Components of Management

Planning –anticipating future possibilities to move in the proper direction

Individual plans united into a central theme for firm
Different time-frames operational, tactical & strategic
(daily, weekly, monthly, yearly and five year)
Reevaluated continuously (rolling horizon)
Not frozen; flexible to changing conditions

Organizing –providing structure for production essentials, people materials

Provide needs for functioning
Raw materials, tools, capital and personnel
Consistent with meeting the goals of the plan
Pyramid structure for organization charts
Foreman supervises 15 workers; 4 foremen need 1 supervisor
4 supervisors need 1 manager, etc.
Define roles of people in the organization
Shareholders, board of directors, general management, regional and local
Management, engineers, department heads, superintendents, foremen and workers
Selection and training employees
Physical, mental, moral, specific and general knowledge and experience
 Components of Management
Command – insures successful operation of the organization

A manager in command – knows his/her people, can remove the incompetent, understands all
agreements binding the firm, sets a good example, periodically audits the organization, uses a meeting
to focus efforts in a single direction, does not become engrossed in minute details, and instills unity,
energy, initiative and loyalty in the employees.

Coordination – integrates the actions of all aspects of the firm

Control – is a verification process

Check to see that what actually happened conforms to the plan

Determine causes for differences and take corrective actions
 Henri Fayol

Father of modern management (1910)

French engineer
Managing director of a large mining company
Saved it from bankruptcy
View problems from the top down
Recall Taylor viewed from the shop floor up

Widely known in France

Management as an area of study
Translated to English in 1930
Complementary to Scientific Management (Taylor)

Firm has six interdependent functions

Technical (the actual production),
Commercial (buying and selling),
Financial (getting and allocating money),
Security (protection of people and property),
Accounting (keeping records of costs and materials)
Managerial (planning, organizing, command, coordination and control)

Management holds the functions of the organization together.

 Planning, Scheduling and Control (Fayol)

Planning –organized approach to accomplish some goal

Project objectives
Activities
Events
Network

Scheduling – time phased commitment of resources to do the project

Activity start and completion times
Project duration
Resource usage over time
Critical activities
Delaying a critical activity delays project completion
Critical activities may need more accurate parameters
Modify critical activity to reduce the project duration or cost

Control – monitor progress and revise plan/schedule

 Fourteen “Principles” of Management

Fayol gave these reluctantly

1) Division of work. It is natural and desirable.

2) Authority and responsibility. They are complements; responsibility for authority must exist.
3) Discipline. Orderly obedience to al agreements both explicit and implied is necessary.
4) Unity of command. Each person should have one boss.
5) Unity of Direction. An organization must have one clear plan.
6) Subordination of individual to general interest. No individual is more important than the firm.
7) Remuneration of personnel. It should be fair and encourage effort.
8) Centralization. This is a matter of degree; depends on many factors.
9) Scalar chain. The chain of superiors from the workers to the board of directors.
10) Order. A place for everything and everything in its place; applies to people and material
11) Equity. Treat everyone with kindness and justice.
12) Stability of personnel. Low turnover promotes better quality and quantity of work.
13) Initiative. Power and freedom to think and execute plans
14) Esprit de corps. Establish a harmonious organization.
 Elton Mayo/Hawthorne Effect

Harvard Professor – first major academic contributor

Hawthorne works of the Western Electric Company (AT&T)

Studied effect of illumination on productivity (1924-1927)
Increased illumination and productivity increased
Decreased illumination, productivity still increased!
Mayo joined the study and observed
Increased due more to increased attention to workers
Need to have a control group

Mayo’s conclusion:

Logical factors are far less important than social factors in motivating workers.
The human factor in production systems is critical.
 Abraham Maslow

Hierarchy of Needs: Self

Physiological needs
Safety or security needs Actualization
Belonging and love needs
Esteem needs
Self-actualization Esteem

Focus on least-recently satisfied need

Love
With these, the worker is motivated

Do workers believe that they are important? Safety

(Hawthorne)

Physical
 Frederick Herzberg

Job-related factors are either

Satisfiers
Achievement
Recognition
Work itself
Responsibility
Dissatisfiers (Hygiene factors)
company policy/administration
supervision
relation to supervisor
relation to peers
working conditions

Must conquer dissatisfiers before motivation

How to manage:
Job redesign: enrichment
Participation: opportunities to work as a team
Supervise themselves
 Theory X, Theory Y and Theory Z

Theory X: authoritative (Taylor)

People are fundamentally lazy, irresponsible
People need to be constantly watched

Theory Y: pure freedom in attaining goals (Maslow and Herzberg)

People are fundamentally hard-working and responsible
People need only to be supported and encouraged.

Theory Z: Japanese Style (group decisions)