Certification study group section 1
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Certification study group section 1
- 1. Certification Study Group Principles and Theories of Management
- 2. Management Management is a set of activities directed at an organization’s resources with the aim of achieving organizational goals in an efficient and effective manner
- 3. Management Activities include the four functions of management Planning (and decision making) Organizing Leading Controlling
- 4. Management Resources include: Human Financial Physical Information
- 5. Management in Organizations Inputs from the environment • Human resources • Financial resources • Physical resources • Information resources Planning and decision making Leading Organizing Controlling Goals attained • Efficiently • Effectively
- 6. Important Definitions Top Managers Middle Managers First-line Managers Operative Employees
- 7. The Management Process Organizing Determining how best to group activities and resources Controlling Monitoring and correcting ongoing activities to facilitate goal attainment Planning and Decision Making Setting the organiza- tion’s goals and deciding how best to achieve them Leading Motivating members of the organization to work in the best interests of the organization Figure 1.2
- 8. The Basic Functions of Management A Circular Process Planning and Decision Making Organizing Leading Controlling
- 10. Fundamental Management Skills Management Skill Mixes at Different Organizational Levels
- 11. Classical Management Perspective Scientific Management Frederick Taylor The Gilbreths Henry Gantt
- 12. Steps in Scientific Management Develop a science for each element of the job to replace old rule-of-thumb methods Scientifically select employees and then train them to do the job as described in step 1 Supervise employees to make sure they follow the prescribed methods for performing their jobs Continue to plan the work, but use workers to get the work done 21 43 Figure 1.3
- 13. The Classical Management Perspective Administrative Management – focuses on managing the total organization Henry Fayol Lyndal Urwick Max Weber
- 14. Weber’s Theory of Bureaucracy Division of labor Reliance on rules and regulations Hierarchy of authority Employment based on expertise Inflexible Rigid Impersonal
- 15. The Behavioral Management Perspective Placed much more emphasis on individual attitudes and behaviors and on group processes in organizations. Recognized the importance of behavioral processes in organizations Hugo Munsterberg Mary Parker Follet Elton Mayo
- 16. Behavioral Management Perspective Elton Mayo – Hawthorne Studies Illumination study Group study
- 17. 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 manager’s concern for workers would lead to increased worker satisfaction and improved worker performance.
- 18. Behavioral Management Perspective 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.
- 19. Maslow’s Hierarchy of Needs Five levels Physiological – hunger, thirst, shelter, sex Safety – security and protection Social – affection, interpersonal relationships Esteem – self-respect, achievement status Self-actualization – achieving full potential Usually thought in the form of a pyramid
- 20. Maslow’s Hierarchy of Needs S A Esteem Needs Social Needs Security Needs Physiological Needs
- 21. Theory X and Theory Y Theory X Assumptions People do not like work and try to avoid it. 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.
- 22. Theory X and Theory Y 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. Source: Douglas McGregor, The Human Side of Enterprise, Copyright © 1960 by McGraw-Hill. Reprinted by permission of The McGraw-Hill Companies.
- 23. Theory X and Theory Y Theory Y Assumptions 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.
- 24. Theory X – Theory Y Think of these theories as a continuum Theory X Theory Y Employees fall somewhere in between the two ends
- 25. The Behavioral Management Perspective Contemporary behavioral science in management – emerged because of the too simplistic descriptions of work behavior by the human relations theorists. Organizational behavior takes a holistic view of behavior, including individual, group, and organization processes
- 26. Organizational Behavior 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
- 27. The Quantitative Management Perspective Focuses on decision making, economic effectiveness, mathematical models, and the use of computers in organizations Management science Operations management
- 28. The Quantitative Management Perspective Contributions Developed sophisticated quantitative techniques to assist decision making Models have increased our awareness of complex organizational processes and have aided in the planning and controlling processes Limitations Cannot fully explain or predict behavior Mathematical sophistication may come at the expense of other important skills Models may require unrealistic or unfounded assumptions
- 29. Contemporary Management Theory The Systems Perspective A system is an interrelated set of elements functioning as a whole. An organization as a system is composed of four elements: Inputs (material and/or human resources) Transformation processes (technical and managerial processes) Outputs (products and services) Feedback (reactions from the environment)
- 30. The Integrated Systems Model FeedbackFeedback InputsInputs From theFrom the environment:environment: HumanHuman MaterialMaterial FinancialFinancial InformationInformation ProcessingProcessing TransformationTransformation process:process: TechnologyTechnology Operating systemsOperating systems AdministrativeAdministrative systemssystems Control systemsControl systems OutputsOutputs Into theInto the environmentenvironment ProductProduct ServicesServices Profit/lossProfit/loss Employee behaviorEmployee behavior InformationInformation
- 31. Systems Perspective Synergy Subsystems are more successful working together than working alone. The whole, working together, is greater than the sum of its parts. Entropy A natural process leading to system decline which can be avoided through organizational change and renewal.
