8/3/2019 Certification Study Group 1224361754157160 9
1/58
Certification Study Group
Principles and Theories of
ManagementOctober 11, 2005
8/3/2019 Certification Study Group 1224361754157160 9
2/58
Management Management is a set of activities
directed at an organizationsresources with the aim ofachieving organizational goals in
an efficient and effective manner
8/3/2019 Certification Study Group 1224361754157160 9
3/58
Management
Activities include the four
functions of management Planning (and decision making)
Organizing
Leading
Controlling
8/3/2019 Certification Study Group 1224361754157160 9
4/58
Management
Resources include:
Human Financial
Physical
Information
8/3/2019 Certification Study Group 1224361754157160 9
5/58
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
8/3/2019 Certification Study Group 1224361754157160 9
6/58
Important Definitions
Top Managers
Middle Managers
First-line Managers
Operative Employees
8/3/2019 Certification Study Group 1224361754157160 9
7/58
The Management ProcessOrganizing
Determining howbest to group
activities andresources
ControllingMonitoring
and correctingongoing activitiesto facilitate goal
attainment
Planning andDecision Making
Setting the organiza-tions goals and
deciding how bestto achieve them
Leading
Motivating membersof the organizationto work in the best
interests of theorganization
Figure 1.2
8/3/2019 Certification Study Group 1224361754157160 9
8/58
The Basic Functions of Management
A Circular ProcessPlanning and Decision Making
Organizing
Leading
Controlling
8/3/2019 Certification Study Group 1224361754157160 9
9/58
Skills and
theManager
8/3/2019 Certification Study Group 1224361754157160 9
10/58
Fundamental Management
Skills Management Skill Mixes at Different
Organizational Levels
8/3/2019 Certification Study Group 1224361754157160 9
11/58
Classical Management
Perspective Scientific Management
Frederick Taylor
The Gilbreths
Henry Gantt
8/3/2019 Certification Study Group 1224361754157160 9
12/58
Steps in Scientific
Management
Develop a sciencefor each element of
the job to replace old
rule-of-thumb methods
Scientifically selectemployees 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 planthe work, but use
workers to get the
work done
21 43
Figure 1.3
8/3/2019 Certification Study Group 1224361754157160 9
13/58
The Classical Management
Perspective
Administrative Management focuses
on managing the total organization Henry Fayol
Lyndal Urwick
Max Weber
8/3/2019 Certification Study Group 1224361754157160 9
14/58
Webers Theory of
Bureaucracy
Division of labor
Reliance on rules and regulations Hierarchy of authority
Employment based on expertise
Inflexible Rigid
Impersonal
8/3/2019 Certification Study Group 1224361754157160 9
15/58
The Behavioral Management
Perspective
Placed much more emphasis on individual
attitudes and behaviors and on groupprocesses in organizations.
Recognized the importance of behavioralprocesses in organizations Hugo Munsterberg
Mary Parker Follet
Elton Mayo
8/3/2019 Certification Study Group 1224361754157160 9
16/58
Behavioral Management
Perspective Elton Mayo Hawthorne Studies
Illumination study
Group study
8/3/2019 Certification Study Group 1224361754157160 9
17/58
Human Relations
Movement Grew out of the Hawthorne studies.
Proposed that workers respond primarily
to the social context of work, includingsocial conditioning, group norms,and interpersonal dynamics.
Assumed that the managersconcern for workers would lead toincreased worker satisfaction andimproved worker performance.
8/3/2019 Certification Study Group 1224361754157160 9
18/58
Behavioral Management
PerspectiveAbraham Maslow
Advanced a theory that employees are
motivated by a hierarchy of needs that theyseek to satisfy.
Douglas McGregor
Proposed Theory X and Theory Y conceptsof managerial beliefs about peopleand work.
8/3/2019 Certification Study Group 1224361754157160 9
19/58
Maslows 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
8/3/2019 Certification Study Group 1224361754157160 9
20/58
Maslows Hierarchy of Needs
SA
Esteem Needs
Social Needs
Security Needs
Physiological Needs
8/3/2019 Certification Study Group 1224361754157160 9
21/58
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 towork toward organizational goals.
People prefer to be directed,to avoid responsibility, andto want security; they havelittle ambition.
Source: Douglas McGregor, The Human Side of Enterprise, Copyright 1960
by McGraw-Hill. Reprinted by permission of The McGraw-Hill Companies.
8/3/2019 Certification Study Group 1224361754157160 9
22/58
Theory X and Theory Y Theory Y Assumptions
People do not dislike work; work is anatural part of their lives.
People are internally motivated to reachobjectives to which they are committed.
People are committed to goals to thedegree that they receive rewards whenthey reach their objectives.
