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ESSENTIALS OF ESSENTIALS OF MANAGEMENT: MANAGEMENT:

An International PerspectiveAn International PerspectiveSixth EditionSixth Edition

Weihrich and KoontzWeihrich and Koontz

Chapter 1. Management: Chapter 1. Management: Science, Theory, and PracticeScience, Theory, and Practice

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After studying this chapter, you should understandAfter studying this chapter, you should understand

1.1. The nature and purpose of management.The nature and purpose of management.2.2. That management applies to all kinds of That management applies to all kinds of

organizations and to managers at all organizational organizations and to managers at all organizational levels.levels.

3.3. That the aim of all managers is to create a "surplus"That the aim of all managers is to create a "surplus"4.  That the nature of excellent and admired companies 4.  That the nature of excellent and admired companies

and their characteristics.and their characteristics.5   The trends in information technology and5   The trends in information technology and

globalization.globalization.6.6. The concepts of productivity, effectiveness, and The concepts of productivity, effectiveness, and

efficiency.efficiency.7.7. That management as practice is an art in which the That management as practice is an art in which the

underlying theory and science are applied in light of underlying theory and science are applied in light of situations.situations.

8.8. The evolution of management and some recent The evolution of management and some recent contributions to management thought.contributions to management thought.

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Definition of Management & Definition of Management & Its Nature and PurposeIts Nature and Purpose

Management is the process of Management is the process of designing and maintaining an designing and maintaining an environment in which individuals, environment in which individuals, working together in groups, working together in groups, efficiently accomplish selected aimsefficiently accomplish selected aims

--THE RESERVE BANK OF INDIATHE RESERVE BANK OF INDIA

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Desining & maintaining environmentDesining & maintaining environment -creating a positive physiological & psychological -creating a positive physiological & psychological

environment & cultureenvironment & culture Working together in groupsWorking together in groups -forming & leading groups-change culturally-forming & leading groups-change culturally Efficiently accomplish Efficiently accomplish -achieve with minimum resources-achieve with minimum resources Selected aimsSelected aims -being focussed with core competency-being focussed with core competency

..

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Nature and scope of Nature and scope of managementmanagement

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The Functions of ManagementThe Functions of Management

The five managerial functions The five managerial functions around which managerial around which managerial knowledge are organized are: knowledge are organized are: planning, organizing, staffing, planning, organizing, staffing, leading, and controllingleading, and controlling

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Managerial Functions at Managerial Functions at Different Organizational LevelsDifferent Organizational Levels

No basic distinction is made between No basic distinction is made between managers, executives, managers, executives, administrators, and supervisorsadministrators, and supervisors

All managers carry out managerial All managers carry out managerial functions. However, the time spent functions. However, the time spent for each function may differfor each function may differ

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Time Spent in Carrying Out Time Spent in Carrying Out Managerial FunctionsManagerial Functions

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..Managerial Skills and the Managerial Skills and the Organizational HierarchyOrganizational Hierarchy

The four skills for administrators The four skills for administrators are:are:

technical, technical, human, human, conceptual, and conceptual, and design skillsdesign skills

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Managerial Skills(Managerial Skills(Katz & others)Katz & others)

Technical SkillsTechnical Skills::Application of specialized Application of specialized

knowledge or expertise knowledge or expertise acquired though formal acquired though formal training & its use.training & its use.

Human Skills:Human Skills:Ability to work with people, Ability to work with people,

understand and motivate understand and motivate groups & individuals.groups & individuals.

Conceptual Skills:Conceptual Skills:Mental ability to recognize, Mental ability to recognize,

analyze, diagnose and think analyze, diagnose and think through complex situations.through complex situations.

Skills NeededSkills Needed

Board

Exec.

Mgr.

Supr.

