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introduction to
MANAGEMENT
Digitized by the Internet Archive
in 2022 with funding from
Kahle/Austin Foundation

httos://archive.org/details/introductiontoma0000comb
introduction to
MANAGEMENT

WANAUNAULNUN
introduction to
MANAGEMENT

Colin Combe

UNIVERSITY PRESS
G =< OXFORD
Ces | UNIVERSITY PRESS

Great Clarendon Street, Oxford, OX2 6DP,


United Kingdom
Oxford University Press is a department of the University of Oxford.
It furthers the University’s objective of excellence in research, scholarship,
and education by publishing worldwide. Oxford is a registered trade mark of
Oxford University Press in the UK and in certain other countries
© Colin Combe 2014
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for information only. Oxford disclaims any responsibility for the materials
contained in any third party website referenced in this work.
Acknowledgements

A number of people have helped in the compilation of this book including members of the
Department of Management at the Glasgow School for Business and Society at Glasgow
Caledonian University. In particular, | am grateful to Dr Peter Duncan for providing a number
of invaluable skillsets for the book. Thanks also to the management practitioners who con-
tributed their valuable time and expertise to the practitioner case studies including Fernando
Mendez Navia (Dex Europe), Alison Keir (NHS Forth Valley), Claire Carpenter (The Melting Pot),
and James Bowes (Bowes Consulting). | have also benefited from the valuable guidance and
support of the editorial team at Oxford University Press including Francesca Griffin, Benjamin
Pettitt, Nicola Hartley, and Sian Jenkins. Thanks also to Sacha Cook for helping to maintain the
momentum of the project at critical stages of the work.
| am also grateful to the reviewers for their wise counsel and invaluable guidance and rec-
ommendations. | have tried wherever possible to incorporate their suggestions to improve
the quality of the book. Personal acknowledgements go to Debbie and Richard Combe for
their patience and understanding during the long hours of researching and writing the book
and to Robert and Catriona Brown for providing some welcome relief from the computer
screen. | also acknowledge the inspirational legacy of Keith Thurley of the London School of
Economics.
Guide to the Book

Identifying and defining


Clear, concise learning outcomes begin each chapter
and help to contextualise the chapter's objectives. These
Aeognise ancexplain therunctions andrates ofmanagers outcomes are then revisited in the chapter summaries.
@ UMGOTSEANG CE jpeceiry anc ansnys0 cxanagomont skim andcompetencies inctterent
‘organtsatlonm satiines
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sores" manzgoment practices and competencies inthe contemporary

(© Grahsate Me chatienges facing moder managers

Each introduction explains the relevance of each chap-


ter topic to managers. A clear, succinct overview of how
the chapter will develop Is also given.

Clear definitions are provided throughout the text to


help all students who are new to management get to
DeDefinition grips with key terms. All definitions are also consolidated
in a glossary at the end of the book for easy reference.
zand motion studies: the science of timing eq
Time ang,of a work task over a set period of time.

Management in practice
The skillsets provide insightful demonstrations of what

©
skills are needed, how to apply them, and why they are
SK
xitset 1
ReéReading skills relevant to both academic study and the professional
workplace. The skillsets are cross referenced to each
Atroductior

{a} Inte arch is a key skill in academic activity and require}


other throughout the text and are designed to be used
practice. Most departments or schools in universities as a package to provide a holistic skills base.

™ ‘N
Management theories are played out in the real world
Mi every day. Contemporary examples from a truly inter-
= Mini case 1.3
Setting the cultural national range of sources help you make the link from
Atat Ben & Jerry's theory to reality. They also come equipped with QR
«many organisational settings the founders of the bu codes to take you directly to the relevant organisation's
“[__workers assimilate. Here, the personality, beliefs, and
website.
Each chapter includes an in-depth and elongated case Qa
Ca study study of a chosen organisation or individual manager =.
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fanising work sched from a wide range of both service and manufacturing ®
fs)
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organisations from around the globe. The case study


=)
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ta Paris-based industrial company specialising in


°
focuses on particular key themes linked to the chapter 0)
12]
egates, concrete, and gypsum. It is the world’s second la and is followed by discussion points, questions and tasks. °
d Holcim Group. Lafarge was established in 1833 by J °a
e Ardeche region of France, an area rich in limestone ré

Testing and applying your


understanding
At the end of every case study, discussion points and
questions help you assess your understanding of the
ssion point
Discussion point ‘success
ofBen &Jerry's isdown toa clearly defined bus central themes and your readiness to progress to the
2 ofluck. Discuss.
The success ofBen@ next part of the topic.
ice of luck. Discu” Visitthe Ben and Jerry's website at the above address. As:
leveltowhich the organisational culture mentioned above
Contrast Ben and Jerry's organisational values with those of.
http-/Avww.unilever.co.uk/

Each chapter concludes with a set of questions and tasks


/ Chapter quest er
apc seocoid WRFSceMaangioent aimed at consolidating the main theories, approaches,
What are the problems commonly aS} sng ofthehumanrelstionstheorists?
What
were the key findings ofthe hur" *?Pm#o*
9management? and case study examples to prepare you for assessment.
fi commercial business and explain the transformation process evident in
What is the ‘contingency’ approach t
Choose a modern commercialipmantary
bxonthese questions canbefound ontheORC

source Cents

Model answers to all questions in the book can be


found on the Online Resource Centre (ORC). These pro-
vide the opportunity to see different ways of answering
Chapter One: introduction to Manag
edad coiavecy Mfr Bective caremanagement skit afGrupoDex such questions and to check you are on the right track.
cussion point
sD powibte to kdentdy the cove uite hat manager need to be weceislui?

Chapter 1: Mul Test yourself on each chapter of the textbook and re-
Instructions ceive instant feedback on your answers through the
Answer the following questions an
J]questions andthenpress "Submit togetyourscore. MCQs on the Online Resource Centre (ORC).
Question 1

Inwhat order domanagers tY45managers typicabyperformthemanagers functions?


a) organising, planni-/98"##2. Pansing, contoting, lacing
0) organising, leading, planning. contoting
) planning, organising, Jeading, controling
) plareing, organising. controling. leading

The flashcard glossary will help you to memorise the key


fon to Manse
/ 4) Instructions: Click on the CarGusrsctton
buttons to view the previous/ftom
terms in the book; they can be viewed on portable de-
additional functionality. _
vices such as iPhones. These can be found on the Online
PEPPEE EEE eset tenet Resource Centre (ORC).
Total Quality 4% ©
Reflecting and summarising
The critical reflection boxes focus on limitations of theo-
i Critcai reflection ry, new and different perspectives or schools of thought,
Whit are the limiting or a viewpoint different from that expressed in the main
ase ated snk text. They also provide an opportunity to reflect on the
St evolution of thinking around key themes.
‘ dine Studies wasoneofthemost ambitious r
___2us Brestill pored over byacademics, managers, and
some
but scorned by others, the studies have been contro,
bate since the results were published in the 1930s. One pai
introduced
by the researchers when monitoring and recq

y At the end of each chapter you will find a summary


/ Summary ary of the key points covered as well as a brief paragraph
Ba he ;
@ Understand the me™ = mening ofmanagementasaconey explaining why each is important to academic study, or
yea definition of management and an overviey é rae = =
The chapter gave a definitiorical contextbefore goingon tooutinethey the workplace. These points revisit those outlined in the
que . - se keywriters
inthe field such as Peter Drucker, H é
mentinitshistorical CO, perspectives onmanagement edtoacrtial} .
learning outcomes at the beginning
F
of the chapter so
me of the key vermanagement should be considered a science or an
you can check your understanding of key themes.
@ Recognise and explain the functions and roles of mq
The key functions of management were identified as foreg
commanding and leading. and coordinating and controlling.

