Text for the course Management

KISS
Management

1

CHAMPLAINREGIONALCOLLEGE – lENNOXVILLE CAMPUS

KISS Management

 2003 Dany Bernier, Stephanie Blanche, Michael Boersen, Martine Chrétien, Justin Dohler, Richard Dupuy, Marie-Josée Fortin, Dan Fournier, Cynthia Godue, Nathalie Gratton-Martin, Jo-Ani Mercier, Vedrana Milic,Pandora Pietraszkiewicz, Marie-Ève Racine, Melanie Roarke, Pierre Rompré, Sophorn Sin, Kim Spader, and Guillaume Taillon

Lennoxville Campus

Lennoxville, Québec

J1M 2A1

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Contributing Editors

MANAGEMENT CONCEPTS
1. Introduction to Management, its Functions, and Organisations / Dan Fournier
2. Ethics and Social Responsibility / Dan Fournier
3. Managing in the International Context / Dany Bernier
PLANNING
4. Strategic Planning / Justin Dohler
5. Decision Making / Martine Chrétien
ORGANISING
6. Organisational Structure and Design / Kim Spader
7. Organisational Culture / Marie-Ève Racine
8. Workforce Diversity / Pandora Pietraszkiewicz
9. Staffing and Human Resource Management / Melanie Roarke
10. Labour-Management Relations / Vedrana Milic
11. Managing Change and Development / Sophorn Sin
12. Management of Innovation / Dan Fournier
LEADING
13. Groups, Teams, and Teamwork / Michael Boersen
14. Communication and Interpersonal Skills / Jo-Ani Mercier
15. Motivation, Rewarding, and Empowering Employees / Guillaume Taillon
16. Managing Conflict and Stress / Stephanie Blanche
17. Leadership / Richard Dupuy
CONTROLLING
18. Control / Nathalie Gratton-Martin
19. Operations Management / Marie-Josée Fortin
20. Power and Political Behaviour / Cynthia Godue
21. Managing for Quality / Pierre Rompré

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Contents

Preface

A collaboration

MANAGEMENT CONCEPTS

1. Introduction to Management, its Functions, and Organisations

2. Ethics and Social Responsibility

3. Managing in the International Context

PLANNING

4. Strategic Planning

5. Decision Making

ORGANISING

6. Organisational Structure and Design

7. Organisational Culture

8. Workforce Diversity

9. Staffing and Human Resource Management

10. Labour-Management Relations

11. Managing Change and Development

12. Management of Innovation

LEADING

13. Groups, Teams, and Teamwork

14. Communication and Interpersonal Skills

15. Motivation, Rewarding, and Empowering Employees

16. Managing Conflict and Stress

17. Leadership

CONTROLLING

18. Control

19. Operations Management

20. Power and Political Behaviour

21. Managing for Quality

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List of Figures

Figure 1 - Selected Management Theories

Figure 2 - Efficiency and Effectiveness

Figure 3 - Management Hierarchy

Figure 4 - Management Roles

Figure 5 - Management Skills

Figure 6 - Areas of Social Responsibility

Figure 7 - 2002 Corruption Perceptions Index (CPI)

