managing chapter 01 copyright © 2011 by the mcgraw-hill companies, inc. all rights reserved....
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Technological Change: The Internet Marketplace Means for manufacturing goods and services Distribution channel An information service 1-3TRANSCRIPT
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ManagingManaging
Chapter 01Chapter 01
Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
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GlobalizationGlobalization
Today’s enterprises are global, with offices and production facilities in countries all over the world
Means that a company’s talent can come from anywhere
Internet makes globalization inevitable
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Technological Change: The InternetTechnological Change: The Internet
Marketplace Means for manufacturing goods and services Distribution channel An information service
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Technological Change: The InternetTechnological Change: The Internet
Drives down costs and speeds up globalization.
Improves efficiency of decision making. Facilitates design of new products, from
pharmaceuticals to financial services
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Knowledge ManagementKnowledge Management
Knowledge management Practices aimed at
discovering and harnessing an organization’s intellectual resources
Knowledge workers
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Collaboration across “Boundaries”Collaboration across “Boundaries”
Requires productive communications among different departments, divisions, or other subunits of the organization
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Collaboration across “Boundaries”Collaboration across “Boundaries”
Companies today must motivate and capitalize on the ideas of people outside the organization e.g. its consultants, ad agencies, and suppliers
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Managing for Competitive AdvantageManaging for Competitive Advantage
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Managing for Competitive AdvantageManaging for Competitive Advantage
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Innovation the introduction of new goods and services often the most important innovation is not the
product itself, but how it is delivered
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Managing for Competitive AdvantageManaging for Competitive Advantage
Quality The excellence of your product (goods or services) Historically, quality referred to attractiveness, lack
of defects, reliability, and long-term dependability
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Managing for Competitive AdvantageManaging for Competitive Advantage
Today quality is about preventing defects and having continuous improvement in how the firm operates
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Managing for Competitive AdvantageManaging for Competitive Advantage
Service The speed and dependability with which an
organization delivers what customers want
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Managing for Competitive AdvantageManaging for Competitive Advantage
Speed Fast and timely execution, response, and delivery
of results.
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Managing for Competitive AdvantageManaging for Competitive Advantage
Cost competitiveness Keeping costs low to
achieve profits and be able to offer prices that are attractive to consumers.
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The Functions of ManagementThe Functions of Management
Management The process of working with people and resources
to accomplish organizational goals Efficient, effective
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The Functions of ManagementThe Functions of Management
Planning Systematically making decisions about the goals
and activities that an individual, a group, a work unit, or the overall organization will pursue
analyzing current situations, anticipating the future, determining objectives, deciding in what types of activities the company will engage
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The Functions of ManagementThe Functions of Management
Organizing assembling and coordinating the human, financial,
physical, informational, and other resources needed to achieve goals
specifying job responsibilities, grouping jobs into work units, marshaling and allocating resources,
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The Functions of ManagementThe Functions of Management
Leading stimulating people to be high performers
Controlling monitoring performance and making needed
changes.
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Management Levels and SkillsManagement Levels and Skills
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Management Levels and SkillsManagement Levels and Skills
Top-level managers Senior executives responsible for the overall
management and effectiveness of the organization.
Middle-level managers Managers located in the middle layers of the
organizational hierarchy, reporting to top-level executives.
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Management Levels and SkillsManagement Levels and Skills
Frontline managers Lower-level
managers who supervise the operational activities of the organization
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Transformation of Management Transformation of Management Roles and ActivitiesRoles and Activities
1-22Table 1.1
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Managerial Roles: WhatManagerial Roles: WhatManagers DoManagers Do
1-23Table 1.2
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Management SkillsManagement Skills
Technical skill The ability to
perform a specialized task involving a particular method or process
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Management SkillsManagement Skills
Conceptual and decision skills Skills pertaining to the ability to identify and
resolve problems for the benefit of the organization and its members.
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Management SkillsManagement Skills
Interpersonal and communication skills People skills; the ability to lead, motivate, and
communicate effectively with others.
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You and Your CareerYou and Your Career
Emotional intelligence The skills of
understanding yourself, managing yourself, and dealing effectively with others.
Social capital Goodwill stemming
from your social relationships
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You and Your CareerYou and Your Career
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Keys to Career ManagementKeys to Career Management
1-29Table 1.3
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Common Practices of Successful ExecutivesCommon Practices of Successful Executives
They ask “What needs to be done?” rather than “What do I want to do?”
They write an action plan. They don’t just think, they do, based on a sound, ethical plan.
They take responsibility for decisions. They focus on opportunities rather than problems.