Taking your learning further


To take your learning further, reading lists have been
/ Further readi ie provided as guides to finding out more about the issues
© Witzel,
M.(2011)AHistory of er coh deren ofmarge inn ised withi h ch
This book presents anevolutionimoder era The author charts the changing economic, s raised within eac Cc apter, and to help you locate the
the early civilisations to the me?2 bw (or explaining how management thinking has chan
eras.n some Instancestheauthorhighighsthewoid-changl US@fUl academic literature in the field.
and political environment as 2 great management thinkers such as Frederick Taylor and the e
and helped to define certain gement at the height of the Industrial Revolution. An interesting
. ¢, @ Management theories into historical context.
TencanCe Ofte) Worn ae Laake? Aauee iepiigen ys site
waeede z troducing Management: elopment Guide (3rd edn),
of scientific
RFHeinemann.
eo n-
For students new to management, the text byWilliams offers a coherent and understand:
introduction to the basic themes of management including innovations in management thi

>.
a A series of annotated web links, organised by chapter, Yy
/ Chapter 1 We . has been provided to point you in the direction of
Apple important material on the principles of management.
Www.apple.com

Ben & Jerry's


www.benjerry.com

QR Code images are used throughout this book. QR Code is a registered trademark of DENSO
WAVE INCORPORATED. If your mobile device does not have a QR Code reader try this website
for advice: www.mobile-barcodes.com/qr-code-software
Guide to the Online
Resource Centre

www.oxfordtextbooks.co.uk/ 10),6 10) (0)


UNIVERSITY PRESS

orc/combe/ Home > Bupinean S.Eoononics > Business > Combs:


inroduction
loMansagment
aa Combe: Introduction to Management
Multiple choice questions:

The Online Resource Centre that emergent Select resources by chapter


Answers to questions in
ie Please select a chapter =|]
accompanies this book provides
on |
serercreecures
students and registered adopters
Test bank Test yourself on each chapter of the book and receive Instant feedback

of the textbook with ready-to-use brary ofvideoFinks Flashcard glossary


PowerPoint slides Memorize and test your knowledge of key terms and definitions to ald revision with these

teaching and learning materials. interactive flashcards

Answers tp questions In the hook


These resources are free of charge AB subjects
Buninese & Exonomice
Guidance on answering the questions in the book

Web links
and designed to maximise the Business
Annotated links to useful sources of Information on management for further reading

learning experience.

Lecturer resources
These resources are password protected. Access is avail-
able to adopters of the book. Please contact your local
sales representative.

Library of video links


— Conte teat © Hamper! » +k we
Library.of video links
Annotated links to a range of useful videos demonstrate
various aspects of management in practice with accom-
panying teaching notes.

PowerPoint slides
Customisable PowerPoint slides have been included
+ Conceptual ==m===> - Knowledge and
understanding for use in lecture presentations. Arranged by chapter
* Human eump + Interpersonal and
motivational theme, the slides may also be used as handouts in class.
+ Technical ===> - Competence and
skill
+ Awareness of how
+ Cultural awareness esti to deal with

[A basic principle of management according to 4


goods and services.
Test bank
-———————- The test bank is a fully customisable resource contain-
ing interactive questions, such as multiple choice, true/
false, and fill in the blank, accompanied by answers and
General Feedback feedback with which to test your students.
A basic principle of management according to \j
Contents in Brief
so
Vir.

List of Figures and Tables xxi


Preface xxiv

Part] Management Principles and Functions 1


1 Introduction to Management
Skillset 1: Reading skills 3]
2 Management Theory 34
Skillset 2: Referencing 63
3 Planning 69
Skillset 3: Time management 104
4 Organising 110
Skillset 4: Sourcing materials 142
5 Leading 149
Skillset 5: Analysing a case study 179
6 Controlling 185
Skillset 6: Exam techniques 215
7 Decision Making 222
Skillset 7: Literature review 251

Part2 Managing People and Communications 261


8 Human Resource Management 263
Skillset 8: Typical exam questions and answer guidance 291
9 Motivation and Communications 296
Skillset 9: Presentation skills 328
10 Managing Groups and Teams Bs5
Skillset 10: Essay writing 363

Part3 Management and Organisations 369


11. Organisational Structure 37
Skillset 11: Essay example 405
12 Organisational Culture 409
Skillset 12: Critical analysis 443
13 Ethics and Corporate Social Responsibility 450
Skillset 13: Avoiding plagiarism 478
Part 4 Managing Strategy, Change, and Innovation | 485

14 Strategic Management 487


Skillset 14: Personal Development Planning 521
15 Marketing 528
Skillset 15: Reflective practice 560
Brief
in
Contents
16 Change Management and Innovation 565
Skillset 16: Overview see

Glossary 596
References 601
Index 621
Detailed Contents

List of Figures and Tables xxi


Preface XXIV

Part] Management Principles and Functions 1

1. Introduction to Management s

Learning outcomes 3
Definition 5
Introduction 5
What is management? 6
Functions of managers 8
Management roles 11
Levels of management 17
New Public Management 19
Managerial skills and competencies in the modern global environment 21
Challenges facing managers in the modern business environment 24

Skillset 1: Reading skills 3]

Minicase 1.1 Practitioner—Effective core management skills at Grupo Dex 10


Mini case 1.2 Managing with style and charisma: the case of Lee lacocca 13
Minicase 1.3 Setting the cultural tone at Ben & Jerry's 23.
Management words of wisdom 26

2 Management Theory 34

Learning outcomes 34
Definition 36
Introduction 36
Origins of management thought Si
Competing values framework 38
Rational goal models of management oh)
Internal process model 45
Human relations models 49
Open systems 4
Contingency 56

Skillset 2: Referencing 63
Mini case 2.1 Scientific management at the Ford motor plant
Mini case 2.2 Bureaucratic reform in the Indian Administrative Service
Mini case 2.3. The fashion industry
Case study: — Foxconn in China

Planning
Detailed
Contents
Learning outcomes
Definitions
Introduction
The planning process
Goals and objectives of organisations
Advantages of planning
Types of plans
The business plan
Business continuity planning
Management skills in the planning process
Limitations of planning

Skillset 3: Time management

Mini case 3.1 Revising performance plans at Hitachi


Mini case 3.2 Contingency planning at the World Trade Center
Mini case 3.3 Succession planning at Visy
Case study: London 2012 Sustainability Plan

Organising

Learning outcomes
Definition
Introduction
Formalising the organisation of work
Organising authority, chain of command, and span of control
Centralisation and decentralisation
Organising human resources

Skillset 4: Sourcing materials

M nicase 4.1 Chain of command in the Nigerian Police Force


Mini case 4.2 All change at DC Thomson
M nicase 4.3 Tocentralise or decentralise? Procter & Gamble
Ce se study: Organising work schedules at Lafarge

Leading

Learning outcomes
Definition
Introduction
Management and leadership 2 9
Traits theory 153 a
Situational theory 155 J
Functional theory 157 oS
Styles and behavioural theories lisy, =
Group dynamics and styles of leadership 159 Fs
The Ohio Studies 164
Contingency approaches 165
Transformational and transactional leadership 168
Power and influence 169
Leadership in a global environment 172

Skillset
5: Analysing a case study Ive)

Mini case 5.1 The charismatic Mr Chavez 156


Mini case 5.2 Leading turnaround expert Pierre-Yves Gerbeau 160
Mini case 5.3 FIFA: Crisis? What crisis? 17]
Case study: — The inconspicuous Carlos Slim Helu 3

Controlling 185

Learning outcomes 185


Definition 186
Introduction 187
Types of control systems 187
The control model 191
Production and quality control 192
Control and Total Quality Management 195
Human resources control 201
Financial control 203
Strategic control 206
Operational control systems 208
Characteristics of effective control systems 209

Skillset 6: Exam techniques ANS

Mini case 6.1 TATA Daewoo Commercial Vehicles 190


Mini case 6.2 Integrating Total Quality Management (TQM) in Botswana 125
Mini case 6.3 A failure to control at Allied Irish Bank 205
Case study: | Control and creativity the Quest Media way 209

Decision Making 222

Learning outcomes LBD


Definition 223
Introduction 224
Conditions affecting decision making 224
Programmed and non-programmed decisions 226
Types of decision making models 228
Errors and biases in decision making 243
Decision making and cognitive styles of management 244
Skillset 7: Literature review 251
Detailed
Contents
Mini case 7.1 Ethical decision making model for social care
provision in New Zealand 231
Mini case 7.2 Intuitive decision making at Intuit India LS,
Mini case 7.3 Decision making in the Loya Jirga of Afghanistan 240
Case study: — The decision making process at the European Patent Office 246

