Chapter 4: The management process

• Learning outcomes
– discuss the evolution of management theory and depict
it
– diagrammatically
– define the term ‘management’
– differentiate between the various levels of management
– differentiate between the various skills that managers
need
– explain the various managerial roles

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Chapter 4: The management process
• Introduction
– All managers, regardless of whether they manage big or
small businesses, whether they are in top managerial
positions or whether they are managing one or two
individuals, are searching for an answer to the same basic
question: What is the best way to manage a business?
– A number of these theories, developed many years ago,
can still be applied in contemporary businesses.

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The evolution of management theory
• The evolution of management theory:
– Scientific management
– Bureaucratic management
– Administrative management
– Human relations management
– Operations management
– Quality management
– Information management
– Systems management
– Contingency management
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Scientific management
• The scientific approach to management
involved a thorough study and testing of
different work methods to identify the best,
most efficient way to complete a job.
• Four individuals who contributed to the
development of scientific management:
– Frederick W. Taylor
– Frank and Lillian Gilbreth
– Henry Gantt
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Frederick W. Taylor
• Scientific management find the ‘one best way’ to
perform each task.
– Principle 1: Develop a science for each element of the
work.
– Principle 2: Scientifically select, train, teach and develop
workers to help them reach their full potential.
– Principle 3: Managers need to cooperate with employees
to ensure that the scientific principles are actually
implemented.
– Principle 4: Divide the work and the responsibility equally
between managers and workers.
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The four principles of Taylor’s scientific
management approach

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Frank and Lillian Gilbreth
• Their motions studies broke each task or job
into separate motions and then eliminated
those that were unnecessary or repetitive.
• Time studies worked by timing how long it
took a ‘first-class worker’ to complete each
part of his or her job.

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Henry Gantt
• Best known for the Gantt chart, but he also
made significant contributions to
management with respect to pay-for-
performance plans and training and
development for workers.

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Bureaucratic management
• Bureaucracy is the exercise of control on the
basis of knowledge, experience or expertise.
• Bureaucratic management is the structuring
of a business into a hierarchy.
• Based on the historical background that Max
Weber proposed the idea of bureaucratic
management.

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Max Weber
• Viewed bureaucracy as the exercise of control on the basis of knowledge,
experience or expertise.
• Weber identified seven elements that he believed characterise bureaucracies:
– Element 1: People should be hired because their technical training or qualification qualifies
them to do the job well.
– Element 2: Promotion within a business should no longer be based on whom you know or
who you are, but on your own experience and achievements.
– Element 3: Each position or job is part of a chain of command that clarifies who reports to
whom throughout the business.
– Element 4: To increase efficiency and effectiveness, tasks and responsibilities should be
separated and assigned to those best qualified to complete them.
– Element 5: A business’s rules apply to all its members, regardless of their position and status.
– Element 6: All rules, procedures and decisions should be recorded in writing.
– Element 7: Professional managers rather than business owners should manage or supervise
businesses.

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The seven elements of Weber’s
bureaucracies

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Administrative management
• The administrative approach to management
focus on how and what managers should do
in their jobs and it focus on the business as a
whole.
• The administrative approach to management
was developed by Henri Fayol.

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Henri Fayol
Identified 14 principles of management:
• Principle 1: Division of Work.
• Principle 2: Authority and
responsibility.
• Principle 3: Discipline.
• Principle 4: Unity of command.
• Principle 5: Unity of direction:
• Principle 6: Subordination of
individual interest to general
interest.
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• Principle 7: Remuneration.
• Principle 8: Centralisation.
• Principle 9: Scalar chain.
• Principle 10: Order.
• Principle 11: Equity.
• Principle 12: Stability of
tenure of personnel.
• Principle 13: Initiative.
• Principle 14: Esprit de corps.
13
Fayol’s 14 principles of management

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Human relations approach to management

• The human relations approach to

management focuses on people, particularly
the psychological and social aspects of work.
• Its worth exploring the contributions of Mary
Parker Follet and Elton Mayo.

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Parker Follet and Elton Mayo
• Mary Parker Follett is known as the ‘mother of modern
management’.
– Conflict can be embraced
– Domination can work short term
– Compromise is not good
– Integration is key

• Elton Mayo is best known for his role in the famous

Hawthorne studies.
– Human factors related to work were found to be more important
than the physical conditions of the work.

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Operations, quality, information, systems and
contingency approaches to management
• Operations management involves the transformation or conversion of
inputs into goods and services as efficiently as possible.
• Quality management is the act of overseeing of all activities and tasks
needed to maintain a desired level of excellence.
• Information management refers to the acquisition of information from
one or more sources, and the ultimate disposition thereof through
storage.
• In systems management, the business is viewed as an open system, in
constant interaction with its environment being influenced by its
environment.
• Contingency management states that the application of management
principles depends on the specific situation that the manager faces at a
given point in time in the business.

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Quality management
• The main contributors to quality management
are:
– W. Edwards Deming
– Joseph M. Juran
– Philip Crosby
– Armand Feigenbaum
– Kaoru Ishikawa
– Genichi Taguchi
– Total Quality Management (TQM)
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Joseph M. Juran
• Three basic processes:
– (i) quality planning, which involves the customer;
– (ii) quality control, which focuses on defining the
critical elements required for control; and
– (iii) quality improvement, which motivates the
need to improve before establishing
improvement projects that focus on addressing
the root causes.

