INTRODUCTION TO MANAGEMENT

2004.8.4 Kidae Chung

POSCO Research Institute

List of contents
What is the management? Management Functions Resources & Management Process Managerial Effectiveness & Efficiency Management Levels & Skills Classical Approach - Case: Bethlehem Steel Behavioral Approach Management Science Approach Contingency Approach System Approach Learning Organization: A New Approach Corporate Social Responsibility Approaches to Meeting Social Responsibilities International Management Multinational Corporation Managing International Corporation Organizational Objectives The MBO Process Planning Strategic Planning & Management Process Organizational Environment Decision-Making Process Factors Considered in Decision Making Organizing Subsystem Making Delegation Effective Job Analysis Success Factors of Organizational Change Determination of Organization Effectiveness Influencing System Continuum of Leadership Behavior Characteristics of Emerging Leadership vs. Manager Coaching Maslows Hierarchy of Needs Unsatisfied Needs of Organization Members Motivation How to motivate? Organizational Effectiveness Controlling Subsystem Further Topics in Managemen

What is the Management?

Definition: the process of reaching organizational goals
by working with and through people and other organizational resources

Characteristics:
It is a process or series of continuing and related activities It involves and concentrates on reaching organizational goals It reaches these goals by working with and through people and organizational resources
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Management Functions
Organizational Goals

Planning
Influencing Organizing
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Controlling

Resources & Management Process

Organizational Resources
People Money Raw Materials Capital Resources

Inputs

Production process

Outputs

Finished Products
Goods Services

Managerial Effectiveness & Efficiency

Efficient
(most resources contribute to production)

RESOURCE USE

Not reaching Reaching goals goals and not and not wasting resources wasting resources

Ineffective
(few resources contribute to production)

Not reaching Reaching goals goals and and wasting wasting resources resources
Ineffective
(little progress toward organizational goals)

Effective
(substantial progress toward organizational goals)

GOAL ACCOMPLISHMENT
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Management Levels & Skills

Top Management Middle management Supervisory or Operational Management

Needs

Conceptual Skills

Needs

Human Skills
Technical Skills

Needs

Classical Approach
Lower Level Management Analysis
Taylors Scientific Management: to increase worker efficiency by scientifically by designing jobs(case: Bethlehem Steel) Gilbreths Motion Study: to establish job performance standards with one best way to perform a job Gantts Exact Scientific Knowledge: scheduling and rewarding

Comprehensive Analysis of Management

Fayols General Principles: originated efficiency handling of people, appropriate action Planning, organizing, commanding, coordinating, control

Limitations: less emphasizing human variables

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Case: Bethlehem Steel

Worker Efficiency: how to increase the total amount of materials
shoveled per a day

Questions

Will a first-class worker do more work per a day with a shovelful of 5, 10 , 15, 20, 30, or 40 pounds? What kinds of shovels work best with which materials? How quickly can a shovel be pushed into a pile of materials and pulled out properly loaded? How much time is required to swing a shovel backward and throw the load a given horizontal distance at a given height?
Size of the worker Weight of the materials Height & distance # of tons shoveled per worker per a day : 16 59 Total # of shovelers : 600 140

Methods: matching shovel size with factors

Results
Workers earning , material handling cost
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Behavioral Approach
Increasing production through an understanding of people The Hawthorne studies (1924-1932)
The relay assembly test room experiment The bank wiring observation room experiment

Recognizing the human Variables The Human Relations Movement

A people-oriented approach To enhance organizational success by building appropriate relationships with people Human relations skill: ability to work with people
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Management Science Approach

Using the scientific method and mathematical technologies to solve operational problems Operations Research (OR) Historical Review
By 1995 : Very effective in solving industrial problems By 1965 : Production scheduling, plant location, product packaging In 1980s: Used extentively in very large and complex or organizations

Characteristics
So complicated in analyzing a large number of variables Best suited for analyzing quantifiable factors as sales, expenses and unit of production Use of mathematical models to investigate the decision situation Use of computer
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Contingency Approach
If-then relationships
If: situational variable Then: action to be taken

Main challenges
Perceiving organizational situations as they actually exist Choosing the management tactics best suited to those situation Competently implementing those tactics
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System Approach
Based on general system theory
System: a number of interdependent parts functioning as a whole for some purposes
Closed systems : not influenced by, and do not interact with, their environments (ex. a clock ) Open system: continually interacting with its environment

Types of systems

<The Open Management System> Input

Customers Government

Process
Competitors Suppliers

Output Environment
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Learning Organization: A New Approach

Knowledge Management : creating, acquiring, and transferring
knowledge

Learning Organization Emphasize:

Systematic problem solving Experimental with new ideas Learning from experience & past history Learning from the experiences of others Transferring knowledge rapidly throughout the organization

Key Features
Systems thinking Shared vision Rapid job procedures Team learning Personal mastery
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Corporate Social Responsibility

Definition: the managerial obligation to take action that
protects and improves both the welfare as a whole and the interests of the organization.

