THE PRINCIPLES OF MANAGEMENT ANALYSIS

We must understand who is manager before further our study into the aspects of management. Managers have long been responsible for planning, organizing, leading and controlling in such a way as to ensure that the organization’s objectives are achieved efficiently. A major change is occurring in many organizations, however Management is increasingly becoming a responsibility of every individual in the organization, not just those who are formally designated as managers. In many organization, all members are managing themselves more than was generally in the past. They are performing some of the functions of management, such as planning, not simply the task assigned to them as part of the organizing process.

1.1.2 Who are managers?

Manager can be defined as,

A manager is an individual who is directly responsible for ensuring that tasks are performed by people or employees in an organisation.

A manager is a person tasked with overseeing one or more employees or departments to ensure these employees or departments carry out assigned duties as required

Practically, managemer is divided into three levels, 1) Senior / Top managemer 2) Middle manager and 3) First level / Lower manager.

Top managers, who are responsible for making ornagization decision and establishing the plan and goals that affect the entire organisations. These individuals typically have titles such as Executive Vice President, Vice President, President, Chief Operation Officer (COO) or Chief Executive Officer (CEO). Senior or Top manager commonly consists of a board of directors or shareholders who own the company and are responsible for making key decisions that affect the company.

Middle managers include all levels of management between the first level manager and top level of the organisation. These managers manage the work of first-line managers and may have titles such as regional managers, project leader, plant managers or division managers.

First-line managers, the lowest level of management, manage the work of nonmanagerial employees who typically are involved with producing the organizations products or servicing the organization’s customer.

There are three key elements to get to know about the manager. The fuctions performed by managers in the management environment, roles and the skills. This three key elements will be discussed later.

1.1.3 What is management?

Self check : In your opinion, what is the definition of management?

Management can be defined as follows:

Management is defined as the process of overseeing and coordinating resources efficiently and effectively in line with the goals of the organisation.

The attainment of organizational goals in an effective and efficient manner through planning, organizing, leading and controlling organizational resources

In the simplest of terms, management is all about ‘getting things done’. However, it is the way and the process of how one achieves ones target or goals and it is in this respect that management is considered an art and a science as well.

Peter Drucker (1993) defined management as

“Supplying knowledge to find out how existing knowledge can best be applied to produce results is, in effect, what we mean by management. But knowledge is now also being applied systematically and purposefully to determine what new knowledge is needed, whether it is feasible, and what has to be done to make knowledge effective. It is being applied, in other words, to systematic innovation.” (Drucker, 1993)

From all the above definitions, it is clear that management is a creative as well as a systematic flow of knowledge that can be applied to produce results by using human as well as other resources in an effective way. Management has not been limited to managing human resource; management today has been segregated into various branches like financial management, strategic management, operations management, time management, crisis management, marketing management etc. Each of these is a separate branch that is being handled by managers who specialize in these fields.

Today the importance of management from an organization’s point of view has increased multifold. It is only through effective management that companies are developing and executing their business’s policies and strategies to maximize their profits and provide with the best of products and services.

Management today combines creative, business, organizational, analytical and other skills to produce effective goal-oriented results! Some of the key functions in management includes learning to delegate, planning and organizing, communicating clearly, controlling situations, motivating employees, adapting to change, constantly innovating and thinking of new ideas, building a good team and delivering results which are not just figure -bound but results that also focus on overall growth and development.

Management focuses on the entire organization from both a short and a long-term perspective. Management is the managerial process of forming a strategic vision, setting objectives, crafting a strategy and then implementing and executing the strategy.

Management goes beyond the organization’s internal operations to include the industry and the general environment. The key emphasis is on issues related to environmental scanning and industry analysis, appraisal of current and future competitors, assessment of core competencies, strategic control and the effective allocation of organizational resources.

Nevertheless, based on definition number 2, effectiveness is the attainment of goals that enables the realisation of the objectives of an organisation or, briefly, as “doing the right thing” whereas efficiency is performing a job using minimum effort, cost and wastage or simply put as “doing things right.” The end result of an efficient and effective management is the success of an organisation.

A person can be described as efficient but not effective or effective but not efficient in managing a specific task. Both elements are not interdependent. Let’s say a factory worker finds a shortcut to doing a task with lower cost but by doing so, he deviates from the ethical objectives of the organisation. For example, he disposes of production waste by dumping it into the river. But one of the organisation’s ethical objectives is to preserve local harmony. So, the factory worker, through his action, deviated from the objective although he was efficient. In short, he was efficient but not effective.

