Summary MNG2601_ STUDY NOTES 2021.

MNG2601_ STUDY NOTES 2021. General Management. Business Organisations and Managers p5 The ways in which organisations serve society: they bring together the resources of a nation to produce the goods and services it needs. The Nature of Management p6 The 4 fundamental management functions: # Management Function 1 Planning 2 Organising 3 Leading 4 Controlling Learn Table 1.1: The basic resources of an organisation p7 The interactive nature of the management process: the external environment: # Function Description 1 Planning Managers determine the organisation’s vision, mission and goals and decide on a strategy to achieve them 2 Organising Managers group activities together, establish authority, allocate resources, and delegate 3 Leading Managers direct and motivate members of the organisation to achieve the mission and goals 4 Controlling Managers monitor progress and take corrective steps to reach the mission and goals A Definition of Management p8 Management is the process of planning, organising, leading, and controlling the scarce resources of the organisation to achieve the organisation’s mission and goals as productively as possible. # Function Description 1 Planning  The management function that determines where the organisation wants to be in the future: vision, mission, goals  Strategic plans: made by top management, 5­10 years  Tactical plans: made by functional managers  Operational plans: made by lower management, shorter term plans i.e. daily, weekly, monthly 2 Organising  Allocation of human resources  Tasks, roles and responsibilities are defined  Development of a framework or organisational structure  Organisational design: management must match the organisation’s structure to its strategies 3 Leading  Directing the human resources of the organisation and motivating them in such a way that they will be willing to work productively to reach the organisation’s mission and goals  Managers are responsible for getting things done through other people  Leading the organisation means making use of influence and power to motivate employees to achieve organisational goals 4 Controlling  Managers should constantly make sure that the organisation is on the right course to reach its goals  The aim of control is to monitor actual results against planned results Different Levels and Kinds of Management in the Organisation p10 Managers are usually classified into 2 categories p10: # Category Description 1 According to their level in the organisation Top, middle, lower or first­line 2 By the functional or specialist area of management for which they are responsible The functional managers i.e. marketing manager, finance manager, operations, human resources, research and development etc. Top management p10: # Responsibility 1 Responsible for the organisation as a whole 2 Includes board of directors, partners, managing director, chief executives 3 Responsible for determining the mission, vision, goals and overall strategies of the entire organisation 4 Concerned with long­term planning, designing the organisation’s broad organisation structure, leading the organisation, and monitoring (controlling) its overall performance Middle management p11: # Responsibility 1 Responsible for specific departments of the organisation 2 Includes functional heads such as financial manager, marketing manager etc. 3 Primarily concerned with implementing the strategic plan formulated by top management 4 Responsible for medium­term planning (the near future) and leads by means of the department heads 5 Continually monitor environmental influences that may affect their own departments Lower/first­line management p11: # Responsibility 1 Responsible for smaller segments of the organisation e.g.: the different sections 2 Includes supervisors or foremen 3 Deal with the monthly, weekly and daily management of their sections 4 Ensure the plans made my middle management are implemented 5 The primary concern of a supervisor is to apply policies, procedures and rules to achieve a high level of productivity in his/her section, to provide technical assistance, to motivate subordinates, and to ensure that the section’s goals are reached Learn the areas of management p12 The Role Distribution of Managers p14 Henry Mintzberg, a famous theorist, came to the conclusion that managers play about 10 different roles i.e. the overlapping role distribution of managers: # Category Description 1 Interpersonal role Figurehead 2 Leader 3 Relationship builder 4 Information role Monitor 5 Analyser 6 Spokesperson 7 Decision­making role Entrepreneur 8 Problem solver 9 Allocator of resources 10 Negotiator Managerial Skills and Competencies at Various Managerial Levels p15 The 3 major skills needed by managers at all levels and in all departments and sections of the organisation are: # Skill Description 1 Conceptual The mental ability to view the organisation and its parts holistically. Involves the manager’s thinking and planning abilities 2 Interpersonal The ability to work with people 3 Technical The ability to use the knowledge or techniques of a specific discipline to reach specific goals Learn Figure 1.6 Managerial skills needed at various managerial levels p16 A competency in managerial skills refers to the necessary: # Competency 1 Knowledge 2 Skills 3 Value orientation Management and Organisational Performance p18 # Theory Description 1 The fundamental economic principle Achieving the highest possible satisfaction of needs with scarce resources 2 The task of management in a free­market economy To manage in such a way that the organisation makes a sustainable profit, that is, earns the highest possible income with the lowest possible costs 3 The triple bottom line Run the organisation as profitably as possible with due responsibility of the organisation towards the community, as well as the environment for which it needs to care CH2 The Evolution of Management Theory p27 Understanding the Different Management Theories p30 The environmental forces that shape management thought: # Environmental Force 1 Social 2 Ecological 3 International 4 Technological 5 Economic 6 Political The key elements of productivity are: # Element of Productivity 1 The outcome is continuous improvement of performance 2 The improvement must be measurable 3 The key drivers of productivity are:  Effectiveness  Efficiency  Utilisation  Elimination of all forms of waste Doing the right things Doing things the right way Optimum use of human capital and physical resources 4 The benefits of productivity must be:  The environment  The economy  Society The Theories of Management p30 There are 2 main schools of thought: # School of Thought Description 1 Classical approaches 2 Contemporary approaches 3 The eclectic approach Borrowing management principles