Management and Business

7/2/2000

Books,

 

Context

Management is a necessary process when you need to make the most of your resources. Someone who is very rich does in general not need much management. When someone is in a situation where there is not great pressure on resources, simple common sense will serve them very well. However the process of management is necessary and helpful to a person or organization where resources are under great pressure.

When studied there are three common elements that emerge in management.

A French man, Fayol, produced a management model with 14 points. This has since been reduced to 5 points.

All these elements of the "modified Fayol model" are interdependent.

Planning

There are 9 types of plan. You should ask why exactly things are done as they are. It is necessary to justify all activities. This ensures resources are not wasted. You can also anticipate problems. A plan can also be the basis of control.

Plans independent of particular situations

 

Plans in connection with a collection of situations

 

Plans for a single specific situations

All of these allow decisions to be made down the line.

 

7 steps in making a plan

Objectives are often arbitrary and sometimes superfluous. The responsibility of evaluating options is often determine by inside politics and power-plays.

Effective Planning Needs

 

Organisation

The need for structure in a group arises as the size and complexity of the group increases. A chart may be used to display the organisational structure of a group.

 

 

 

 

 

Charts show the division of work in an organisation.

Charts allow us to see who are the managers and the managed. A chart also describes the work done. We can also see the levels of management. From the above, the chief exec has sole profit responsibility.

Here is a breakdown by division.

Each division can be big enough to be a separate company.

Divisions can be made in various ways, on the basis of,

There is another type of structure too…

Matrix Organisation

For example, a consultancy may be structured in the following two-dimensional way,
 

Area 1

Area 2

Area 3

Man. Science

      

I.R.

      

Training

      

Work Study

      

 

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Another example of how a matrix organisational structure could be employed is Royals Royce with their aerospace products.

Organising brings in the concept and presence of formal authority. There are two views on formal authority.

Power

Power is a wider concept than formal authority. Power gives you the ability to make something happen. There are five bases for this.

Organisations have to be structured. From that structure there arises heirarchy. Within that heirarchy there are active control links, the limit of these defines the span of control. Specialisation casuses the organisation to split into the specific parts. Line and Staff means that when a person that doing a task, he'she needs support staff.

The classical school of management was based on the church and Military, which were organisations simply control, they had no driving objectives. More reciently we employ "scientific management".

Problems with calssical theory

The Hawthorne Experiment

This was conducted at the Hawthrone plant of Western Electric by Elton Mayo from 1927 to 1932. After analysing the resulting productivity of staff after applying various positive and negative changes to the work environment, the Hawthorne effect was coined. People perform more when you show them recognition.

Specific problems detailed:

Some Solutions proposed:

Some problems withe the humans realtions school of though:

 

Quantitative School techniques from operational research abd management science.

Uses;

Problems;

We have seen that there are 3 schools of organisation;
1)Classical
2)Neo-Classical human relations
3)The Contingency approach

There are two methods to integrate all of these into a single system;

The Systems approach

Key concepts;

There are 4 basic tasks to install this system:

Defining the organisation

Ask the following;

The aim is to answer the question "what are we now and what do we want to become?".

Traditional goals can lead to problems (internal cost and profit). We need a set criteria which interrelate.

Here are some wider systems of interest:

 

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Formal susbsystems,

Officially extablished groups breated to carry on teh organisation's activities.

Divisions
Departments
Region
Committees
Boards
Other official level bodies
Style of organisation

Systems Integration

Cheif Executive's role

The Contingency Approach
Situations differ, so it is the job of the manager to pick the approach which will work.

 

Staffing

"The People Function"

Human resource planing.

Needd to consider several things when acting on the above points.

Planning tasks;

 

Recruitment

Objective: Attract a pool of good candidates.

1) Define the job (Job description)

2) Define the (desired) job holder (jon sepcifacation)

Job description + Job specifacation = Job analysis

Sources of candidates:
Inside organisation: Level os seniority
Advertising
High flyers
(always look from with where possible)
Outside organisation: Advertisiing (expensive)
Consultants (20%-25% of 1st year salary)
Exectutive search (head hunting)
(60% of 1st year salary).

Selecton

Objective: Make an offer to someone who will do the job well.

7 stages;

1) Application form.
• Formal request for job.
• Providiing basic data to help the process.
• If accepted, becomes part of personal data.
• Begins the appraisel process.

2) Screening Interview.
• An apraisel of both sides.

3) Testing.
• Should give consistent results.
• Needs to be a good predictor.

4) Background check.

5) Selection Interview.
• Practice/Reherse.
• Try to be different.

6) Physical Examination.

7) Job offer.

 

Induction and Orientation. (training)

General Routine
History f the organisation
Policies and Rules (health and safety)
Conditions oof service.

 

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Training and Development

Training: Teaching technical skills to non-management personel.

Development: Improving technical, H.R. and communication skills of managers.

The purpose of all trainging and developme outside the academic sphere, is to improce the effectiveness of the trainee are in heis/her job.

