BHM _Lecture Note Week 1_ Introduction

BHM 2041/2043/2046BHM 2041/2043/2046Basic Economics, Basic Economics,

Accounting & Accounting & Management Management

Dr. Arnifa Haji AsmawiDr. Arnifa Haji AsmawiFOM, MMUFOM, MMU

Management: An IntroductionManagement: An Introduction(Week 1, 15-21 June 2009)

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2004

2005

2008

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Key Realities In Key Realities In ManagementManagement

The only certainty today is The only certainty today is change

Speed, teamwork and flexibility Speed, teamwork and flexibility

Customer-centricityCustomer-centricity

Continuous improvement and lifelong Continuous improvement and lifelong learninglearning

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Learning ObjectivesLearning Objectives1.1. Define the basic components of managementDefine the basic components of management

2.2. Identify the basic skills of effective managementIdentify the basic skills of effective management

3.3. Explain the role of managersExplain the role of managers

4.4. Explain the various management theories Explain the various management theories

5.5. Understand what management is all about Understand what management is all about

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Definition of Management ?Definition of Management ?Attainment of organizational goals in an effective and efficient manner through

the four management functions: - Planning- Organizing- Leading - Controlling

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The Process of Management The Process of Management

Resources

HumanFinancial Raw MaterialsTechnologyInformation

OrganizingAssign responsibility

for task accomplishment

LeadingUse influence to

motivate employees

PlanningSelect goals and ways to attain

them

ControllingMonitor activities

and make correction

Performance Attain goalsProductsServicesEfficiency Effectiveness

Input Management Function Output

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What is an organization?What is an organization?

A social entity that is goal directed and A social entity that is goal directed and deliberately structured.deliberately structured.

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Characteristics of an Characteristics of an Organization Organization

Source: Robbins & Coulter (2007)

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Effectiveness and Efficiency in Effectiveness and Efficiency in Management Management

Source: Robbins & Coulter (2007)

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The Four Functions of The Four Functions of Management Management

Planning Organizing Leading Controlling

Defining goals, establishing strategies and developing sub-plans to coordinate activities.Decides tasks and use of resources

Determining what needs to be done and how it will be done and who is to do it. Involves assignment of tasks into departments and allocation of resources across organization

Directing and motivating all involved parties and resolving conflicts

Monitoring activities to ensure that they are accomplished as planned. Determining whether the organization is on target towards its goals. Making corrections as necessary

Achieving the

organization’s goals and

objectives

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Who is a manager?Who is a manager?An organizational member who

integrates and coordinates the work of others

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Types of managersTypes of managers

VerticalVertical

Horizontal Horizontal

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Types of Managers Types of Managers (Vertical)(Vertical)

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First-line Managers

the lowest level of management. manage the work of non-managerial employees train non-managerial employees encourage, monitor and reward performance e.g. sales supervisors, accounting supervisors

MiddleManagers

manage the work of first-line managers. set objectives aligned with top management goals and plans plan and allocate resources coordinate departments and divisions within company e.g. General Manager, Accounting Manager

Top Managers

create organization vision and mission establish plans and goals that affect the entire organization create positive organizational culture monitor internal and external business environment e.g. CEO, President, Managing Director

Types of Managers Types of Managers (Vertical)(Vertical)

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Relative amount of time that Managers spend on the four managerial functions

Middle Managers

Top Managers

First-line Managers

Planning Organizing Leading Controlling

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Types of Managers Types of Managers (Horizontal)(Horizontal)

Functional Managers

Manage departments performing a single functional task. e.g. sales manager, finance manager, accounting manager.

GeneralManagers

Responsible for several departments with different functions. e.g. general manager of a department store, project manager.

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Management SkillsManagement Skills Conceptual skills

Ability to see the organization as a whole and the relationship among its parts.

Human skills Ability to work with and through other people and to work effectively as a group member

Technical skills Understanding of and proficiency in the performance of specific tasks

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The Skills Required of the Different Types of The Skills Required of the Different Types of ManagersManagers

Middle Managers

Top Managers

First-line Managers

Non-Managers

Conceptual

Skills

Human Skills

TechnicalSkills

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Managerial RolesManagerial RolesInformational Interpersonal Decisional

1. Monitor

2. Disseminator

3. Spokesperson

1. Figurehead

2. Leader

3. Liaison

1. Entrepreneur

2. Disturbance handler

3. Resource allocater

4. Negotiator

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Management TheoriesManagement Theories

The evolution of management theories The evolution of management theories is due to three factors.is due to three factors.