from different theories as dictated by circumstance Learn Figure 2.2: The evolution of management theory p32 The Classical Approaches p32 The main limitations of the classical approaches: # Limitation 1 They ignored the relationship between the organisation and its external environment 2 They focused on specific aspects of the organisation at the expense of other considerations Scientific Management School p34 # Fact Description 1 Founded by Frederick W. Taylor 2 What he studied Studied individual workers to see exactly how they performed their tasks 3 Premise There is 1 best way to perform any task and measure everything that is measurable ­ known as time­motion­study 4 Problem he addressed How to judge whether an employee had put in a fair day’s work 5 Limitations  Workers cannot be viewed simply as parts of a smoothly running machine  Money is not the only motivator of employees  Creates the potential for exploitation of labour i.e. possible strikes by workers  Can lead to ignorance of the relationship between the organisation and its changing external environment as the focus remains on internal issues i.e. the workers and their productivity 6 Belief Money motivates workers The 3 fundamental things he taught: # Fundamental Lesson 1 Find the best practice wherever it exists – today we call it “benchmarking” 2 Decompose the task into its constituent elements – we call it “business process redesign” 3 Get rid of things that don’t add value Summary: # Summary 1 Summary: scientific management focused on the issue of managing work – not on managing people 2 Focus: ways to improve the individual worker The Process or Administrative Approach p34 # Fact Description 1 Founded by Henri Fayol 2 What he studied Administrative side of operations 3 Premise There are 5 basic functions of administration: planning, organising, commanding, coordinating, and controlling 4 Limitation Postulates that formal authority should be maintained by managers 5 Belief Management is a skill – something that one can learn once its underlying principles are understood 6 Focus Focuses on managing the total organisation Learn Fayol’s 14 principles p35 The Bureaucratic Approach p35 # Fact Description 1 Founded by Max Weber 2 What he studied The fundamental issue of how organisations are structured 3 Premise Any goal­oriented organisation comprising thousands of individuals would require the carefully controlled regulation of its activities 4 Problem he addressed He developed a theory of bureaucratic management that stressed the need for a strictly defined hierarchy, governed by clearly defined regulations and authority 5 Limitations  Bureaucratic riglevels ofidity results in managers being compensated for doing what they are told to do – not for thinking  Managers are often rewarded for complying with old, outdated rules  Limited organisational flexibility and slow decision­making 6 Belief  Weber’s ideal bureaucracy is based on legal authority  Legal authority stems from rules and other controls that govern an organisation in its pursuit of specific goals  Managers are given authority to enforce the rules by virtue of their position  Obedience is not owed to an individual person but to a specific position in the hierarchy of the organisation Human Relations Movement p36  Grew out of a famous series of studies called the ‘Hawthorne Studies’.  The studies following the ‘Hawthorne Effect’ concluded that group pressure, rather than management demands, had the strongest influence on worker productivity.  In short, workers were more motivated by social needs than economic needs. # Fact Description 1 Founded by Mayo 2 What he studied Hawthorne Studies (see above) 3 Premise Management’s concern for the well­being of their subordinates and sympathetic supervision enhances workers’ performance 4 Problem he addressed Viewed workers as human beings and not as machines 5 Limitations  The belief that a happy worker is a productive worker is too simplistic  Economic aspects of work remain important to workers  The human aspect of work is even more complex than originally suggested by the results of the Hawthorne Studies  Many factors play a role in the productivity of workers: their values, attitudes, perceptions, learning, motivation 6 Belief Management’s concern for the well­being of their subordinates and sympathetic supervision enhances workers’ performance The Quantitative Management Theory p38 # Fact Description 1 Founded by Not any 2 What he studied Management science or operations research 3 Premise Management is primarily about crunching the numbers 4 Problem he addressed The greatest contribution of the techniques (linear programming, PERT/CPM, regression analysis) are in planning and control activities 5 Limitations Many aspects of management decisions cannot be quantified and expressed by means of mathematical symbols and formulae 6 Belief Not addressed in text book 7 Focus Deals with mathematical models, statistics, and other models, and their use in management decision­making Contemporary Approaches p39 The Systems Approach p39 # Fact Description 1 Founded by Ludwig von Bertalanffy 2 What he studied Not any 3 Premise He noted characteristics common to all sciences:  The study of a whole, or organism  The tendency of a system to strive for a steady state of equilibrium  An organism is affected by and affects its environment and can thus be seen as an open system 4 Problem he addressed Viewed an organisation as a group of interrelated parts with a single purpose: to remain in balance (equilibrium) 5 Limitations 6 Belief From a systems point­of­view, management should maintain a balance between the various parts of the organisation, as well as between the organisation and its environment 7 Focus The open system perspective of an organisation is a system that comprises 4 elements:  Input – resources  Transformation processes – managerial processes, systems etc.  Outputs – products or services  Feedback – reaction from the environment The Contingency Approach p40 Based on the systems approach to management: # Fact Description 1 Founded by Not listed in text book 2 What he studied Equifinality – there is more than one way to reach the same goal i.e. different treatments may be available for the same management problem 3 Premise  The application of management principles depends on the particular situation that management faces at a given point in time  Emphasises a situational approach (dependent on a specific situation) but not all management situations are unique, so;  The characteristics of a situation are called ‘contingencies’: o The organisation’s external environment ­ its rate of change and degree of complexity o The organisation’s own capabilities – its strengths and weaknesses o Managers and workers – their values, goals, skills, and attitudes