Areas
Urban affairs Consumer affairs Environment affairs

Employment practices affairs There is still much controversy about whether corporate social responsible involvement is necessary or even appropriate
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Pollution prevention Natural resource conservation

Approaches to Meeting Social Responsibilities

Incorporates social goals into the annual planning process Seeks comparative industry norms for social programs Presents reports to organization members, the board of directors, and stockholders on social responsibility progress Experiments with different approaches for measuring social performance Attempts to measure the cost of social programs as well as the return on social program investments
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International Management
Six Stages of Multinalization
stage1
Exports its products to foreign countries

stage2
Establish sales organization abroad

stage3
Licensee use of its patterns and know-how to foreign firms that make and sell its products

stage4
Establishes foreign manufacturing facilities

stage5
Multinationalizes management from top to bottom

stage6
Multinationalizes ownership of corporate stock

Complexities of Managing the Multinational Corporation

Within different national sovereignties Under widely different economic conditions Among people living within different value systems In places experiences the industrial revolution at different times Often over greater geographical distance In national markets varying greatly in population and area
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Multinational Corporation
Planning
Establishing a new salesforce in a foreign country Developing new manufacturing plants in other countries through purchase or construction Financing international expansion Determining which countries represent the most suitable candidates for international expansion

Components of International Plans

Imports/Exports License agreements Direct investing Joint ventures
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Managing International Corporation

Cultural Issues
Acquire a working knowledge of the language used in countries that house foreign operations Understand the attitudes of people in countries that house foreign operations Understand the needs that motivate people in countries that house foreign operations

Managing Ethics in International Management

Respecting core human rights Respecting local traditions

Preparing Expatriates for Foreign Assignments

Cultural profiles Cultural adaptation Logistical information Specific organizational roles
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Organizational Objectives
<Hierarchy of Objectives>
TOP MANAGEMENT
Represent stockholders interests-net profits of 10% or more Provide service to consumers-provide reliable products Maintain growth of assets and sales-double each decade Provide continuity of employment for company

PRODUCTION DEPARTMENT
Keep cost of goods no more than 50% of sales Increase productivity of labor by 3% per year Maintain rejects at less that 2% Maintain inventory at 6 months of sales

SALES DEPARTMENT
Introduce new products so that over a 10-year period, 70% will be new Maintain a market share of 15% Seek new market areas so that sales will grow at a 15% annual rate Maintain advertising costs at 4% of sales

FINANCE AND ACCOUNTNG DEPARTMENT

Borrowing should not exceed 50% of assets Maximize tax write-offs Provide monthly statements to operating departments by 10th of following month Pay dividends at rate of 50% of net earnings

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The MBO Process

Organizational Objectives Reviewed

MBO for Next Normal Operating Period Begins

Worker Objective Set

Rewards Given
Performance Evaluated * MBO : Management by Objectives

Progress Monitored

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Planning
Purpose : To help the organization reach its objectives The Planning Subsystem
Input
A portion of the organizations: People Money Raw materials Machines

PROCESS
(PLANNING PROCESS) Starting organizational objectives Listing alternative ways of reaching objectives Developing premises upon which each alternative is based Choosing best alternative for reaching objectives Developing plans to pursue chosen alternative Putting plans into action

Output

Organizational Plans

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Strategic Planning & Management Process

STEP 1
Environmental Analysis General Operating Internal

STEP 2
Establishing Organizational Mission Objectives

STEP 3
Strategy Formulation

STEP 4
Strategy Implementation

STEP 5
Strategic Control

FEEDBACK

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Organizational Environment
GENERAL ENVIRONMENT OPERATING ENVIRONMENT

Social Component International Component INTERNAL

Economic Component Supplier Component

ENVIRONMENT
Planning Aspects Organizing Aspects Influencing Aspects Controlling Aspects Competition Labor Component Component Technology Political Component Component Customer

Component

Legal Component

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Decision-Making Process
Identify Existing List Alternative Problem Select Most Beneficial Implement Chosen

Problem

Solutions

Alternative

Alternative

Gather ProblemRelated

Feedback

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Factors Considered in Decision Making

Legal Restrictions Moral and Ethical Norms

Discretionary Area (Acceptable Courses of Action)

Unofficial Social norms

Formal Policies and Rules

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Organizing Subsystem
OUTPUT

INPUT
A portion of organizations People Money Raw Materials Machines

PROCESS (ORGANIZING PROCESS)

Reflecting on Plans and Objectives Establishing Major Tasks Dividing Major Tasks into Subtasks Allocating Resources and Directives for Subtasks Evaluating Results of Organizing Strategy

Organization

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Making Delegation Effective

Give employees freedom to pursue tasks in their own way Establish mutually agreed upon results and performance standards for delegated tasks Encourage employees to take an active role in defining, implementing and communicating progress on tasks Entrust employees with completion of whole projects or tasks whenever possible Explain the relevance of delegated tasks to larger projects or to department or organization goals Give employees the authority necessary to accomplish tasks Allow employees access to all information, people, and departments necessary to perform delegated tasks Provide training and guidance for employees to complete delegated tasks satisfactorily When possible, delegate tasks on the basis of employee interests
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Job Analysis
JOB ANALYSIS
A process for obtaining All pertinent job facts

