The evolution of management theories can be broken down to six main schools of thought.
1. Classical School of Management Thought
2. Behavioural ...
3. Quantitative ...
4. Systems ...
5. Contingency ...
6. Quality ...
We ought to use the best and reject the obsolete contributions of each theory. Be selective
If you read the lecture 1 course notes, you'll see the Professor broke it down to three components: Classical, Behavioural, and Strategic School of Management thought. That broader view is also valid.
To summarize, the Classical ideas focused on the manufacturing environment (small scale), the Behavioural ideas focused on the people-aspect of the manufacturing environment, and the Strategic ideas focused on improving the industry (macro scale).
1. Classical School uses scientific method approach to study work & work flows.
1- Classic Scientific School - focused on manufacturing environment
2- Classic Administrative School - focused on flow of info & how org should operate
Assessment:
-1 led to boring, inhumane, repetitive work. Modern factories now depend on employees' creativity, backed by managers who serve as teachers, coaches, servants.
-2 led to the development of the bureaucratic system, essentially is management by rules and it's purposely impersonal. Rigid bureaucratic system, unresponsive decision making, and lack of commitment among workers led to to strangled economic system. These limitations led to the development of the Behavioural School of thought.
People:
Charles Babbage (break down labor into small tasks that are quick to learn/master)
Fred Taylor (developed 14 general principles of management)
Henri Fayol (claimed skills can be learned and taught)
Mary Follett (goal sharing among managers)
Max Weber (developed Bureaucratic system with his Six Major Rules)
2. Behavioural School viewed people as assets, not expenses. It's limitations lie in its complexity.
People:
Robert Owen (claimed quantity/quality of output is influenced by conditions on/off the job)
Elton Mayo (his Hawthorne Studies made aware of worker social needs like engagement)
Douglas McGregor ( emphasized what matters was how people were treated and valued in work settings)
3. Quantitative School used a mathematical approach to management problems. A facet of this school is OR/MS. OR tools include inventory control models, break even analysis, production scheduling, and production routing. The drawbacks observed of this management practice was long term investment, esp R&D, was neglected.
4. Systems School shifts the paradigm of how organizations are viewed to a more holistic approach. They envision employees, groups, tasks as interrelated parts of an organic whole. Related to (5),(6). The org's system and subsystems interact with external systems and subsystems to ideally create increased effectiveness through synergy.
Limitations stem from fear due to system complexity. ie. Paralysis - manager become overly cautious and refuse to act until they...(contact every source, conduct lots of analysis, ask reviews from top management, etc). And time constraints don't allow for that.
5. Contingency School promoted experimental & creative approaches to solving problems. "Think outside the box". Diversity in the workplace was seen as a plus, and employees stayed flexible and considered fallback positions when solving problems, meeting challenges, and taking advantage of opportunities.
6. Quality School is said to have integrated (2),(3),(4),(5),(6). Kaizen, reengineering, ERP, EAI, CRM concept and technologies have been introduced to emphasize on incremental success, (org cannot rest after any achievement), and on redesigning business processes to the ever changing business environment.
ERP - Enterprise Resource Planning, (integrates all depts & functions onto single comp sys)
EAI - Enterprise Application Integration (ties together business's sys together, including supply chain).
CRM - Customer Relationship Management
Definitions:
Kaizen - Japanese business term meaning incremental, continuous improvement for people, product, processes
Operations Research / Management Science - Uses (eng, math, psych, management) for informed decision making. Uses Management information systems (MIS) as well.
Complexity Theory - Emphasizes ways how factory resembles ecosystem, responding to natural laws to find best possible soln to problems. It also suggests an organization needs an element of chaos to survive -> Chaos theory. Chaos theory claims under the right conditions, chaotic systems organize into well-ordered states.
Friday, May 30, 2014
Thursday, May 29, 2014
Introduction to Management 620:301 Lecture 1
About:
I decided to audit the summer Intro to Management class to prep for the PBL management concepts competitive event. To audit a class means to attend (a class) informally, not for academic credit.
Professor Denis Hamilton is teaching the course, and he set up the course to be very engaging. I liked that he included a handful of relevant videos to further explain management ideas and the amount of group work.
Below on the right is the table of contents for the custom course textbook.
Lecture 1:
What is "management"?
Simply put, it is Right Work Done Well.
We will look at all sorts of management, focusing on Strategic Management, Performance Management, Global Management, and Managing Innovation & Growth.
Simply put, it is Right Work Done Well.