Part 2 Managing People and Communications 261

Human Resource Management

Learning outcomes
Definition
Introduction
Core HRM activities: attraction, recruitment, and retention
Human resource management strategies
Equality and fairness
Managing diversity
Human resource management processes
Developing workers as assets
Managing employee relations

Skillset 8: Typical exam questions and answer guidance

Mini case 8.1 Recruitment at Canadian Forces


Mini case 8.2 Managing diversity at Qantas
Mini case 8.3 Practitioner—Healthcare provision for the elderly at
NHS Forth Valley and Stirling Council
Case study: Managing training and development at MI5

Motivation and Communications

Learning outcomes
Definitions
Introduction
Theoretical perspectives of motivation
Reward systems
Empowerment
Communications
Barriers to effective communications
Skillset 9: Presentation skills 328 ~)
iv)
rd
Mini case 9.1 Motivating the workforce at the Polish Competence Centre 303 =
o
Mini case 9.2 Smoke-free factory boosts worker motivation at Azucarlito 307 a.
a)
Mini case 9.3 Peer recognition as a motivator at Informa 32 °
s
=
Case study: Total worker empowerment at Semco 522 ©
s
>
u
10 Managing Groups and Teams 333
Learning outcomes 333
Definitions 3135)
Introduction 335
Groups and teams 336
The development of groups 338
Factors that determine group effectiveness 341
Types of teams 342
Advantages of teams 347
Limitations of teams and teamwork 350
Managing effective teams and teamwork 352
Virtual teams 354

Skillset 10: Essay writing 363

Mini case 10.1 Fast track innovation at the Nordstrom Innovation Lab 346
Minicase 10.2 Team building the BMW way 5O0
Mini case 10.3 Practitioner—Bowes Consulting—A team approach
to managing growth Sp)
Case study: Les Folies Bergére Theatre 358

Part 3 Management and Organisations 369

11 Organisational Structure

Learning outcomes
Definition ©
Introduction
Determinants of structure
Types of organisational structures
Strategic alliances

Skillset 11: Essay example

Mini case 11.1 Restructuring at Xerox


Minicase 11.2 The disastrous consequences of an inadequate
organisational structure at BP
Mini case 11.3 Restructuring at Gazprom
Case study: Organisational structure at the Ministry of Health in Oman
12 Organisational Culture

Learning outcomes
Definition
Introduction
Organisations and organisational culture
Detailed
Contents Formation of organisational culture
Models of organisational culture
Managing and influencing a positive organisational culture
Trust
Managing culture in the modern business environment
Culture and the agile organisation

Skillset 12: Critical analysis

Mini case 12.1 Organisational culture in Saudi Arabia


Minicase 12.2 Generating a culture ofcreativity at Pixar University
Mini case 12.3. Knowledge sharing at the World Bank
Case study: The Toyota Way

13 Ethics and Corporate Social Responsibility

Learning outcomes
Definitions
Introduction
Philosophical approaches to ethics
Advantages of ethical business practice and CSR
Ethics, CSR, and stakeholders
The role of CSR in mission and goals
A framework for CSR

Skillset 13: Avoiding plagiarism

Mini case 13.1 Managing the ethics of stem cell research at Pfizer
Mini case 13.2 Whistleblowing on GlaxoSmithKline in Puerto Rico
Mini case 13.3 Moral meltdown at News International
Case study: The Fairtrade credentials of Starbucks in Guatemala

Learning outcomes 487


Definitions 489
Introduction 489
The strategy process 490
Levels of strategy in organisations 490
The development of strategic management 491 o
®las
Environmental analysis 494 a
The competitive environment 495 ry
o
Internal analysis: the Positioning approach 499 a
°
Strategy options and choice 503 =
®
toad

Alternative methods for delivering strategy 505 =


oo
2)
Strategic choices 507
Global perspectives on strategy 510

Skillset 14: Personal Development Planning 521

Mini case 14.1 The structure of the petrol retailing industry 497
Mini case 14.2 Adding value at AES Cargo, Hungary 502
Mini case 14.3. The rise and rise ofAir Asia 508
Case study: Gaining and sustaining competitive advantage at Amazon.com 514

Marketing = hi
5 v4 &

Learning outcomes 528


Definition 530
Introduction
Types and aims of marketing
Marketing plan
Demand and competitor intelligence
Marketing audit
The marketing mix
Managing the brand
New approaches to marketing
Marketing using new media applications
Customer relationship management

Skillset 15: Reflective practice

Mini case 15.1 The marketing mix at Nokia


Mini case 15.2 Global branding at Adidas
Mini case 15.3 Marketing at IKEA using social media
Case study: New media marketing strategies for wine—from Chile to China

Learning outcomes
Definitions
Introduction
Models of organisational change
Scale of change
Managing change for developing innovation
Managing information systems
Managing resistance and barriers to change 582
Influences on responses to change 583
Reasons for resistance 584
Managing successful change 585
Tactics for overcoming resistance to change 585

Detailed
Contents Organisational development 586

Skillset 16: Overview 395

Mini case 16.1 Business process reengineering at the State Bank of India 573
Mini case 16.2 — Practitioner—Managing social innovation at The Melting Pot Si
Mini case 16.3 _ IT project failure at the NHS 580
Case study: Change management at the BBC 587

Glossary 596
References 601
Index 621
List of Figures and Tables

Chapter1
Fleure 721.1 Levels of management in organisations 18
Figure 1.2 Types of modern management 24

Chapter 2
Figure 2.1 Competing values model 39
Figure 2.2 The transformation process 55
Fleure #8.2:3 Complexity and an open system 55
Table Fas Fayol’s fourteen principles of good management 50
Table A Pe Scientific management at Foxconn in Shenzhen 59

Chapter 3
iourcams.l The planning process 72
Figure 32.3.2 Three levels of planning 1a
Figure 3.3 Scenario planning process 85
Figure 3.4 Forecasting and scenario planning 85
Ficure ae s.5 Stages of succession planning 87
Table 3.1 Identifying critical roles in an organisation 88
Table 3.2 Role analysis form 89
Table 3.3 Succession plan 89
Table 3.4 Responsibilities for sustainability for London 2012 99

Chapter 4
Figure 4.1 Ranking system in the Nigerian Police Force 120
Figure 4.2 Command structure in the Nigerian Police Force 121
Figure 4.3 Theoretical perspectives of work design 129
Figure 4.4 Gantt Chart 133
Table 4.1 Three-shift system 138
Table 4.2 Four-on/four-off system 138
Table 4.3 Four-on/two-off system so

Chapter 5
Table 5.1 Five Factor Model 154
Table 5.2 Leadership styles 158
Table She! Summary of Lewin, Lippitt, and White study 161
Table 5.4 Likert's systems of management style 163
Table 5-5 Sources of power 170

Chapter 6
Figure 6.1 Key steps in a control process 189
Figure 6.2 Components of a Total Quality Management system 196
Figure 6.3 Sources of control of Total Quality Management systems 198
Table 6.1 Quality management systems 194
Table 6.2 Dimensions of Total Quality Management 97

Chapter 7
Figure 7.1 The decision making process 224
Figure 7.2 Rational decision making model 229
Figure 7.3 Intuition as a decision making support mechanism 235
Figure 7.4 Political model of decision making 238
Tables
and
Figures
of
List
Figure 7.5 Decision making and cognitive styles of management 245
Figure 7.6 European patent procedure 247
Figure 7.7 From search to substantive examination of a patent application 247
Table 7.1 Errors and bias in decision making 244
Table 7.2 The rational decision making model applied to conducting
a literature review 259

Chapter 8
Figure 8.1 Approaches to human resource strategies 269
Figure 8.2 Key elements for developing workers as assets 282

Chapter 9
Figure 9.1 Maslow’s Hierarchy of Needs 300
Figure 9.2 Motivation-oriented reward systems 310
Figure 9.3 Types of communication and information richness ae
Figure 9.4 Barriers to communications 320
Figure 9.5 Semco organisational structure 324
Table 9.1 Advantages and disadvantages of empowerment Sls

Chapter 10
Figure 10.1 Tuckman’'s model of group development 338
Figure 10.2 Types of teams in organisations 343
Figure 10.3 Virtual team for a web design company 357
Figure 10.4 Production team at Les Folies Bergére 358
Table 10.1 Key differences between work groups and teams 337
Table 10.2 Belbin's team roles and characteristics 340

