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Dr. Bagus Nurcahyo

Program Studi Manajemen PemasaranDirektorat Program D3 Bisnis & Kewirausahaan

Management and Its Evolution

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Learning ObjectivesAfter reading this chapter, you should be able to:After reading this chapter, you should be able to:

• Understand the challenges organizations face in the new millennium.

• Specify the functions and roles of successful managers.

• Explain the origins of management as an academic discipline.

• Describe the bureaucratic and administrative approaches to the study of management.

• Explain the behavioral perspective in analyzing management issues.

• Interpret recent approaches to the study of management.

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The performance of organizations depends to a large extent on how their resources are allocated and their ability to adapt to changing conditions.

Successful organizations know how to manage people and resources efficiently and effectively to accomplish organizational goals and to keep those goals in tune with changes in the external environment.

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Management in the New Millennium• A firm can be efficient by making

the best use of people, money, physical plant, and technology.

• It is ineffective if its goals do not provide a sustained competitive advantage.

• A firm with excellent goals would fail if it hired the wrong people, lost key contributors, relied on outdated technology, and made poor investment decisions.

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Strategic Managers

Tactical Managers

Operational Managers

Levels of Management

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Strategic Managers

•The firm’s senior executives with overall responsibility for the firm.

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Tactical Managers

•Responsible for translating the general goals and plans developed by strategic managers into specific objectives and activities.

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Operational Managers

•Lower-level managers who supervise the operations of the organization.

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Management Functions

Planning Organizing

Leading Controlling

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Planning

• The management function that assesses the management environment to set future objectives and map out activities necessary to achieve those objectives.

• To be effective, the objectives of individuals, teams, and management should be coordinated to support the firm’s mission.

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Organizing

• The management function that determines how the firm’s human, financial, physical, informational, and technical resources are arranged and coordinated to perform tasks to achieve desired goals.

• The deployment of resources to achieve strategic goals.

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Leading

• The management function that energizes people to contribute their best individually and in cooperation with other people.

• This involves:Clearly communicating organizational goalsInspiring and motivating employeesProviding an example for others to followGuiding othersCreating conditions that encourage management

of diversity

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Controlling

• The management function that measures performance, compares it to objectives, implements necessary changes, and monitors progress.

• Many of these issues involve feedback or identifying potential problems and taking corrective action.

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Management as a Set of Roles

• Day-to-day management activities are routine, orderly, and rational.

• These include:Interpersonal roles - communication with superiors,

peers, subordinates, and people from outside the organization.

Information Roles - obtaining, interpreting, and giving out information.

Decisional Roles - choosing among competing alternatives.

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Interpersonal & Informational Roles

Interpersonal Roles • Figurehead-visible personality representing an

organization, department, or unit• Leader-energizes others to get the job done

properly• Liaison-links together the activities of people

both inside and outside of the organization.

Informational Roles• Include monitor and disseminator

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Decisional Roles

• Entrepreneur-introduces changes in the organization

• Disturbance handler-takes corrective action, provide damage control, and responds to unexpected situations or crisis

• Resource allocator-assigns people and other resources to best meet organizational needs

• Negotiator-reaches agreements and makes compromises

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The Evolution of Management Thought

Early Management Thought

Contemporary Management Approach

Behavioral Perspective

Administrative Management Approach

Operational Perspectives

Bureaucratic Management Approach

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Early Management Thought

• Early ideas about management strategySun Tzu, The Art of War

• Early ideas about leadershipNicolò Machiavelli, The Prince

• Early ideas about the design and organization of workAdam Smith, The Wealth of Nations

division of labor

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The Operational Perspective

• Scientific ManagementFrederick W. Taylor

• Quantitative ManagementBreak-even AnalysisEconomic Order QuantityMaterials Requirements PlanningQuality Management

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Taylor’s Four Principles of Scientific Management

• Scientifically study each part of a task and develop the best method of performing the task.

• Carefully select workers and train them to perform the task by using the scientifically developed method.

• Cooperate fully with workers to ensure that they use the proper method.

• Divide work and responsibility so that management is responsible for planning work methods using scientific principles and workers are responsible for executing the work accordingly.

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Bureaucratic Management Approach

• Max Weber

Key Characteristics

• Specialization of labor• Formal rules and procedures• Impersonality• Well-defined hierarchy• Career advancement based on merit

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Administrative Management Approach

• Division of work

• Authority

• Discipline

• Unity of command

• Unity of direction

• Subordination of individual interest to the general interest

• Remuneration

• Centralization

• Scalar chain

• Order

• Equity

• Stability and tenure

• Initiative

• Esprit de corps

Henry Fayol’s 14 Principles of Management

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Behavioral Perspective

• Mary Parker Follett & the Hawthorne Studies

• Mary Follett questioned the wisdom of scientific management because she believed it ignored many ways in which employees could contribute ideas and exercise initiative.– She advocated increased employee participation, autonomy,

and organization of teams

• It acknowledges that psychological and social processes of human behavior can result in improvements in productivity and work satisfaction.

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Behavioral Perspective

The Hawthorne effect - when a manager shows concern for employees, their motivation and productivity levels are likely to improve.

Human Relations Approach - the relationship between employees and a supervisor is a vital aspect of management.Employee motivationLeadership style

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Physical Needs

Need for Security

Need for Social Relations

Need for Self Esteem

Self-Actualization

Maslow’s Hierarchy of Needs

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McGregor’s Theory X and Theory Y

• Leaders and managers who hold Theory X assumptions believe that employees are inherently lazy and lack ambition.A negative perspective on human behavior.

• Leaders and managers who hold Theory Y assumptions believe that most employees do not dislike work and want to make useful contributions to the organization.A positive perspective on human behavior.

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Contemporary Management Approach

• Systems Theory

• Contingency Theory

• The Learning Organization Perspective

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Systems Theory

• Views the organization as a system of interrelated parts that function in a holistic way to achieve a common purpose.

• Systems theory concepts that affect management thinking:Open and closed systemsSubsystemsSynergyEquifinality

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Contingency Theory

•States that there is no “one best way” to manage an organization.

Because what works for one organization may not work for another

Situational characteristics (contingencies) differ

Managers need to understand the key contingencies that determine the most effective management practices in a given situation

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The Learning Organization

• The management approach based on an organization anticipating change faster than its counterparts to have an advantage in the market over its competitors.

• Rather than reacting to change , which is a normal part of the business landscape, organizations need to anticipate change so they are well positioned to satisfy customer needs.

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Emerging Perspectives and Issues

The Modular Organization• Every function not regarded as crucial is outsourced

to an independent organization.• “Disaggregated Corporation”

The Intangible Organization• Shifts from tangible (plant and equipment) to

intangible (know-how and product design) investments

• Mangers and employees in today’s companies focus on opportunities rather than efficiencies