1 Chapter 1: Understanding the Manager’s Job

CHAPTER 1
Understanding the Manager’s Job

Part I: An Introduction to Management introduces students to the world of management and establishes
a foundation for the rest of the book. Part I has two chapters. Chapter 1 is entitled “Understanding the
Manager’s Job.” Chapter 2 is entitled “The Environment of Organizations and Managers.”

CHAPTER SUMMARY
Chapter 1 provides an overview of management and the manager’s job. After a brief introduction, the
chapter describes the management process, the various kinds of managers, and managerial functions
and skills. Next, the science and art of management is described. The history of management is then
discussed, beginning with a discussion of the role of theory and history in management. Next, the
chapter introduces and discusses in detail the classical, behavioral, and quantitative perspectives of
management. Integrating perspectives for managers are then described. The chapter concludes by
identifying several contemporary management challenges.

LECTURE OUTLINE
I. An Introduction to Management
An organization is a group of people working together in a structured and coordinated fashion to
achieve a set of goals. Management is a set of activities (including planning and decision making,
organizing, leading, and controlling) directed at an organization’s resources (human, financial,
physical, and information) with the aim of achieving organizational goals in an efficient and
effective manner. A manager is someone whose primary responsibility is to carry out the
management process.
Efficient means using resources wisely and in a cost-effective way. Effective means making the
right decisions and successfully implementing them.
A. Kinds of Managers
1. Levels of Management
a. Top managers are the small group of executives who control the organization by
setting its goals, overall strategy, and operating policies. Top managers also
represent the organization to the external environment. Job titles for top managers
include chief executive officer (CEO), president, and vice president (VP).
b. Middle managers are the largest group of managers in most companies. These
managers hold positions such as plant manager, operations manager, and division
head. They primarily take the policies and plans designed by top managers and
put them into effect. They supervise lower-level managers.
c. First-line managers supervise and coordinate the activities of operating
employees. They often have job titles such as supervisor, coordinator, and office
manager. The majority of their work is direct supervision of their subordinates.
2. Managing in Different Areas of the Organization
a. Marketing managers work in areas related to the marketing function of the
organization. They help to find ways to get consumers and clients to buy the
organization’s products or services.
b. Financial managers deal primarily with an organization’s financial resources and
are involved in such activities as accounting, cash management, and investments.

© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
c. Operations managers are concerned with creating and managing the systems that
create an organization’s products and services. They achieve their goals through
production control, inventory control, quality control, site selection, and plant
layout.
d. Human resources managers are responsible for hiring and developing employees.
They are concerned with recruiting and selecting employees, training and
development, and discharging low-performing and problem employees.
e. Administrative managers are generalists who have some basic familiarity with all
functional areas of management rather than specialized training in any one area.
f. Specialized types of managers include those who work in public relations, R&D,
internal consulting, and international business.
B. Basic Management Functions
The management process, as noted earlier, involves the four basic functions of planning and
decision making, organizing, leading, and controlling.
1. Planning
a. Planning means setting an organization’s goals and deciding how best to achieve
them.
b. Decision making, a part of the planning process, involves selecting a course of
action from a set of alternatives.
2. Organizing
Organizing involves determining how activities and resources are to be grouped.
3. Leading
Leading is the set of processes used to get members of the organization to work
together to further the interests of the organization.
4. Controlling
Controlling is monitoring the progress of the organization as it works toward its goals
to ensure that it is effectively and efficiently achieving these goals.
C. Fundamental Management Skills
1. Technical Skills
Technical skills are necessary to accomplish or understand the specific kind of work
done in an organization.
2. Interpersonal Skills
Interpersonal skills rely on the ability to communicate with, understand, and motivate
individuals and groups.
3. Conceptual Skills
Conceptual skills include the ability to think in abstract terms and the mental capacity
to understand the “big picture” or the overall workings of the organization and its
environment.
4. Diagnostic Skills
Diagnostic skills consist of the ability to recognize the symptoms of a problem and
then determine an action plan to fix it.
5. Communication Skills
Communication skills are abilities to effectively convey ideas and information to
others and effectively receive ideas and information from others.
6. Decision-Making Skills
Decision-making skills include the ability to correctly recognize and define problems
and opportunities and to then select an appropriate course of action to solve problems
and capitalize on opportunities.
7. Time Management Skills
Time management skills are abilities such as prioritizing work, working efficiently,
and delegating appropriately.
D. The Science and the Art of Management
1. The Science of Management
Management is partly a science, because some aspects of management are objective
and can be approached with rationality and logic.
Management is partly an art, because some aspects of management are subjective and
are based on intuition and experience.
II. The Evolution of Management
A. The Importance of History and Theory
1. Why Theory?
A theory provides a simple conceptual framework for organizing knowledge and
providing a blueprint to help organizations achieve their goals.
2. Why History?
Contributions from past industrialists have molded the American culture, and managers
can benefit from an awareness of these contributions.
B. The Historical Context of Management
While the practice of management can be traced back thousands of years, it was not given
serious attention until the 1800s, when large organizations emerged.
C. The Classical Management Perspective
The classical management perspective includes two approaches: scientific management
and administrative management.
1. Scientific Management
Scientific management focuses on ways to improve the performance of individual
workers.
a. Frederick W. Taylor saw workers soldiering, or deliberately working beneath
their potential. He divided each job into parts and determined how much time
each part of the job should take, thus indicating what each worker should be
producing. He designed the most efficient way of doing each part of the job, and
instituted a piecework pay system with incentives for workers who met or
exceeded the target output level.
b. Frank and Lillian Gilbreth, a husband-and-wife team, also helped to find more
efficient ways for workers to produce output.
2. Administrative Management
Administrative management focuses on managing the total organization.
a. Henri Fayol was the first to identify the four management functions—planning,
organizing, leading, and controlling—and he developed guidelines for managers
to follow.
b. Lyndall Urwick is best known for integrating scientific management with
administrative management.
c. Max Weber outlined the concept of bureaucracy based on a rational set of
guidelines for structuring organizations in the most efficient manner. His work is
the foundation of contemporary organization theory.
3. The Classical Management Perspective Today
a. Contributions of the classical management perspective are that it laid the
foundation for management theory; it identified key techniques and approaches
that are still relevant today; and it made management a valid subject of scientific
inquiry.
b. Limitations include that it is not well suited for complex or dynamic
organizations, it provided universal procedures that are not appropriate in all
settings, and it slighted the role of the individual in organizations.
D. The Behavioral Management Perspective
 The behavioral management perspective placed more emphasis on individual attitudes and
behaviors and on group and behavioral processes. Hugo Munsterberg and Mary Parker
Follett were early contributors to this perspective.
1. The Hawthorne Studies
a. The Hawthorne studies, performed by Elton Mayo, showed that when
illumination was increased, productivity increased. However, productivity also
increased in a control group, where the lighting did not change. The increase in
productivity was attributed to the fact that the workers were having extra
attention paid to them for perhaps the first time.
b. Other studies found that employees will not work as fast as they can when being
paid piecework wages. Instead, they will perform to the level informally set by
the group in order to be accepted by the group. These two studies, and others, led
Mayo to the conclusion that individual and social processes played major roles in
shaping employee attitudes and behavior at work.
2. The Human Relations Movement
The human relations movement, which stemmed from the Hawthorne studies, is
based on the idea that a manager’s concern for workers will lead to increased
satisfaction and improved performance. The movement includes the need theories of
motivation, such as Maslow’s hierarchy of needs and McGregor’s Theory X and
Theory Y.
3. Contemporary Behavioral Science in Management
The emergence of organizational behavior occurred because of the too-simplistic
descriptions of work behavior by the human relationists. Organizational behavior
takes a holistic view of behavior and addresses individual, group, and organization
processes.
4. The Behavioral Management Perspective Today
a. Contributions include that it gave insights into interpersonal processes, focused
managerial attention on these processes, and challenged the view of employees as
tools and not resources.
b. Limitations include that prediction is difficult due to the complexity of human
behavior, managers may be reluctant to adopt some of the behavioral concepts,
and contributions may not be communicated to practicing managers in an
understandable form.
E. The Quantitative Management Perspective
The quantitative management perspective focuses on decision making, cost-effectiveness,
mathematical models, and the use of computers in organizations. The two branches of the
quantitative perspective are management science and operations management.
1. Management Science
Management science focuses specifically on the development of mathematical
models. These models help organizations to try out various activities with the use of a
computer. Modeling can help managers locate the best way to do things and save
money and time.
2. Operations Management
Operations management is an applied form of management science that helps
organizations develop techniques to produce their products and services more
efficiently.
3. The Quantitative Management Perspective Today
a. Contributions include that it developed sophisticated quantitative techniques that
improve decision making, and it increased understanding of complex
organizational processes.
b. Limitations are that it cannot fully explain or predict behavior, that mathematical
sophistication may come at the expense of other important managerial skills, and
that the models may require unrealistic or unfounded assumptions.
III. Contemporary Management Perspectives
A. The Systems Perspective
1. A system is an interrelated set of elements functioning as a whole. An organization as
a system is composed of four elements: inputs (material, human, financial, and
informational resources), transformation processes (technological and managerial
processes), outputs (products or services), and feedback (reactions from the
environment).
2. Open systems are systems that interact with their environment. Closed systems do not
interact with their environment.
3. Subsystems are systems within a broader system.
4. Synergy refers to units that are more successful working together than working alone.
5. Entropy is the process that leads to decline.
B. The Contingency Perspective
Universal perspectives try to identify the “one best way” to manage organizations. The
contingency perspective argues that universal theories cannot be applied to organizations
because each organization is unique.
C. Contemporary Management Challenges and Opportunities
1. Contemporary Applied Practices
Books that highlight the management practices of successful firms or outline
conceptual or theoretical models to guide managers are having an important impact on
the theory and practice of management today.
2. Contemporary Management Challenges
a. Globalization is a significant challenge as managers must reach out across
cultural and national boundaries.
b. There is renewed importance placed on ethics, social responsibility, and corporate
governance.
c. Quality also poses an important challenge, as a basis for competition, lowering
costs, and increasing productivity.
d. The shift toward a service economy continues to be important, challenging
managers who may be more familiar with manufacturing sectors.
e. The economic recession of 2008–2010 and slow recovery in 2011–2015 pose
many challenges as well as offer some opportunities.
f. Managers must contend with the changing nature of the workplace, including
workforce reductions and expansion.
g. The management of diversity is an important opportunity and challenge,
especially with regard to younger generations of workers.
h. Organizations need more than ever to monitor the environment and change to
keep pace with it.
i. Technological advances, especially in communications, have increased the pace
of work, reduced managers’ available time to consider decisions, and increased
the amount of information managers must process.