Chapter 11
Figure 16 Determinants of organisational structure 374
Figure 11.2 Hierarchical structure 384
Figure 11.3 Flat structure 386
Figure 11.4 Functional structure 387
Figure 11.5 Geographical and product-based structures 389
Figure 11.6 Multidivisional structure 390
Figure (ile7/ Strategic business units 39]
Figure 11.8 Matrix structure 392
Figure 11.9 Virtual organisation 395
Figure 11.10 Organisational structure of the Ministry of Health in Oman 400
Table 11.1 Advantages and disadvantages of hierarchical structures 385
Table 11.2 Advantages and disadvantages of flat structures 386 =
Table 11.3 Advantages and disadvantages of functional structures 388 a
Table 11.4 Advantages and disadvantages of multidivisional structures 391 : =
Table 11.5 Advantages and disadvantages of the matrix structure 393 -
Table 11.6 Advantages and disadvantages of virtual organisations 396 5
Table 11.7 Advantages and disadvantages of strategic alliances Boi) 6
a.
Chapter 12 7
Figure 12.1 Layers of cultural influence 412 =
Figure 12.2 Layers of corporate culture 412 i
Figures 912:3 Formation of organisational culture 413
Figure 12.4 The cultural web 415
Figure 12.5 Zone of knowledge creation 430
Figure 12.6 Components of the agile organisation 433
Table 12.1 Types of organisational culture 420

Chapter13
Figure 13.1 Philosophical approaches to ethics 453
Figure 13.2 Competing responsibilities that influence CSR 462
Figure 13.3 Key characteristics of a CSR framework 471
Figure 13.4 Levels of CSR attainment 472

Chapter 14
Figure 14.1 The strategy process 490
Figure 14.2 The value chain model 499
Figure 14.3 The value chain for AES Cargo 502
Figure 14.4 Ansoff’s product/market matrix 504
Figure 14.5 Global drivers 512
Table 14.1 Development of strategic management thinking since the 1950s 493
Table 14.2 PEST factors 494

Chapter 15
Figure 15.1 Marketing plan Sy
Figure 15.2 Consumer categories 534
Figure 15.3 Five key criteria for evaluating CRM strategy 551
Figure 15.4 Key drivers of the global wine trade 554
Table 15.1 Types of marketing 531
Table 15.2 Consumer and brand values 542
Table 15.3 Gibbs Learning Cycle 561
Table 15.4 How Skillsets combine to aid particular tasks and activities 564

Chapter 16
Figure 16.1 Force-field analysis model 568
Figure 16.2 Stage gate process 576
Figure 16.3 Information systems implementation activities 580
Figure 16.4 Potential individual responses to change 582
Table 16.1 Internal and external factors for learning and knowledge ays
Preface

Introduction
This book provides a valuable introduction to key issues, concepts, ideas, and theoretical
perspectives on management for students, teachers, and practitioners. The book is primarily
aimed at undergraduate and postgraduate students who are new to the study of management.
The contents have been designed, and the writing styled, in a way that deliberately appeals to
those who seek an accessible, flexible, and fully supported introductory text on management.
Although the book necessarily adopts the ‘language’ of business and management, the ideas,
theories, and concepts are all clearly explained and supported by definitions and a glossary of
terms where appropriate. The book is flexible in the sense that it supports a number of differ-
ent learning approaches including text-based analysis and discussion, critical reflection, and
case study discussion points, questions, and tasks. The Online Resource Centre (ORC) adds a
further learning support facility and includes answers to the case study questions, multiple-
choice questions (MCQs) and answers, PowerPoint slides linked to each chapter topic, and a
series of test bank questions and answers for teachers.

Contents
The book comprises four main parts. Part One covers Management Principles and Functions
including a treatment of what management is and the functions and roles of managers; and
the development and application of management theory in different sectors and international
contexts. Part One offers clear explanations and examples of the management process in ac-
tion including key functions of planning, organising, leading, and controlling. Although these
functions are presented in stages, it is clear that they overlap each other and are usually under-
taken simultaneously. Thus, the sequence in which they are presented is simply a matter of
choice. Part One also covers the important decision-making skill of management and adopts a
critical view of the theoretical models devised to help the decision making process.
Part Two comprises elements relating to Managing People and Communications by first ad-
dressing the role, aims, and importance of human resource management (HRM) within com-
mon themes of managing equality and diversity in a global economy. This part of the book
also features an explanation and critical evaluation of theoretical perspectives on motivation
of workers and addresses key issues of empowerment and rewards in the modern business
environment. The management of groups and teams is linked to this and is the focus of further
explanation and critical scrutiny.

Part Three focuses on Management and Organisations with an emphasis on organisational


structures (including modern iterations such as virtual organisations), organisational culture,
and ethics. Issues of corporate social responsibility (CSR) and an ethical stance in business are
important contemporary issues facing managers as they seek trust-forming relationships with
consumers and other stakeholders. The analysis of these key concepts relates the evolution of
thinking in CSR and business ethics and delivers a valuable insight into why these ideas and
concepts have become an important element in managing organisations in the modern era.
Part Four features Managing Strategy, Change, and Innovation. This part begins with an over-
view of the strategy process before going on to apply theoretical models that help managers
formulate and implement strategy. The discussion also extends to the evaluation of strategy.
aILJa1
Each part of the strategic process is subject to a detailed explanation and also a critique of the
limitations of each model applied. The analysis then turns to that of change. Here, the discus-
sion begins with a rationale for the reasons why change is necessary in modern organisations.
Detailed accounts of types of organisational change are outlined as are the management issues
relating to the change process. This discussion leads on to the treatment of the culture of
innovation and creativity with an emphasis on managing and influencing the development
of innovation. A deeper discussion of information systems and knowledge management as
catalysts for change and innovation is also included.

Key theme: Skillsets


A key added value to students using the book is the enhancement of skills that the content
helps to deliver. The learning processes in the main body of the text, which are followed and
supplemented by the Skillsets, provide students with insightful demonstrations of how to
apply key skills to improve the quality of their academic performance and, ultimately, their
employability. In the main body of the text these include the ability to choose and apply ap-
propriate theoretical models; make effective decisions; design work schedules; motivate work-
ers; understand the need for an ethical dimension to business; analyse internal and external
environments as part of a strategy process; and many others.
The Skillsets provide a practical guide to applying many of the techniques that underpin aca-
demic work. These include essay writing skills; exam techniques; presentation skills; reading
skills; personal development planning; time management; referencing techniques; critical anal-
ysis; sourcing materials; and analysing and using case studies. This section also gives examples
of typical exam questions and guidance to model answers, and an example of an academic
essay. These skills are not only a vital part of students’ portfolio of technical abilities that help
them to navigate their way through their academic career, but are also transferable to the
workplace and help improve employability prospects.

Key theme: International in scope


The book has a distinct international flavour with case studies featuring examples of contem-
porary management issues and challenges in different contexts. These include the emerging
economic powerhouses of Brazil, Russia, India, and China (the so-called BRIC nations); fast-
developing nations of strategic significance such as Malaysia and Mexico; an example of a
supra-national entity, the European Union (EU); and other distinct and diverse examples such
as the rise and fall of Toyota in Japan; the organisation of police forces in Nigeria; the introduc-
tion of Total Quality Management techniques in Botswana; and the charismatic leadership
style of former Venezuelan President Hugo Chavez.
The international tenor of the narrative content and examples used is designed to reflect
the truly multi-ethnic and global characteristics of the modern student body. The content
and design of the book provides clear and concise explanations and mini case studies,
chapter case studies, question and answer sections, glossaries and additional web-based
materials that will be of practical help to both domestic UK and international students. The
content offers an insight into management techniques and practices evident in a broad
aUU range of regions and countries, whilst recognising the integrated characteristics of global
£ management.
o[=
a The book enhances learning and understanding in an international context by illustrating
comparisons of management practice between different regions as well as highlighting the key
social and cultural differences that influence management practice in different contexts and
countries. The discussion covers many different sectors including service, knowledge econ-
omy, digital economy, pharmaceuticals, agriculture, retailing, public sector, social enterprise,
and renewables among others. The regions and countries selected span the globe and range
from a publicly owned organisation in the UK (BBC), to private enterprises in Europe and the
USA (Nokia, IKEA, Procter & Gamble, Ford); a family run business in Australia (Visy) to a public
body in Germany (European Patent Office). The role of multinationals in developing nations
such as Guatemala (Starbucks) and Puerto Rico (Pfizer) are also included. The book features
discussion on some recent trends in management such as the challenge of managing a social
enterprise (The Melting Pot) and the management techniques for supporting innovation and
creativity among small and medium sized enterprises (Dex Europe).

