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1. Introduction to the Principles of Management

Principles of Management 1

Introduction

  • Management:
    • The art of getting things done through the efforts of other people.
    • Defined by Mary Parker Follett (1868–1933).
  • Principles of Management:
    • The means that are used to manage.
    • The activities that “plan, organize, and control the operations of the basic elements of people, materials, machines, methods, money and markets, providing direction and coordination, and giving leadership to human efforts, to achieve the sought objectives of the enterprise.
    • Developed by French management theorist Henri Fayol (1841–1925).
    • POLC Framework: Planning, Organizing, Leading, Controlling.
  • Managers are required in all the activities of organizations: budgeting, designing, selling, creating, financing, accounting, and artistic presentation.
  • The larger the organization, the more managers are needed.
  • Goodwill’s business practices encompass the values of the triple bottom line of people, planet, and profit.
  • A role is an organized set of behaviors.

1.2 Who Are Managers?

  • In contrast to the traditional, hierarchical relationship among layers of management and managers and employees, in the contemporary view, top managers support and serve other managers and employees (through a process called empowerment).
  • Empowerment is the process of enabling or authorizing an individual to think, behave, take action, and control work and decision-making in autonomous ways.
  • Types of managers:
    • Top Managers: responsible for developing the organization’s strategy, vision, and mission. Example: CEO.
    • Functional Manager: responsible for the efficiency and effectiveness of a specific area such as accounting or marketing. Example: Director of Marketing.
    • Team managers: (aka, Supervisors) responsible for coordinating a subgroup of a particular division or a team composed of members from different parts of the organization. Example: Shift Supervisor.
    • Line Managers: responsible for the production of goods or services in an organization. Example: Plant Manager, or Product X Manager.
    • Staff Managers: responsible for the efficiency of a specific area such as accounting or marketing. Example: Director of Marketing, an important part of the organization, but not directly related to the product that the organization produces.
    • Project Managers: responsible for the planning, execution, and closing of any project. Example: Project Manager. Project managers are often found in construction, architecture, consulting, computer networking, telecommunications, or software development.
    • General Managers: responsible for managing a clearly identifiable revenue-producing unit, such as a store, business unit, or product line. Example: Store Manager, or General Manager of production (all products in a plant).
      • General managers typically must make decisions across different functions and have rewards tied to the performance of the entire unit.
      • General managers take direction from their top executives.
  • Role groups of Managers:
    • Interpersonal Roles: These roles involve dealing with other people.
      • Figurehead: The manager represents the organization in all matters of formality, including legal, social, and ceremonial matters.
      • Leader: The manager is responsible for the actions of his or her subordinates.
      • Liaison: (aka coordinator) The manager communicates with internal and external contacts to gather information and facilitate work.
    • Informational Roles: These roles link all managerial work together.
      • Monitor: collect and receive information from inside and outside sources.
      • Disseminator: transmits outside information into the organization.
      • Spokesperson: communicates internal information to outsiders.
    • Decisional Roles: These roles require decision-making.
      • Entrepreneur: The manager introduces change into the organization.
      • Disturbance Handler: The manager deals with threats to the organization.
      • Resource Allocator: The manager decides who gets what resources.
      • Negotiator: The manager represents the organization in negotiations.
  • The most important role of a manager is leadership.

1.3 Leadership, Entrepreneurship, and Strategy

  • Leader:
    • A person who persuades people to do what they don’t want to do, or do what they’re too lazy to do, and like it.
    • You manage things, you lead people.
    • A manager takes people people where they want to go. A leader takes people where they don’t necessarily want to go, but ought to be.
  • Entrepreneurship is defined as the recognition of opportunities (needs, wants, problems, and challenges) and the use or creation of resources to implement innovative ideas for new, thoughtfully planned ventures.
  • Strategy is a long-term purpose that defines clear goals and objectives, and a coherent plan of action for achieving those goals and objectives.
  • Synchronizing leadership, entrepreneurship, and strategy:
    • Leadership answers who to follow and the characteristics of a good leader.
    • Entrepreneurship answers what to do and what problems to solve.
    • Strategy answers how to do it.

