ninth edition

STEPHEN P. ROBBINS MARY COULTER

Chapter Introduction to
1 Management and
Organizations

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All rights reserved. The University of West Alabama
LEARNING OUTLINE
Follow this Learning Outline as you read and study this chapter.

Who Are Managers?

• Explain how managers differ from non-managerial
employees.
• Describe how to classify managers in organizations.

What Is Management?
• Define management.
• Explain why efficiency and effectiveness are important to
management.

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L E A R N I N G O U T L I N E (cont’d)
Follow this Learning Outline as you read and study this chapter.

What Do Managers Do?

• Describe the four functions of management.
• Explain Mintzberg’s managerial roles.
• Describe Katz’s three essential managerial skills and how
the importance of these skills changes depending on
managerial level.
• Discuss the changes that are impacting managers’ jobs.
• Explain why customer service and innovation are
important to the manager’s job.

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L E A R N I N G O U T L I N E (cont’d)
Follow this Learning Outline as you read and study this chapter.

What Is An Organization?
• Describe the characteristics of an organization.
• Explain how the concept of an organization is changing.

Why Study Management?

• Explain the universality of management concept.
• Discuss why an understanding of management is
important.
• Describe the rewards and challenges of being a manager.

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Who Are Managers?
• Manager
Someone who coordinates and oversees the work of
other people so that organizational goals can be
accomplished.

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 Management

Definitions of Management
“Management is an art of getting things done
through people”. - Mary Parker Fallett
“Management is a process of planning, organizing,
staffing, directing and controlling to accomplish
organizational objectives through the
coordinated use of human and material skills”. –
Prof. Moore
“Management is the process of designing and
maintaining an environment in which individuals
working together in groups, accomplish their
aims efficiently and effectively”. - Koontz
Exhibit 1–1 Managerial Levels

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Classifying Managers
• First-line Managers
Individuals who manage the work of non-managerial
employees.
• Middle Managers
Individuals who manage the work of first-line
managers.
• Top Managers
Individuals who are responsible for making
organization-wide decisions and establishing plans
and goals that affect the entire organization.

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What Is Management?
• Managerial Concerns
Efficiency
❖ “Doing things right”
– Getting the most output
for the least inputs
Effectiveness
❖ “Doing the right things”
– Attaining organizational
goals

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Exhibit 1–2 Effectiveness and Efficiency in Management

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 Some Key Concepts

Managerial performance is the measure of how efficient

and effective a manager is; i.e., how well he or she
determines and achieves appropriate objectives.
Organizational performance is the measure of how
efficient and effective an organization is; i.e., how well it
achieves appropriate objectives.
Efficiency (resource usages) is the ability to minimize
the use of resources in achieving organizational
objectives - “doing the things right”.
Effectiveness (goal attainment) is the ability to
determine appropriate objectives - “doing the right
thing”.
 What Do Managers Do?(Management
Functions)
• Functional Approach
Planning
❖ Defining goals, establishing strategies to achieve goals,
developing plans to integrate and coordinate activities.
Organizing
❖ Arranging and structuring work to accomplish organizational
goals.
Leading
❖ Working with and through people to accomplish goals.
Controlling
❖ Monitoring, comparing, and correcting work.

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Exhibit 1–3 Management Functions

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 What Do Managers Do? (cont’d)
Henry Mintzberg’s Management Roles Approach
Interpersonal roles
❖ Figurehead, leader, liaison
Informational roles
❖ Monitor, disseminator, spokesperson
Decisional roles
❖ Entrepreneur, Disturbance handler, resource
allocator, negotiator

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What Managers Actually Do (Mintzberg)
• Interaction
with others
with the organization
with the external context
of the organization
• Reflection
thoughtful thinking
• Action
practical doing

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What Do Managers Do? (cont’d)
• Skills Approach
Technical skills
❖ Knowledge and proficiency in a specific field
Human skills
❖ The ability to work well with other people
Conceptual skills
❖ The ability to think and conceptualize about abstract and
complex situations concerning the organization

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The Management Process

It is a dynamic process by which management creates,

operates and directs purposive organization through
systematic, coordinated and co-operated human efforts.

