Management Chapter 4

1. Management Chapter 4

2. Introduction This lecture will: • Make an outline definition of management themes • Explore the concepts of rationality and strategy • Explore issues of globalization and decision-making • Examine management performance.

3. The Meaning of Management • Derived from the Italian ‘maneggiare’ meaning to handle or train horses: • Fayol defined management as four key activities – • Planning • Organizing • Directing • Controlling • Drucker – management fulfils the needs of social justice • The organization is a formal structure and its staff needs are varied – line and staff management • Sociological approaches emphasises power • OB – relates to the behaviour of managers.

4. Major Perspectives on Management Four perspectives can be identified: • The Science Perspective • The Political Perspective • The Control Perspective • The Practice Perspective: • Synthesises the other perspectives • Practices include: Primary and Secondary social practices

5. Figure 4.2 - Four Major Perspectives on Management

6. The Process of Management (1) • Recent approaches have shown the limits of managerial rationality: • Mintzberg and Carlson have shown that interruption and superficial activity are a feature of management • Mintzberg classified work into ten roles with three sets of behaviours • Kotter challenged technical rationality and distinguished demands associated with task responsibilities from demands linked to relationships

7. Figure 4.3 - The Manager’s Ten Roles - Mintzberg

8. The Process of Management (2) Recent research has also emphasised the following themes: • Level of education of co-workers • The diversity of managerial activities and importance of environmental scanning • Hales has suggested the value of rationality • Gender and cross-cultural aspects • Harassment and bullying have been linked to certain kinds of production - These various themes have been related to issues of conflict and power

9. Managerial Rationality It is also possible to ask ‘why’ managers do what they do. A variety of approaches to this question exist, including: • The Neoclassical Approach • The Contingency Approach • The Political Approach • The Labour Process Approach.

10. Rationality – Neoclassical Approach • Emphasises the managers as agent of the owner and the maximisation of profit • The market is key • It becomes rational to obey managers, in accordance with Weber’s notion of legitimacy

11. Rationality – Contingency Approach • Looks to the internal structure of the firm and its match to the environment • Woodward adopted this approach in her study of manufacturing technology • Proposes a link between rationality, structure and technical complexity of firm processes • Organic or small batch production can be seen as more effective in certain situations

12. Rationality – Political Approach • Elements of stakeholder and resource dependency theories are incorporated • Focuses on power relationships as causal in management behaviour • Management can be viewed as an elite in a coalition of stakeholder groups which can also include external parties (stakeholder theory)

13. Rationality – Labour Process Approach • Management is viewed as economically exploitative and socially alienating • Maximum output is extracted at minimum cost (Braverman) • The rationality issue relates also to strategic choice theory which view gives the choices of elite some force in the market

14. Strategic Management • Goes beyond rationalistic approaches and includes a consideration of power and markets • It is possible to systematise a view of strategy as having five steps – • Mission and goals • Environmental analysis • Strategy formulation • Implementation • Evaluation

15. Figure 4.5 - The Strategic Management Model

16. Porter’s Hierarchy of Strategy • Porter divided multi-divisional firm units into three main levels: • Corporate Level Strategy • Business Level Strategy • Functional Level Strategy • An integration of these levels is emphasised in the area of strategy formulation

17. Figure 4.6 - The Hierarchy of Strategy Decision Making

18. Global Capitalism and Managerial Behaviour • Hertz describes globalization as ‘the unfettered pursuit of profit’ • Factors include: • Economies of scale and low cost leadership • Tensions faced to cut costs and to create product differentiation, at global levels • The drive towards efficiency: integration of product and control systems in technological areas • Taking into account national regulatory requirements

19. Figure 4.7 - An Integrated Model of Management The inter-linked behaviour’s and contingencies suggest management is a multi-dimensional integrating and controlling activity (Hales)

20. Figure 4.8 - The Behaviour of Successful Managers A more individualized view of managerial work can be created – the link between theory and performance is, however, complex and rarely predictive.