HUMAN

Conceptual

Technical

Management: roles & skills

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The Goals of All Managers and The Goals of All Managers and Organizations Organizations

The aim of all managers should The aim of all managers should be to create a surplus. Thus, be to create a surplus. Thus, managers must establish an managers must establish an environment in which people environment in which people can accomplish group goals can accomplish group goals with the least amount of time, with the least amount of time, money, materials, and money, materials, and personal dissatisfactionpersonal dissatisfaction

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Characteristics of Excellent Companies Characteristics of Excellent Companies (Peters & Waterman)(Peters & Waterman)

These firmsThese firms** Were oriented toward actionWere oriented toward action** Learned about the needs of their customersLearned about the needs of their customers** Promoted managerial autonomy and entrepreneurshipPromoted managerial autonomy and entrepreneurship** Achieved productivity by paying close attention to the Achieved productivity by paying close attention to the

needs of their peopleneeds of their people** Were driven by a company philosophy often based on the Were driven by a company philosophy often based on the

values of their leadersvalues of their leaders** Focused on the business they knew bestFocused on the business they knew best** Had a simple organization structure with a lean staffHad a simple organization structure with a lean staff** Were centralized as well as decentralized, depending on Were centralized as well as decentralized, depending on

appropriateness-super powerappropriateness-super power

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Excellent Companies Adapt to Excellent Companies Adapt to Changes in the 21Changes in the 21stst Century Century

To be successful in the 21To be successful in the 21stst Century, Century, companies must take advantage of companies must take advantage of the new information technology - the new information technology - especially the Internet - and especially the Internet - and globalizationglobalization

M-Commerce is mobile or wireless M-Commerce is mobile or wireless commercecommerce

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Definition of ProductivityDefinition of Productivity Productivity is the output-input ratio Productivity is the output-input ratio

within a time period with due within a time period with due consideration for qualityconsideration for quality

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Definitions of Effectiveness and Definitions of Effectiveness and EfficiencyEfficiency

Productivity implies effectiveness Productivity implies effectiveness and efficiency in individual and and efficiency in individual and organizational performanceorganizational performance

Effectiveness Effectiveness is the achievement of is the achievement of objectivesobjectives

Efficiency Efficiency is the achievement of the is the achievement of the ends with the least amount of ends with the least amount of resources (time, money, etc.) –resources (time, money, etc.) –mittalmittal

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Managing: Science or Art?Managing: Science or Art?

Managing as practice is an Managing as practice is an artart; ; the organized knowledge the organized knowledge underlying the practice may be underlying the practice may be referred to as a referred to as a sciencescience

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Art of management-it is the creative Art of management-it is the creative & communicative side of & communicative side of management,it is managing as management,it is managing as practice-ex: advt campaigns,hr etc.-practice-ex: advt campaigns,hr etc.-

Honda adHonda ad

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Science of management-it is the Science of management-it is the organized knowledge underlying the organized knowledge underlying the practice-operations mgt,financial practice-operations mgt,financial accountsaccounts

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TABLE 39TABLE 39 THE OPINION TOWARDS DECENT INTRICATE THE OPINION TOWARDS DECENT INTRICATE

DESIGN IN FORMAL DRESS CODEDESIGN IN FORMAL DRESS CODE 60.9% of the respondents consider that there can 60.9% of the respondents consider that there can

be intricate design in the formal dress.be intricate design in the formal dress. 32.9% of the respondents consider that 32.9% of the respondents consider that

sometimes, there can be intricate design in the sometimes, there can be intricate design in the formal dress and only 6.2% of the respondents formal dress and only 6.2% of the respondents consider that there should not be intricate design consider that there should not be intricate design in the formal dress.in the formal dress.

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Contd-Contd- Management is both science & Management is both science &

artart It is all theory ,practice & knowledge It is all theory ,practice & knowledge

combined-several operations involve combined-several operations involve science & art-ex :mrktg research.science & art-ex :mrktg research.

