Components of Management
Planning –anticipating future possibilities to move in the proper direction Individual plans united into a central theme for firm Different time-frames operational, tactical & strategic (daily, weekly, monthly, yearly and five year) Reevaluated continuously (rolling horizon) Not frozen; flexible to changing conditions Organizing –providing structure for production essentials, people materials Provide needs for functioning Raw materials, tools, capital and personnel Consistent with meeting the goals of the plan Pyramid structure for organization charts Foreman supervises 15 workers; 4 foremen need 1 supervisor 4 supervisors need 1 manager, etc. Define roles of people in the organization Shareholders, board of directors, general management, regional and local Management, engineers, department heads, superintendents, foremen and workers Selection and training employees Physical, mental, moral, specific and general knowledge and experience
Components of Management
Command – insures successful operation of the organization A manager in command – knows his/her people, can remove the incompetent, understands all agreements binding the firm, sets a good example, periodically audits the organization, uses a meeting to focus efforts in a single direction, does not become engrossed in minute details, and instills unity, energy, initiative and loyalty in the employees. Coordination – integrates the actions of all aspects of the firm Control – is a verification process Check to see that what actually happened conforms to the plan Determine causes for differences and take corrective actions
Henri Fayol
Father of modern management (1910) French engineer Managing director of a large mining company Saved it from bankruptcy View problems from the top down Recall Taylor viewed from the shop floor up Widely known in France Management as an area of study Translated to English in 1930 Complementary to Scientific Management (Taylor) Firm has six interdependent functions Technical (the actual production), Commercial (buying and selling), Financial (getting and allocating money), Security (protection of people and property), Accounting (keeping records of costs and materials) Managerial (planning, organizing, command, coordination and control) Management holds the functions of the organization together.
Planning, Scheduling and Control (Fayol)
Planning –organized approach to accomplish some goal Project objectives Activities Events Network Scheduling – time phased commitment of resources to do the project Activity start and completion times Project duration Resource usage over time Critical activities Delaying a critical activity delays project completion Critical activities may need more accurate parameters Modify critical activity to reduce the project duration or cost Control – monitor progress and revise plan/schedule
Fourteen “Principles” of Management
Fayol gave these reluctantly 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) 13) 14) Division of work. It is natural and desirable. Authority and responsibility. They are complements; responsibility for authority must exist. Discipline. Orderly obedience to al agreements both explicit and implied is necessary. Unity of command. Each person should have one boss. Unity of Direction. An organization must have one clear plan. Subordination of individual to general interest. No individual is more important than the firm. Remuneration of personnel. It should be fair and encourage effort. Centralization. This is a matter of degree; depends on many factors. Scalar chain. The chain of superiors from the workers to the board of directors. Order. A place for everything and everything in its place; applies to people and material Equity. Treat everyone with kindness and justice. Stability of personnel. Low turnover promotes better quality and quantity of work. Initiative. Power and freedom to think and execute plans Esprit de corps. Establish a harmonious organization.
Elton Mayo/Hawthorne Effect
Harvard Professor – first major academic contributor Hawthorne works of the Western Electric Company (AT&T) Studied effect of illumination on productivity (1924-1927) Increased illumination and productivity increased Decreased illumination, productivity still increased! Mayo joined the study and observed Increased due more to increased attention to workers Need to have a control group Mayo’s conclusion: Logical factors are far less important than social factors in motivating workers. The human factor in production systems is critical.
Abraham Maslow
Hierarchy of Needs: Physiological needs Safety or security needs Belonging and love needs Esteem needs Self-actualization Focus on least-recently satisfied need With these, the worker is motivated Do workers believe that they are important? (Hawthorne)
Self Actualization Esteem Love Safety Physical
Frederick Herzberg
Job-related factors are either Satisfiers Achievement Recognition Work itself Responsibility Dissatisfiers (Hygiene factors) company policy/administration supervision relation to supervisor relation to peers working conditions Must conquer dissatisfiers before motivation How to manage: Job redesign: enrichment Participation: opportunities to work as a team Supervise themselves
Theory X, Theory Y and Theory Z
Theory X: authoritative (Taylor) People are fundamentally lazy, irresponsible People need to be constantly watched Theory Y: pure freedom in attaining goals (Maslow and Herzberg) People are fundamentally hard-working and responsible People need only to be supported and encouraged. Theory Z: Japanese Style (group decisions)