Figure 8 - Strategic Planning Process

Figure 9 - The three levels of strategy

Figure 10 - Decision making in the five management functions

Figure 11 - Factors shaping culture

Figure 12 - Dimensions of organizational culture

Figure 13 - Negative Dynamics Confronting Women and Minorities in Organizations

Figure 14 - Advantages of a Diverse Workforce

Figure 15 - Subjective performance appraisal system

Figure 16 - Objective performance appraisal system

Figure 17 - Prohibited Grounds of Discrimination in Employment

Figure 15 - Grievance Procedure

Figure 16 - Maslow’s Hierarchy of Needs

Figure 17 - Simplified Expectancy Theory

Figure 18 - Equity Theory

Figure 22 - Major Stressors

Figure 23 - Symptoms of Stress

Figure 19 - Leadership Skills and Traits

Figure 20 - Management versus Leadership

Figure 21 - Control techniques for common functional areas of a business

Figure 27 - Flow of Operations

Figure 28 - Three types of inventory

Figure 29 - The Seven steps TQM model

Figure 30 - Factors that facilitate continuous incremental improvements

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Preface

A collaboration

H

ow many times have you read a textbook and asked yourself: “This chapter is really long… get to the point already!”? Students often complain that class texts are long and boring. And most often they are right. What ever happened to the KISS rule? You know…“Keep It Simple Stupid”. It seems that many authors today shy away from that principle. In today’s complex and busy world we are all pressed with time – especially students. Since time is now a scarce resource we all like to spend it wisely. None of us wants to waste hours upon hours of our precious time reading through irrelevant “bla bla”. So what are the alternatives? How about using no textbook at all? “Yeah…eh wait a minute…we gotta have a textbook man!” Okay then.

So, in the winter semester of 2003 it was decided that third-year business students would write their own textbook for their Management course. The fruits of their labour will now benefit you. As a result, it is a book written by students for students. Thanks to all students who have contributed to the making of KISS Management. We hope you enjoy it.

This book is dedicated to all graduate 2003 Business students at ChamplainRegionalCollege for all their hard work and commitment.

- Dan Fournier, Business Teacher

PART
I /

MANAGEMENT CONCEPTS

1. Introduction to Management, its Functions, and Organisations

History of Management

"People who ignore the past are destined to relive it."

A person unaware of mistakes made by others is likely to repeat them.

Each generation of managers needs to understand the lessons learned by its predecessors and build on them.

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n order to gain a better understanding about management let’s take a ride through time and explore how concepts have evolved to shape what we know today about this fascinating subject. It is important to learn about who helped shape concepts and ideas that we use in business practices today.

Ancient History

Early civilisations - Management began when the earliest humans banded together in tribes. Their survival depended on the individual and collective efforts to hunt, organise, and utilise scarce resources such as food, clothing and shelter.

One of the earliest feats of management involves the construction of the Egyptian pyramids. Just think. The construction of a single pyramid occupied over 100,000 people for many decades. The largest of the pyramids contained more than 2 million blocks, each weighing several tons. The quarries the blocks came from were many miles from the construction site. Someone had to design the structure, find a stone quarry, and arrange for the stones to be cut and moved - possibly over land and by water - to the construction site, and mounted on top of the others. Who planned for, designed, organised, and lead the efforts to construct such wonders? How did they manage to do it? The answer to such a question is management.

Modern History

Two other events of importance occurred in the past few centuries. In 1776, Adam Smith published a classical economic doctrine - The Wealth of Nations. He argued the economic advantages that organisations would gain from the division of labour. Simply put, Smith concluded that the division of labour increased productivity by taking advantage of each worker's area of specialisation.

Possibly the most significant pre-twentieth century influence on management was the Industrial Revolution which started in Great Britain in the eighteenth century. This revolution eventually made its way across the Atlantic to North America and machine power began to take the place of human and animal power (as previously seen in the Agricultural Revolution). This, in turn, made it more economical and effective to manufacture goods in factories. The advent of such factories spun the requirement for managerial skills. Managers were needed to:

  • Forecast demand
  • Ensure that the necessary material resources were available and on hand for producing goods in question
  • Assign tasks to people
  • Ensure that machines were kept in good working condition
  • Find markets for the finished products
  • etc.

Management Theories and Schools of Thought

MANAGEMENT THEORIES
Classical (1780 - ) / Behavioural / Quantitative / System / Quality
Scientific / Administrative
Era: / 1890 – 1940 – / 1920 – 1950 – / 1920 – 1980 – / 1940 – 1990 – / 1950 – 1990 – / 1980 –
Ideas: / - Classic Scientific School
- Classic Administrative School / -Administrative Management
-Bureaucracy / - Human Relations
- Human Resources / - Management Science
- Operations Management
- Management Information
systems (MIS) / - Kaizen Approach
- Reengineering
Key People: / Frederick Taylor / Henri Fayol / Abraham Maslow / W. Edwards Deming
Henry Gantt / Mary Parker Follett
Chester Barnard
Max Weber

Figure 1 - Selected Management Theories

Theory attempts to explain the relationships between and among its underlying principles. Theory gives people a reason for doing things.

