LESSON 1.

1
ORGANIZATIONS
Unit 1: Foundations of Management
 WHAT IS
AN
ORGANIZA
TION?
Organization – a
collection of people
working together to
achieve a common
purpose.
ORGANIZATIONS &
BUSINESSES
•What are your favourite organizations or
businesses?
• What do you like about them?
• Why are you loyal to them?
• Have you ever stopped using a business?
Why?
PURPOSE OF
ORGANIZATIONS
• They make stuff or do stuff.

• They come in all sizes.

• They do “it” better than an

individual can.
• Most of them want to make
a profit.
ORGANIZATIONS AS
SYSTEMS
Organizations are open systems that interact with their environments.
 Turn INPUTS into OUTPUTS
MEASURING THE
SUCCESS OF YOUR
ORGANIZATION
PRODUCTIVIT
Y
•Productivity – Measures the
quantity and quality of outputs
relative to the cost of inputs.
• Measures the transformation process

• Productivity is measured in two

common ways:
• Efficiency
• Effectiveness
EFFECTIVENESS VS.
EFFICIENCY

Just because input is efficient, does not mean the

output will be effective.
MANAGEM
ENT
WHAT IS A
MANAGER?
Manager – A person who supports,
activates, and is responsible for the
work of others.
 An effective manager is a strong leader,
but not necessarily a loud leader.
LEVELS OF
MANAGEM
ENT
MANAGER ROLES

Top Managers – Guide the performance of an

organization as a whole or one of its major parts

•Middle Managers – preside over the work of a large

department

•First Line/Low Managers – reports to middle

management and supervises non managerial workers.
 WHO IS THE MOST
IMPORTANT PERSON/PEOPLE
IN A COMPANY?
UPSIDE
DOWN
PYRAMID
 Customers and clients
come first
 Workers are supported
by managerial staff to
ensure customers are
happy and receive the
service they expect
THE MANAGEMENT Mangers continually engage
in these functions as they
PROCESS move from task to task
CORE COMPETENCIES
 Core competencies are the
resources and capabilities that
comprise the strategic advantages
of a business.
 What you do better than anyone?
 An organization must define,
cultivate, and exploit its core
competencies in order to succeed
against the competition
CORE COMPETENCIES
 Successful management competencies
MANAGE include:
1. Communication skills
RIAL 2. Teamwork
COMPETE 3.
4.
Self-Management
Leadership
NCIES 5. Critical Thinking
6. Professionalism
MANAGEM
ENT
THEORIES
Classical Management
Behavioural Management
 CLASSICAL MANAGEMENT
APPROACHES
Classical
Approaches
Assumption: People are rational

Scientific Administrative Bureaucratic

Management Principles Organization
Frederick Taylor Henri Fayol Max Weber
SCIENTIFIC MANAGEMENT
Scientific Management – emphasizes careful
selection and training of workers and manager
support.
Taylors four guiding principles are the following:
1. Every job/position has a “science” to doing it
right. This should be studied and refined.
2. Select workers with the right abilities for the job.
3. Proper training and compensation of workers is
essential.
4. Provide workers with clear and organized
instructions so they can be efficient and effective.
 Henri Fayol created 14 principles of management. They are the following:

ADMINIST
RATIVE
PRINCIPLE
S
 Henri Fayol created 14 principles of management. They are the following:
1. Division of Labour – specialization of work
2. Authority – managers and workers must understand managers can give
orders
h of
ac
3.
r i z ee
Discipline – No slacking or bending of rules
4.
o
Unity of Command – each employee should only have one manager
m
ADMINIST t
5.
o m e
Unity of Direction – leader generates plan, everyone else helps execute plan
i z . e s o f
e d 6.
q u
Subornation of Individual Interest – At work, only work issues should be
pl
RATIVE n ot n e
7. f o r aconsidered
pr i nc i
Remuneration – All should receive fair pay. Employees are valuable and not
s
PRINCIPLEd o h e s e y o
an expensel ’
Yo u t 8.
d F a
gh.
Centralization – Decisions are made from the top
a n o u
S under ment t
9. s t h
Scalar Chain (Line of Authority) – Companies must have clear formal chain
of command
l d 10. age
ho u a n Order – There is a place for everything, and all things should be in their pace

o u s m
11. Equity – Managers should be kind and fair
Y 12. Personnel Tenure – Unnecessary turnover is to be avoided; should be
lifetime employment for good workers
13. Initiative – All managers and workers should undertake work with energy
14. Esprit de Corps – Managers should work to build harmony and cohesion
BUREAUCRATIC
ORGANIZATION
Bureaucracy – Rational and efficient form
of organization founded on logic, order, and
legitimate authority.

Weber created the following

characteristics:
1. Clear Division of Labour
2. Clear Hierarchy of Authority
3. Formal Rules
4. Impersonality/Impartiality
5. Careers Based on Merit
 WHICH DO YOU LIKE THE
BEST? WHY?
Classical
Approaches
Assumption: People are rational

Scientific Administrative Bureaucratic

Management Principles Organization
Frederick Taylor Henri Fayol Max Weber
 BEHAVIOURAL MANAGEMENT
APPROACHES
Theory X &
Y
Hawthrone Organizations as
Studies Communities

Maslow Human
Personality and
Needs Resource
Organizations
Theory Approach

Assumption: People are social and self actualizing. They will always try to reach full potential. People at work
are assumed to seek relationships, respond to group pressures, and search for personal fulfillment
MASLOW’S NEEDS
THEORY
Two basic principles:
1. Deficit Principle – Deprived
needs motivate people.
Satisfied needs do not.
2. Progression Principle –
Needs exist in a hierarchy.
You cannot ascend unless
lower level need is met.

How is Maslow relevant to

Management & Leadership?
MCGREGOR’S
THEORY X & Y
•Theory X – Assumes people
dislike work, lack ambitions, and
prefer to be led.
• Managers become directive,
punitive and controlling.
• The Micromanager
•Theory Y – Assumes people are
willing to work, like responsibility,
and are self directed. Managers
will delegate responsibilities.
• The Macro Manager
MCGREGOR’S
THEORY X & Y
Self Fulfilling Prophecy
• If a manager sets expectations or
treats employees in a certain way,
the employees will fulfill this
expectation.
• Example: If a manager assumes
employees are lazy, employees
will be lazy.
• The employee believes the
manager has made an
assumption of them that cannot
be changed. The employees feel
they might as well behave in a
way to confirm the assumption.
ORGANIZATIONS AS
COMMUNITIES
Follett viewed organizations as
communities.
• A manager’s job is to develop
cooperation.
• She believed if every employee is
an owner of the business, it would
create feelings of collective
responsibility.
• This is seen today with:
• Profit sharing
• Employee ownership
• Gain sharing plans