As a process, management consists of three aspects:

• Management is a social process – Human factor &
Relationships
• Management is an integrating process – Human, Physical
& Financial
• Management is a continuous process – Problem solving
Exhibit 1–5 Skills Needed at Different Management Levels

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 Exhibit 1–6 Conceptual Skills

• Using information to solve business problems

• Identifying of opportunities for innovation
• Recognizing problem areas and implementing
solutions
• Selecting critical information from masses of
data
• Understanding of business uses of technology
• Understanding of organization’s business model

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Source: Based on American Management Association Survey of Managerial Skills and
Competencies, March/April 2000, found on AMA Web site (www.ama.org), October 30, 2002.
reserved. 1–19
 Exhibit 1–6 Communication Skills

• Ability to transform ideas into words and actions

• Credibility among colleagues, peers, and
subordinates
• Listening and asking questions
• Presentation skills; spoken format
• Presentation skills; written and/or graphic
formats

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 Exhibit 1–6 Effectiveness Skills

• Contributing to corporate mission/departmental

objectives
• Customer focus
• Multitasking: working at multiple tasks in parallel
• Negotiating skills
• Project management
• Reviewing operations and implementing
improvements

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Competencies, March/April 2000, found on AMA Web site (www.ama.org), October 30, 2002.
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 Exhibit 1–6 Effectiveness Skills (cont’d)

• Setting and maintaining performance standards

internally and externally
• Setting priorities for attention and activity
• Time management

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Competencies, March/April 2000, found on AMA Web site (www.ama.org), October 30, 2002.
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 Exhibit 1–6 Interpersonal Skills (cont’d)

• Coaching and mentoring skills

• Diversity skills: working with diverse people and
cultures
• Networking within the organization
• Networking outside the organization
• Working in teams; cooperation and commitment

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 Exhibit 1–7 Management Skills and Management Function Matrix

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How The Manager’s Job Is Changing
• The Increasing Importance of Customers
Customers: the reason that organizations exist
❖ Managing customer relationships is the responsibility of all
managers and employees.
❖ Consistent high quality customer service is essential for
survival.
• Innovation
Doing things differently, exploring new territory, and
taking risks
❖ Managers should encourage employees to be aware of and
act on opportunities for innovation.

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Exhibit 1–8
Changes Impacting
the Manager’s Job

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What Is An Organization?
• An Organization Defined
A deliberate arrangement of people to accomplish
some specific purpose (that individuals independently
could not accomplish alone).
• Common Characteristics of Organizations
Have a distinct purpose (goal)
Composed of people
Have a deliberate structure

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Exhibit 1–9 Characteristics of Organizations

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Exhibit 1–10 The Changing Organization

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Why Study Management?
• The Value of Studying Management
The universality of management
❖ Good management is needed in all organizations.
The reality of work
❖ Employees either manage or are managed.
Rewards and challenges of being a manager
❖ Management offers challenging, exciting and creative
opportunities for meaningful and fulfilling work.
❖ Successful managers receive significant monetary rewards
for their efforts.

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Exhibit 1–11 Universal Need for Management

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Exhibit 1–12 Rewards and Challenges of Being A Manager

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 Key Management Theories – An Overview
In search of Excellence
becomes bestseller (Mid-1980s)
“Muckrakers” began The Great Depression Deming lectures on
exposes of business Begins quality in Japan Apple Corp. Baldrige Award
(1902) Formed (1977) initiated (1987)

1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990

Labour World War I World War II Protest IBM PC AT & T

Shortage Movemenets Introduced divestiture
(1914-1918) (1941-1945)
(1960s to early (1981) takes effect
1970s) (Jan 1, 1984)

Scientific Management School Classical Organizational Theory School

The Behavioral School

Management Science

The System Approach

The Contingency
Approach

Dynamic Engagement Approach

The Scientific Management School

• Scientific Management theory arose in part from the need to

increase productivity.
• The only way to expand productivity was to raise the efficiency
of workers.
Frederick W. Taylor (1856-1915) rested his philosophy on four
basic principles:
• The development of a true science of management, so that the
best method for performing each task could be determined.
• The scientific selection of workers, so that each worker would
be given responsibility for the task for which he or she was best
suited – Functional foremanship.
• The scientific education and development of the worker.
• Intimate, friendly cooperation between management and labor.
The Scientific Management School