1.4 Planning, Organizing, Leading, and Controlling

  • Planning:
    • The process of setting objectives and determining what should be done to accomplish them.
    • Planning steps:
      • Environmental Scanning: monitoring the environment to identify opportunities and threats.
      • Forecasting: predicting future events.
      • Establishing Objectives: setting SMART goals.
      • Identifying Alternatives: developing alternative strategies and contingency plans.
      • Making Decisions: evaluating alternatives and making choices.
      • Formulating Plans: specifying how to achieve objectives.
      • Constantly evaluating the success of the plan.
    • Strategic Planning: long-term planning (more than 3 years) that focuses on the organization as a whole. Usually done by top managers.
    • Tactical Planning: mid-term planning (1-3 years) that focuses on specific functions that align with the strategic plan. Usually done by middle managers.
    • Operational Planning: short-term planning (less than a year) that focuses on the specific procedures used to accomplish objectives. Usually done by first-line managers or supervisors.
  • Organizing:
    • The process of developing an organizational structure and allocating human resources to ensure the accomplishment of objectives.
    • The process of arranging resources to carry out the organization’s plans.
    • Organizing steps:
      • Identifying activities and jobs needed.
      • Departmentalization: grouping jobs into logical units. There are 5 common ways to group jobs by function, product, customer, geographic location, or process.
      • Job design: design of individual jobs within the organization.
      • Allocation of resources: assigning people to jobs.
    • Organizational Structure: the way in which an organization groups its resources to accomplish its mission.
  • Leading:
    • The process of influencing employees to work toward the achievement of objectives.
    • Leading steps:
      • Understanding employees’ personalities and attitudes.
      • Motivating employees.
      • Managing group dynamics.
      • Influencing individuals and groups.
      • Communicating effectively.
  • Controlling:
    • The process of evaluating and regulating ongoing activities to ensure that goals are achieved.
    • It ensures that performance does not deviate from standards.
    • Controlling steps:
      • Establishing standards and Measuring performance.
      • Comparing performance to standards.
      • Making corrections as needed.
    • Performance standards are often stated in monetary terms such as revenue, costs, or profits but may also be stated in other terms, such as units produced, number of defective products, or levels of quality or customer service.
    • Two traditional control techniques are budget and performance audits.
    • Quality Control: the process of ensuring that goods and services are produced in accordance with specifications.
    • Feedback: information about the results of an action.

1.5 Economic, Social, and Environmental Performance

  • The triple bottom line of people, planet, and profit aligns with social, environmental, and economic performance.
  • Economic Performance:
    • The ability of an organization to use its resources to create value.
    • Profit: the difference between revenue and opportunity costs of all resources used.
    • Value: the relationship between the price of a good or a service and the benefits that it offers its customers.
    • Productivity: the amount of output that is generated by an input.
    • Profits depend a great deal on how much customers are willing to pay for a good or service.
  • Social and Environmental Performance:
    • Social Responsibility: the duty of a business to contribute to the well-being of a community.
    • Sustainability: the ability to maintain or improve standards of living without damaging or depleting natural resources for present and future generations.
    • Corporate Social Responsibility (CSR): the idea that business has social obligations above and beyond making a profit.
    • Green Management: the process of managing an organization in a way that promotes the well-being of the environment.
    • Ethics: the standards of moral behavior that define how humans should treat one another.

1.6 Performance of Individuals and Groups

  • Individual Performance:
    • In-Role Performance: the things that you are expected to do in your job.
    • Organizational Citizenship Behaviors (OCBs): extra behaviors that are not required of organizational members but that contribute to and are necessary for organizational efficiency, effectiveness, and competitive advantage.
  • Organizational Citizenship Behaviors (OCBs):
    • Helping behaviors: helping others with their work.
      • Altruism: voluntarily helping others with their work-related problems. E.g., helping a new employee learn the ropes.
      • Interpersonal helping: helping others with their work-related problems. E.g., picking up the workload for a sick coworker.
      • Courtesy: warning others that some actions may negatively affect them. E.g., warning a coworker that a project is due soon.
      • Peacemaking: helping to resolve conflicts between coworkers. E.g., helping two coworkers resolve a disagreement.
      • Cheer Leading: encouraging others to keep up their spirits. E.g., encouraging a coworker who is having a bad day.
    • Sportsmanship:
      • maintaining a positive attitude and not complaining despite inconveniences in the workplace.
      • E.g., setting on a new desk if yours is broken or temporarily occupied without making a drama.
    • Organizational loyalty:
      • Putting the organization’s interests above one’s or team’s interests.
      • Contributing to the organization’s good reputation.
      • E.g., defending the organization against criticism.
    • Organizational compliance:
      • Following the organization’s rules and regulations.
      • E.g., following the organization’s dress code.
    • Individual initiative:
      • Going beyond the minimum requirements of the job.
      • E.g., cleaning up your desk and conserving resources.
    • Civic virtue:
      • Participating in the organization’s activities and events.
      • E.g., participating in the organization’s charity events.
    • Self-development:
      • Engaging in activities that improve one’s skills and abilities.
      • E.g., taking a course to improve your skills.
  • Group-Level Performance:
    • Group Performance is the inputs of the group minus the process losses.
    • Process Losses are the resources expended in managing the group or any aspect of group interaction that inhibits good problem-solving.
    • A team is a cohesive coalition of people working together to achieve mutual goals; a team is a small number of people with complementary skills.
    • A group is not a team; a group is more general (may include many teams or subsets of teams).