Key theme: Critical reflection


A key feature of the book is the critical dimension to much of the discussion. Although the book
provides a comprehensive account of key introductory concepts of management, knowledge
and understanding cannot ever be complete. Not all information is available at any given time,
environments change (sometimes quickly and without warning), attitudes and beliefs change,
technology changes rapidly, and so on. What we are dealing with is a dynamic environment
in which management takes place. What is relevant, useful, and appropriate in one timeframe
may become less relevant, of limited practical use, and inappropriate in the next. Also, different
writers and contributors to management may come from different schools of thought, differ-
ent cultures, or different political and economic environments. These cannot help but colour
the way they see the world, and in particular the role and practice of management within that
environment.

To account for these dynamic and diverse features of the environment in which the study
of management takes place, the book pauses occasionally for what is called ‘critical reflec-
tion’. The boxes containing critical reflections provide an opportunity to take note of some
of the limitations associated with the approach to explaining and discussing key topics on
management. They provide an opportunity to remind ourselves that other perspectives on
the same topic exist and that they too have something to contribute to our understanding of
management. Critical reflection also helps us to evaluate the true contribution to knowledge
and understanding of a chosen approach by comparing it to other approaches or perspectives.
Critical reflection is a skill that needs to be developed over time so that we are able to make
balanced judgements regarding the quality, rigour, and robustness of analysis, discussion, and
findings of the work we produce. It is a key emotional intelligence asset that is highly valued by
employers and reflects the intellectual maturity of students and workers.

Teaching support
The book is also a valuable resource for teachers of management as it provides a systematic
approach to key management issues and concepts; demonstrates how to apply a range of
appropriate models to help enhance knowledge and insight into both management and the
environment in which management practice takes place; provides a critical evaluation of mod- a)
a
els and frameworks; and gives access to a set of new case studies. The book aligns the syllabus ak
w
of management teaching in many universities and colleges and can be used as a core text (a)
7)
or supplementary reading for courses and modules on management. The Online Resource
Centre (ORC) provides a range of additional support materials for teachers including:
© PowerPoint slides relating to each chapter with added hyperlinks to podcasts, YouTube
videos and other sources of information;
© outline answers for the mini and main case studies in the book;
® test bank questions with 10 multiple-choice questions per chapter;
© avideo library of clips to YouTube and other sites.
Introduction to
Management

Learning outcomes
@ Understand the meaning of management as a concept

® Recognise and explain the functions and roles of managers

® Identify and analyse management skills and competencies in different


organisational settings

®@ Appreciate management practices and competencies in the contemporary global


environment

® Evaluate the challenges facing modern managers


Bill Gates is probably one of the most successful and high-profile managers of amajor corpo-
ration in the modern era. The former CEO and co-founder of Microsoft has put into practice
his management philosophy and principles to good effect over a number of decades. Today,
Microsoft remains one of the world’s most successful corporate giants. Much of the suc-
cess can be put down to some simple but effective management principles. In the context
of the business where Microsoft operates, Bill Gates firmly believes that effective managers
must have an understanding of what it is they are expecting their workers to do. So, pro-
gramme managers must understand programming, marketing managers must understand
marketing, and so on. Only by possessing a measure of technical competence can managers
earn the respect of subordinates and make good decisions (Thielen, 1999). Unlike many
other organisations who hire generalist managers, Microsoft primarily focuses on the level
of specialist expertise candidates have before putting them into management positions.
In contrast to other management protocols practised elsewhere (such as in Japan where
seniority or ‘next in line’ characterises promotion criteria, The Economist, 3 January 2008),
Microsoft only promote those who have demonstrated that they are the best person for the
job rather than being influenced by extraneous factors such as internal politics, networking,
or even luck. The analogy with Charles Darwin’s ‘natural selection’ in the animal kingdom is
a suitable metaphor for the guiding principles under which Bill Gates exercised his judge-
ment on his managerial team. Thus, at Microsoft, those who perform well in one timeframe
cannot rest on their laurels because they will quickly be out-performed by others. And those
who cannot maintain the highest level of performance get replaced as they are no longer
an asset to the business. Managers have to demonstrate an ability to adapt to changes in
the environment whilst maintaining high levels of performance. This regime may appear
brutal, but it accounts for the excellence that has maintained a competitive advantage for
the company over four decades. The case is an illustration of a distinct management style in
action underpinned by guiding principles. There are many different management styles and
principles of management, some of which are discussed in this book. There is no generic
model of management that guarantees effectiveness in all situations so managers need to
find the style and methods that work for them in the environment in which they operate. It
is this diversity within an unpredictable and changing environment that makes the study of
management so compelling.

Skillset 1
Reading skills

At the end of this chapter you will find the first in the series of Skillset sections. These
sections highlight the skills you will need in the course of your academic study but also
many skills which will be invaluable in the business world beyond university.
This chapter's Skillset covers reading skills.

Managers rely on accurate, relevant, and timely information to help them make decisions. Very
often this will entail a research effort by designated workers who are tasked with generating the
type of information managers need. Deciding what information is needed, how to access it,
and making sense of what it means are among the key research skills evident among workers
in organisations. Some organisations have research as their core activity, such as research insti-
tutions or universities, most have someone in a designated role where research is carried out,
such as a Knowledge Transfer Coordinator. Students will also have to acquire research skills in
order to meet the challenges presented in their academic careers, such as writing essays, reports,
dissertations, or theses. Among the important research skills lies the discipline of reading.
Accessing and engaging with the topics, cases, tasks, and other content requires the applica-
tion of some research skills such as sourcing information, case analysis, literature searches
and reviews, and managing workloads. This opening chapter will introduce management as a
concept and a function where a broad range of skills and competencies are required. Reading
skills form part of management skills and Skillset 1 is designed to offer an overview of what
comprises reading skills and how they can be used effectively.

Definition
There are many definitions of management but most coalesce around common themes to offer a
general explanation. Management is the organisation and coordination of the activities of a busi-
ness (or some other formal organisational setting) in order to achieve defined aims and objectives.

Introduction
Management has a long history and dates back to well before it became a subject of formal study.
As societies developed so too did the need for management in organising and deploying resources
for the needs of society. Empires were built on effective management of resources and the tech-
nologies used to protect those civilisations. The Incas in South America, the ancient Egyptians, and
the Romans in Europe are good examples of empires built on some form of management process.
By the eighteenth century feudal forms of society were giving way to more industrially based
structures where small-scale and craft-based production was replaced by mass production. This
involved a different form of management from that which had previously characterised the work-
place. Instead of small-scale agrarian-based economies, many societies in Western Europe and
the USA developed productive capacities that required a high level of control over large numbers
of employees. The factory system ushered in a form of management based on control, author-
ity, discipline, and strict rules and regulations. In many respects this was simply an extension of
the way that such societies were structured; the class system ensured that the landed gentry or
capital owning classes dominated the mass ranks of the workforce gleaned from the lower work-
ing class. The dawn of the wage labourer had arrived and with it a draconian form of manage-
ment. Typical of this was the advent of scientific management proposed by Frederick Taylor in
the late nineteenth century. Taylor (1911) believed that it was possible to measure in great detail
the amount of work that each worker should perform as his or her daily duty and that wage rates
(he believed that workers were not motivated by anything other than economic reward) could
be set accordingly. This gave rise to the development of time and motion studies—a system that is
still in evidence in some forms today. Chapter 2 discusses scientific management in more detail.

In the aftermath of the First World War (1914-18) workers in Europe started agitating for a new
deal and a new social structure that was based on fairness and social welfare rather than one
dominated by privilege for the few. Management practices reflected this change by initiating
a trend towards more humane characteristics. The human relations school of management
emerged as a counterbalance to the more rigid and process-driven management practices
applied in the factory system. Protagonists of this approach included the industrial philanthro-
pist Seebohm Rowntree (1901), Mary Parker Follett (1920), Elton Mayo (1933), and later the so-
called neo-human relations school that included McGregor (1960) and Herzberg et al. (1959).

