Organisation: a structured group of people who are assembled to achieve certain goals that individuals alone couldn’t achieve.
Management: an art of getting things done through people.
Manager: a person who allocates resources and directs its operation in the organization.
Alfred P Sloan Jr – Great Man theory, all great managers are born, not made, they’re gifted with certain abilities (speech, charm, personality, etc)
How to measure the effectiveness of management? 1. Qualitative and 2. Quantitative. Qualitative e.g market reputation, service level, innovativeness, the development of core competencies, etc. Quantitative e.g the percentage of market shares, profit, sales revenue, labour. Etc.
Henri fayol: (management functions) POCCC; planning, organizing, commanding, controlling, coordinating.
Mintzberg: (management roles): interpersonal roles (figure head, leader, and liaison), informational roles (monitor, spokeperson, disseminator) and decisional roles (resource allocator, disturbance handler).
Katz: 3 different skills required technical skills, conceptual skills and interpersonal skills.
Rosemary stewart, demand, choices and constraint.
Peters and waterman, 8 attribute of excellence.
Why management is needed? 1. to reach objectives, 2. to maintain a balance between conflicting goals. 3. to achieve effectiveness and efficiency.
Classical Theory:
1. Weber: believes in bureaucracy as the most efficient form of the organization at his period. Emphasise on the rules and regulations to achieve efficiency. Hierarchy of authority and responsibility. (Rigid structure)
Adv: high lvls of predictability, accountability, standardization, high lvl of competence and expertise.
Dadv: de-motivates, not suitable in current volatile environment. Slow decision making, prevent creativity and innovation.
2. Taylor (scientific management) workers are motivated only by money (rational economic man). And that’s how we can increase our productivity, using “Motion Study” by gilbreth, and incentive cash by Gantt.
Highly rely on the performance, believes in one best way to solve problems (to achive professionalism e.g auditing). Increases productivity and efficiency through job design. (Specialization.) good in measuring productivity of its worker.
Dadv: ignores human factor, concentrates too much on economic and physical needs of employer, potential exploit on labour. Assumption to simplistic about human elements were misguided. (man is not only a rational econ man). Views workers as cogs of machines.
3. Fayol (administrative management) 14 principles of mgt, hence able to mgt org efficiently. Dadv: inapplicable to changing situations. Overemphasis on rational behaviours of mgers to get things done.
4. Elton Mayo (Human Relations Theory) (Hawthorne plant). Adv: Discovered the existence of informal relationship in company. Working condition doesn’t affect the workers behavior. Money isn’t the cause of increased output. Importance of informal communications, Dadv: happy worker may not be a productive worker. Ignored the more rational side what motivates people the most. Ignored the formal organisations’s rules and regulations. This exp was never validated.
5. System Theory: organisations are complex entities or systems inter-related and independent parts comprising of input process and output, which have interaction with the external environment (Internal and External boundaries) to arrive at stable state (Homeostasis) (Katz and Kahn)
Eric Trist: open socio-techical system, is working in groups, compatibility with structure and machines.
Adv: holistic view of whole org system and stresses the process within it. No one best way, but there could be several ways arriving the same outcome. Synergiies (whole is greater than sum of its parts). Concept of open socio tech motivates workers through job redesign.
Dadv: ignores any guidance on the func and duties of mgers. Hard to apply to a global organisation which operates in volatile environment.
Lawrence and Lorsch (structure and environment)
Joan Woodward: (find a fit between structure and technology). Small, organic, big, on the other hand, mechanistic structure.)
4. Burns and Stalkers (Organic and Mechanistic management). Acknowledged that firm could well move from one system to the other system as external conditions changed. Emphasis on the flexibility of the firm to adapt to its environment.
5. Contigency Theory: focus in detail on the nature of relationships, seeking to define those factors that are crucial to a specific task or issue. (be aware of the complexity in every situation and take an active role in trying to determine what would work best in each case).
Dadv: not well developed.
Development of an Organisation,
mission à analyzing its environment (external and internal) à goal formulation à strategy formulation à programme formulation à implementation à feedback and control.
mission guides the business activities of the business units. (within its framework)
External environment analysis, using PEST factor (Fahey and Narayanan), and/or Porter’s five force model. pest is political, economics, social and technology. Using the PEST factor, now we know the SWOT, strength, weakness, opportunities and thread. Str and Thread is internal analysis, Opportunity and Weaknesses is external analysis.
Porter’s five force model tool is basically measures the attractiveness or the strength of competition in the industry. Five forces including: bargaining power of supplier, bargaining power of buyer, potential of new entrants, rivalry among competing sellers, substitute products. How to overcome the five forces? à improve the value chain. The value chain is the primary source of competitive advantage for firms. Including: purchased suppliers, inbound logistic, operations, distribution or outbound logistic, sales and marketing, service, general administration, HRM, R&D, system development, technology. Value chain is the basis on which firms will plan their Generic Strategies.
Strategic formulation:: porter’s Competitive Generic Strategy, including Focus, narrow segment (Mercedes, bmw), Differentiate (sony, SIA) striving to create important differences between the company’s own product and those of rivals, to build customer loyalty, and Cost leadership.
Internal environment anaylsis, using value chain or I can use BCG (boston consulting group) analysis, identifies how well is the firm’s resent strat, the competitiveness of its price, market share etc etc. BCG matrix: 2 axis, x axis relative market share and y axis market growth rate. question marks, stars, cash cows, and dogs. Adv: visual representation of business portfolio. Improves cash flow, help mgers to plan ahead. Dadv; only considers 2 variables, make hasty decisions, overmilk a cow or kill a dog prematurely. (dog is not all worthless)
Leadership.
What’s the difference between leader and manager? Leader: motivate, long term, develops people, focus is on people, relies on trust, does the right thing. Manager: short term, focus is on systems and structure, maintains employee, relies on control, does thing right.
Early studies of leadership were based on the assumption that leaders were born and not made. They tried to seek out the common personality characteristics (or traits). (physical traits, personality traits, and social traits)
Style / behavioural theory: Mouton and McGregor: approach concentrates on what a leader does – their behaviour or style. (managerial grid)
Rensis Likert four key styles of leadership: 1. exploitative, 2. benevolent, 3. consultative, 4. participative group. Argues that managers adopting system no4 are consistenly effective in setting goals and achieving them.
Contingency theories, particularly influential and offers a systematic way of analyzing situations and then prescribing the most effective leadership response to that situation. Based on his least preferred co-worker scale, a leader can be task – oriented or relationship – oriented.
(French and Ravens) 5types of power and its consequences: expert and referent power à commitment, reward and legitimate à compliance, coercive à resistance.
National culture is an important situational factor determining which leadership style will be most effective. (china, autocratic, usa democracy, Korean paternalistic, high power distance, etc) and it’s also depends on how much people trust their leaders.
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