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Essentials of Contemporary Management  847
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 1
Essentials of Contemporary Management

Chapter 1
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Learning Objectives
What, why, how managers use organizational resources efficiently and
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effectively to achieve
We thinkorganizational
you have liked goals
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4 principal managerial
downloadtasks: planning,
it, please organizing,
recommend it to leading, and controlling
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3 levels of management andbuttons
system. Share the tasks
areand responsibilities
a little at different
bit lower. Thank you! levels
in the hierarchy
Buttons: skills and why managers are divided into different
3 kinds of managerial
departments
Changes in management due to globalization and technology (IT)
Challenges in today’s competitive global environment
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3
Definitions
Organizations: collections of people who work together and coordinate their actions to achieve
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Cancela wide variety
of goals or desired future outcomes
Management” the planning, organizing, leading, and controlling of human and other resources to achieve
organizational goals efficiently and effectively
Organizational performance: a measure of how efficiently and effectively a manager uses resources to satisfy
customers and achieve organizational goals
Efficiency: a measure of how well or how productively resources are used to achieve a goal
Effectiveness: a measure of the appropriateness of the goals an organization is pursuing and the degree to
which the organization achieves those goals

4
Principal tasks of management

Planning: identifying and selecting appropriate goals/strategy: a cluster of decisions about what goals to
pursue, what actions to take, and how to use resources to achieve goals
Organizing: structuring working relationships so organizational members work together to achieve
organizational goals with the outcome to create an organizational structure: a formal system of task and
reporting relationships that coordinates and motivates organizational members so they work together to
achieve organizational goals.

5
Leading: articulating a clear vision and energizing and enabling organizational members so they
understand the part they play in achieving organizational goals
Controlling: evaluating how well an organization is achieving its goals and taking action to maintain or
improve performance

6
Management Structures

Managers are on different levels in hierarchy and by type of skills

Levels of managers in the hierarchy AND
Grouped managers in different departments or functions according to their specific job related skills,
expertise, and experiences
Department: a group of people who work together and possess similar skills or use the same knowledge,
tools, or techniques to perform their jobs.

7
Levels of management
First-line managers: often called supervisor, a manager who is responsible for the daily supervision of
nonmanagerial employees
Middle managers: a manager who supervises first-line managers and is responsible for finding the best way
to use resources to achieve organizational goals
Top managers: a manager who establishes organizational goals, decides how departments should interact,
and monitors the performance of middle managers
Top management team: a group composed of the CEO, the COO, and the vice presidents of the most
important departments of a company
p. 13 graphics

8
Managerial skills: Education and Experience

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Conceptual skills: the ability to analyze and diagnose a situation and to distinguish between cause and effect
Human skills: the ability to understand, alter, lead, and control the behavior of other individuals and groups
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Technical skills: the job specific knowledge and techniques required to perform an organizational role.
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AND Core Competency: the specific set of departmental skills, knowledge, and experience that allows one
organization to outperform another OR having the Competitive Advantage.

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Recent Changes in Management Practices to INCREASE EFFICIENCY AND EFFECTIVENESS

To reduce Payroll -
Restructuring: downsizing an organization by eliminating the jobs of large numbers of top, middle, and first
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line managers and nonmanagerial employees.
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Outsourcing: contracting with another company, usually abroad, to have it perform an activity the
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organization previously performed itself.
To make more use of remaining workforce - Buttons:
Empowerment: the expansion of employees’ knowledge, tasks, and decision making responsibilities
Self managed team: a group of employees who assume responsibility for organizing, controlling, and
supervising their own activities and monitoring the quality of the goods and services they provide.
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10
Challenges for Management in a Global Environment

Global organizations: organizations that operate and compete in more than one country Cancel
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11
COMPETITIVE ADVANTAGE

BUILD - Competitive advantage: the ability of one organization to outperform other organizations because it
produces desired goods or services more efficiently and effectively than they do.
Efficiency:
Quality:
Innovation: the process of creating new or improved goods and services or developing better ways to
produce or provide them
Responsiveness to customers

12
Other TQM Speed: bringing new products to the market

Flexibility: how easily they can change or alter the way they perform their activities to respond to actions of
their competitors
Turnaround management: the creation of a new vision for a struggling company based on a new approach to
planning and organizing to make better use of a company’s resources and allow it to survive and prosper..
Ethics and responsible standards
Managing a diverse workforce
Utilizing IT and E-Commerce
Managing global crisis: such as British Petroleum, a refinery explosion, war, etc.