By the 1960s and 1970s the emphasis of management had evolved to an extent that writers
such as Robert Greenleaf (creator of the servant leadership model) put forward radical ideas
that saw a directive form of management (getting people to do things) replaced by a steward-
ship form of management (helping people to do things). The late twentieth century was char-
acterised by concepts around ‘best practice’ management which included excellence and total
quality management, reengineering, systems thinking, cross-functional teams, empowerment,
delayering and flat organisation charts, learning organisation, dialogue, reinventing work, and
diversity (Goetsche and Davis, 2011). The advent of the internet as a disruptive technology
also changed management practices with a greater emphasis emerging on how to manage the
advantages of speed and increased access to information and knowledge. This coincided with
renewed interest in management thinking around the concepts of the learning organisation
and diversity. All of these characteristics, concepts, and issues are addressed at some stage in
this book, but for now attention turns to providing an introduction to management.

This opening chapter begins with a description of what management is. There are many different
definitions of management according to different writers but for the purposes of clarity the defi-
nitions presented here call on the thinking of three key writers in the field: Peter Drucker, Henry
Mintzberg, and Henri Fayol. This is followed by an outline and explanation of the main functions
and roles of managers and includes a discussion around the different layers of management typi-
cally observed in organisations. The changing role of management in the public sector is recog-
nised by an overview of the development of the new public management model. Analysis then
extends to cover key management skills and competencies applied in the modern global environ-
ment. The chapter concludes with a critical evaluation of the challenges facing modern managers.

What is management?
Many writers have contributed to the understanding of what management is including such
luminary names in the field as Peter Drucker, Henry Mintzberg, and Henri Fayol among many
others. Drucker (2001) outlined a five point guide that encapsulates the essence of what
management is. These are:
1 Making people's strengths effective and their weaknesses irrelevant.
2 Enhancing the ability of people to contribute.

3 Integrating people in a common venture by thinking through, setting, and exemplifying the
organisational objectives, values, and goals.
4 Enabling the enterprise and its members to grow and develop through training, developing,
and teaching.
5 Ensuring everyone knows what needs to be accomplished, what they can expect of managers,
and what is expected of them.
Term
Definition

Management: the organisation and coordination of activities to achieve stated aims and
objectives.
ae
Ieee
he
Le

Fundamentally, Drucker viewed management as a means by which it is possible to coordinate


hundreds or thousands of people with different skills and knowledge to achieve common
goals.

Mintzberg (1989) defines management as having the following basic principles:


to ensure the efficient production of goods and services; JUdWas
jeic
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|
eu
to design and maintain the stability of organisational operations;
to adapt the organisation, in a controlled way, to the changing environment;
to ensure that the organisation serves the ends of those persons who control it;
to serve as the key information link between the organisation and its environment;
to operate the organisation's status system.

Frenchman Henri Fayol was a trained mining engineer who spent most of his career in general
management. From 1888 to 1918 he was Managing Director of the French mining and metal-
lurgical combine Commentry-Fourchamboult Decazerville. Fayol’s main contribution to man-
agement thought was his 1916 text, which appeared in an English version in 1949 as ‘General
and Industrial Management’ This translation from the French has resulted in some discussion
of the use of the word ‘management (with its industrial connotations) as a translation or ex-
pression of the French word ‘administration’. However, Fayol clearly states that management
plays a very important part in the government of all undertakings: large or small, industrial,
commercial, political, religious, or any other. Fayol wrote that to manage is to forecast and
plan, to organise, to command, to coordinate, and to control (Cunningham-Wood and Wood,
2001). This analysis still forms the basis of one of the most frequently adopted views of man-
agement. Fayol was one of the first theorists to stress the key position of the formal organisa-
tion chart and job descriptions. He also firmly advocated the belief that management could,
and should, be taught.

Critical reflection
Is management a science or an art?

Since management first became a subject for study there has been a debate as to whether it con-
stitutes an art or a science, or both. No definitive answer to this has been forthcoming, nor is it
likely to as it tends to polarise opinion. There are elements of both art and science in the practice of
management. If art is defined as a function that effects change and achieves stated aims through
a systematic and deliberate course of action, then it clearly displays those characteristics. In this
regard, management can be deemed an art from the perspective that it is an aspect of human
behaviour that delivers knowledge and know-how as a means of achieving stated aims. In effect
the art of management delivers the ‘how’ aspect of human behaviour. Science, on the other hand,
represents a systematic body of knowledge linked to a particular area of study. Fundamentally,
science is concerned with cause and effect relationships between different variables. The body of
knowledge consists of concepts, principles, and theoretical perspectives that help an understand-
ing of past events and inform predictions about the outcomes of future actions. Again, these are
evident in the practice of management. Essentially, science explains the ‘why’.
Protagonists of the ‘management as an art’ camp point to the fact that management involves
the use of skills, knowledge, and techniques; that effective management relies on the applica-
tion of these in many different settings and contexts. There is also a creative aspect to manage-
ment such as employing different approaches to interpersonal relationships, problem solving,
or innovative means of motivating workers. Influencing people's behaviour so that they help
Functions
and
Principles
Management achieve stated aims is an art form. Alternatively, those who believe management is a science
point to the fact that it exhibits all the characteristics of what constitutes a science. That is, it
contains a body of knowledge based on widely accepted principles that are applied in many
different organisational settings and environments. These principles cover a wide range of dif-
ferent management functions including delegating authority, decision making, business analy-
sis, motivating workers, and so on. These principles continue to be used because they have
been robustly tested through continuous observation and verified through empirical evidence.
So, most likely, management is a combination of both art and science and the most successful
managers are the ones who can deploy elements of both when and where appropriate.

Functions of managers
The main functions of managers involve forecasting and planning, organising, commanding
and leading, coordinating and controlling. These key functions are of sufficient importance to
merit dedicated individual chapters but it is useful to offer an overview of them here.

Forecasting and planning


Forecasting and planning involves assessing the future and making provision for it. The prob-
lems of forecasting and planning are many, but managers should ensure that within the organ-
isation there is unity of direction, continuity, flexibility, and precision (Fayol, 1949). Planning is
the process used by managers to identify and select appropriate goals and courses of action
for an organisation. The planning function determines how effective and efficient the or-
ganisation is and determines the strategy of the organisation. Forecasting and planning are
undertaken within a fast-moving and changing environment but are essential tools for gaining
a better understanding of that environment so that more effective and informed decisions can
be made. All organisations undertake some form of forward planning and forecasting of how
the future will look. Forecasting is an essential part of planning for public sector organisations
such as the police, health services, local authorities, and transport agencies as they need to
match income with expected demand stretching well into the future. For example, the pro-
posed high speed train line (HS2) linking London with Manchester and Leeds has to take into
account future demand for rail travel, the expected business benefits, and the overall cost of
the project. The planning also assesses the costs in terms of finance and the effects on the
environment. A close understanding of these variables helps to inform decisions on large-
scale infrastructure projects that have inordinately large social, economic, and environmental
Impacts. .

Organising
Organising ensures that the organisation has the necessary resources in terms of staff, money,
and materials and that they are brought together in the correct balance. Organising also in-
volves managers creating structures of working relationships between employees that en-
courages collaboration and helps to achieve their goals. Managers will group people into
departments according to the tasks performed and will also establish lines of authority and re-
sponsibility for members. An organisational structure is the outcome of organising. This struc-
ture coordinates and motivates employees so that they work together to achieve the identified >
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|
goals (Jones and George, 2007).

Commanding and leading


Commanding involves maintaining activity among employees by making decisions and com-
municating them to subordinates. Leadership involves setting a clear direction for the organi-
sation; creating and communicating a vision that employees can follow; and ensuring that
employees understand their role in achieving goals. Thus, a leader is a person who exercises in-
fluence over other people (Huczynski and Buchanan, 2003). In his leadership role as chairman
of London 2012, Lord Coe was able to use a combination of these attributes to help deliver a
successful Olympic Games and smooth over some of the problematic issues such as the failure
of the private sector security firm G4S to fulfil its remit and the ineffective ticket allocation
system for some events (Hopkins, 2012).
The ideal outcome of the leading function is a high level of motivation and commitment from
employees to the organisation (Stum, 1999). Although leadership is different from manage-
ment, the two are interlinked. Management necessarily requires some form of leadership as,
by implication, to manage is to accept responsibility for influencing the behaviour of others.
There have been a number of theoretical frameworks developed over the decades and Bolden
et al. (2003) provide a useful review of those that have been most influential. Of course, it is
often the case that managers undertake leadership responsibilities without much leadership
style being in evidence. The work carried out may be process oriented and managers only
issue directives that are acted upon. However, for the most part, modern organisations require
managers to lead in order to achieve the stated aims and objectives.

Coordinating
Coordinating involves the manager liaising with others in the organisation to ensure that ac-
tivities occur at the right time and place and to ensure that they do not adversely affect other
areas of organisational activity. This can only be attained by a two-way flow of information
between workers and managers. The achievement of aims and objectives relies on effective
coordination between different levels of management and workers. It is also reliant on the
ability of managers to devise work schedules and outcomes based on the resources and capa-
bilities within the organisation.
Control
The control function requires managers to effectively assess the extent to which the organisa-
tion is achieving its goals and to initiate corrective action to improve performance if neces-
sary. Control and the monitoring of performance feature at all levels of the organisation from
individuals, to teams of workers, departments, and the organisation as a whole. Control allows
performance to be measured and regulates the efficiency and effectiveness of the organisa-
tion's activities (Hales, 1986). Levels of control will vary according to the organisational setting
and context. For example, in process-driven industries the control function is high due to the
continuous production line characteristics of the working environment. Alternatively, in many
creative industries the control function is low as freedom of expression and movement is part of
creating an environment and organisational culture that is conducive to creativity. In some cases
there will be a mixture of both. For example, award winning Japanese architect Tadao Ando
emphasises the need forfreedom in exploring possibilities mixing the intuitive and illogical with
the discipline that engineering and structural design requires (Royal Academy of Arts, 2013).

|)
Functions
and
Principles
Management
>)

Mini case 1.1: Practitioner


Effective core management
skills at Grupo Dex

Grupo Dex is an international consultancy specialising in the provision of services on European


affairs, strategic planning, local development, and international economic and institutional
relationships to private enterprises and public administrations. Founded in 1997, the company
is based in Gijon in the Asturias region of northern Spain and has a presence in five other
countries. The company is loosely structured to help maximise competitiveness through the
expertise and knowledge sharing of a multidisciplinary team specialising in economics, law,
and international relations. The group consists of four main divisions including Dex, | + Dex,
Dex Europe, and Dex Central Europe.

Founding partner and chief executive officer (CEO) Fernando Mendez Navia has been involved
in setting the strategic direction of the company as well as managing the deployment of staff in
the myriad different projects in the portfolio. Fernando highlights his core skills as negotiation
skills, cultural understanding, innovative approaches to problem solving, flexibility, and adapt-
ability. He says ‘It is necessary to have competence in many different aspects of business and
relationship building in the modern environment. Flexibility is key to so many problem solving
situations and opportunities that emerge as a normal part of running a business like ours. We
think about flexibility when recruiting staff so that we can deploy their skills in many differ-
ent ways’. It is these skills that have leveraged an advantage for Grupo Dex in the competitive
arena of international cooperation projects and EU funded projects. In the industry in which
Grupo Dex competes, it is necessary for staff to possess and be able to deploy all of these skills
and attributes. Fernando gives examples of why flexibility is important by stating that ‘in the
management of an EU funded project there are typically numerous international partners that
comprise the project team, each with their own ways of doing business, cultural norms, lan-
guages, and expectations of outcomes. It is important for Dex and our partners and clients that
we are able to meet the challenges that these present’. One of the key roles of Grupo Dex staff
is to manage the cultural diversity of the team so that the partners’ skills and experience can be
brought to bear on the successful running of the project and problems of misunderstandings,
interpretations, and expectations can be solved in a manner that ensures continuity of work
and progress towards successful completion.

The cultural awareness attributes need to be complemented by technical skills in understand-


ing the mechanisms offunding bodies—their regulations, guidelines, and procedures. Fernando
recognises the importance of knowledge and insight to the organisation. He says ‘we need to
be able to demonstrate superior knowledge and expertise in our specialist field to maintain
the confidence of partners and clients. That is what drives the value for an organisation such
as Dex’. Partners often rely on Grupo Dex staff for guidance on tasks such as budget spending,
financial audits, partnership agreements, administration, and others. It is this technical aspect
of the company’s service provision that adds real value to their partners and clients and the
expertise they provide accounts for the growth of the business in the last decade or so. Much
of this success is down to the ability of Grupo Dex management to effectively control and coor-
dinate current projects (operational) whilst simultaneously planning for the future (strategic). yuaWwase
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This latter attribute involves using experience and judgement to interpret the way in which the
EU as a trading and economic entity is likely to be shaped in future and what opportunities
will become available going forward. To gain an insight into these developments, Grupo Dex
staff deploys effective interpersonal skills to network on a pan-European basis, build strategic
partnerships, and establish a presence in key decision making institutions across Europe.

Source: www.grupodex.com

T
+

Is it possible to identify the core skills that managers need to be successful?

Visit the Grupo Dex website, select a project from their portfolio, and evaluate how the func-
tions of managers previously discussed in this chapter would be applicable. Would some
functions be more central than others?
Give an example of an operational management activity and a strategic management activity
at Grupo Dex.

Online Resource Centre


wy Author commentary on this discussion point and questions can be found on the Online
Resource Centre at: www.oxfordtextbooks.co.uk/orc/combele/

Management roles
As described by Mintzberg (1989) a role is a set of specific tasks a person performs linked to
the position they hold. Roles are directed inside as well as outside the organisation. There are
three broad role categories:
1 interpersonal;
2 informational;
3 decisional.
Interpersonal roles
Managers have interpersonal roles to coordinate and interact with employees and provide
direction to the organisation. Three main roles include being the organisation's figurehead,
leader, and liaison link to others.

Figurehead role
The figurehead symbolises the organisation and what it is trying to achieve. This role requires
managers to be highly visible so that stakeholders come to recognise the manager as a symbol
of the organisation. Sometimes the figurehead role extends to the marketing and promotion of
the organisation and/or its products or services. The figurehead uses human and communica-
tions skills to carry out this function (Lussier, 2008). For example, the role that Richard Branson
plays as head of the Virgin group extends beyond the boardroom to incorporate roles within
the marketing and advertising function of the organisation. The Branson image and persona
is used as a symbol of what the organisation stands for and how it views itself. In other cases
the figurehead may assume a position of authority that extends to the wider community. For
Functions
and
Principles
Management
Part) example, many chairmen try to influence government policy or regulation or even the industry
in which they operate as part of their role as the figurehead of an organisation.

Leader role
Leadership can involve a wide range of roles as it incorporates many different activities.
Acclaimed writer on leadership John Adair (2006) states that the leader role may involve pro-
viding motivation, inspiration, and encouragement to others. Leaders have to demonstrate
qualities that others admire or seek to emulate or who, through force of character and per-
sonality, can get people to accept and support their views regarding the vision and mission of
the organisation they represent. As noted previously, leadership differs from management.
There is no consensus on what makes an effective leader in terms of the skills and attributes
needed to engage and influence followers, but it is true that a measure of leadership is the
extent to which they can gather a following to support their ideas and aspirations. Whilst it
may be possible to teach management practices, it is not possible to teach someone to be a
leader as it invariably involves some attributes that are determined at birth, or during early life
development, such as charisma and personality. All organisations need some form of leader-
ship whether it is a patriarchal figure in a small-scale family business, or head of a large-scale
multinational. Failure to provide effective leadership can seriously undermine the credibility
of an organisation. The crisis that engulfed the BBC in 2012 is a case in point: newly appointed
Director General George Entwistle was unable to control events surrounding poor editorial
control of news stories featuring child abuse allegations (Batty and Mitchell, 2012). Such high-
profile organisations require strong leadership to navigate the myriad different, complex, and
politically sensitive situations that are a common feature of their activities.