1.7 Your Principles of Management Survivor’s Guide

  • Learning styles: active or reflective, sensory or intuitive, visual or verbal, and sequential or global.
  • Use this link to find your Learning Style Index (LSI): https://learningstyles.webtools.ncsu.edu/
  • Active and Reflective Learners:
    • If you always act before reflecting, you can jump into things prematurely and get into trouble, while if you spend too much time reflecting, you may never get anything done.
    • “Let’s try it out and see how it works” is an active learner’s phrase.
    • “Let’s think it through first” is the reflective learner’s response.
    • Active learners tend to enjoy group work more than reflective learners, who prefer working alone.
  • Sensing and Intuitive Learners:
    • Sensing learners tend to like learning facts and solving problems by well-established methods and dislike complications and surprises.
    • Intuitive learners prefer discovering possibilities and relationships and dislike repetition and memorization.
    • Sensing learners are more likely to be innovative and engage in more practical activities.
    • Intuitive learners are more likely to remember what they’ve learned by thinking about what it might mean.
    • Sensing learners are more practical, patient, and careful about details.
    • Intuitive learners are more comfortable with abstract and theoretical information, and in grasping new concepts quickly, and work faster.
    • Sensors don’t like courses that have no apparent connection to the real world.
    • Intuitors don’t like “plug-and-chug” courses that involve a lot of memorization and reading.
  • Visual and Verbal Learners:
    • Visual learners remember best what they see—pictures, diagrams, flow charts, timelines, films, and demonstrations.
    • Verbal learners get more out of words—written and spoken explanations.
    • Visual learners often close their eyes to visualize or remember something; they will find something to watch if bored.
    • Verbal learners often talk to themselves; and will move their lips while reading or writing.
    • Most people are visual learners.
  • Sequential and Global Learners:
    • Sequential learners gain an understanding through linear steps, with each step following logically from the previous one.
    • Global learners learn in large jumps, absorbing material almost randomly without seeing connections, and then suddenly “getting it.”
    • Sequential learners tend to follow logical stepwise paths in finding solutions.
    • Global learners may be able to solve complex problems quickly or put things together in novel ways.
    • Sequential learners are more patient with details.
    • Global learners may be more impatient with details, especially those that are not relevant to their current interests.
  • My Style:
Aspect My Preference Why?
Active/Reflective Reflective I like to read and know things before trying them out; I work better alone.
Sensing/Intuitive Sensitive I like to learn facts and solve problems by well-established methods; I’m practical and have attention to details.
Visual/Verbal Visual I remember best what I see; I like pictures, diagrams, and demonstrations more than text.
Sequential/Global Sequential I like sequential understanding; I feel not comfortable jumping into book chapters, as I like to read them one by one.
  • Gauge-Discover-Reflect:
    • Gauge: assess your current knowledge and skills.
    • Discover: learn new knowledge and skills. Learn, set goals, apply, and practice.
    • Reflect: think about what you have learned and how you can apply it. Gauge again, record your progress, and set new goals.

Functions of Management 2

  • 4 functions of management:
    1. Planning:
      • Setting objectives for the organization will determine our actions.
      • Attach objectives to our vision and mission.
      • Build a Strategy to achieve our objectives.
      • Keywords: Vision, Mission, Objectives, Strategy.
    2. Organizing:
      • Delegating and organizing tasks and resources to achieve our objectives.
      • keywords: Organizational Structure, Delegation, Change Management.
    3. Leading:
      • Influencing and motivating employees to achieve our objectives.
      • Not all managers are leaders.
      • keywords: Leadership, Motivation, Communication, Group/Team.
    4. Controlling:
      • Monitoring and evaluating our progress towards our objectives.
      • keywords: Monitoring, Evaluation, Feedback, Quality Control, Systems/Processes.

SMART Goals 3

  • Characteristics of SMART Goals:
    • Specific: Clearly defined and understood. Answer the 5 W’s: Who, What, When, Where, Why.
    • Measurable: Quantifiable and observable.
    • Achievable: Realistic and attainable.
    • Relevant: Aligned with our vision and mission.
    • Time-bound: Have a deadline.
  • So a SMART goal is easy to understand, achievable, and has a clear point of success.

References

  1. Carpenter, M., Bauer, T., & Erdogan, B. (2010). Management principles, v.1.1. Chapter 1: Introduction to Principles of Management. https://2012books.lardbucket.org/books/management-principles-v1.1/s05-introduction-to-principles-of-.html ↩

  2. HumberEDU. (2015, November 13). Leadership and management | Part 3 of 4: The four functions of management [Video]. YouTube. https://youtu.be/X6RObZecBHI ↩

  3. Curriculum Wadhwani. (2013, October 7). Explaining how to set SMART goals [Video]. YouTube. https://youtu.be/d6o5PyJM3bY ↩