• Taylor based his management system on production-line

time studies.
• Using time study as his base, he broke each job down into
components and designed the quickest and best methods of
performing each component. In this way he established how
much workers should be able to do with the equipments and
materials at hand.
• He also encouraged employers to pay more productive
workers at a higher rate than others using a ‘scientifically
correct rate’ that would benefit both company and worker.
• Thus, workers were urged to surpass their previous
performance standards to earn more pay. Taylor called his
plan the differential rate system.
The Classical Organization Theory School

• Henri Fayol (1841-1925) is generally hailed as

the founder of the classical management school.
• Taylor was basically concerned with organizational
functions; however, Fayol was interested in the total
organization and focused on management which he
felt had been the most neglected of business
operations.
Fayol listed 14 principles of management most
frequently to be applied:
• Division of Labor
• Authority
• Discipline
The Classical Organization Theory School
• Unity of Command
• Unity of Direction
• Subordination of the individual interest to the
common good
• Remuneration
• Centralization
• The Hierarchy
• Order
• Equity
• Stability of the Staff
• Initiative
• Esprit de corps
 Principles of management

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Characteristics of Weber’s Bureaucracy

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The Behavioral School / Approach / OB

• The behavioral school emerged partly because the

classical approach did not achieve sufficient
production efficiency and workplace harmony.
• To managers’ frustration, people did not always
follow predicted or expected patterns of behavior.
• Thus there was increased interest in helping
managers deal more effectively with the ‘people
side’ of their organizations.
Relations Theory – The Human Relations
Movement
• Human relations are frequently used as a general
term to describe the ways in which managers
interact with their employees.
• When “employee management” stimulates more
and better work, the organization has effective
human relations; when morale and efficiency
deteriorate, its human relations are said to be
ineffective.
• The human relations movement arose from early
attempts to systematically discover the social and
psychological factors that would create effective
human relations.
The Hawthorne Experiments

The human relations movement grew out of a

famous series of studies conducted at the Western
Electric Company from 1924 to 1933. These
eventually became known as the “Hawthorne
Studies” because many of them were performed at
Western Electricity Hawthorne plant by Elton Mayo
near Chicago. They were:
• Illumination Experiments
• Relay Assembly Test Room
• Interviewing Program
• Bank Wiring Test Room
The Quantitative Approach

The quantitative approach, uses quantitative

techniques to improve decision making.
It is a research method that uses numerical
measurements and statistical analysis to understand
phenomena.

Differentiate qualitative Vs quantitative approach.