Source: Douglas McGregor, The Human Side of Enterprise, Copyright 1960
by McGraw-Hill. Reprinted by permission of The McGraw-Hill Companies.
8/3/2019 Certification Study Group 1224361754157160 9
23/58
Theory X and Theory Y Theory Y Assumptions
People seek both seek responsibility andaccept responsibility under favorableconditions.
People can be innovative in solving
problems. People are bright, but under most
organizational conditions their potentialsare underutilized.
Source: Douglas McGregor, The Human Side of Enterprise, Copyright 1960
by McGraw-Hill. Reprinted by permission of The McGraw-Hill Companies.
8/3/2019 Certification Study Group 1224361754157160 9
24/58
Theory X
Theory Y
Think of these theories as a continuum
Theory X Theory Y
Employees fall somewhere in between the two ends
8/3/2019 Certification Study Group 1224361754157160 9
25/58
The Behavioral Management
Perspective Contemporary behavioral science in
management emerged because of the
too simplistic descriptions of workbehavior by the human relationstheorists.
Organizational behavior takes a holisticview of behavior, including individual,group, and organization processes
8/3/2019 Certification Study Group 1224361754157160 9
26/58
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
8/3/2019 Certification Study Group 1224361754157160 9
27/58
The Quantitative Management
Perspective
Focuses on decision making, economic
effectiveness, mathematical models, andthe use of computers in organizations
Management science
Operations management
8/3/2019 Certification Study Group 1224361754157160 9
28/58
The Quantitative Management
Perspective Contributions
Developed sophisticated quantitative techniques to assistdecision making
Models have increased our awareness of complex organizationalprocesses and have aided in the planning and controllingprocesses
Limitations Cannot fully explain or predict behavior
Mathematical sophistication may come at the expense of otherimportant skills
Models may require unrealistic or unfounded assumptions
8/3/2019 Certification Study Group 1224361754157160 9
29/58
Contemporary Management
Theory The Systems Perspective
A system is an interrelated set of elementsfunctioning as a whole. An organization as asystem is composed of four elements:
Inputs (material and/or human resources)
Transformation processes (technical andmanagerial processes)
Outputs (products and services)
Feedback (reactions from the environment)
8/3/2019 Certification Study Group 1224361754157160 9
30/58
The Integrated Systems Model
FeedbackFeedback
InputsInputsFrom theFrom theenvironment:environment:HumanHuman
MaterialMaterial
FinancialFinancial
InformationInformation
ProcessingProcessingTransformationTransformationprocess:process:TechnologyTechnology
Operating systemsOperating systems
AdministrativeAdministrative
systemssystemsControl systemsControl systems
OutputsOutputsInto theInto theenvironmentenvironmentProductProduct
ServicesServices
Profit/lossProfit/loss
Employee behaviorEmployee behaviorInformationInformation
8/3/2019 Certification Study Group 1224361754157160 9
31/58
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.
8/3/2019 Certification Study Group 1224361754157160 9
32/58
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
8/3/2019 Certification Study Group 1224361754157160 9
33/58
Certification Study Group
The Functions of Management
8/3/2019 Certification Study Group 1224361754157160 9
34/58
The Functions of Management
A Circular ProcessPlanning
Organizing/Staffing
Leading/Directing
Controlling
8/3/2019 Certification Study Group 1224361754157160 9
35/58
Plans
Strategic
Tactical
Operational
Mission Statement
8/3/2019 Certification Study Group 1224361754157160 9
36/58
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 beincluded
Mission Statement & Objectives
Objectives - The ends or results desired by the organizationand are derived from the organizations mission.
8/3/2019 Certification Study Group 1224361754157160 9
37/58
Plans Are Classified on Their
Scope
Strategic
Tactical
Operational
Plans becomemore specific as
they movefrom strategic to
operational Contingency
8/3/2019 Certification Study Group 1224361754157160 9
38/58
Top
Middle
SupervisorySupervisory
Strategic
Tactical
Operational
Management & Planning Levels
8/3/2019 Certification Study Group 1224361754157160 9
39/58
Certification Study Group
Decision Making
8/3/2019 Certification Study Group 1224361754157160 9
40/58
Managers As Decision Makers Decision making the process of
recognizing a problem or opportunity
and creating a solution
A decision is a choicebetween alternatives
8/3/2019 Certification Study Group 1224361754157160 9
41/58
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
8/3/2019 Certification Study Group 1224361754157160 9
42/58
8/3/2019 Certification Study Group 1224361754157160 9
43/58
Steps in the Rational
Decision-Making ProcessStep Detail Example
1. Recognizing anddefining the decision
situation
Some stimulus indicatesthat a decision must be
made. The stimulus may bepositive or negative.