-the science underlying management -the science underlying management Is crude because the several Is crude because the several

variables that managers deal with variables that managers deal with are complex.ex:CBare complex.ex:CB

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The Evolution of Management Thought The Evolution of Management Thought & Patterns of Management Analysis& Patterns of Management Analysis

Frederick Taylor and Scientific Frederick Taylor and Scientific Management Management

Fayol, the Father of Modern Fayol, the Father of Modern Operational Management TheoryOperational Management Theory

Elton Mayo and F. Roethlisberger and Elton Mayo and F. Roethlisberger and the Hawthorne Studies the Hawthorne Studies

Recent Contributors to Management Recent Contributors to Management ThoughtThought

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Taylor's Principles of Scientific Taylor's Principles of Scientific ManagementManagement

1.1.Replacing rules of thumb with science Replacing rules of thumb with science (organized knowledge)(organized knowledge)

2.2.Obtaining harmony in group action, Obtaining harmony in group action, rather than discordrather than discord

3.3.Achieving cooperation of human beings, Achieving cooperation of human beings, rather than chaotic individualismrather than chaotic individualism

4.4.Working for maximum output, rather Working for maximum output, rather than restricted outputthan restricted output

5.5.Developing all workers to the fullest Developing all workers to the fullest extent possible for their own and their extent possible for their own and their company's company's highest-history of mgt highest-history of mgt

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Fayol, the Father of Modern Fayol, the Father of Modern Operational‑Management Operational‑Management

Theory-14 principalsTheory-14 principals Authority and responsibilityAuthority and responsibility. authority is . authority is

a combination of official‑factors and a combination of official‑factors and personal factorspersonal factors

Unity of Command.Unity of Command. Employees should Employees should receive orders from one superior onlyreceive orders from one superior only

Scalar Chain.Scalar Chain. A "chain of superiors" A "chain of superiors" from the highest to the lowest ranks. If it from the highest to the lowest ranks. If it is short‑circuited scrupulously it would is short‑circuited scrupulously it would be detrimental.be detrimental.

Esprit de Corps.Esprit de Corps. This is the principle This is the principle that "in union there is strength"that "in union there is strength"

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Elton Mayo and F. Roethlisberger and Elton Mayo and F. Roethlisberger and the Hawthorne Studies/ the Hawthorne Studies/ EMERGENCE OF THE EMERGENCE OF THE

BEHAVIOURAL SCIENCE. BEHAVIOURAL SCIENCE. In general, that the improvement in In general, that the improvement in

productivity was due to such social factors productivity was due to such social factors as morale, satisfactory interrelationships as morale, satisfactory interrelationships between members of a work group (a between members of a work group (a "sense of belonging"), and effective "sense of belonging"), and effective management--a kind of managing that management--a kind of managing that would understand human behavior, would understand human behavior, especially group behavior, and serve it especially group behavior, and serve it through such interpersonal skills as through such interpersonal skills as motivating, counseling, leading, and motivating, counseling, leading, and communicating-communicating-mcgregor’smcgregor’s x & y theory x & y theory

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Recent Contributors to Management Recent Contributors to Management ThoughtThought

Peter F. Drucker Peter F. Drucker Keith Davis Keith Davis Edwards Deming Edwards Deming Joseph M. Juran Joseph M. Juran Peter LaurencePeter Laurence William Ouchi William Ouchi Thomas Peters and Robert Thomas Peters and Robert

Waterman Waterman

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Management: roles & skills …ctd.Managerial Roles (Mintzberg) approach

Role Description ExamplesInterpersonal •Figurehead symbolic head; required to show Ceremonial,

‘face’ in social & legal conditions. Civic etc.•Leader Motivating & directing subordinates project plan•Liaison Networking outside for information Industry -

& favours group meetsInformational •Monitor nerve centre and interpretator Reports•Disseminator networking within the organization Meetings etc.•Spokesperson Transmit intent to outsiders; expert Board Meets

Decisional •Entrepreneur Opportunity finding& reacting Strategy Plan•Trouble shooter Handling unexpected disturbance Contingency•Resource allocator Initiating/approving changes Budgeting•Negotiator Getting best deal for Organization Contracts

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Organisational behaviour stageOrganisational behaviour stage -koontz design on management -koontz design on management

functionsfunctions -it is concerned with org -it is concerned with org

theory,informal group management theory,informal group management etcetc

-7’s model was developed by -7’s model was developed by Mckenzie-strategy, Mckenzie-strategy, structure,system,style,staff,shared structure,system,style,staff,shared values & values & skills-air skills-air indiaindia

