(My other note was crashing from word overload)

Nature of management

• Traditional definition

  • Process of coordinating a business’s resources to achieve its goals

• Contemporary definition

  • Process of working with and through other people to achieve business goals in a changing environment

• Features of management

  • Working

    • Working with and through others

      • Management is a social process

      • Managers must be able to communicate

  • Achieving

    • Achieving business goals

      • Without goals, a business can lose direction

      • Effectiveness measures the degree to which a goal has been achieved

  • Getting

    • Getting the most from limited resources

      • Managers need to coordinate resources efficiently

      • Efficiency measures the resources used (costs) against what was actually achieved (benefits)

  • Balancing

    • Balancing efficiency and effectiveness

      • The balance of efficiency and effectiveness leads to success

  • Coping

    • Coping with a rapidly changing environment

      • Successful managers anticipate and adapt to change

• Role of efficiency & effectiveness

  • Efficiency is achieved by producing the maximum outputs with the minimum level of inputs

    • Raw materials, time, and money are not wasted

    • Increases level of productivity of a firm

  • Productivity measures how efficiently goods and services are produced

  • Outputs are the goods or services produced by a firm using inputs

  • Effectiveness measures the degree to which a goal has been achieved

• Features of effective management

  • Plan and organise

  • Guide/lead the business

  • Make decisions

• Roles of management

  • Interpersonal

    • Create an environment to help staff achieve business goals

    • Communicate their vision and values

    • Satisfy the human needs of employees

  • Informational

    • Communicate business goals

    • Communicate decisions and directions

    • Pass on knowledge and expertise

  • Decisional

    • Choose the best course of action from the alternatives

    • Make informed decisions that best suit the business and its employees

    • Think in a long-term strategic way

• Role of Efficiency & Effectiveness

  • An effective manager needs to be good at POLC

    • Planning

      • Setting objectives and deciding methods to achieve them

    • Organising

      • Structuring the organization to turn plans into action

    • Leading

      • Influencing or motivating people to work towards organization objectives

    • Controlling

      • Process of evaluating performance and taking corrective action to make sure set objectives are being achieved

• Features of effective management

  • Effective managers will plan and organise the functions of the business to ensure the effort of employees is coordinated to produce goods and services demanded

  • The effectiveness of this process determines the success or failure of the business

  • A combined effort from employees will bring about the greatest amount of goods and services at least cost = effective

• Skills of Management

  • Every occupation needs certain skills that are needed for success

  • A skill comes with knowledge, practice, and talent to do something well

  • Changes in the structure of businesses over the last 10 years

    • Movement away from tall hierarchical

  • I Can Swim Very Fast During A Pool Race

    • Interpersonal

      • Interpersonal skills are those needed to work and communicate with people and to understand their needs

      • This involves

        • Motivating

        • Encouraging

        • Gaining respect and loyalty

        • Knowing the staff, not just their abilities, but recognising their talent

    • Communication

      • Includes written, verbal, and non-verbal

    • Strategic thinking

      • Looking at the business as a whole and taking a broad, long-term view

      • Involves thinking about a business’s future direction and goals

      • In a practical sense, it means being able to:

        • Determine business objectives

        • Courses of action needed to meet objectives

        • How resources need to be allocated to pursue courses of action and thus meet objectives

    • Vision

      • Clear, shared sense of direction that allows people to achieve a common goal

      • Should be broadly understood and agreed to by all employees

      • The most effective way for managers to share their vision is by communicating the organisation’s goals

      • To do this, managers have to display leadership skills

      • Leadership is the ability to influence people to set and achieve specific goals

    • Flexibility

    • Decision making

    • Adaptability

    • Problem solving

      • Broad range of activities involved in searching for, identifying, and implementing a course of action to correct an unworkable situation

      • Managers must understand the different challenges at each stage of the business life cycle

      • There are 6 steps in this:

        • Identify the problem and causes

        • Gather relevant information

        • Develop alternative solutions

        • Analyse the alternatives

        • Choose one and implement it

        • Evaluate the solution

    • Reconciling conflicts

Management Approaches

Classic Approach

• • The classical approach to management emphasises how best to manage and organise workers so as to improve productivity (output)

  • Features of the management style:

    • Clear lines of authority (chain of command)

    • Discipline as a feature of leadership

    • Autocratic leadership style

    • Rules and procedures.