13
FW Taylor 1856-1915 ( the father of management): Scientific Management

The systematic study of relationships between people and tasks for the purpose of redesigning the work
process to increase efficiency.
Principle 1: study the way workers perform their tasks, gather all the informal job knowledge that workers
possess, and experiment with ways of improving the way tasks are performed.
Principle 2: codify the new methods of performing tasks into written rules and standard operating procedures
Principle 3: carefully select workers so that they possess skills and abilities that match the needs of the task,
and train them to perform the task according to the established rules and procedures
Principle 4: establish fair or acceptable level of performance for a task, and then develop a pay system that
provides a reward for performance above the acceptable level.

14
Max Weber’s (1864-1920/Prussian) Bureaucratic Theory

Bureaucracy: a formal system of organization and administration designed to ensure efficiency and
effectiveness
Principle 1: in a bureaucracy, a manager’s formal authority derives from the position he or she holds in the
organizations with AUTHORITY BEING the power to hold people accountable for their actions and to make
decisions concerning the use of organizational resources
Principle 2: in a bureaucracy, people should occupy positions because of their performance, not because of
their social standing or personal contacts
Principle 3: the extent of each positions' formal authority and task responsibilities, and its relationship to
other positions in an organization, should be clearly specified
Principle 4: authority can be exercised effectively in an organization when positions are arranged
hierarchically, so employees know whom to report to and who reports to them

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Principle 5: managers must create a well defined system of rules, standard operating procedures, and norms
so that they can effectively control behavior within an organization.

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Rules: formal written instructions that specify actions to be taken under different circumstances to achieve
specific goals
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Standard operating procedures (SOPs): specific sets of written instructions about how to perform a certain
aspect of a task
Norms: unwritten, informal codes of conduct that prescribe how people should act in particular situations
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Mary Parker Follett (1868-1933), the mother of management thought

Emphasized the human side of management

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Authority should go with knowledge, whether it is up the line or down
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Anticipated current interest in self managed teams and empowerment.
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Recognized the importance of having managers in different departments communicate directly with each
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The Hawthorne Studies and Human Relations

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Purpose: to study ways to improve various characteristics of the work setting, such as job specialization or the
kinds of tools workers used
Conducted between 1924 and 1932 at the Hawthorne Works at Western Electric Company
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Hawthorne Effect: seemed to suggest that the attitudes of workers toward their managers affect the level of
workers’ performance. Manager or leadership behavior affect performance so researcher began to study
management behavior – Human Relations Movement

17
Human Relations Movement

Thus, Human Relations Movement: advocated that supervisors be behaviorally trained to manage
subordinates in ways that elicit their cooperation and increase their productivity.
Managers must understand the workings of the informal organizations: the system of behavioral rules and
norms that emerge in a group, when they try to manage or change behavior in organizations
Organizational Behavior: the study of the factors that have an impact on how individuals and groups respond
to and act in organizations,

18
Theory X and Theory Y, Douglas McGregor, after WWII

Two different sets of assumptions about work attitudes and behaviors dominate the way managers think and
affect how they behave in organizations
Theory X: the average worker is lazy, dislikes work, and will try to do as little as possible, so managers
maximize their control over workers’ behaviors and minimize workers’ control over the pace of the work,
rules, rewards, and punishments
Theory Y: workers are not inherently lazy, do not naturally dislike work, and if given the opportunity, will do
what is good for the organization. The limits of collaboration in the organizational setting are not limits of
human nature but of management’s ingenuity in discovering how to realize the potential represented by its
human resources.

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