In contrast, an employee is considered effective but not efficient if he uses an old method to resolve a management issue even if it could have been resolved efficiently without deviating from the objectives of the organisation. For example, in delivering information, the employee sends a letter via post instead of e-mail. Although it does not affect or clash with the organisation’s objectives, the employee has wasted a part of the resources allocated to him.

Both efficiency and effectiveness cannot be excluded from the definition of management as these are essential elements in defining management.

1.1.4 What is organizations ?

When two or more people get together and agree to coordinate their activities in order to achieve their common goals, an organization has been born. There is really no doubt about the present meaning of organization. Its purpose is to create an arrangement of positions and responsibilities through and by means of which an enterprise can carry out its work. An academic textbook definition of organization can be formulated as follows: “a. the responsibilities by means of which the activities of the enterprise are dispersed among the (managerial, supervisory, and specialist) personnel employed in its service; and b. the formal interrelations established among the personnel by virtue of such responsibilities.”

It must be emphasized that an organization should not be seen as rigid as the term “framework” implies. In reality, almost all organization structures must be occasionally reviewed due to various changes in the external environment of the organization in question. Moreover, internal changes also occur oftentimes due to the development of various informal relationships.

However, in order to develop a so-called science of organizations a conceptual framework of theory and principle must first be developed. It is true to state that principles of management have existed for a long time. These principles were not recorded as scientific truths, but simply applied as practical means to accompany the process of modernization. As societies became more complex, an acceptable framework to encompass the “unscientific” principles of management was needed. Since the nineteenth century, many writers and researchers have contributed a great deal to existing principles and accepted practices. It is in the formulation of principles that the science of management can be developed. A management principle distils and organizes knowledge that has been built up through experience and analysis.

It is highly unlikely that management will ever become an exact science with many laws governing it because personal judgment will always be needed to supplement available knowledge. Unlike principles in the natural sciences, management principles are not fundamental truths, they are only conditional statements which largely depends on many other variables. However, it is still necessary to continue the process of understanding and applying accepted principles to improve the quality of day-to-day management practice. For this reason management will always be an art.

1.2 Who are managers and what they do?

There are three key elements to get to know about the manager.

Management Fuctions

Management Roles

Management Skills.

1.2.1 Management Functions

Today in most management book, basic management functions

The manager is involved in various basic activities. These activities are usually grouped in a concept categorised as management functions. These functions are illustrated as follows.

Management functions – Planning, Organising, Leading & Controlling

Referring to the table below, all four management functions elorated.

Table 1.1: Management Functions

Management

Functions

Descriptions

Planning

Defining objectives to be achieved for a given period and what needs to be done to achieve the objectives. All management levels in an organisation need to be involved in planning. Managers need to develop objectives in line with the overall strategies of the organisation.

Organising

Determining what tasks are to be done; who will implement and co-ordinate them; how the tasks are to be grouped; who reports to whom; and where decisions are to be made. The manager needs to logically and effectively organise the information, resources and workflow of the organisation so that he is able to react positively towards changes in the business environment.

Leading

This involves motivating subordinates; selecting the most effective communication channels; resolving conflicts; and directing as well as guiding the actions of others with the intention of achieving all objectives. The effective leader of today has to be visionary in foreseeing the future, sharing the vision and encouraging employees in realising the vision.

Controlling

The measuring of performance in all pre-determined objectives, determining reasons for deviation and taking appropriate actions, where necessary. Controlling is an important function in the management process as it provides ways to ensure that the organisation moves towards achieving its objectives.

1.2.2 MANAGEMENT ROLES

Manager can identified by the role they play in the organisations. An expert in management, Prof Henry Mintzberg, did a research by observing what managers did during their work hours. His research conclude that managers not only have 4 elements as discussed in Management Functions, but they have to play another roles as detailed below (Lewis, P.S. et al; 2001).

Role as a Figurehead

A manager must carry out ceremonial duties. For example, the vice-chancellor of a university must be involved in the opening ceremony of programmes conducted at the university. The head of a department is responsible for entertaining his clients.

Role as a Leader

A manager indirectly functions as a leader. Each manager must function as a leader in motivating and encouraging his subordinates. The manager steers members of his unit to continuously work effectively to achieve the goals of the unit and organisation besides resolving problems and issues.