- 32. Contemporary Management Issues & Challenges Downsizing Diversity and the New Workforce Information Technology New Ways of Managing Globalization Ethics and Social Responsibility Managing for Quality Service Economy
- 33. Certification Study Group The Functions of Management
- 34. The Functions of Management A Circular Process Planning Organizing/ Staffing Leading/Directing Controlling
- 36. Written explanation of company aims What goods and services the company will offer What market the company will serve Company belief vision Statement about employee treatment may be included Written explanation of company aims What goods and services the company will offer What market the company will serve Company belief vision Statement about employee treatment may be included Mission Statement & Objectives Objectives - The ends or results desired by the organization and are derived from the organization’s mission.
- 37. Plans Are Classified on Their Scope Strategic Tactical Operational Plans become more specific as they move from strategic to operational Contingency
- 39. Certification Study Group Decision Making
- 40. Managers As Decision Makers Decision making – the process of recognizing a problem or opportunity and creating a solution A decision is a choice between alternatives
- 41. Steps in the Decision Making Process Recognize and define the decision situation Develop options Analyze options Implement the decision Monitor the consequences Select the best option
- 42. Decision Making Process Recognizing Identifying Alternatives Evaluate Alternatives Select Alternative Implement decision Evaluate
- 43. Steps in the Rational Decision-Making Process Step Detail Example 1. Recognizing and defining the decision situation Some stimulus indicates that a decision must be made. The stimulus may be positive or negative. A plant manager sees that employee turnover has increased by 5 percent. 2. Identifying alterna- tives Both obvious and creative alternatives are desired. In general, the more important the decision, the more alternatives should be considered. The plant manager can increase wages, increase benefits, or change hiring standards. 3. Evaluating alterna- tives Each alternative is evalu- ated to determine its feasibility, its satisfactoriness, and its consequences. Increasing benefits may not be feasible. Increasing wages and changing hiring standards may satisfy all conditions.
- 44. Steps in the Rational Decision-Making Process Step Detail Example 4. Selecting the best alternative Consider all situational factors, and choose the alternative that best fits the manager’s situation. Changing hiring standards will take an extended period of time to cut turnover, so increase wages. 5. Implementing the chosen alternative The chosen alternative is implemented into the organizational system. The plant manager may need permission from corporate headquarters. The human resource department establishes a new wage structure. 6. Following up and evaluating the results At some time in the future, the manager should ascertain the extent to which the alternative chosen in step 4 and implemented in step 5 has worked. The plant manager notes that, six months later, turnover has dropped to its previous level.
- 45. Evaluating Alternatives in the Decision-Making Process Is the alternative feasible? Eliminate from consideration Is the alternative satisfactory? Are the alternative’s consequences affordable? Retain for further consideration Yes Yes Yes Eliminate from consideration Eliminate from consideration No No No Figure 4.3
- 46. Rational Decision-making Process Steps The Classical Model 1 2 3 4 5 6 A Circular Process
- 47. Types of Decisions Programmed Decisions A structured decision or one that occurs frequently Have well established and understood solutions Nonprogrammed Decisions An unstructured decision, which occurs less frequently than a programmed decision Involves complex, important, and nonroutine problems or opportunities
- 48. Decision-Making Conditions Level of ambiguity and chances of making a bad decision Lower HigherModerate Certainty UncertaintyRisk The decision maker faces conditions of...
- 49. Distinguishing Between Decision Making Conditions Source: Barney, Jay B. and Ricky W. Griffin. The Management of Organizations. Copyright © 1992 by Houghton Mifflin Company. Used with permissions. There are different kinds of conditions in which to make a decision.