  • Management hierarchy - features

    • Rigid lines of communication

    • Numerous levels of management

    • Clear roles, positions, responsibilities

    • Most information directed downwards

    • Specialisation of labour - tasks divided into jobs

    • Chain of command

  • There are 2 perspectives

    • Classical-scientific approach

      • Studies a job in great detail using time and motion studies to reduce a task to an effective minimum standard (e.g. McDonald’s Big Mac)

    • Classical-bureaucratic approach

      • Uses a strict hierarchical structure to break jobs down into individual, specialised tasks, with clear lines of communication and responsibility

  • Advantages:

    • Shorter time to make decision

    • Could lead to improved efficiency

    • Increased productivity

    • Clear chain of command

  • Disadvantages

    • Specialisation and repetitive tasks could lead to employee boredom

    • Less job satisfaction, which could lead to increased turnover

    • Could discourage creativity and innovation

    • Organisation becomes inflexible

  • Management as planning

    • Planning is the preparation of a pre-determined course of action for a business

    • Levels of planning

      • Strategic

        • 3-5 Years

      • Tactical

        • 1-2 Years

      • Operational

        • Day to day

    • Planning provides:

      • A vision and goals

      • Strategies to achieve the vision and goals

      • Ancticipation for future directions for change

  • Management as organising

    • Organising is the structuring of the organisation to translate plans and goals into action

    • The organisation process is the range of activities that translate the goals of a business into reality

    • Steps;

      • Determine the work activities

      • Classify and group activities

      • Assign work and delegate authority

  • Management as controlling

    • Controlling compares what was intended to happen with what has actually occurred

    • The control process:

      • Establish standards in line with the firm’s goals and influences from employees, management, industry, and government

      • Measure performance and determine how comparisons will be made against standards or benchmarks

      • Take corrective action

        • Changing activities, processes, and personnel to ensure that the goals of the business have been met

    • Control methods

      • Quality control

        • Checking finished product

      • Quality assurance

        • Checking quality during and after production

      • Total quality management

        • ‘Quality in everything we do’

  • Hierarchical organisational structure

    • Management hierarchy is the arrangement that provides increasing authority at higher levels of the hierarchy

  • Autocratic Leadership style

    • A manager using an autocratic leadership style:

      • Tends to make all the decisions

      • Dictates work methods

      • Limits worker knowledge about what needs to be done

      • Frequently checks employee performance

      • Sometimes gives feedback that is punitive

Behavioural

• The behavioural approach to management stresses that people should be the main focus of the way in which the business is organised

• Features:

  • Employees are the most important resource

  • Economic and social needs of employees should be satisfied

  • Employee participation in decision making

  • Team-based structure

  • Managers need good interpersonal skills

  • Democratic leadership

• Management functions

  • Leading

  • Motivating

  • Communicating

• A successful leader:

  • Keeps an open mind, seeks out new ideas, and freely shares information

  • Shows confidence in people, shares credit and recognition

  • Builds and communicates a clear vision

  • Sets an example and earns the respect of employees

  • Delegates tasks to suitable emplyees

  • Conveys the goals of the business to workers and motivates them

  • Demonstrates flexibility in dealing with situations

  • Understands the technical aspects of the industry or business

• Management vs. Leadership

  • Management is:

    • Coping with complexity

    • Planning and budgeting

    • Organising and controlling

  • Leadership is:

    • Coping with change

    • Determining direction

    • Motivating people

• Management as motivating

  • Motivation is the individual, internal process that energises, directs, and sustains an individual’s behaviour. It is the personal force that causes a person to behave in a particular way

  • Managers must be aware of the human factor involved in the business organisation, and implement practices that motivate employees

  • Motivational methods include:

    • Trust

    • Respect for the individual

    • Positive reinforcement

    • Empowerment

    • Enhancing self-esteem

    • Employee participation

    • Rewarding team performance

    • Employee encouragement

• Management as communicating

  • One of the most difficult challenges for managers is getting employees to understand and want to achieve the business’ goals

  • Effective communication are effective communicators and able to share their thoughts and plans, they will find it difficult to influence others

  • Many studies have shown that the performance of both individuals and businesses improves when managerial communication is effective, especially when they are provided with information regarding goals, plans, and financial results

• Teams

  • Teamwork involves people who interact regularly and coordinate their work towards a common goal

  • Many businesses are starting to realise that a team approach can be the catalyst for superior performance

  • It is essential that managers foster a sense of cohesion between team members, otherwise the team is no more than a group of individuals all working separately

  • The use of teams has the following effects:

    • Decisions are negotiated rather than imposed

    • Flatter organisational structures

    • Manager as facilitator not controller

    • Move from autocratic to participative style

• Participative/democratic leadership style

  • A participative or democratic leadership style is one in which the manager consults with employees to ask their suggestions and then seriously considers those suggestions when making decisions

• Advantages and Disadvantages:

  • Advantages

    • Communication is a two-way process

    • Employer/Employee relationships are positive

    • Motivation and job satisfaction are optimal

    • There is a high level of trust

  • Disadvantages

    • Reaching decisions and introducing tasks can be time consuming

    • The role of management may be weakened

    • Internal conflict can arise if opinions differ

Contingency Management Approach

• Contingency approach stresses the need for flexibility and adaptation of management practices and ideas to suit the changing circumstances

• Adapting to changing circumstances

  • Contingency theorists stress that the traditional classical approach to management was not wrong, but is no longer adeuqate for our needs today

  • They urge managers to borrow and blend from a wide range of management approaches and practices

