up in a time of crisis Keeping the momentum Take responsibility

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Have a concern for staff

Leading – to inspire effort: o Build enthusiasm o Communicate the vision – clear sense of future o Maintain momentum 5 principles of visionary leadership 1. challenge the process 2. show enthusiasm 3. help/ enable others to act 4. set the example 5. celebrate achievements (break vision into smaller milestones) Position Power: based on things managers can offer to others. Reward- “if you do what I ask I’ll give you a reward” Coercion- “IF YOU DON’T DO WHAT I ASK, ILL PUNISH YOU” Personal Power: based on the ways managers are viewed by others Expert- as a source of special knowledge and info – other people recognise your skills/ knowledge Referent- as a person with whom others like to identify Leadership traits and behaviours: • •

drive – energy, initiative and tenaciousness self-confidence

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creativity cognitive ability to interpret information

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business knowledge

research on traits says there is NOT ONE DEFINED SET OF TRAITS WHICH EVERY LEADER MUST HAVE

Contingency theories of leadership Fiedler contingency model Leaders have fixed style of leadership, effectiveness depends on situation • Task orientated and people orientated •

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3 contingency dimensions that defined the key situational factors for determining leader effectiveness o leader-member relations o task structure o position power

In most situations a relationship orientated leader is better, but in cases where relationships are really good or bad a task orientated leader is better House’s path-goal theory Substitutes for leadership reduce the need for a leader’s personal involvement. Possible substitutes for leadership include: subordinate characteristics such as ability, experience and independence; task characteristics such as routineness and availability of feedback; and organisational characteristics such as clarity of plans and formalisation of rules and procedures Hersey-Blanchard Model

Vroom-Jago Leader-participation model

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An authority decision

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A consultative position A group position

Transformational leadership Inspirational leadership that gets people to do more in achieving high performance. • Leadership which directs others through tasks, reward and structures •

Building block that supports transformational leadership

Theory of the week: Transformational leadership – James and John Riady

Lecture 7 (week 8): Information & Decision Making24/11/201 Final exam on the 7th nov most likely (2hours) Decision Making: The work of managers involves planning, organising, controlling and leading in the course of daily problem solving. Problem solving: process of identifying a discrepancy between actual and desired state of affairs, and taking action to resolve the deficiency or take advantage of the opportunity. A decision is a choice between alternative courses of action. A judgement reached after consideration. How information is used for decision making Information systems help managers gather data, turn them into useful info and use that info to make problem solving decisions. Types of managerial decisions: • Programmed decisions: solutions from past experience to a routine problem • Non-programmed decisions: specific solutions crafted for a unique problem • A crisis: an unexpected problem that can lead to disaster if not resolved quickly and appropriately. Managers in progressive organisations expect that crises will occur and plan ahead on how to deal with them Rationality: it is assumed managers act rationally in the decisions they make. Best choice: “maximising” Decision Conditions: People in organisations make decisions under 3 different conditions: • Certain environments: • •

Risk environment: An uncertain environment:

How managers approach decisions: Three approaches: •

Problem avoiders – ignore info and are inactive

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Problem solvers – willing to make decisions and solve problems,

but they are reactive • Problem seekers – actively process info and constantly look for problems to solve or opportunities to explore Systematic thinking: Approaches problems in a rational and analytical fashion Intuitive thinking: approaches problems in a flexible and spontaneous fashion Strategic opportunism: refers to the ability to focus on long term objectives while being flexible in dealing with short term problems The Decision Making Process 1. Find and define the problem: Information gathering, processing and deliberation. Common mistakes: a. Defining the problem too broadly or narrowly b. Focusing on the symptoms instead of causes c. Choosing the wrong problem to deal with 2. Generate and evaluate alternative solutions: More info is gathered, data is analysed. Pros and cons of potential actions are identified. Cost benefit analysis 3. Select preferred solution and conduct ethics double check: a. Classical design model – describes decision making with complete info b. Optimising decision – chooses the alternative giving the absolute best solution to a problem c. Behavioural decision model – describes decision making 4. Implement the solution: Stage at which directions are finally set and problem-solving actions are initiated. Managers need the ability/ willingness to implement their decisions 5. Evaluate results: if desired results are not achieved, the process must be renewed to allow for corrective actions.

Theory of bounded rationality Decisions made within the parameters of a simplified model that captures the essential features of a problem.

Bounded by the limitations and constraints, managers attempt to behave rationality. Rational decisions more effective than initiative decisions Behavioural influences on decision making: •

Availability heuristic: Using information ‘readily available’ from memory as a basis for assessing a current event or situation.

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Representativeness heuristic: Assessing the likelihood of something occurring based on its similarity to a stereotyped set of occurrences.

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Anchoring and adjustment...