1. Social Forces2. Political Forces3. Economic Forces

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Four Approaches to Management Four Approaches to Management TheoriesTheories

The Classical ApproachThe Classical Approach

The Behavioral/Humanistic ApproachThe Behavioral/Humanistic Approach

The Management Science ApproachThe Management Science Approach

The Modern ApproachThe Modern Approach

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The Classical ApproachThe Classical Approach Scientific ManagementScientific Management

Bureaucratic OrganizationBureaucratic Organization

Administrative PrinciplesAdministrative Principles

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Pioneers - Fredrick Winslow Taylor, Frank and Lillian Gilbreth

Careful study of individual work situation Precise work procedures developedPrecise work procedures developed Putting the right person on the job with Putting the right person on the job with

the correct tools and equipmentthe correct tools and equipment Having a standardized method of doing Having a standardized method of doing

the job.the job. Providing an economic incentive to the Providing an economic incentive to the

workerworker.. 24

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Bureaucratic Organization Max Weber Max Weber

Systematic approach to management Systematic approach to management and looked at the organization as a and looked at the organization as a wholewhole

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Bureaucratic Organization

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Founder - Henri FayolFounder - Henri Fayol

Believed that the practice of management Believed that the practice of management was distinct from other organizational was distinct from other organizational functions functions

Developed fourteen principles of Developed fourteen principles of management management

that applied to all organizational situationsthat applied to all organizational situations27

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1. Division of work.

2. Authority.

3. Discipline.

4. Unity of command.

5. Unity of direction.

6. Subordination of individual interest to the interests of the organization.

7. Remuneration.

8. Centralization.

9. Scalar chain.

10. Order.

11. Equity.

12. Stability of tenure of personnel.

13. Initiative.

14. Esprit de corps.

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The Behavioral/Humanistic The Behavioral/Humanistic ApproachApproach

Human Relations PerspectiveHuman Relations Perspective

Human Resources PerspectiveHuman Resources Perspective

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Human Relations Perspective Human Relations Perspective Hugo Munsterberg

Role of psychologist in industry Study jobs & the suitable people Identify psychological work conditions Devise strategies to influence employees

Mary Parker Follet

Importance of human behavior in shaping management style Coordination –key to effective management coordinate and harmonize group effort best decisions are by those closest to the situation integration process- to solve conflicts

Elton Mayo Hawthorne Experiments productivity increased because someone was paying

attentionImprovement in productivity due to social factors (morale,

group relationship, leading, communicating)

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Human Resources Perspective Human Resources Perspective Chester Barnard

Two primary functions of managers:Establish and maintain communication systemEstablish objectives of organizations and motivate employees

Theory on authority- authority flows from the ability of the subordinates to accept or reject an order

Abraham Maslow

The Hierarchy of Human NeedsPeople will perform well if work provides them with opportunities to satisfy their needs

Douglas McGregor

Theory X and Theory Y of human behavior Theory Y is a more realistic view of workers- employees will exercise self-control and will contribute to organizational goals when given the opportunity.

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Maslow’s Hierarchy of NeedsMaslow’s Hierarchy of Needs

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McGregor’s Theory X and Theory YTheory X Assumptions Theory X Assumptions• Dislike work-will avoid it• Must be coerced,

controlled, directed or threatened with punishment

• Prefer direction, avoid responsibility, little ambition, want security

• Do not dislike work• Self-direction and self-

control• Seek responsibility• Imagination, creativity

widely distributed• Intellectual potential only

partially utilized.

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Management Science Management Science ApproachApproach

Characteristics:Characteristics: Focus on decision making Use of economic decision criteria Use of mathematical models Use of computers in data processing

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The Modern ApproachThe Modern ApproachLooks at the dynamics and responses Looks at the dynamics and responses

of anof anorganization facing business challengesorganization facing business challenges

Systems approach Contingency approach Learning organization

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System DefinedSystem Defined– A set of interrelated and interdependent parts A set of interrelated and interdependent parts

arranged in a manner that produces a unified arranged in a manner that produces a unified whole.whole.

Basic Types of SystemsBasic Types of Systems– Closed systemsClosed systems

Are not influenced by and do not interact with their Are not influenced by and do not interact with their environment (all system input and output is environment (all system input and output is internal).internal).

– Open systemsOpen systems Dynamically interact to their environments by Dynamically interact to their environments by

taking in inputs and transforming them into outputs taking in inputs and transforming them into outputs that are distributed into their environments.that are distributed into their environments.

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The Contingency ApproachThe Contingency Approach Contingency Approach DefinedContingency Approach Defined

– Also sometimes called the Also sometimes called the situational situational approach.approach.

– There is no one universally applicable set There is no one universally applicable set of management principles (rules) by of management principles (rules) by which to manage organizations.which to manage organizations.

– Organizations are individually different, Organizations are individually different, face different situations (contingency face different situations (contingency variables), and require different ways of variables), and require different ways of managing.managing.

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Popular Contingency VariablesPopular Contingency Variables

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Organization sizeOrganization size

Routineness of task technologyRoutineness of task technology

Environmental uncertaintyEnvironmental uncertainty

Individual differencesIndividual differences

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Learning OrganizationLearning Organization An organization that learns and An organization that learns and

encourages learning among people.encourages learning among people.

Exchange of info Exchange of info knowledgeable knowledgeable workforceworkforce

Flexible organizationFlexible organization

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Benefits of Learning Benefits of Learning OrganizationOrganization

Greater Motivation

Flexible workforceMore creative peopleImproved social interaction

Better teamwork

Knowledge sharingInterdependency

Company benefits

Breakdown of communication barriersBetter customer relationsMore resourcesMore innovation and creativity

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Thank YouThank You