JOB DESCRIPTION
A statement containing items such as: Job title Location Job summary Duties Machines,tools,equipment Materials and forms used Supervision given or received Working conditions Hazards

JOB SPECIFICATION
A statement of the human qualifications necessary to do the job. Usually contains such items as: Education Experience Training Judgment Initiative Physical efforts Physical Skills Responsibilities Communication skills Emotional characteristics Unusual sensory demands, such as sight, smell, hearing 28

Success Factors of Organizational Change

Change Agent Individuals Affected by Change

Evaluation of Change

SUCCESS of CHANGE

Determination of What Should Be Changed

Type of Change to Be Made

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Determination of Organization Effectiveness

TECHNOLOGICAL FACTORS

Process
Equipment

PEOPLE FACTORS

ORGANIZATIONAL EFFECTIVENESS STRUCTURAL

Attitudes
Leadership skills Communication Skills

FACTORS
Policies Procedures

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Influencing System
PROCESS
(Influencing Process)

Input A portion of the organizations: People Money Raw Materials Machines

Leading

Considering Groups

Output Appropriate Organization Member Behavior

Communicating

Motivating

Influencing: The process of guiding the activities of organization members in appropriate directions
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Continuum of Leadership Behavior

BOSS-CENTERED LEADERSHIP SUBORDINATE-CENTERED LEADERSHIP

Use of Authority by the Manager

Area of Freedom for Subordinates

Manager presents tentative decision subject to change

Manager makes decision and announces it

Manager sells Decision

Manager presents ideas and invites questions

Manager presents problem, gets suggestions, makes decision

Manager defines limits; ask group to make decision

Manager permits subordinates to function within limits defined by superior

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Characteristics of Emerging Leadership vs. Manager

LEADER MANAGER

SOUL
Visionary Passionate Creative Flexible Inspiring Innovative Courageous Imaginative Experimental Independent

MIND
Rational Consulting Persistent Problem-solving Tough-minded Analytical Structured Deliberate Authoritative Stabilizing

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Coaching
Successful Coaching Behavior
Listens closely Gives emotional support Shows appropriate example

Trait, Attitude, or Behavior for Successful Coaching

Empathy (putting self in other persons shoes) Listening skill Insight into people(ability to size them up) Diplomacy and tact Patience toward people Concern for welfare of people Minimum hostility toward people Self-confidence and emotional stability Noncompetitiveness with team members Enthusiasm for people
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Maslows Hierarchy of Needs

Self-Actualization Needs Esteem Needs Social Needs Security Needs

SEQUENCE OF SATISFACTION

Physiological Needs

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Unsatisfied Needs of Organization Members

FORMS OF INAPPROPRIATE BEHAVIOR: FEEDBACK
External withdrawal(leave) Aggression Internal withdrawal(absenteeism)

NEEDS: Physiological Security Social Esteem Self-Actualization

Unsatisfied Needs

Tension and Frustration

Search for Behavior to Relieve Tension and Frustration

FEEDBACK

Appropriate Behavior
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Motivation
Value of rewards Ability to Do a Specific Task

Perceived Equitable Rewards

Effort

Performance Accomplishment

Intrinsic Rewards

Satisfaction

Perceived Effort-Reward probability

Perception of Task Required

Extrinsic Rewards

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How to motivate?
Job enlargement & enrichment Flex time Punishment Incentives
Monetary Non-monetary

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Organizational Effectiveness
PEOPLE-REALTED FACTORS
Personal work satisfaction Mutual trust and team spirit Good communication Low unresolved conflict and power struggle

ORGANIZATION-REALTED FACTORS

EFFECTIVE TEAM PERFORMANCE

Organizational stability and job security Involved, interested, supportive management Proper rewards and recognition of accomplishment Stable goals and priorities

Innovative ideas Goal(s) accomplished Adaptable to change High personal/team commitment Rated highly by upper management

TASK-REALTED FACTORS

Clear objectives, directions, and project plans Proper technical direction and leadership Autonomy and professionally challenging work Experienced and qualified project/team personnel Team involvement and project visibility

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Controlling Subsystem
INPUT A portion of the organizations: People Money Raw Materials Machines PROCESS (CONTROLLING PROCESS)

Work Continues
Controlling Begins

No Corrective Action Necessary Compare Measurement to Standards Take Corrective Action: Change Plans, Organization, or Influencing Methods OUTPUT

Performance Equivalent to Standards

Measure Performance

New Work Situation Begins

Performance Significantly Different from Standards

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Further Topics in Management

Strategy Organization & HRM Marketing Production & Operating Finance & Accounting Technology & Innovation Quality & Environment MIS & IT
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