CLASSICAL MANAGEMENT THEORY
Classical Management Theory originated during the Industrial Revolution. It has two branches – Classic Scientific and Classic Administrative.
Classic Scientific School
Arose as a result of a need to increase productivity
The emphasis was to try to find the “one best way” of getting work done by examining the way work was accomplished
Focused on worker-machine relationships for increasing production
Classic Administrative School
Grew out of a need for guidelines to manage the complex organisations that emerged from the Industrial Revolution
The emphasis was on the development of managerial principles rather than work methods
Advocated a belief in studying the flow of information
Theorists aimed at understanding how an organisation operated
BEHAVIOURAL MANAGEMENT THEORY
Dealt with the human aspects of organisations
Focused on employees as individuals, resources, assets, and as part of work groups
Motivation and Leadership became topics of great interest
Resulted in the creation of positions for professionals as a Human Resources Manager
QUANTITATIVE MANAGEMENT THEORY
Was born in World War II era
Used mathematical and statistical approaches, as well as computational models and simulations for management problems
Used quantitative tools to help plan and control nearly every aspect in the organisation
SYSTEMS MANAGEMENT THEORY
An organisation is viewed as a system, with inputs being processed, through operations, into outputs. So a system is a set of interrelated parts that work together to achieve stated goals.
SystemsSchool
The systems school holds that an organisation comprises various parts (subsystems) that must perform tasks necessary for the survival and proper functioning of the system as a whole
The Functional Areas of business – Marketing, Finance, Human Resource Management, etc. – are subsystems
Interrelatedness emphasises that a manager can’t change one subsystem without affecting the rest
Cumulative Energy of Synergy
The whole is greater than the sum of its parts
Synergy is the increased effectiveness that results from combined action or co-operation
It is sometimes described as 2 + 2 = 5 since the result of a synergistic partnership is more than the sum production of each partner alone
Synergy can lead to negative effects (clash of cultures, loss of jobs (mergers & downsizing), antitrust and ethical issues, etc.)
QUALITY MANAGEMENT THEORY
Quality Management emphasises achieving customer satisfaction by providing high quality goods and services
What is done must be measured and evaluated quantitatively and qualitatively
QualitySchool is the most current and it is embraced worldwide
Kaizen
Japanese in origin (means continuous improvement for people, products, and processes)
No matter how well things are going, the individual or organisation can do it better
Reengineering
Change is constant; It will always occur
Is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements

Key People:

Frederick W. Taylor (1856-1915)

  • Called the Father of Scientific Management
  • Scientifically studied work to identify the “one best way” to get a job done (standardising tasks)
  • Scientifically selected, hired, and trained workers
  • Motivated workers with financial rewards (prorata)
  • Introduced work breaks

Henry Gantt (1861-1919)

  • Developed the Gantt chart used for scheduling multiple overlapping tasks over a time period (still widely used in organisations today for scheduling work)
  • Focused on motivational schemes, emphasising the greater effectiveness of rewards for good work
  • Developed a pay incentive system with a guaranteed minimum wage and bonus systems for people on fixed wages

Henri Fayol (1841-1925)

  • Believed that management required specific skills that could be learned and taught
  • Designated management as a universal set of functions that included planning, organising, commanding, co-ordinating, and controlling
  • Described the practice of management as something distinct from accounting, finance, production, and the other business functions
  • Developed several principles of management

Mary Parker Follett (1868 - 1933)

  • Focused on how organisations cope with conflict
  • Emphasised the human element in organisations and the need to discover and enlist individual and group motivation
  • Introduced three important concepts: The Universal Goal, The Universal Principle, and the Law of the Situation:
  • The Universal Goal of organisations is an integration of individual effort into a synergistic whole (goal sharing)
  • The Universal Principle is a circular or reciprocal response emphasising feedback to the sender (the concept of two-way communication)
  • Law of the Situation emphasises that there is no one best way to do anything, but that it all depends on the situation

Max Weber (1864-1920)

  • Known as the Father of Modern Sociology
  • Analysed bureaucracy as the most logical and rational structure for large organisations
  • A bureaucracy was a system characterised by division of labour, a clearly defined hierarchy, detailed rules and regulations, and impersonal relationships