Liaison role

Managers also have a liaison role which is used to link and coordinate people inside and outside
the organisation to help achieve goals (Mintzberg, 1989). This role is very much related to skills
in communication, networking, interpersonal skills, and so on. Managers must understand the
types of relationships they need to foster in order to help their organisation achieve its aims
and objectives. This may involve communicating with a diverse range of people representing
many different groups such as government, trade unions, consumer groups, suppliers, part-
ners, industry regulators, and so on. The role of liaison between government and media has be-
come a high profile and sometimes controversial position. Former UK Prime Minister Margaret
Thatcher relied on her press secretary Sir Bernard Ingham as a conduit for expressing her style
of government and how it was presented to the wider world. Alistair Campbell held a similar
position in the Blair government and his account of the role and his relationship with the prime
minister and press is outlined in his diaries (Campbell, 2007). Both exhibited an understand-
ing of how to present policy and the work of government in a positive light even though their
combative style often had the opposite effect. In a liaison role, different approaches will be
required to deal with the myriad of different people involved and managers need to develop
an understanding of the subtle nuances that define the relevant communication style that is
appropriate to each group or individual. The more effective managers are at utilising that skill,
the greater the benefits to the organisation through the application of the liaison role.

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Managing with style and charisma:


the case of Lee lacocca

Acting as a figurehead of an organisation is one of the key roles of top management and re-
quires attributes beyond the technical knowledge of the processes that transform inputs into
outputs in the organisation. Rather, the effectiveness of a figurehead is the manner in which he
represents the organisation, provides advocacy and guidance, develops and communicates the
vision and strategy, and demonstrates leadership. This may require a combination of different
attributes such as analytical skills, strategic thinking, intellect, charisma, drive, courage, com-
munications skills, and so on. Few managers possess all of these qualities but some have been
able to harness a select few to make a radical difference to the organisation they represent.
The lack of leadership qualities across modern corporate America forms the basis of Lee
lacocca’s own withering critique of why the United States has suffered economic decline in the
2000s (lacocca, 2008).
Perhaps one of the most celebrated figureheads of a major corporation is that of former chief
executive officer (CEO) of US car maker Chrysler Corporation, Lee lacocca. The car industry in
the USA was in crisis in the late 1970s as it struggled with rising fuel prices, structural inefficien-
cies, and intense competition from Germany and Japan. lacocca used his strategic thinking skills
and a powerful personality to turn around the fortunes of Chrysler from a position where its
future existence was in doubt. These two attributes combined to great effect as he set about
dismantling the thirty-five business units that comprised the organisational structure to one that
was leaner and fit for purpose. This was also designed to reinvigorate the culture within the
organisation. This latter aspect was helped along by the figurehead duties of lacocca himself as
his powerful ego ensured that he was highly visible and vocal and therefore listened to. Although
his authoritarian style of leadership may not have been appropriate in all circumstances and
settings, in the context of Chrysler at that time it was the perfect antidote for the general malaise
sweeping the organisation. An illustration of his willingness to act is outlined in his autobiog-
raphy where he recalls that he sacked some thirty vice-presidents in his first three years at the
helm (lacocca, 1986). lacocca sought managers who could set an example of demonstrable
good leadership so that the trickle-down effects would instil a new and positive culture among
workers. He also reached out to people, for example he persuaded key personnel in rival com-
panies to join him at Chrysler and drive forward his change agenda and he gave a seat on the
board to a labour union representative. Importantly, he used his influencing skills and power to
negotiate a Congress approved loan to stave off bankruptcy when Chrysler hit its worst financial
crisis early into his reign as CEO. lacocca is one of numerous examples of effective leaders and
figureheads within organisations whose presence, charisma, and business acumen have defined
an era. Others such as John D. Rockefeller (Standard Oil), Jack Welch (General Electric), and Steve
Jobs (Apple) had similar transformational effects on the organisations they represented.

Sources:
lacocca, L. (2008) Where Have All The Leaders Gone, New York, NY, Pocket Books.
lacocca, L. (1986) lacocca: An Autobiography, New York, NY, Bantam USA.

Discussion point

Do organisational figureheads always need to possess a dominant personality type?

Questions and tasks

Lee lacocca, while lauded for his managerial skills, has also been critiqued by some commen-
tators. Investigate lacocca's career and assess the situations in which lacocca’s judgement has
Functions
and
Principles
Management
o>»)
been called into question. Do you agree with the critique?
Visit the Lee lacocca website, and review his Leadership Scorecard (http://www.leeiacocca.
com/scorecard/scorecard.pdf). Select a contemporary business person and evaluate their
leadership skills and style against these criteria.

/ Online Resource Centre


i Author commentary on this discussion point and questions can be found on the
Online Resource Centre at: www.oxfordtextbooks.co.uk/orc/combele/

Informational roles
Informational roles are associated with the tasks needed to obtain and transmit information
for the management of the organisation. Three main roles are monitor, disseminator, and
spokesperson roles.

Monitor role

The monitor role requires managers to analyse information from both the internal and exter-
nal environment as a means of making better informed decisions (Mintzberg, 1979). Managers
should acquire attributes of knowing what information to look for that is relevant to their or-
ganisation and industry in terms of influencing performance. They should also be able to apply
techniques for helping make sense of information and contextualise it to the environment in
which their organisation operates. In many instances effective monitoring by management
can lead to a competitive advantage as the outcomes can offer better insights into what op-
portunities can be exploited as well as predicting the emergence of threats so that contingen-
cies can be put in place to deal with them.

Disseminator role

The disseminator role refers to how managers transmit information to influence the attitudes
and behaviour of employees. In many ways this may be rightly viewed as the most important
management skill of all (Adair, 2009). This role requires superior communications skills that
may include oral and written skills and even body language. Here, it is important that managers
understand the correct media to use to disseminate information. For example, there are some
communications that are best suited to face-to-face conversation rather than via electronic
media. Telephone conversations may be useful for speeding up the exchange of information,
but the lack of visible body language may mean that the manager is left unaware of the reac-
tion of the recipient to the communication. Social media are increasingly used in the workplace
but whilst some workers are used to this form of media, for others it may be an alien system
that they do not feel comfortable using (Bennett et al., 2010). Developments in information
and communication technologies (ICTs) have broadened the scope of possible media through
which managers can disseminate information and many have greatly improved the presenta-
tion of key information to individuals or groups of workers. For example, e-mail is a ubiquitous
and effective tool for disseminating information where there is no requirement for formality or
visual references between sender and receiver. Effective dissemination requires an understand-
ing of the appropriate media and the balance, tone, and nuance of the communication sent.
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Spokesperson role
Organisations do not exist in isolation from the wider community and therefore it is neces-
sary for the figurehead to act as a spokesperson on behalf of the organisation. This is closely
linked to the liaison role outlined above. This usually involves speaking to the media, customer
representative groups, industry and trade bodies, governments, universities and other educa-
tional and training institutions, and many others. The role relies on superior communications
skills which can be honed over time through experience and training (Hartvigsen, 2007). It is
vital that managers are able to communicate the mission and aims of the organisation they
represent and to present it in a positive but also realistic light. It is likely that managers will be
confronted with situations or events that require a response from the organisation, such as
in cases of industrial dispute, or health and safety concerns of consumers. Here, the spokes-
person is the main conduit for information from the organisation to the outside world. Not all
managers are adept at this aspect of the job, however, and very often there are staff members
whose remit includes that of media spokesperson.

Decisional roles
Decisional roles are associated with the methods managers use to plan strategy and utilise
resources to achieve goals. Decision making is discussed in more detail in Chapter 7 but it is
useful to note here that this role forms one of the most important aspects of management.
Managers will be confronted with decision making duties on a daily basis and they require a
range of skills and attributes to be effective. To deal with the potentially complex factors in-
fluencing decision making, Teale et al. (2003) emphasise the integrative approach. Some deci-
sions will be operational in nature and may only be informed by past precedent, procedure, or
experience. Others will have a strategic dimension to them that requires more analytical and
intuitive skills alongside experience and knowledge. Either way, managers need to exude con-
fidence in decision making so that others around them feel a sense that they are in command
of their environment and showing leadership (Boyatzis, 1982).
The style of decision making differs markedly between managers. Some may take an egalli-
tarian approach whereby they allow subordinates a say in the process, others may be more
authoritative and make decisions entirely on their own. Very often the effectiveness of decision
making depends on the way it is communicated as much as the nature of it. If those affected by
the decision understand why it has been made and how to transfer it into action then it is more
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all

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