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Evolution of Management
Throughout history most managers operated strictly on a trial-and-error basis
The management profession as we know it today is relatively new wide swings in management approaches over the
last 100 years parts of each approach have survived and been
incorporated into modern perspectives on management
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BUREAUCRATIC MANAGMENT
Max Weber – late 19th century Germany
RULES – uniformity/stability IMPERSONALITY – fairness for clients and employees DIVISION OF LABOR – functional specialization HIERARCHICAL STRUCTURE – decentralization AUTHORITY STRUCTURE – rational-legal authority LIFELONG CAREER COMMITEMENT RATIONALITY – logical and scientific
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BUREAUCRATIC MANAGEMENT
BENEFITS
Consistency Jobs clearly defined Expertise/specialization Continuity Efficient under
conditions of stability
COSTS
Rigid rules and red tape Protection of authority Slow decision making Incompatibility with
changing technology (Incompatibility with
worker values)
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ASSESSING BUREAUCRATIC MANAGEMENT
MOST EFFECTIVE WHEN:
1. Standardized information/production requiring efficiency
2. Needs of customers known and not changing 3. Technology is routine and stable 4. Need to coordinate activities of large
numbers of employees
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SCIENTIFIC MANAGEMENT
Frederick W. Taylor – early 20th century Methods engineering/time and motion studies Basic observations
Great loss through inefficiencies Remedy in systematic management Best management is a true science Standardization of job performance and uniformity of behavior Impersonalization and replaceability of workers is key to
efficiency Motivation through monetary incentive systems
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SCIENTIFIC MANAGEMENT
STUDIES AT BETHLEHEM IRON WORKS IN 1898 REPORTED BY TAYLOR
Picked Schmidt (Nolls) as his subject Trotted to and from work (over a mile) Had purchased land and was building a house Had reputation of being “close with a dollar” Increased from 12 ½ to 47 tons Pay increased from $1.15 to $1.85 Earlier studies had failed because of social influences
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SCIENTIFIC MANAGEMENT
Frank and Lillian Gilbreth Developed tools for scientific management –
time and motion studies Trained industrial engineers Popular subjects for newsreels in the 1920s “Cheaper by the Dozen” movie (not the new
one) Economic needs versus other needs
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ADMINISTRATIVE MANAGEMENT
Henri Fayol – French industrialist – 14 principles 1. Division of labor – specialization 2. Authority and responsibility – delegation 3. Discipline – clear rules and consequences for violating 4. Unity of command – one boss for each employee 5. Unity of direction – similar activities under one manager 6. Subordination of individual interests to the common good 7. Remuneration – fair pay 8. Centralization – power and authority at the top
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ADMINISTRATIVE MANAGEMENT
9. Scalar Chain – from the lowest employee to the top
10. Order – human and materials coordinated 11. Equity – managers should be fair with
subordinates 12. Stability and tenure of staff – avoid high
turnover 13. Initiative – free to take initiative 14. Esprit de corps – team spirit, sense of unity
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BEHAVIORAL VIEWPOINT
Chester Barnard’s Acceptance Theory of Authority
Different from traditional view of authority that authority flows from top down
Effective authority requires willingness of employees to follow management’s orders
Zone of indifference
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HAWTHORNE STUDIES
Lighting studies by industrial engineers Productivity continued to increase even when lighting was
reduced below starting levels Motivational factor Relay Assembly Test Room Studies
Five workers plus supervisor Error in text concerning financial incentives Group incentive plan Mayo (not a researcher in the study) concluded that the results
supported his theories concerning work groups replacing family
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HAWTHORNE STUDIES
Five workers not randomly selected Two workers replaced because not cooperating Replacements wanted to be in the experiment because of
the financial incentives – one of these became the informal leader
Workers formed tightly knit, cohesive work group with high production goals operating under informal, participative leadership plus a strong informal leader within the group
If all of the results are considered, the behavioral approach has consistencies with the original scientific management studies
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Quantitative Management
Teams of quantitative experts tackle complex issues facing large organizations
Helps management make a decision by developing formal mathematical models of the problem
Personalities military planners in World War II mathematics and u-boats –Bletchley Park
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Quantitative Management (cont.)
Application of quantitative analysis to management decisions
Developed specific mathematical methods of problem analysisHelped managers select the best alternative among a set
Models neglect nonquantifiable factorsManagers not trained in these techniques may not trust or
understand the techniques’ outcomesNot suited for nonroutine or unpredictable management decisions
Key concepts
Limitations
Contributions
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Systems Theory
Organization is viewed as a managed systemManagement must interact with the environmentOrganizational goals must address effectiveness and efficiencyOrganizations contain a series of subsystemsThere are many avenues to the same outcomeSynergies enable the whole to be more than the sum of the parts
Recognized the importance of the relationship between the organization and the environment
Does not provide specific guidance on the functions of managers
Key concepts
Limitations
Contributions
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Contingency Perspective
Situational contingencies influence the strategies, structures, and processes that result in high performance
There is more than one way to reach a goalManagers may adapt their organizations to the situation
Identified major contingenciesArgued against universal principles of management
Not all important contingencies have been identifiedTheory may not be applicable to all managerial issues
Key concepts
Limitations
Contributions