A plant manager sees thatemployee turnover has
increased by 5 percent.
2. Identifying alterna-tives
Both obvious and creativealternatives are desired. Ingeneral, the more importantthe decision, the more
alternatives should beconsidered.
The plant manager canincrease wages, increasebenefits, or change hiringstandards.
3. Evaluating alterna-tives
Each alternative is evalu-ated to determine itsfeasibility, itssatisfactoriness, and itsconsequences.
Increasing benefits may notbe feasible. Increasingwages and changing hiringstandards may satisfy allconditions.
8/3/2019 Certification Study Group 1224361754157160 9
44/58
Steps in the Rational
Decision-Making ProcessStep Detail Example
4. Selecting the bestalternative
Consider all situationalfactors, and choose the
alternative that best fits themanagers situation.
Changing hiring standards willtake an extended period of time
to cut turnover, so increasewages.
5. Implementing thechosenalternative
The chosen alternative isimplemented into theorganizational system.
The plant manager may needpermission from corporateheadquarters. The humanresource department establishesa new wage structure.
6. Following up andevaluating theresults
At some time in the future,the manager should ascertainthe extent to which thealternative chosen in step 4and implemented in step 5has worked.
The plant manager notes that, sixmonths later, turnover hasdropped to its previous level.
8/3/2019 Certification Study Group 1224361754157160 9
45/58
Evaluating Alternatives in the
Decision-Making ProcessIs the alternative
feasible?
Eliminate from
consideration
Is the alternative
satisfactory?
Are the alternatives
consequences
affordable?
Retain for further
considerationYes Yes Yes
Eliminate from
consideration
Eliminate from
consideration
No No No
Figure 4.3
8/3/2019 Certification Study Group 1224361754157160 9
46/58
Rational Decision-making Process StepsThe Classical Model
1
2
3
4
5
6A Circular Process
8/3/2019 Certification Study Group 1224361754157160 9
47/58
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 lessfrequently than a programmed decision
Involves complex, important, and nonroutineproblems or opportunities
8/3/2019 Certification Study Group 1224361754157160 9
48/58
Decision-Making Conditions
Level of ambiguity and chances of making a bad decision
Lower Higher Moderate
Certainty UncertaintyRisk
The decision
maker faces
conditions of...
8/3/2019 Certification Study Group 1224361754157160 9
49/58
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.
8/3/2019 Certification Study Group 1224361754157160 9
50/58
Decision-Making Conditions Decision Making Under Certainty
Decision Making Under Risk
Decision Making Under Uncertainty
8/3/2019 Certification Study Group 1224361754157160 9
51/58
Rational Perspectives on
Decision Making
The Classical Model of 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
8/3/2019 Certification Study Group 1224361754157160 9
52/58
Behavioral Aspects of Decision
Making
The Administrative Model of Decision MakingThe 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
8/3/2019 Certification Study Group 1224361754157160 9
53/58
Bounded rationality Satisficing
Coalition
Intuition Escalation of Commitment
Risk Propensity
The Administrative Model
Important Behavioral Concepts
8/3/2019 Certification Study Group 1224361754157160 9
54/58
Ethics and Decision Making Components of managerial ethics:
Relationships of the firm to employees
Employees to the firm
The firm to other economic agents
8/3/2019 Certification Study Group 1224361754157160 9
55/58
Group and Team Decision
Making in Organizations The most common method of group
and team decision making are:
Interacting groups
Delphi groups
Nominal groups.
8/3/2019 Certification Study Group 1224361754157160 9
56/58
Group Decision MakingAdvantages
More information &
knowledge are availableMore alternatives arelikely to be generated
More acceptance of thefinal decision is likely
Enhanced communicationof the decision may result
Better decisions
DisadvantagesThe process takes
longer, so it is morecostly
Compromise decisionsdue to indecisiveness
may emergeOne person maydominate the group
Groupthink may occur
8/3/2019 Certification Study Group 1224361754157160 9
57/58
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 occurswhen a group or teamsdesire for consensus andcohesiveness overwhelmsits desire to reach the best
possible decision.
8/3/2019 Certification Study Group 1224361754157160 9
58/58
Managing Group and Team
Decision-Making Processes
Be aware of the pros andcons of having a groupor team make a decision.
Set deadlines for whendecisions must be made.
Avoid problems withdominance by managinggroup membership.
Hold a follow-up meetingto recheck the decision.
Have each groupmember individually andcritically evaluate allalternatives.
As a manager, do not
make your positionknown too early.
Appoint a group memberto be a devilsadvocate.
Promoting the Effectiveness of Group andTeam Decision Making:
Top Related