- 50. Decision-Making Conditions Decision Making Under Certainty Decision Making Under Risk Decision Making Under Uncertainty
- 51. Rational Perspectives on Decision Making The Classical Model of Decision Making When faced with a decision situation, managers should. . . . . . and end up with a decision that best serves the interests of the organization. • obtain complete and perfect information • eliminate uncertainty • evaluate everything rationally and logically
- 52. Behavioral Aspects of Decision Making The Administrative Model of Decision Making When faced with a decision situation managers actually… . . .and end up with a decision that may or may not serve the interests of the organization. • use incomplete and imperfect information • are constrained by bounded rationality • tend to satisfice
- 53. Bounded rationality Satisficing Coalition Intuition Escalation of Commitment Risk Propensity The Administrative Model Important Behavioral Concepts
- 54. Ethics and Decision Making Components of managerial ethics: Relationships of the firm to employees Employees to the firm The firm to other economic agents
- 55. Group and Team Decision Making in Organizations The most common method of group and team decision making are: Interacting groups Delphi groups Nominal groups.
- 56. Group Decision Making Advantages More information & knowledge are available More alternatives are likely to be generated More acceptance of the final decision is likely Enhanced communication of the decision may result Disadvantages The process takes longer, so it is more costly Compromise decisions due to indecisiveness may emerge One person may dominate the group Groupthink may occur
- 57. Groupthink Source: Gregory Moorhead, Group & Organizations Studies (Vol. 7, No. 4), pp. 429-444. Copyright © 1982 by Sage Publications, Inc. Reprinted by permission of Sage Publications, Inc. A situation that occurs when a group or team’s desire for consensus and cohesiveness overwhelms its desire to reach the best possible decision.
- 58. Managing Group and Team Decision-Making Processes Be aware of the pros and cons of having a group or team make a decision. Set deadlines for when decisions must be made. Avoid problems with dominance by managing group membership. Hold a follow-up meeting to recheck the decision. Have each group member individually and critically evaluate all alternatives. As a manager, do not make your position known too early. Appoint a group member to be a “devil’s advocate.” Promoting the Effectiveness of Group and Team Decision Making:
Hinweis der Redaktion
- Top Managers – a group of people responsible for establishing an organization’s overall goals objectives and developing policies to achieve those objectives Middle Managers – next level down, manage other managers. They are responsible for establishing and meeting specific departmental or unit goals. First-line Managers – oversee the work of operative employees – often have job titles like foremen, supervisor. The majority of their work is direct supervision of their employees. Operative Employees – employees who physically produce an organization’s goods or services by working on specific tasks
- Planning & Decision Making – determine courses of action. Planning - defining goals, establishing an overall strategy to achieve the goals, developing a comprehensive set of plans to integrate and coordinate activities. Decision making – selecting a course of action from alternatives Organizing – grouping activities in some logical fashion - the division of labor, determining what tasks are to be done, who does them, how tasks are grouped Leading – the set of processes used to get people to work together to advance the interests of the organization - directing, motivating, communicating and resolving conflicts Controlling – monitoring/measuring an organizations performance, comparing results to plans – ensures the organization is effectively and efficiently achieving its goals
- Technical Skills – ability to accomplish or understand tasks relevant to the organization Interpersonal Skills – ability to communicate understand, and motivate other people, individually and in groups Conceptual Skills – the ability to understand the the big picture, ability to analyze and diagnose the overall workings of the organization and its environment Diagnostic Skills – the ability to recognize the symptoms of a problem then determine a way to fix it Communication Skills – ability to both effectively convey ideas and information to others and to receive ideas and information from others Decision-making Skills - the ability to correctly recognize and define problems and opportunities and then select appropriate courses of action Time Management Skills – the ability to prioritize work, to work efficiently, and to delegate appropriately
- Scientific Management – focuses on ways to improve individual performance – focused on efficiency Grew out of the industrial revolution’s labor shortage at the beginning of the twentieth century. Frederick Taylor: Father of Scientific Management Replaced the old rule-of-thumb method. Believed in selecting, training, teaching and developing workers. Used time study, standards planning, exception rule of management, slide-rules, instruction cards, incentives, etc. Frank and Lillian Gilbreth Reduced number of movements in bricklaying, resulting in increased output of 200% Henry Gantt Developed other techniques, including the Gantt chart, to improve working efficiency through planning/scheduling
- Henri Fayol Wrote General and Industrial Management Helped to systematize the practice of management First to describe management as planning, organizing, leading, and controlling Max Weber Theory of bureaucracy is based on a rational set of guidelines for structuring organizations Lyndall Urwick Integrated scientific management with the work of Fayol and other administrative management theorists
- Hugo Munsterberg – advocated that psychologists could make valuable contributions to management theory Mary Parker Follet – recognized the human element in the work place