Total quality management, or TQM

The Management Science School
• At the beginning of World War II, Great Britain desperately needed
to solve a number of new, complex problems in warfare. With their
survival at stake, the British formed the first operational research
(OR) teams.
• By pooling the expertise of mathematicians, physicists, and other
scientists in OR teams, the British were able to achieve significant
technological and tactical breakthroughs and so as the Americans.
• The teams used early computers to perform the thousands of
calculations involved in mathematical modeling.
• When the war was over, the applicability of operations research to
problems in industry gradually became apparent. New industrial
technologies were being put into use and transportation &
communication were becoming more complicated.
• These developments brought with them a host of problems that
could not be solved easily by conventional means. Increasingly,
OR specialists were called on to help managers come up with
answers to these new problems.
The Management Science School
• Over the years, OR procedures were formalized into what is
now more generally called the management science school.
• The management science approach to solving a problem
begins when a mixed team of specialists from relevant
disciplines is called in to analyze the problem and propose a
course of action to management.
• The team constructs a mathematical model that shows, in
symbolic terms, all relevant factors bearing on the problem
and how they are interrelated.
• By changing the value of the variables in the model (such as
increasing the cost of raw materials) and analyzing the
different equations of the model with a computer, the team
can determine the effects of each change.
• Eventually the management science team presents
management with an objective basis for making a decision.
The Systems Approach
• The systems approach to management views the organization as a
unified, purposeful system composed of interrelated parts.
• This approach gives managers a way of looking at the organization as
a whole and as a part of the larger, external environment.
• Systems theory tells us that the activity of any segment of an
organization affects, in varying degrees, the activity of every other
segment.
• Production managers in a manufacturer’s plant, for example prefer
long uninterrupted production runs of standardized products in order
to maintain maximum efficiency and low costs.
• Marketing managers, on the other hand, who want to offer customers
quick delivery of a wide range of products, would like a flexible
manufacturing schedule that can fill special orders on short notice.
• Systems oriented production managers make scheduling decisions
only after they have identified the impact of these decisions on other
departments and on the entire organization.
The Systems Approach
• The point of the systems approach is that managers cannot function
wholly within the confines of the traditional organization chart. They have
to communicate not only with other employees and departments, but
frequently with representatives of other organizations as well.
Some Key Concepts
• Subsystems: The parts that make up the whole of a system are called
subsystems. And each system in turn may be a subsystem of a still larger
whole. Thus a department is a subsystem of a plant, which may be a
subsystem of a company, which may be a subsystem of an industry.
• Synergy: Synergy means that the whole is greater than the sum of its
parts. In organizational terms, synergy means that as separate
departments within an organization cooperate and interact, they become
more productive than if each were to act in isolation. For example, in a
small firm, it is more efficient for each department to deal with one
Finance department than for each department to have a separate finance
department of its own.
• Open and Closed Systems: A system is considered an open system if it
interacts with its environment; it is considered a closed system if it does
not. All organizations interact with their environment, but the extent to
which they do so varies. An automobile is a perfect example for an open
system.
The Systems Approach
• System Boundary: Each system has a boundary that separates it from
its environment. In a closed system, the system boundary is rigid; in an
open system, the boundary is more flexible. The system boundaries of
many organizations have become increasingly flexible in recent years.
For example, managers at oil companies wishing to engage in offshore
drilling now consider public concern for the environment.
• Flow: A system has flows of information, materials and energy (including
human energy). These enter the system from the environment as inputs
(raw materials for example), undergo transformation processes within the
system (operations that alter them) and exit the system as outputs (goods
and services).
• Feedback: Feedback is the key to system controls. As operations of the
system proceed, information is fed back to the appropriate people, and
perhaps to a computer, so that the work can be assessed and, if
necessary corrected.
Systems theory calls attention to the dynamic and interrelated nature of
organizations and the management task. With a systems perspective,
general managers can more easily maintain a balance between the
needs of the various parts of the enterprises and the needs and goals of
the whole firm.
The Systems Approach
GENERAL
ENVIRONMENT

ECONOMIC
SOCIAL OPERATING
ENVIRONMENT

NEW ENTRANTS
SUPPLIER

PLANNING, ORGANIZING,
INFLUENCING, CONTROLLING
INPUT 🡪 PROCESS🡪 OUTPUT
SUBSTITUTES
POLITICAL
COMPETITION

TECHNOLOGY

CUSTOMER

LEGAL
The Contingency Approach

• The contingency approach (sometimes called the situational

approach) was developed by managers, consultants, and
researchers who tried to apply the concepts of the major
schools to real life situations.
• When methods were highly effective in one situation, failed to
work in other situations. Results differ because situations
differ, a technique that works in one case will not necessarily
work in all cases.
• According to the contingency approach, the manager’s task
is to identify which techniques will, in particular situation,
under particular circumstances and at a particular time, best
contribute to the attainment of management goals.
The Contingency Approach

• Where workers need to be encouraged to increase

productivity, for example, the classical theorist may prescribe
a new work simplification scheme.
• The behavioral scientist may instead seek to create a
psychologically mutating climate and recommend some
approach like job enrichment.
• If the workers are unskilled and training opportunities and
resources are limited, work simplification would be the best
solution. However, with skilled workers driven by pride in
their abilities, a job-enrichment program might be more
effective.
• The contingency approach represents an important turn in
modern management theory, because it portrays each set of
organizational relationships in its unique circumstances.
Organizational and Natural Environments