We will look at all sorts of management, focusing on Strategic Management, Performance Management, Global Management, and Managing Innovation & Growth.
While reading the material, make sure to identify and categorize ideas as one of these four labels.
- Definition
- Method (ex. forming a strategy)
- Tool (ex. Six Sigma, external analysis to develop strategy)
- Concept (ex. Taylor Scientific management)
Also make sure to read carefully management practices shown in (HBR) case studies. Learn from others' mistakes to make sure you do not make them in the future.
HBR: "Does Management really work?" by Bloom, Sadun, Van Reenan
HBR: "Does Management really work?" by Bloom, Sadun, Van Reenan
3 core management elements claimed: targets, incentives, monitoring
The authors evaluated several US companies based on those 3 management elements.
Some results:
The authors evaluated several US companies based on those 3 management elements.
Some results:
- Only 15% of US companies got 5/5 in their evaluation
- And 79% of managers claimed they're above average (meaning their lousy at self evaluation)
Question asked: Why is it so difficult to adopt improved management skills?
- Progress doesn't happen over-night (long-term)
- Progress doesn't happen over-night (long-term)
- Need burning plate -> motivation
- Resistance can be overcome with small successful trials (example of Performance Management)
- Resistance can be overcome with small successful trials (example of Performance Management)
Management History
Management schools of thought can be broken down to three main shifts in thinking.
1. Scientific Management School (1880-1940) (Fred Taylor, Henry Ford and his assembly-line)
2. Behavioural Management School (1940-1980) (Hawthorne Studies, Douglas McGregor, Elton Mayo)
3. Strategic Management School (1980-present)
During the Scientific period, management dehumanized work. They were all about determining the "one best way" to maximizing profits. Jobs were simplified to so they can be quickly learned. There were minimum benefits and no unions were allowed. Laws, rules, and principles were set up to prevent deviations in work and increase worker efficiency. (Think of Henry Ford's 1908 innovative assembly-line. To increase efficiency, he 1. observed the work and 2. put in rules to increase productivity).
During the Behavioural period, management looked at the people-aspect of workers and they managed their workers' feelings about their work. Mary Follet argued "power with rather than power over employees". In the Hawthorne Studies, managers learned productivity increases after getting employees engaged, (ie. asking them for feedback, how they felt). By getting employees engaged by involving them in managerial discussion and allowing group dynamics, employees' work pro-activeness went up and overall productivity increased.
Theory X & Theory Y by McGregor (1960s) describe two contrasting workforce motivation theories, with Theory X assuming employees are inherently lazy and Theory Y assuming employees are self motivated.
Theory Z was popularized in the 1980s; it incorporates Japanese emphasis on collective decision making and concern for employees with American emphasis on individual responsibility.
Strategic Management theories looked at broader scale - industry. It integrates both perspectives 1 & 2, focusing on leadership and innovation. Bruce Henderson (1963) used business analytics to study industries. Peter Drucker(1964) had a way with conveying results with the public in his logical books.
John Galbraith (1967)
Michael Porter (1980) - competitive strategy (5 forces)
(1985) - competitive advantage (value chain)
Jensen (1980) - Agency Theory
M. Hammer (1990) - Reengineering
We focused on Strategic Management the most. I'm guessing it's because that's the Professor's specialty.
Strategy - An action plan to outperform competitors in growth and profitability by doing something unique.
Steps to develop strategy: (method)
1. Q) What is the present situation?
- identify conditions and capabilities of workers
2. Q) Where do we want to go?
- create vision
3. Q) How are we going to get there?
- create action plan
Building Competitive Advantage: (method)
- low-cost provider (ie. WALMART)
- differentiation on features (ie. Apple)
- focus on market niche (ie. Tesla)
- best-cost provider88
A strategy is effective iff it is adaptive. A proactive concrete-plan should not be your strategy. An emergent strategy is defined to be a set of actions, or behaviour, consistent over time, developing a pattern not expressed intendedly in the original planning phase. Basically, having an emergent strategy implies an organization is learning what works in practice; it may help a business adapt more flexibly to the practicalities of changing market conditions.
[proactive] -------------v
(plan) [current strategy]
[reactive] --------------^
(what we learn)
Customer's value proposition: (Value derived from doing business)
If you offer superior value proposition, then you need only to educate the customer about your product. Otherwise, you need to sell like crazy to get people to buy.
Profit formula: P-V-C (profit, value, cost)
V > P to sell
P > C to profit
3 tests for a strategy:
- performance test
- comparative advantage test (attain significant & sustainable comparative advantage)
- strategic fit test (internal & external business fit)
1. Scientific Management School (1880-1940) (Fred Taylor, Henry Ford and his assembly-line)
2. Behavioural Management School (1940-1980) (Hawthorne Studies, Douglas McGregor, Elton Mayo)
3. Strategic Management School (1980-present)
During the Scientific period, management dehumanized work. They were all about determining the "one best way" to maximizing profits. Jobs were simplified to so they can be quickly learned. There were minimum benefits and no unions were allowed. Laws, rules, and principles were set up to prevent deviations in work and increase worker efficiency. (Think of Henry Ford's 1908 innovative assembly-line. To increase efficiency, he 1. observed the work and 2. put in rules to increase productivity).
During the Behavioural period, management looked at the people-aspect of workers and they managed their workers' feelings about their work. Mary Follet argued "power with rather than power over employees". In the Hawthorne Studies, managers learned productivity increases after getting employees engaged, (ie. asking them for feedback, how they felt). By getting employees engaged by involving them in managerial discussion and allowing group dynamics, employees' work pro-activeness went up and overall productivity increased.
Theory X & Theory Y by McGregor (1960s) describe two contrasting workforce motivation theories, with Theory X assuming employees are inherently lazy and Theory Y assuming employees are self motivated.
Theory Z was popularized in the 1980s; it incorporates Japanese emphasis on collective decision making and concern for employees with American emphasis on individual responsibility.
Strategic Management theories looked at broader scale - industry. It integrates both perspectives 1 & 2, focusing on leadership and innovation. Bruce Henderson (1963) used business analytics to study industries. Peter Drucker(1964) had a way with conveying results with the public in his logical books.
John Galbraith (1967)
Michael Porter (1980) - competitive strategy (5 forces)
(1985) - competitive advantage (value chain)
Jensen (1980) - Agency Theory
M. Hammer (1990) - Reengineering
We focused on Strategic Management the most. I'm guessing it's because that's the Professor's specialty.
Strategy - An action plan to outperform competitors in growth and profitability by doing something unique.
Steps to develop strategy: (method)
1. Q) What is the present situation?
- identify conditions and capabilities of workers
2. Q) Where do we want to go?
- create vision
3. Q) How are we going to get there?
- create action plan
Building Competitive Advantage: (method)
- low-cost provider (ie. WALMART)
- differentiation on features (ie. Apple)
- focus on market niche (ie. Tesla)
- best-cost provider88
A strategy is effective iff it is adaptive. A proactive concrete-plan should not be your strategy. An emergent strategy is defined to be a set of actions, or behaviour, consistent over time, developing a pattern not expressed intendedly in the original planning phase. Basically, having an emergent strategy implies an organization is learning what works in practice; it may help a business adapt more flexibly to the practicalities of changing market conditions.
[proactive] -------------v
(plan) [current strategy]
[reactive] --------------^
(what we learn)
Customer's value proposition: (Value derived from doing business)
If you offer superior value proposition, then you need only to educate the customer about your product. Otherwise, you need to sell like crazy to get people to buy.
Profit formula: P-V-C (profit, value, cost)
V > P to sell
P > C to profit
3 tests for a strategy:
- performance test
- comparative advantage test (attain significant & sustainable comparative advantage)
- strategic fit test (internal & external business fit)
Wednesday, May 21, 2014
Chapter 1: Management Overview
In management there are functions, levels, roles, and skills all great managers need to understand.
The basic functions of management are planning, organizing, staffing, leading, and controlling. One function that may not be clear to many is staffing. It is carried out by first determining the organization's need for people. Then staffers do appraising, recruiting, etc. Another is controlling. Controllers simply prevent, identify, and correct deviations made from the guidelines.
As you can imagine, the levels of management include top, middle, and first-line. The first line managers manage workers, and they are being transformed into team leaders and team facilitators. Middle managers may or may not be needed. They are essential if an organization is in the process of radical organizational change. Otherwise, they are eliminated to reduce costs and increase response communication time within management, (more horizontal organization allows workers to me more directly involved with decision making process of top management). Furthermore, the board of directors are not included; they appoint key members to top management.
At each level of management, managers carry out he same functions; however, a different time/depth is spent into each function. Management can also take on several specific roles, which can be grouped into three categories:
1. interpersonal : ie. figure head, liason, leader
2. informational : ie. monitor, disseminator*, spokesperson
3. decisional : ie. disturbance handler, negotiator, entrepreneur
In interpersonal roles, managers must actively make interactions every day. Informational managers gather information and relays it to colleagues. And decisional managers safeguard the resources.
* A disseminator is a managerial role involving sharing information about the company with followers. (Think of company reps and promoters on campus).
Managerial skills are divided into three main categories:
1. Technical : ability to use tools, techniques.
2. Human : ability to interact and communicate
3. Conceptual : ability to view the big picture, to deal with ideas and abstractions, and to diagnose and solve problems
A lot of this can be related to the ECE coursework we did. (Think of ECE classes when we had to apply procedures for analysis to different circuits, to present our analysis to colleagues and make sure everyone knows the material, and when we had to efficiently study for the final exams by relating every idea with the big picture).
Remember, a manager's job is more of an art than a science. They are interdependent (meaning they are not only autonomous, but also they require sufficient input, attention, and guidance from superiors to be effective), proactive information seekers, and they benefit in an organization more through collaboration and cooperation than from competition with each other.
Advice:
- Long term success in an organization is attained by doing the two following things:
1. Stick to values and 2. Create systems that encourages employees to act in parallel to those values.
- A person who refuses to accept responsibility lacks ethical armor to stand against temptation.
- Those in new positions tend to fail in 18 months because
CRM - Customer relationship management. Software that manages every point of contact with customer.
human skills - ability to interact and communicate. This includes being sensitive to different cultures, and to be able to understand an relate with others.
People to know:
Peter Drucker
John Kotter
Henry Mintzberg
Resources:
- EEOC: Equal Employment Opportunity Commission
- AMA: American Management Association: Leadership Development and Management training
- A Manager's Job: Folklore and Fact by Henry Mintzberg (Ask me for a copy)
The basic functions of management are planning, organizing, staffing, leading, and controlling. One function that may not be clear to many is staffing. It is carried out by first determining the organization's need for people. Then staffers do appraising, recruiting, etc. Another is controlling. Controllers simply prevent, identify, and correct deviations made from the guidelines.
As you can imagine, the levels of management include top, middle, and first-line. The first line managers manage workers, and they are being transformed into team leaders and team facilitators. Middle managers may or may not be needed. They are essential if an organization is in the process of radical organizational change. Otherwise, they are eliminated to reduce costs and increase response communication time within management, (more horizontal organization allows workers to me more directly involved with decision making process of top management). Furthermore, the board of directors are not included; they appoint key members to top management.
At each level of management, managers carry out he same functions; however, a different time/depth is spent into each function. Management can also take on several specific roles, which can be grouped into three categories:
1. interpersonal : ie. figure head, liason, leader
2. informational : ie. monitor, disseminator*, spokesperson
3. decisional : ie. disturbance handler, negotiator, entrepreneur
In interpersonal roles, managers must actively make interactions every day. Informational managers gather information and relays it to colleagues. And decisional managers safeguard the resources.
* A disseminator is a managerial role involving sharing information about the company with followers. (Think of company reps and promoters on campus).
Managerial skills are divided into three main categories:
1. Technical : ability to use tools, techniques.
2. Human : ability to interact and communicate
3. Conceptual : ability to view the big picture, to deal with ideas and abstractions, and to diagnose and solve problems
A lot of this can be related to the ECE coursework we did. (Think of ECE classes when we had to apply procedures for analysis to different circuits, to present our analysis to colleagues and make sure everyone knows the material, and when we had to efficiently study for the final exams by relating every idea with the big picture).
Remember, a manager's job is more of an art than a science. They are interdependent (meaning they are not only autonomous, but also they require sufficient input, attention, and guidance from superiors to be effective), proactive information seekers, and they benefit in an organization more through collaboration and cooperation than from competition with each other.
Advice:
- Long term success in an organization is attained by doing the two following things:
1. Stick to values and 2. Create systems that encourages employees to act in parallel to those values.
- A person who refuses to accept responsibility lacks ethical armor to stand against temptation.
- Those in new positions tend to fail in 18 months because
- uncertain of boss's expectations (poor communication)
- unable to make tough decisions (study up on ethics)
- being unable to build partnerships with subordinates and peers (leadership)
- lacking political savvy (human skills)
CRM - Customer relationship management. Software that manages every point of contact with customer.
human skills - ability to interact and communicate. This includes being sensitive to different cultures, and to be able to understand an relate with others.
People to know:
Peter Drucker
John Kotter
Henry Mintzberg
Resources:
- EEOC: Equal Employment Opportunity Commission
- AMA: American Management Association: Leadership Development and Management training
- A Manager's Job: Folklore and Fact by Henry Mintzberg (Ask me for a copy)
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