Role as a Liaison Officer

A manager conveys relevant information gathered to individuals outside his unit or to other relevant parties outside his organisation. The manager will allocate time for interacting with people outside his organisation. Thus, a manager acts as a channel for communications between his department and those within as well as those outside his organisation.

For example, a human resource manager may liaise with the finance manager to check on funds allocated for the recruitment of new employees by the organisation before embarking on a recruitment drive.

Role as a Spokesperson

The manager of an organisation usually acts as its spokesperson. For example, a supervisor will usually ensure that the operations manager is furnished with the latest information on the running of his production plant. Similarly, the general manager of a factory will lobby local authorities for a new tender.

Role as a Negotiator

No organisation is without problems. A manager is compelled to find a solution for each of its problems regardless of complexities. The manager needs to spend a lot of time in discussions as he plays the role of a negotiator. For example, a manager will negotiate with the trade union chief to reach an amicable agreement on salaries.

Role as an Initiator

Two management experts, Sumantra Ghoshal and Christopher Bartlett (Dessler, G; 2001), highlighted the additional role of a manager as an initiator of corporate actions and transformations. Moreover, an excellent manager is one who cultivates three processes that steer his employees towards achieving initiatives for change. These processes are as follows:

Entrepreneurship Process

The manager will try to improve his unit’s performance and when he gets a good idea, he will launch a programme to realise the idea.

Researches carried out in Japan, the United States and Europe showed that a successful manager is one who focuses a lot of time and effort on steering his employees towards thinking like an entrepreneur. To meet this objective, the manager needs to empower, support and provide incentives for employees to attain self-direction.

Capability Development Process

In a technology-centred world, conglomerates need to fully utilise their advantage as a large establishment not only in matters of economies of scale but also in the aspects of widening and deepening the knowledge and abilities of its employees.

A manager who succeeds will focus on creating a conducive environment that encourages employees to shoulder additional responsibilities. He will also focus on preparing the necessary training and guidance to build their self-confidence. The successful manager will allow employees room for making mistakes without the fear of being penalised while undergoing training and encourage them to learn from their mistakes.

Reformation Process

A successful manager will identify situations that might pose challenges to the strategies of the organisation and assumptions made. In other words, the manager is capable of cultivating a querying disposition such as why something is done in a certain way and whether there are alternative ways of doing it.

1.2.3 MANAGEMENT SKILLS

SELF-CHECK 1.2

When an organisation shortlists employees for the position of a manager, it will usually select individuals with technical, interpersonal and conceptual skills. Therefore, the third approach to understanding the tasks of managers is to analyse the skills required to carry out the tasks.

Figure 1.2 shows three types of essential skills required at each level of management. The arrow pointing upwards shows the type of skills that are needed by top-level management. The arrow pointing downwards shows the type of skills that are needed by lower-level management or line managers.

Figure 1.2: Skills required of a manager

(a) Conceptual Skills

Conceptual skills refer to the ability to view the organisation as a whole, and the impact the different sections have on the organisation, as a whole and on each other. It also involves observing how an organisation adapts to or is affected by external environmental factors such as society, economic pressure, customers and competition. An efficient manager should be able to identify, understand and solve the various problems and critical perspectives. The need for conceptual skills becomes increasingly crucial when a manager climbs higher in the management hierarchy.

(b) Interpersonal Skills

Interpersonal skill is the ability to work well with other people. Managers with good interpersonal skills work more effectively in a group, encouraging other employees to input their ideas and comments as well as being receptive to the needs and views of others. The manager will also, indirectly, become a good listener and speaker. Interpersonal skills are crucial, regardless of the level of management. However, a low-level manager will be more occupied in solving technical problems while a manager at the middle and higher levels will be mainly occupied with dealing directly with others.

Technical skills are the ability to apply procedures, techniques and specialised knowledge required in a certain task. For a shoe factory supervisor, the technical skills required will include the steps involved in shoe manufacturing from the beginning until the final product is ready. A housing developer’s technical skills will include ways to complete the development of a housing estate.

Technical skills are crucial for low-level managers as they supervise employees in manufacturing or service sectors. The manager needs to have technical knowledge and the skills to train new employees and assist employees in solving problems. Skills and technical knowledge are required to solve operational problems that cannot be handled by employees. Nevertheless, the higher the position of a manager in a hierarchy, the fewer the technical skills required.