• External groups with particular agendas are often organized

and powerful and many organizations depend on them for
support.
• Technological, political, economic and social trends can have
major effects on whether or not organizations are successful.
• Today’s managers must pay attention to the natural
environment if we are to preserve the world for future
generations.
• It is difficult to separate ‘organizational’ and ‘natural’
environments because they are ultimately connected.
• To understand organizational environments we must borrow
some concepts from systems theory.
• One of the basic assumptions of systems theory is that
organizations are either self sufficient or self contained.
Organizational and Natural Environments
• They exchange resources with and are dependent upon the
external environment, defined as all elements outside an
organization that are relevant to its operations. (Some of these
elements connect the organizations to the physical world).
• Organizations take inputs (raw materials, money, labor and
energy) from the external environment, transform them into
products or services and then send them back as outputs to the
external environment.
• The external environments have both direct action and indirect
action elements.
• Direct action elements also called stakeholders include
shareholders, unions, suppliers and many others who directly
influence an organization.
• Indirect action elements such as the technology, economy, and
politics of a society, affect the climate in which an organization
operates and have the potential to become direct action elements.
Ethics & Social Responsibility

• Ethics and Social Responsibility are concepts that are

fundamentally about the quality of our relationships over
time.
• Many organizational decisions involve knotty problems where
organizational interests affect the interests of others.
• Companies and managers that ignore moral concerns are
saying to those affected, "we don’t want to invest in making
this relationship better”.
• Even tough unethical behavior may sometimes pay today;
those who ignore ethical issues are heading for trouble over
the long run.
• So companies are using their past experiences and values
and the concerns of the present in setting new moral visions
for the future.
Ethics & Social Responsibility
Examples
• San Francisco bakery instituted a practice of hiring ex-convicts to
fulfill the responsibility of business which has to play a large role in
changing our society. Business people especially those in smaller
companies know how to get things done.
• In response to the homeless situation, one of Ben & Jerry’s
answers was to open a store in Harlem and employ homeless
people to serve ice cream.
• For every UPC code mailed in by consumers, Scott Paper donates
five cents to Ronald McDonald Houses.
• Paul Newman earmarks all of the profits from Newman’s Own food
products for various charities such as the Hole in the Wall Gang, a
camp for children with terminal cancer.
• The Campbell Soup Company has sponsored a long running
program; “Labels for Educations”, that involves supplying
equipment for schools based on the number of Campbell and
Swanson labels sent in by consumers during the school year.
Ethics & Social Responsibility
Examples
• Burger King, along with IBM, operates a similar program. Through
Burgers and Bytes, computers are donated to schools according to
the number of cash register receipts generated. Burger king also
operates Burger King Academy to provide education and social
services for dropouts and truants.
• Colgate-Palmolive kicked off its Partners in Education program,
which doubled as a marketing endeavor and a philanthropic
measure. In return for retailers putting up their display, the
company gave the retailers Map Playground Kits, which included
materials for students to paint their own maps. The stores then
dispersed the kits to local grade schools.
• Reebok ended up launching a new product in 1991 – the Black
Top line of outdoor basketball shoes. Part of the profits from the
shoes are used to renovate basketball courts, such as a court in
South Dade County, Florida, devastated by Hurricane Andrew and
renovated in 1993.
Some Key Concepts
• Corporate social responsibility focuses on what an
organization does that affects the society in which it exists.
• Corporate social responsiveness is a theory of social
responsibility that focuses on how companies respond to
issues, rather than trying to determine their ultimate social
responsibility.
• Corporate social performance is a single theory of
corporate social action encompassing social principles,
processes and policies.
• Ethics is the study of people’s rights and duties, the moral
rules that people apply in making decisions, and the nature
of the relationships among people.
In business, most ethical questions fall into one or more of
four categories: societal, stakeholder, internal policy, or
personal (the individual).
 Terms to Know
• manager management roles
• first-line managers interpersonal roles
• middle managers informational roles
• top managers decisional roles
• management technical skills
• efficiency human skills
• effectiveness conceptual skills
• planning organization
• organizing universality of management
• leading
• controlling
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