- Elton Mayo – Hawthorne Studies Illumination study - Controlled lighting in one room of workers but not another – compared results – when the results increased in the varied lighting room also increased in the control group Increase in productivity came because both groups were receiving attention Group study – found workers did not work as fast as they could on a piece rate system, Performed at a level set informally by the group rate busters: over-producing workers chiselers: under-producing workers Conclusion was that individual and social processes played a role in shaping employee attitudes and behavior at work
- Management Science – focuses on the development of mathematical models. These models help the organization to try out various activities with the use of a computer. Modeling can help managers locate the best way to do things and save money and time Operations Management – is an applied form of management science that helps organizations develop techniques to produce their products and services more efficiently
- Planning – defining goals, establishing an overall strategy to achieve the goals, developing a comprehensive set of plans to integrate and coordinate activities Organizing – the division of labor, determining what tasks are to be done, who does them, how tasks are grouped, who reports to whom, when decisions are made Organizing is the structuring of resources and activities to accomplish objectives in an efficient and effective manner. Managers organize by reviewing plans and determining what activities are necessary to implement them. Managers divide the work into small units and assign it to specific individuals or groups. Staffing is hiring people to carry out the work of the organization. Leading/Directing – directing, motivating, communicating and resolving conflicts Especially important to lower-level managers Controlling – monitoring/measuring an organizations performance, comparing results to plans, if needed correcting actual performance Linked very closely to planning The process of evaluating results to objectives Involves monitoring and measuring Plans, organization, staffing, and leading may be changed on the basis of results from the controlling process
- Planning The process of determining the organization’s objectives and deciding how to accomplish them Plans are derived from the organization’s mission, which describes its fundamental purpose and basic philosophy.
- Set guideposts by which managers define standards that the organization should accomplish Include areas such as profitability, customer service, and employee satisfaction
- Strategic – those plans that establish the long range objectives and overall strategy or course of action by which a firm fulfills its mission Tactical – shorter range plans designed to implement activities and objectives specified by strategic plans Operational – short-term plans that specify what actions individuals, work groups, or departments need to accomplish in order to achieve the tactical plan and ultimately the strategic plan Crisis management or contingency planning refers to plans for dealing with potential disasters such as product tampering, oil spills, fire, earthquake, computer virus, or airplane crash Generally cover two elements: maintaining business throughout a crisis and communicating with the public, employees, and officials about the problem and the company’s response Seeks to resume/restore operations as quickly and smoothly as possible after a crisis
- Decision Making Under Certainty A condition in which the decision maker knows with reasonable certainty what the alternatives are and what conditions are associated with each alternative. Decision Making Under Risk A condition in which the availability of each alternative and its potential payoffs and costs are all associated with risks. Decision Making Under Uncertainty A condition in which the decision maker does not know all the alternatives, the risks associated with each, or the consequences of each alternative.
- Most managers think of themselves as rational decision makers Many experts argue that managers should try to be as rational as possible in making decisions
- When faced with a decision situation, managers actually… Use incomplete and imperfect information Are constrained by bounded rationality Tend to satisfy immediate concerns ...and end up with a decision that may not serve the interests of the organization
- Bounded rationality Decision makers are limited by their values and unconscious reflexes, skills, and habits Satisficing The tendency to search for alternatives only until one is found that meets some minimum standard of sufficiency Coalition A political force in decision making which consists of an informal alliance of individuals or groups formed to achieve a goal. Intuition An innate belief about something without conscious consideration. Escalation of Commitment A decision maker is staying with a decision even when it appears to be wrong. Risk Propensity The extent to which a decision maker is willing to gamble when making a decision.
- Individual ethics (personal beliefs about right and wrong behavior) combine with the organization’s ethics to create managerial ethics. Ethics are clearly related to decision making in a number of ways. A managers belief in right and wrong can directly affect their decision. Thus each decision one makes indeed has an ethical component that will affect their decision as does politics and risk propensity.
- Interacting groups or teams are the most common form of decision-making groups which consists of an existing group or newly formed team interacting and then making a decision. Delphi groups are sometimes used for developing a consensus of expert opinion from a panel of experts who individually contribute through a moderator. Nominal groups are a structured technique designed to generate creative and innovative ideas through the individual contributions of alternatives that are winnowed down through a series of rank-ordering of the alternatives to reach a decision.