Chester Barnard (1886-1961)

  • Saw organisations as social systems requiring human co-operation
  • Argued that success depended on maintaining good relations with external groups and institutions
  • Developed the concepts of Strategic Planning and Acceptance Theory of Authority
  • Argued that managers must gain acceptance for their authority
  • Believed that three top functions of the executive were to:
  1. establish and maintain effective communication system,
  2. hire and retain effective personnel, and
  3. motivate those personnel

Abraham Maslow (1908-1970)

  • Developed a needs-based theory of motivation (Hierarchy of Needs)
  • The theory is now considered central to understanding human motivation an behaviour

W. Edwards Deming (1900-1994)

  • Father of Total Quality Management
  • Regarded by the Japanese as the key influence in their postwar economic turnaround
  • Created constancy of purpose for continual improvement of products and services

What is Management?

Management is the process of getting things done, effectively and efficiently, through and with other people[1]. Let's take a look at several components of this definition:

Process: Represents the functions or primary activities managers perform (discussed below).

Efficiency:Efficiency is a vital part of management. It means doing the task correctly and refers to the relationship between inputs and outputs. For instance, if you get more output for a given input, you have increased efficiency. You also increase efficiency when you get the same output with fewer resources. Since managers deal with input resources that are scarce - money, people, and equipment - they are concerned with the efficient use of those resources.

Effectiveness:Is getting activities completed. When managers achieve their organisation's goals, we say they are effective.

There exists a fundamental difference between efficiency and effectiveness. Efficiency is how you go about accomplishing something (means) while effectiveness is the attainment or completion of a goal (ends).

For example, if you kill a fly with a hammer you may be effective (ends - killing the fly). But you would be much more efficient by using a fly swatter (means – waste less energy, swat faster).

Figure 2 - Efficiency and Effectiveness

Management Functions

Management Functions are activities that comprise the Management Process. The four basic Management activities are planning, organising, leading, and controlling.

Planning

The planning function involves defining an organisation's goals, establishing an overall strategy for achieving these goals, and developing a set of plans to integrate and co-ordinate activities. Setting goals keeps the work to be done in proper focus and helps organisation members keep their attention on what is important.

Organising

Managers are also responsible for designing an organisation's structure. Organising involves determining what jobs or tasks are to be done, hiring and choosing who is going to do them, and deciding how they will be done.

Leading

Simply put, leading is influencing other people to get the job done. Leaders direct the activities of others, motivate employees, maintain morale, mold company culture, and manage conflict and communication.

Controlling

Controlling is the last function a manager performs. Controlling is making sure that an organisation's performance is up to par with the goals previously set. A manager must continuously monitor and compare actual performance with set standards and take corrective action when necessary.

What do Managers do?

A manager is someone who plans, organises, leads, and controls people and the work of an organisation with the aim of ensuring that the organisation achieves its goals.[2]

Types of Manager

Most organisations have several types of managers. There are several ways to classify managers. The three most common classifications are by Organisational Level, by Managerial Function, and by Region or Divison.

1) Classifying Managers by Organisation Level:

Top
Managers
Middle
Managers
First-Line
Managers
Non-Managerial
Employees

Figure 3 - Management Hierarchy

Top managers are usually referred to as executives. They are responsible for making decisions that affect the organisation as a whole. In addition, top managers define policies and establish long-term strategies that provide direction and vision to the organisation. Top management also creates and co-ordinates alliances and partnerships with outsiders.

Middle managers usually report to top managers. Middle management translates Top management's long-term goals into shorter-term objectives and set some of their own goals. They oversee the work of other Middle managers and those of the First-Line (or Operational) level. Middle managers are typically assigned by function (e.g.: Marketing Manager) or region (e.g.: East Coast Sales Manager).

First-Line managers are usually called supervisors. But more recently, many of them have been attributed the title "team leader" or "team facilitator". These managers convert middle managers' goals and objectives in their own set of objectives. Of all the levels, the first-line is most concerned with the day-to-day execution of ongoing operations.

2) Classifying Managers by Function:

A Functional manager is one whose expertise lies primarily, but not exclusively, in one specialty area. The most common functional areas are: