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  2. Objectives of This Chapter To provide an overview of the role of management in business To explain the four fundamental management tasks, namely planning, organising, leading and control as a management process To explain the different levels and kinds of management in the business To examine the various schools of thought in management

  3. Types of Organisations • businesses • schools • hospitals • sports clubs • The point of departure of our discussion is general principles involved in the management of a business

  4. The Role Of Management • An organisation consists of people, resources and certain objectives that have to be attained • a squash club endeavours to get to the top of the league • Pick ‘n Pay endeavours to make a healthy profit • UWC endeavours to……

  5. Statistics of business failures • 44 percent: Managerial incompetence • Explanation: Inability to run the business • 17 percent: Lack of managerial experience • Little experience managing employees and other resources before going into business

  6. Statistics of business failure • 16 percent: Unbalanced experience • Explanation: insufficient experience in marketing, finance, purchasing, and production • 15 percent: Inexperience of the product • Explanation: Little, if any, experience in the product or service before going into business

  7. Statistics of business failure • 1% due to neglect • Explanation: Too little attention given to the business, poor health, or marital difficulties • 1% due to fraud or disaster • 6% • Cause of failure : Unknown

  8. Importance of Management • Management is necessary to direct a business towards its objectives • a balance must be maintained between the objectives of the business, the resources, the personal objectives of the employees, and the interests of the owners • Management is also necessary to keep the organisation in equilibrium with its environment (corporate social investment)

  9. Definition Of Management • management may be formally defined as the process whereby human, financial, physical and informational resources are employed efficiently and effectively for the attainment of the objectives of an organisation.

  10. The most important elements in the management process • Planning-setting objectives and determining in advance how objectives will be met • Organising-delegating and coordinating tasks and resources to achieve objectives • Leading-influencing employees to work toward achieving objectives • Control-establishing mechanisms to ascertain whether the tasks have been carried out

  11. The Functions of Management • Planning determines the mission and goals of the business, including the ways in which the goals are to be attained, and the resources needed for this task. It includes determining the future position of the business, and guidelines or plans on how that position is to be reached

  12. The Functions of Management • Organising-developing a framework or organisational structure to indicate how personnel, equipment and materials are to be employed to attain the predetermined goals • Leading entails giving orders to the human resources of the business and motivating them to direct their actions in conformity with the goals and plans

  13. The Functions of Management • Control means that managers should constantly check whether the business is properly on course toward the accomplishment of its goals

  14. The four fundamental management tasks Planning Organizing Leading Control

  15. The different levels/types of management • Top Management • Middle Management • Lower Management (supervisors) • Marketing management • Financial management • Operational management • Purchasing management • Human resources management

  16. The Integrated Management Process Planning Organizing Leading Control Human resources Goals Financial resources Physical resources Information resources

  17. Function of Top Management • responsible for the business as a whole and for determining its mission and goals • is concerned mainly with long-term planning

  18. Function of Middle Management • accountable for executing the policies, plans and strategies determined by top management • responsible for medium- and long-term planning

  19. Function of Lower Management • responsible for smaller segments of the business • day-to-day activities and tasks of a particular section, short-term planning and implementing the plans of middle management • guide staff in their own subsections and keep close control over their activities

  20. Functional managers • Planning the activities of the marketing department • Organising marketing activities, such as the allocation of tasks to persons so that certain objectives can be attained • Motivating and giving orders to marketing staff to perform their duties and thus accomplish the goals of the business

  21. Functional managers • Controlling marketing activities, for example, ensuring that marketing objectives are accomplished as planned • In the same way financial management, human resources management, purchasing management and other functional managements plan, organise, lead and control their departments

  22. Three key skills are identified as prerequisites for sound management: • Conceptual skills. The mental capacity to view the business and its parts in a holistic manner • Interpersonal skills. The ability to work with other people in teams (Bill Gates) • Technical skills. The ability to use the knowledge or techniques of a particular discipline to attain ends (spreadsheet software)

  23. Planning Conceptual and Decision Making Skills Organising Controlling Technical Skills Human and Communication Skills Leading

  24. The Role of Managers Representative figure Leader Relationships Interpersonal Role Informational role Monitors Analyses Spokesman Entrepreneur Troubleshooter Allocator of resources Negotiator Decision-making Role

  25. Interpersonal Role • Representative-takes visitors out to dine • Leading-training, promotion, firing and motivation • Relationships-internal (staff) and external (suppliers, customers)

  26. Informational Role • Monitor-gathering of information about opportunities and threats • Analyze the data and report meaningful information • Spokesperson in the business

  27. Decision-making Role • Managers are entrepreneurial-develop new products • Solve problems such as strikes, equipment breakdowns etc. • Allocation of resources in the business • Negotiate goals, performance standards and trade union agreements

  28. The most important schools of thought on management • Existing knowledge about management is derived from a combination of ongoing research by practitioners and researchers • 4 schools of thought: the classical school, the human relations school, management science and integrative theory (systems, socio-technical and contingency theories)

  29. Classical Theorists • Focus on the job and management functions to determine the best way to manage in all organisations • F.W. Taylor (1856-1915) • increase productivity

  30. Scientific Management • Develop a procedure for each element of a job • Promote job specialisation • Scientifically select, train and develop workers • Plan and schedule work • Establish standard methods and times for tasks • Wage incentives schemes

  31. Scientific Management • Frank and Lillian Gilbreth (1868-1972) • Time and motion studies • Henry Gant (1861-1919) • Method for scheduling work over time

  32. Administrative Theory • Henri Fayol (1841-1925) • French engineer • 4 major functions of management • Max Weber (1864-1920) • Bureaucracy • Set of rules and procedures to treat workers fairly • McDonalds

  33. Behavioral Theory • The human relations or behaviourist school came into being because of the failure of the scientific and classical schools to make an adequate study of the human element as an important factor in the effective accomplishment of the goals of a business

  34. Behavioral Theory • Mayo (1880-1949) • Focus changed from the job to people who perform the job • Research into social interaction, motivation, patterns of power, organisational design and communications

  35. Management Science • The quantitative school uses maths to aid in problem solving and decision making • Military and logistics problems in WW2 • Mathematical models used in finance, MIS, operations • Facilitated by the use of computers • DCF, Break Even Analysis, Payback Period

  36. Integrative Perspective • the systems approach considers the business as an integrated system consisting of related systems • Conceptual skills • Decision making in Finance Dept affects other departments • Open systems thinking (Govt laws)

  37. Socio-technical Theory • Focus on integrating people and technology • Another approach is Ouchi's Theory Z, which was developed during the early 1980's in an attempt to explain decreasing productivity • the method in this approach is to take the best management practices from American and Japanese businesses and integrate them into one

  38. Contingency Theory • Focus on the best management approach for a given situation • Studied the environment and its effects on the organisation and management systems • Stable and innovative • Stable-mechanistic/bureaucratic approach • Innovative-organic/behavioral approach

  39. Management in the new millennium • Businesses today are exposed to a number of revolutionary forces: technological change, global competition, demographic change and trends toward a service society and the information age. Forces like these have changed the playing field on which businesses must compete. In particular, they have dramatically increased the need for businesses to be responsive, flexible and capable of competing in a global market

  40. The "new organisation" • The average business will be smaller and employ fewer people • the boundaryless business in which employees do not identify with separate departments, but instead interact with whoever they must to get the job done • Employees will be called on to make more and more decisions

  41. The "new organisation" • Flatter organisations will be the norm • Work will be organised around teams and processes • Competency and knowledge, not titles, will be the basis of power