Ethics

• Not exclusive to any approach. Ethics is what society deems right and wrong

  • It is not concerned with legal obligationgs - often the feelings expressed by society that may one day become the law

  • Ethical businesses will honour commitments, not engage in misleading or deceptive conduct in marketing and provide a safe working environment for their employees

• Ethical management comes at a cost, however, most business owners regard these costs a necessary expense 0 it is an essential part of their business operations

  • Provides a great deal of pride in their reputation

  • Allows the busniess to be seen as responsbible corporate citizens, conscious of high standards expected by customers and society

  • Incorporate CSR (Corporate Social Responsibility)

    • Broader social welfare of the community including employees, customers, suppliers and the environment when making business decisions

• Ethical business management

  • Businesses who exhibit ethical responsibility are often rewarded with improved business performance

  • This business performance is measured using the triple bottom line

    • Focus on provit, the environmental impact, and the social performance

      1. The ‘profit’ bottom line', which is a measure of the traditional ‘profit and loss’ financial bottom line

      2. The ‘people’ bottom line, which is a measure of how socially responsible a business has been

      3. The ‘planet’ bottom line, which is a measure of how sustainable and environmentally responsible the business has been

• So what are the qualities of an ethical and socially responsible manager?

  • Ethics involves

    • Evaluating personal values

    • Knowledge of personal standards, community and universal principles

    • Choices and the impact of these choices on other s and yourself

    • Both short and long term consequences

    • Accepting responsibility for the choices you make

  • Social responsibility means to have a:

    • Caring attitude towards yourself and others

    • Sense of control and competence

    • Recognition and acceptance of individual and cultural diversity

    • Recognition fof basic human rights of self and others

    • Open mind to new ideas

• Common ethical dilemmas

  • A loyal, long serving employee cannot adapt to new technology

  • Access to confidential information about a competitors pricing policy that a disgruntled employee leaked to management

  • Cash payment bribes offered for quick contract arrangement

  • Competitors negaging in unethical tactics that require action to manage not losing competitive advantage

  • Managers must maintain high personal and ethical standards so employees perceive the importance of ethical considerations - good ethics = good business

• Fairness and Honesty

  • Businesses MUST obey laws and regulations or they will incur a fine

  • Society expects

    • The truth and not to be misled or deceived by dishonest information

  • Employees expect

    • To be dealth with honestly and fairly (e.g follow through with a promotion promise)

  • Customers and suppliers expect

    • To be treated honestly and fairly in business dealings

      • If a product is delivered then the business should pay within the gareed timeframe

• Respect for people - Human Resources

  • If a business owner treats the employees with respect then the employees will also act ethically

  • Occasionally a stakeholder is placed in a difficult ethical position

    • If the owner discovers some sort of unethical practice of an employee

    • An employee discovers some sort of unethical behaviour of another employee

    • Examples include practical jokes played on others in the workplace

    • More serious examples include breaches of confidentiality or discrimination

    • HR must also act ethically in the separation of staff - See Quantas case study

• Conflict of interest

  • When a person takes advantage of a situation or piece of information for their own gain rather than the employers gain

    • This could be by accepting a gift or payment to make a particular decision

    • A gift is different from a bribe - but there is a fine line of difference (a gift would occur regardless of the decision but there could still be a perception that it is a bribe - an offering so that a particular decision IS made)

  • Corruption undermines the integrity of the business and can change the workplace culture

    • Changing this culture once it is established is very difficult

    • Small incidents so develop into corruption on a big scale

    • These then have a significantly negative effect on the business reputation

• FInancial management - Finance

  • Financial management decisions must reflect the objectives of the business and interests of the shareholders

  • Shareholders rely on accurate infomration presented in the 3 financial statements to determine whether o rnot they invest (buy shares)

    • Assets on the balance shseet must be valued accurately

    • Financial records should be regularly audited

• Truthful communication - Marketing

  • Advertising can bring about ethical dilemmas as businesses fight to gain the consumers attention

    • False or misleading advertising is unethical and illegal

  • Specific unethical practices include

    • Using sexual references to sell

    • Gender stereotyping

    • Selling to children

    • Product placement (subliminal advertising)

• Ethical operations

  • In transforming inputs into outputs

    • Society expects the careful treatment of resources such as energy, waste, and recycling so that future generations are not impacted

      • Energy conservation and the use of sustainable inputs

      • Minimising waste that would pollute the environment

      • Recycling waste and returned products to landfill

• Ensuring ethics in the workplace

  • It is not always easy to maintain a high degree of ethical behaviour in the workplace

  • A strategy to encourage consistency is to devicse a code of conduct which is a set of ethical standards for managers and employees to abide by

  • Many businesses document and distribute their code of conduct to all internal stakeholders to ensure workplace practices are employed

  • Training incorporates these values to ensure they are understood by employees

  • Formal procedures are also devised for reporting unethical behaviour in the workplace

Management and Change

• Responding to internal and external factors

  • Businesses can control internal factors

  • Businesses can only respond to external factors