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Philip Crosby
• Classifies quality in businesses in five stages of
maturity:
1. Uncertainty: the business has no comprehension or
recognition of quality.
2. Awakening: has awakened to the concept of quality
and becomes acutely aware of it
3. Enlightenment: an understanding of quality and
support for improvement is evident
4. Wisdom: quality is an accepted routine
5. Certainty: Quality management is the norm during
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Total Quality Management (TQM)
• Systems approach: is an open system that takes input
from the environment it functions in, and adds value
through its assets and internal systems to produce outputs
to the environment
• Customer (Ishikawa’s) focus: every human resource to
recognise the next person in line
• People involvement: tactic to engage people specifically in
the initiating and planning processes
• Process of continuous improvement: (by Deming):
assumes that proper planning establishes and approves
business goals
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The four pillars of Total Quality Management

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Summary of the evolution of management
theory

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Defining management
• Management is the process of working with and through
others to achieve business objectives in a changing
environment.
• Thus:
– Management is a process
– Four fundamental management functions
– Management requires working with and through others
– Management aims to achieve business goals and objectives
– Management requires a balance between effectiveness and efficiency
– Management should make the most of limited resources
– Management should cope with a changing environment

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The management functions
• Planning is the management function that determines the
business’s mission and goals.
• Organising, once goals and plans have been determined,
management has to allocate the business’s resources to
relevant departments or individuals.
• Leading refers to directing the human resources of the
business and motivating them in such a way that their
actions are aligned with goals and plans.
• Controlling means that managers should constantly make
sure that the business is on the right course to attain its
goals.
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Inputs or resources
• The following basic resources are found in all businesses:
– people (human resources)
– money (capital or financial resources)
– raw materials (physical resources)
– knowledge (information resources)
– technology
– information
– Components
• The resources listed above are utilised by management to
achieve the goals of the business as efficiently and
effectively as possible
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Outputs or performance
• Inputs or resources are transformed in the
business to realise certain outputs, of which
goal achievement, products, services, profit,
job creation, efficiency and effectiveness are
the most important.

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Management entails working with and
through others
• Management is, above all else, a social process.
Many collective purposes bring individuals
together - building houses and cars
• The ability to work with and through others is
therefore an important skill that managers
should have in order to be successful.
• Problems with interpersonal relationships and
failure to build and lead a team are often the
reasons why managers fail.
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Management aims to achieve business goals
and objectives
• An objective can be described as a target to be
striven for
• Businesses will also be more successful when
their activities are guided by challenging, yet
realistic and achievable objectives.
• Business goals and objectives serve later as
measuring sticks for performance.
• Without goals and objectives, the management
process would be aimless and wasteful.
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Management requires a balance between
effectiveness and efficiency
The concepts 'effectiveness' and `efficiency’.
• Effectiveness is achieved when the business formulates
and pursues appropriate (or stated) goals. Effectiveness
means 'doing the right things’.
– Effectiveness alone is not enough. A business also needs to
be efficient.
• Efficiency essentially means 'doing things right.
– Efficiency is achieved by using the fewest inputs (such as the
number of people employed or the amount of capital utilised
during the financial year) to generate a maximum amount of
output
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Management should make the most of
limited resources
• We live in a world of scarcity and limited resources.
• Although experts and non-experts alike may quibble
over exactly how long it will take to exhaust our non-
renewable resources or come up with exotic new
technological alternatives, one fact remains: our planet
is becoming increasingly crowded and we are using
more resources than we should.
• Managers are the custodians of limited and scarce
resources and it is their job to see that the basic factors
of production are used efficiently and effectively.

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Management should cope with a changing
environment
• Successful managers are those who anticipate and
adjust to changing circumstances, rather than
being passively swept along or caught unprepared.
• A challenging profile of tomorrow's managers:
'The next generation of corporate leaders will need
the charm of a debutante, the flexibility of a
gymnast, and the quickness of a panther. A few
foreign languages and a keen understanding of
technology won't hurt either'

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Levels of management
• Top managers are responsible for the business as a whole,
as well as for determining its mission, goals and overall
strategies.
• Middle managers are responsible for specific departments
of the business and are primarily concerned with
implementing the policies, plans and strategies
formulated by top management.
• Lower-level managers are responsible for smaller
segments of the business and their daily activities are
centered around short-term planning and the
implementation of the plans of middle managers.
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Skills needed at different levels of
management
• Technical skills are the application of
education, training and experience to organise
a task, job or project.
• Teambuilding is listening carefully and
communicating clearly to develop an effective
team.
• Drive is setting goals, maintaining standards,
and evaluating performance to achieve
effective outcomes.
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Wilson’s three categories of managerial skills

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Managerial roles
• Interpersonal role: managerial jobs are people-intensive
• Information role: enables managers to obtain information
from colleagues, subordinates and departmental heads, as
well as from outside
• Decision-making role: the manager initiates projects that
capitalise on opportunities that have been identified

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Chapter 4

Any
Questions?
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