Mng2601 Updated notes exam prep

GENERAL MANAGEMENT: MNG2601 CHAPTER 1: THE EVOLUTION OF THE MANAGEMENT THEORY UNDERSTANDING THE DIFFERENT MANAGEMENT THEORIES The environmental forces that shape management thought: # Environmental Force 1 Social 2 Political 3 Economic 4 Technological 5 International 6 Ecological Significant developments that have an effect on managers & organisations: 1. Advances in information technology - The internet & other forms of globally connected networks which provide the ability to share info on a worldwide basis. - Electronic commerce including EDI (electronic data interchange) enabling managers to reshape their business processes to improve response time & efficiency. - Mobile computing: enables individuals to have access to information technology, irrespective of their physical location. 2. Globalisation of the marketplace Used to be associated only with large, mature organisations, with the availability of the internet and the trend toward e-commerce even the smallest business can reach global marketplace with ease. 3. Increasing predominance of entrepreneurial firms Entrepreneurs provide opportunities for minorities & others who may face barriers in traditional corporate environments & provides many job opportunities for others. 4. The growing importance of intellectual capitals Many employees will work in knowledge companies, and the value of their knowledge, as both input & output will determine their value to the organisation. 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 CLASSICAL APPROACHES Scientific Management – production efficiency Fact Description Founded by Frederick W. Taylor What he studied Studied individual workers to see exactly how they performed their tasks Premise There is 1 best way to perform any task and measure everything that is measurable (time-motion-study) Problem he addressed How to judge whether an employee had put in a fair day’s work 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 Belief Money motivates workers Other researchers who helped establish these principles of efficiency: - Frank & Lillian Gilbreth who focused on work simplification and - Henry L Gantt whose main concern was productivity on shop floor level The fundamental things he taught: 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 The Process or Administrative Approach Fact Description Founded by Henri Fayol What he studied Administrative side of operations. Functions of managers within a framework of clear guidelines or principles Premise There are 5 basic functions of administration: planning, organising, commanding, coordinating, and controlling Limitation Postulates that formal authority should be maintained by managers Belief Management is a skill – something that one can learn once its underlying principles are understood Focus Focuses on managing the total organisation 14 principles of admin: 1. Division of work 2. Authority and responsibility 3. Discipline 4. Unity of command 5. Unity of direction 6. Subordination of individual interests to general interests 7. Fair remuneration 8. Centralisation of power & authority 9. Scalar chain 10. Order 11. Equity 12. Stability of tenure of personnel 13. Initiative 14. Union in strength The Bureaucratic Approach Fact Description Founded by Max Weber What he studied The fundamental issue of how organisations are structured Premise Any goal-oriented organisation comprising thousands of individuals would require the carefully controlled regulation of its activities 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 Limitations  Bureaucratic 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 decision-making 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 BEHAVIOURAL APPROACHES Focus on changing individual and group behaviour to improve organisational efficiency Human Relations Movement  The studies following the ‘Hawthorne Effect’ concluded that group pressure, rather than management demands, had the strongest influence on worker productivity. Fact Description Founded by Mayo What he studied Hawthorne Studies (see above) Premise Management’s concern for the well-being of their subordinates and sympathetic supervision enhances workers’ performance Problem he addressed Viewed workers as human beings and not as machines Limitations  The belief that a happy worker is a productive worker is too simplistic  Economic aspects of work remain important to workers  Factors play role in productivity: their values, attitudes, perceptions, learning, motivation Belief The importance of paying attention to people to improve their productivity. Researchers Munsterberg – showed linkage between scientific mngt and human effort in work environments Kurt Lewin – group dynamics. Subordinate participation in decision-making Chester Barnard – Org as social system that need the support of employees to be effective. Mary Parker Follett – Universal law – group ethics rather than individualism should form the basis or org. Law of situation – impossible for manager to achieve success unless there is unity and cooperation among all elements, material and people One best way to manage Human needs and motivation Employees’ personal needs and how these needs influence performance Douglas McGregor Theory X: based on a set of assumptions that take a command and control view of management, underpinned by negative view of human nature. People are lazy, lack ambition, dislike responsibility, inherently self-centred, by nature resistant to change, gullible and not bright Theory Y: mixture of assumptions and underlying beliefs based on positive view of human nature, taking an empowering view of management. People are not passive by nature, are motivated, mngt task to arrange organisational conditions so people can achieve goals Maslow – Individuals work to satisfy unfilled needs QUANTITATIVE MANAGEMENT THEORY Fact Description Founded by What he studied Management science or operations research Premise Management is primarily about crunching the numbers Problem he addressed The greatest contribution of the techniques (linear programming, PERT/CPM, regression analysis) are in planning and control activities Limitations Many aspects of management decisions cannot be quantified and expressed by means of mathematical symbols and formulae Belief Focus Mathematical models & statistics and their use in management decision-making