SELF-CHECK 1.3

Self check – Based on what you have learned, identify the differences between the three levels and tabulate your answers.

Exercise – Explain each of the management functions that you have learned about.

1.3 HISTORY OF MANAGEMENT

Scientific Management Theory

(1890-1940)

At the turn of the century, the most notable organizations were large and industrialized. Often they included ongoing, routine tasks that manufactured a variety of products. The United States highly prized scientific and technical matters, including careful measurement and specification of activities and results. Management tended to be the same. Frederick Taylor developed the :scientific management theory” which espoused this careful specification and measurement of all organizational tasks. Tasks were standardized as much as possible. Workers were rewarded and punished. This approach appeared to work well for organizations with assembly lines and other mechanistic, routinized activities.

Bureaucratic Management Theory

(1930-1950)

Max Weber embellished the scientific management theory with his bureaucratic theory. Weber focused on dividing organizations into hierarchies, establishing strong lines of authority and control. He suggested organizations develop comprehensive and detailed standard operating procedures for all routinized tasks.

Human Relations Movement

(1930-today)

Eventually, unions and government regulations reacted to the rather dehumanizing effects of these theories. More attention was given to individuals and their unique capabilities in the organization. A major belief included that the organization would prosper if its workers prospered as well. Human Resource departments were added to organizations. The behavioral sciences played a strong role in helping to understand the needs of workers and how the needs of the organization and its workers could be better aligned. Various new theories were spawned, many based on the behavioral sciences (some had name like theory “X”, “Y” and “Z”).

General Administrative Theories

Administrative theory,

Classical administrative theory An early form of organization theory, pioneered mainly by Henri Fayol (1841-1925), which was concerned principally with achieving the ‘most rational’ organization for co-ordinating the various tasks specified within a complex division of labour (see his Administration industrielle et générale, 1916)

. The translation of this book into English as General and Industrial Management (1949) implies that Fayol was concerned mainly with business management, although he himself makes it clear that his ideas about management were intended to apply to all formal organizations, including political and religious undertakings. Expressing the French ‘administration’ as ‘management’ has also led to the alternative designation of this approach as the ‘classical school of scientific management’. More recent exponents include Lyndall Urwick and Peter F. Drucker.

Fayol, who is acknowledged to be the earliest advocate of a theoretical analysis of managerial activities, identified the key functions of management as being those of forecasting and planning. The most rational and efficient organizations were, in his view, those which implemented a plan that facilitated ‘unity, continuity, flexibility, precision, command and control’. Universal principles of administration were then distilled from these objectives. These include the key elements of the scalar chain (authority and responsibility flowing in an unbroken line from the chief executive to the shop floor); unity of command (each person has only one supervisor with whom he or she communicates); a pyramid of prescribed control (first-line supervisors have a limited number of functions and subordinates, with second-line supervisors controlling a prescribed number of first-line supervisors, and so on up to the chief executive); unity of direction (people engaged in similar activities must pursue a common objective in line with the overall plan); specialization of tasks (allowing individuals to build up a specific expertise and so be more productive); and, finally, subordination of individual interests to the general interest of the organization. This list is not exhaustive, but illustrates the key proposition of administrative theory, which is that a functionally specific and hierarchical structure offers the most efficient means of securing organizational objectives (see M. B. Brodie , Fayol on Administration, 1967)

.

Classical administrative theory, like its near-contemporary the scientific management approach, rests on the premisses that organizations are unproblematically rational and (effectively) closed systems. In other words, organizations are assumed to have unambiguous and unitary objectives, which the individuals within them pursue routinely, by obeying the rules and fulfilling their role expectations, according to the prescribed blueprint and structure. Moreover, in the attempt to maximize efficiency, it is only variables within that structure that need to be considered and manipulated. The interaction of the organization with its environment, together with the various factors which are external to the organization but nevertheless have consequences for its internal functioning, are systematically ignored. Clearly, both perspectives take a rather deterministic view of social action, since each assumes that individuals will maximize organizational efficiency, independently of their own welfare, and with no thought for the relationship between the collective goal and their own particular purposes. The Human Relations Movement in organizational analysis, an otherwise diverse group of writers and approaches, is united by its opposition to precisely this assumption. Despite such criticisms, the classical theory of administration has exerted considerable influence on the fields of business studies and public administration, and it still provides the basic concepts which many managers use in clarifying their objectives.

Question – why they need evolution in the first place? What change the theory,

From the start of the 19th century until the 20th century, managers and scholars formed a theoretical framework to explain what they believe to be good practices of management. Their efforts led to five different classes of perspectives on management – classical, behavioural, quantitative, systems and contemporary. Each perspective is based on different assumptions towards the objectives of the organisation and human behaviour. Figure 1.3 will help you to understand the chronological sequence of the perspectives.

Figure 1.3: Evolution of management theory

You might be wondering why it is important and necessary to study the historical development or the evolution of management thought. Studying history enables us to learn from mistakes made in the past so as to avoid making them in the future. History also enables us to study past successes that can be emulated accordingly in the future. Most importantly, we must understand the reasons behind such occurrences in order to improve in the future.

1.4.1 Classical Perspective

This perspective existed in the 19th century and early 20th century. It focused on the rational and scientific approaches to the study of management and on finding ways to mould an organisation to become more efficient. There are three sub-classes in this perspective, the scientific management, bureaucracy management and administrative management.

(a) Scientific Management

This approach existed at a time when productivity was deemed critical by businessmen. Businesses were growing rapidly but businessmen were facing a critical shortage of workers. Hence, management was continuously finding ways to improve the performance of its employees. The focus on improving employees’ efficiency is known as the scientific management approach. A number of researchers contributed towards the findings of scientific management, among them Frederick Winslow Taylor, Frank and Lilian Gilbreth and Henry Gantt.

Frederick Taylor (1856-1915), a mechanical engineer, was of the opinion that problems arose mainly due to bad management practices and, to a lesser degree, problems with employees. He stressed that management itself needed to transform and that the transformation method could only be established through scientific research. He suggested that decisions based on “rules of thumb” be substituted with established procedures, after analysing each situation. Taylor’s theory, which stated that the productivity of the labour force could be improved through scientifically-based management practices, earned him the title “Father of Scientific Management.” To improve the work performance of employees, Taylor conducted a research entitled “Time and Motions Study.”

From the research findings, Taylor identified five principles of management that could boost production efficiency. The five principles were:

(i) Using the scientific approach to determine best practices and not relying on “rules of thumb”;

(ii) Selecting suitable employees to perform a particular task. Suitability covers mental and physical aspects;

(iii) Training and developing an employee so that he is able to perform a given task according to established procedures;

(iv) Giving monetary incentives to ensure that employees perform a task accordingly; and

(v) Reassigning all responsibilities pertaining to planning and organising to the manager.

Taylor was not alone in this research. Henry Gantt (1861-1919), a friend of Taylor, focused on the control system in the scheduling of production. The Gantt Chart is still used today in planning the schedule of a project and has also been adapted in computerised-scheduling applications.

The husband and wife team of Frank (1868-1924) and Lillian Gilbreth (1878-1972), also strived to further expand the scientific management approach. Lillian was a pioneer in the field of industrial psychology and contributed greatly to human resource management. She believed that if scientific management was widely utilised, the abilities of each employee would grow considerably.

(b) Bureaucratic Management

Bureaucratic management is an approach to management that is based on guidelines, hierarchy, clear division of labour as well as rules and procedures. Max Weber (1864-1920), a German social theorist, introduced many bureaucratic concepts. Among the components of bureaucracy are:

(i) Authority and clearly defined responsibilities;

(ii) Positions in an organisation that are structured according to hierarchy;

(iii) Promotions based on qualifications;

(iv) Records of all administrative actions and decisions to ensure continuity of organisational rules;

(v) Separation of ownership and management; and

(vi) Guidelines implemented to all employees without bias.

The bureaucratic approach strives to increase efficiency and ensure continuity of overall operations of the organisation. This approach differs from scientific management, which only focuses on the employee as an individual. Nevertheless, this principle, used to improve efficiency, also may cause inefficiency. Rigid guidelines create red tape and slow down the decision-making process, resulting in the inability to change swiftly to adapt to the needs of the environment and, at times, create conflicts in performing a task professionally.

The administrative management principle focuses on the organisation as a whole. Among the contributors to this approach are Henri Fayol, Mary Parker Follett and Chester I. Barnard.

Henri Fayol (1841-1925), a Frenchman, is considered the pioneer of administrative theory as he introduced the organisational principles and administrative functions. His most relevant contribution was presenting the definition and roles of an administrator.

Fayol defined administration and management as planning, organising, directing, coordinating and controlling. He identified 14 principles of management:

Division of labour: This is a concept on specialisation of work, based on the assumptions that:

No one can do all the work;

Each job requires different skills; and

Repetition of work will increase efficiency.

Authority: The right to give directions and power to be complied with. Here, authority at the office has to be differentiated from personal authority.

Discipline: Based on respect and conformity.

Unity of command: An employee should receive instructions from one superior only.

Unity of direction: One superior and one direction for a particular activity with the same objective.

Subordination of individual interests to the general interests: Personal interest should not exceed or precede over common interest.

Remuneration: Salary payment based on various factors.

Centralisation: The centralisation of work depends on the situation and formal communications channel.

Scalar chain: This is about the line of authority and its formal communication channel.

Order: Resources are allocated in the right place at the right time.

Equity: Formed out of justice and virtue.

Stability of tenure: This is a necessity in good human resource planning.

Initiative: This is the hope that employees will work diligently and sincerely.

(xiv) Esprit de corps: A term, borrowed from the French language, that means loyalty and devotion in uniting the members of a group. It emphasises on harmony and unity in an organisation.

Mary Parker Follet (1868-1933) was trained in the field of philosophy and political science. Her approach focused on the involvement of employees and sharing of information among managers. She stressed the importance of common goals among subordinates to reduce personal conflicts. Follet’s ideas were contrary to the ideas in scientific management but conformed with modern management. Her approach focused on the individual and not engineering techniques. Follet stressed on issues relevant to the 1990s such as mankind, ethics, authority and leadership to inspire employees to excel in their jobs. Her main concepts included delegation of authority, leading employees and not commanding them as well as allowing employees to act according to situations.

Chester I. Barnard (1886-1961) introduced the informal organisation concept. An informal organisation exists in a formal organisation. He believed that organisations were not mere machineries and that informal relations could be a powerful tool and an asset to an organisation if properly managed. He also introduced the Acceptance Theory of Authority which stated that employees have options in complying with the directives of the management. Managers should treat their employees well as the acceptance of authority by employees is critical in ensuring the success of an organisation.

Overall, the classic perspective towards management is very important and has given organisations a basic skill to increase productivity and garner effective support from employees.

1.4.2 Human Perspective

Mary Parker Follet and Chester Barnard were the main founders of the human approach in management which emphasises the importance of understanding human behaviour, employees’ needs, the attitude of employees in a working environment besides social interaction and group processes. The categories of the human approach are – the movement of human relations, the human resource view and the approach to behavioural science.

Human Relations Movement

This approach is based on the premise that effective control comes from individual employees rather than strict control by authorities. This approach originated from research that was conducted at the Western Electric Company’s Hawthorne Works in Chicago between the years 1927 and 1932. The research was overseen by Elton Mayo and Fritz Roethlisberger, two psychologists from Harvard University. The research originally intended to study the relationship between physical conditions and production. Light irradiation temperature and other factors related to the working environment were selected as physical conditions. The original conclusion obtained by the researchers contradicted the results they anticipated.

Three series of experiments were conducted and the results of all the experiments contradicted what was expected. The first experiment had conducted the experiment of lighting radiation as a physical situation. It assumed that levels of brightness would facilitate higher output for the employees. From this, it was found that when the lighting radiation is brightened or dimmed, the production output will continue to increase. This meant that there were other factors that may have caused the increase in productivity. It was the same for the second and third experiments where other physical situations were chosen; the results could not clearly explain the causes for increase in production.

In conclusion, the Hawthorne research shows that the productivity of employees increases because they had received special treatment from management. The human relationship was connected to the increase in output. Group pressure will also affect a person’s behaviour. Group quality is very effective in determining the output of an employee and monetary compensation is less effective if compared to group quality, sentiments and guarantee. As an overall conclusion, the Hawthorne research started a new era the awareness that humans are complex and an influential input to determining the performance of an organisation.

Human Resource Approach

The human resource approach stresses that employees productivity will increase when the employees’ satisfaction of basic requirements are met. This movement is likened to a dairy farm where satisfied cows will produce more milk. From the management point of view, the pattern of satisfied employees will increase their work performance. This approach combines the work structure with the motivation theories.