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Management process stageManagement process stage

-mbo & other concepts of peter -mbo & other concepts of peter druckerdrucker

-providing direction & motivation-providing direction & motivation -draws together pertinent knowledge -draws together pertinent knowledge related to manager’s jobrelated to manager’s job

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It tries to integrate the concepts, It tries to integrate the concepts, principles, and techniques that principles, and techniques that underlie the task of managingunderlie the task of managing

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Systems approach toManagement-airtell case

Organization as a System receives Input, transforms it through a Process for Output and Operates in an Environment (economic, regulatory and other forces)

Transformation processinput output

Feedback (Reenergizing the system)

ENVIRONMENT

System Boundary

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Inputs(Goal

Oriented)

Outputs(External

ToOrgnzn.)

Planning

Organizing

Staffing

Leading

Controlling

Product/Services,Profits, Customer & Societal satisfaction,

Other Long-term Goals

Man, MachineMaterial,Method,

Measurement

Stake holder Feedback (reenergizing the system)

EXTERNAL ENVIRONMENT(Opportunities, Constraints)

StakeholdersShareholders;Society; Customers;Employees; Suppliers

Systems approach to ManagementSystems approach to Management …ctd. …ctd.

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The Systems Model of Management The Systems Model of Management and This Bookand This Book

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PATTERNS OF MANAGEMENT ANALYSIS: A PATTERNS OF MANAGEMENT ANALYSIS: A MANAGEMENT THEORY JUNGLE?MANAGEMENT THEORY JUNGLE?

(1) the empirical, or case, approach, (1) the empirical, or case, approach, (2) the managerial roles approach, (2) the managerial roles approach, (3) the contingency, or situational, (3) the contingency, or situational,

approach, approach, (4) the mathematical, or "management (4) the mathematical, or "management

science," approach, science," approach, (5) the decision theory approach, (5) the decision theory approach, (6) the reengineering approach, (6) the reengineering approach, (7) the systems approach, (7) the systems approach,

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Quantitative schoolQuantitative school -Opearation Reasearch models where -Opearation Reasearch models where

used after world war- IIused after world war- II -involves usage of computers-involves usage of computers -usage of inventory control -usage of inventory control

models,financial ratios,budgetting models,financial ratios,budgetting etc-lmw caseetc-lmw case

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Contigency approachContigency approach -concepts fail because situation differ-concepts fail because situation differ -concepts has to be adjusted to -concepts has to be adjusted to

reality-reality-contigencycontigency planning planning

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Managing domestic & international Managing domestic & international enterprisesenterprises

Managerial FunctionManagerial Function Domestic enterprise (in industrialized country) International enterprise Domestic enterprise (in industrialized country) International enterprisePlanning:Planning:Scanning the environment National MarketScanning the environment National Market World wide market World wide marketfor threats & opportunitiesfor threats & opportunities

Organizing:Organizing:Organization structure Structure for domestic operations Global structureOrganization structure Structure for domestic operations Global structure

View of authority Similar DifferentView of authority Similar Different

Staffing:Staffing:Sources of managerial talent National Labor pool World wide labor poolSources of managerial talent National Labor pool World wide labor pool

Manager orientation Often ethnocentric GeocentricManager orientation Often ethnocentric Geocentric

Leading:Leading:Leadership and motivation Influenced by similar culture Influenced by many different Leadership and motivation Influenced by similar culture Influenced by many different culturescultures

Communication lines Relatively short Network with long distancesCommunication lines Relatively short Network with long distances

Controlling:Controlling:Reporting system Similar requirements Many different requirements Reporting system Similar requirements Many different requirements

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COMPARATIVE MANAGEMENTCOMPARATIVE MANAGEMENT

Definition: The study and analysis of Definition: The study and analysis of management in different management in different environments and the reasons that environments and the reasons that enterprises show different results in enterprises show different results in various countries.various countries.