Training needs must be identified first,

Sources:-
Performance Appraisal.
Job Ananlysis.
Organisational analysis.
Attitude survey.

Training Methods:

On the job:

Off the job:

Combined:

Management development needs must also be idnetified.

Sources: As for 'taining' but more emphasis on the individual.

Development Methods (1) :

Coaching

Job rotation

Training positions

Planned work activities

All of thess are done with the manager at his/her place of work.

Development Methods (2):

Training Schools

University programmes

Behavioural Approaches

Mostly done away from the work place.

[Missing Text]

B.C. View:-
(3 elements)

Who should approve this?

There are 4 possibilites:-

Possible pitfalls;

 

Overcoming Problems

There are four ways an employee can move in an organisations;

 

Leading

There are two parts to this section; leading and being led.

Factors necessary for performance;

There are 3 ways to look at motiviation, 3 theories.
1) Content

2) Process
3) Reinforcement

"Content"

Some problems with content theory;

"Process"

Which goals/rewards motiviate?

Inherent in "Process" are ideas of:

Implications for management are'

Some important lessons

"Reinforcement"

How can consequences of past actions be used to influence future behaviour through a learning process?

This leads to...

...Behaviour Modification/Operant Conditioning

 

Some early views on motivation;

A further model is...

... A SYSTEMS APPROACH

"The Individual"
Moslow's "Hierachy of needs"

Atkinson & McClelland defined three basic drives:

"The Job"

Herzberg's 2 factor approach. He took 200 engineers and asked for instances when they felt good and and bad about their job.

Flaw to methodology are that anecdotes are biased.

"The Work Situation"

Depends on immediate work environment & organisational 'slimate'.

 

Leadership

"The process of directing & influencing the task related activities of group members".

Implications:-

There are 3 approachex to study of leadership.

"Traits"

2 lines of research:

Traits of leaders Vs non-leaders
Traits of effective leaders Vs ineffective leaders.

Basic leadership functions.

McGregor's2 basic styles,

Theory X Assumptions;

Theory Y Assumptions;

McGregor postulated that theory Y was better than theory X.

Ohio State University analysed management techniques & came uup with this matrix.

This is known as Blake's grid,

Blake's Styles

1,1 Impoverish
1,9 Country club
9,1 Task for authoritarian
5,5 Middle of the road
9,9 Team

Blake (& Muton) postulated that 9,9 was best.

 

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Liket's 4 leadership systems;


Likert goes for System 4. Systems 3 andd 4 are most efficient.

 

Reddin

"It's the mangaers job to be effective. It si his only job".
Basic personal styles; RO=Relationships orientation, TO=Task orientated.

Reddin called this the 3D Approach.

If the system is used less efficiently, it can be drawn out as,

If the system is used more efficiently, it can be drawn out as,

The 'situation' affects a leader's behaviour.

Now we go into the field of CONTINGENCY

Fielder's 3 factors:


Path/Goal Approach

Subbordinates can be influenced in a number of ways. Most important, ability to;

Life Cycle Theory

Hersey & Blanchard (based on Reddin)

Being effective requires;


MOTIVATION + LEADERSHIP + COMMUNICATION = EFFECTIVE TEAM WORKING

Let us now focus on communication.

Communication

"Formal transmission of ideas from a sender to a reciever".
Implications;



Common communication problems;


This also leads us to the idea that TWO WAY COMMUNICATION HELPS!

Some other barriers;

Guidelines for effective communications;

 

Controling

4 steps in the control process:

Budgetary control

2 broad approaches;

and 2 forms of budget;

4 stages to make budgetary control effective;

Setting budgets;


Collection of actual costs

Comparing Actual Vs Budget

 

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Comparing Actual Vs Budget


Budgets

For an example, consider an small engineering business. The first colum
is an example of a typical 'good month'. The second colum takes the
situation where all quantities go 5% against us.



Some problems with budgetary control.


Let's look at the same engineering business and look at managing cash.
In this situation we see that there is a time lag between expenditure
and any sales proceeds coming in.

Standard Costing

Often we would use a table as below to show this,
Quantity Value
Direct labour
Direct Material
Overhead recoverey factors

Reporting using standard costs,
Take actual output x Appropriate standards & Total
For this we must use labour and material costs which should have been
incurred. Then Compare with actual totals.

Managemet by Objectives (MBO)

Drucker, Odiorne and Humble wrote about this.
Key results areas
Performance standards.

Reddin's effective MBO


eg, for a salesman,
EA Sales of X
ES Tonnes PA
£ PA
Market share
OBJ 850 to 1000 tonnes PA
£3500 to £11000 PA
17% to 19% (market share)

Ratio Analysis

ROI = Proffits / Assets employed.

There are many others;



Break even anaylsis,




The Z chart,

Work Study

"A standard labour hour" (SH)
That amount of work produced by a skilled and motivated person working under incentive conditions. Suppose we produce 6 SH, the clock time is 8 hours, then teh performance is 100x(6/8) = 75%.
Typically, pay is laid out as,

Labour cost control




Implications for management;