Among the main motivators of this approach are Abraham Maslow and Douglas McGregor. (please refer to Topic 7 on motivation)

Social Science Approach

The social science approach developed the theories of human behaviour based on the scientific and learning methods. It is derived from the fields of sociology, psychology, anthropology, economic and other disciplines to understand the behaviour of employees and interactions in an organisation.

This approach can be seen in most companies. The economic and sociology sector has significantly influenced how managers probe further into an organisation’s strategy and structure. Psychology has influenced the management approach through motivation, communication, leadership and personnel management.

1.4.3 Quantitative Management Approach

This approach began in the era of World War Two, where quantitative techniques were used in the war in the handling of ships and bombs by the British army. The three main concepts of this approach are the management of science, management of operations and management of information systems.

(a) Management of Science

This approach was put forward to resolve the problems that arose due to World War Two. A group of mathematicians, physicists and scientists had been formed to resolve military issues. As these were recurring issues that involved the transfer of equipment and humans quickly and efficiently. Later, these techniques were applied by large-scale firms.

(b) Management of Operations

This approach refers to the management sectors that focus on the production of physical products or services. The members of operations management use quantitative techniques to resolve manufacturing issues. Among the methods usually use are forecasting, inventory modelling, linear and non-linear programming, and theories of rotation, scheduling, simulation and break-even analysis.

This approach is a new sub-sector in the quantitative management approach. Systems were designed to provide relevant information to managers at the appropriate time and cost. With the creation of high-speed digital computers, it opened up potential for management to utilise this as a tool. These computer systems compile information to assist in management’s decision making.

1.4.4 Contemporary Approach

Management is naturally complex and dynamic. The elements of each approach that has been discussed is still being used till now. The humanity approach is the most evident approach, yet lately, there have been some changes to this approach.

The two main theories under this perspective are the systems and contingency theories.

(a) Systems Theory

A system comprises of closely related sections that function in general to achieve the same objective. A system functions to transform input found from the external environment to output. The five components of a system are:

Input – equipment, people, finance or information source that are used to produce products or services.

Transformation process – the use of production technology to transform input to output.

Output – comprises of products and services of an organisation.

Feedback – decisions that will influence the selection of input used in the next process cycle.

Environment – includes social, political and economic influences.

Ideas of systems that influence the mind sets of management comprise of:

Open system – a system that interacts with the external environment to survive.

Closed system – a system that does not interact with the external environment to survive will face failures.

Entropy – the tendency for a system to become obsolete.

Synergy – individuals, groups and organisations that can achieve more if they cooperate compared to working alone.

Sub-system – sections of a system that are interdependent.

(b) Contingency Approach

The classical management approach is perceived as a universal observation. The management concept is perceived as universal when the management practice is the same in all situations. In business studies, an alternative observation arose.

A person learns management by experiencing the problems of case studies. The Contingency perspective combines the universal and case observations.

SUMMARY

Management is an art to direct other people in performing work by emphasising the aspects of effectiveness and efficiency in its implementation.

Effectiveness is achieving the objectives that enable the realisation of the organisation’s objective or doing the job the right way.

Efficiency is implementing the work by using minimum ability, cost and wastage or doing things right.

In brief, managers are known for their management functions that are implemented.

The functions can be divided into planning, organising, leading and controlling. The manager plays several roles in an organisation.

The roles include figure-head, leader, liaison officer, spokesperson, negotiator, ideas initiator, developing capability and motivator for transformation.

Management skills are crucial to ensure the success of a manager. It consists of conceptual, interpersonal and technical skills.

The types of managers can be divided into three main sections: top management, middle management and lower/line management.

The evolution of management expanded in tandem with the beginning of human civilisation in Egypt, China and Babylon.

The methods of management at that time were quite different from today.

Modern management significantly expanded with the emergence of the Industrial Revolution in Europe.

Generally, there are two well-known systems in discussions pertaining to trend or management of mind sets, which are the rational system and the social system.

Amongst the renown figures of the rational system are Henri Fayol, Max Weber and Frederick Taylor, whereas in the social system are Elton Mayo, William Ouchi and Henry Mintzberg.

KEY TERMS

Concept skills

Controlling

Effectiveness

Efficiency

Interpersonal skills

Leading

Organising

Planning

Scientific management

Technical skills

Theory X

Theory Y

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