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Management as a critical environment Management as a critical environment in economic growth:in economic growth:

One country have a higher per capita One country have a higher per capita national income than other or the increasing national income than other or the increasing difference in production in various countries.difference in production in various countries.

Concern for productivity and economic Concern for productivity and economic growth:growth:

The disparity in national incomes is The disparity in national incomes is because of differing productivities.because of differing productivities.

The transfer of technology, education and The transfer of technology, education and capital alone is not sufficient for it.capital alone is not sufficient for it.

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Pure technical knowledge is necessary for economic Pure technical knowledge is necessary for economic growth but it is copied like-atomic bomb’s secrecy was growth but it is copied like-atomic bomb’s secrecy was closely protected by US, became known in closely protected by US, became known in Russia,France,China,..Russia,France,China,..

Cultural factors have an impact on economic factors and Cultural factors have an impact on economic factors and

also cultural variables can be significant. ex: education and also cultural variables can be significant. ex: education and consumption patterns.consumption patterns.

The constraints on economic progress are caused by a The constraints on economic progress are caused by a large number of political factors such as, large number of political factors such as,

… … fiscal policy,fiscal policy, … … labor regulationslabor regulations … … business restrictions &business restrictions & … … foreign policy.foreign policy.

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The Systems Model of Management The Systems Model of Management and This Bookand This Book

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PATTERNS OF MANAGEMENT ANALYSIS: -- PATTERNS OF MANAGEMENT ANALYSIS: -- continuedcontinued

(8) (8) the sociotechnical systems approach, the sociotechnical systems approach, (9) (9) the cooperative social systems the cooperative social systems

approach,approach,(10) the group behavior approach, (10) the group behavior approach, (11) the interpersonal behavior approach,(11) the interpersonal behavior approach,(12) McKinsey's 7‑S framework, (12) McKinsey's 7‑S framework, (13) the total quality management (13) the total quality management

approach, approach, (14) the management process, or (14) the management process, or

operational, operational, approach.approach.

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The Managerial Roles Approach The Managerial Roles Approach (Mintzberg)(Mintzberg)

1 1 Interpersonal rolesInterpersonal roles 2 2 Informational rolesInformational roles 3 3 Decision rolesDecision roles

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The Management Process, or The Management Process, or Operational, ApproachOperational, Approach

This approach draws together the This approach draws together the pertinent knowledge of management pertinent knowledge of management by relating it to the managerial job--by relating it to the managerial job--what managers dowhat managers do

It tries to integrate the concepts, It tries to integrate the concepts, principles, and techniques that principles, and techniques that underlie the task of managingunderlie the task of managing

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Decision theory

Mathematics Clinical

experience

Psychology

Systems theory

Sociology/social psychology

Sociology/social psychology

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A Basic Input-Output ModelA Basic Input-Output Model

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The Five Managerial FunctionsThe Five Managerial Functions

PlanningPlanning OrganizingOrganizing StaffingStaffing LeadingLeading ControllingControlling

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Definition of PlanningDefinition of Planning Planning involves selecting missions Planning involves selecting missions

and objectives and the actions to and objectives and the actions to achieve them; it requires decision achieve them; it requires decision makingmaking

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Definition of OrganizingDefinition of Organizing Organizing involves establishing an Organizing involves establishing an

intentional structure of roles for intentional structure of roles for people to fill in an organizationpeople to fill in an organization

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Definition of StaffingDefinition of Staffing Staffing involves filling, and keeping Staffing involves filling, and keeping

filled, the positions in the filled, the positions in the organization structureorganization structure

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Definition of LeadingDefinition of Leading Leading is influencing people so that Leading is influencing people so that

they will contribute to organization they will contribute to organization and group goalsand group goals

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Definition of ControllingDefinition of Controlling Controlling is measuring and Controlling is measuring and

correcting individual and correcting individual and organizational performance to ensure organizational performance to ensure that events conform to plansthat events conform to plans

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The Systems Model of Management The Systems Model of Management and This Bookand This Book