Management in Organizations: Business Administration - Essay Example

 Management in Organizations: Business Administration Introduction From ancient times, the man has been looking to do his jobs and tasks in an organized manner. With the passage of time the man learnt from his different sort of experiences to arrange the life standards. However, the academic and research work on management started in the recent history. In this paper an endeavor has been made to discuss the principles of management by reviewing concept of management in history as well as modern principles of management has been discussed that took the concept of management in almost every field of life. Since leadership is different from management, therefore evolution of leadership has been discussed through different academic theories on the basis of need, process and reinforcement. Leadership brings productive changes in organization, thus importance of change management and basic guiding principles are provided for management authorities to show self example at their work places to put positive influence on their subordinates. A brief touch about five fundamental managerial functions is discussed like planning, organizing, directing, coordinating and controlling while a synthesis between principles and practices of management has been explained by providing practical examples of managers in performing different practices such as interpersonal, informational and decisional practices. 1.0 Principles of Management The history of principles of management is not very old. It started in 1900 but has emerged as the central theme of our age and economy. Now it calculates our economic progress, makes employer of our educated people, increases of our resources, strengthens the national defence, and moulder of our society. The historical records in this perspective are scattered, vague as well as scarce. However, there is no doubt that there is a rich heritage of ideas and deeds in management discipline from the very past as almost in all civilizations as the daily life, government matters and business activities had certain concepts of management. 1.1 Historical Review of Principle of Management 1.1.1 Sumerian Civilization (5,000 B.C.). They introduced vast tax system, collected and managed tremendous amount of goods, flocks, herds, revenues and estates. Priests were answerable to the chief priest. All inventories were recorded in written from. 1.1.2 Egyptian Civilization (5,000-525 BC). The architectural wonder of Pyramids, recognition of value of planning and the use of staff advice and the understanding of managerial authority and responsibility were the concepts established in that society. 1.1.3 Babylonian Civilization. The Babylonian civilization was rich with laws concerning sales, loans, contracts, partnership, agreements, and promissory notes. Probably the most significant contribution of the Babylonians to management thought was the code of Hammurabi, the ruler of Babylon. 1.1.4 Indus Civilization. In Indus Civilization, Pakistani cities of Mohenjo-daro and Harappa appear dominant. They were well-planned on modern architectural designs, and had all possible civic amenities like water supply, drainage system, roads and transport, temples, shops, workshops and houses. The Indus Civilization had a remarkable uniform level of integrated administrative principles, and implies internal trade within the state. Similarly, the Harappans also employed regular system of weights and measures. 1.1.5 Greek Civilization Concept. The Greeks recognized the principles of management that maximum output is achieved through the use of uniform methods at stipulated tempos. Socrates, the great Greek philosopher, believed that good manager of a family would work equally well as President of a city or as a minister of defence. This, of course, underscores the importance of universal principles of management. 1.1.6 Roman Civilization Concept. With determination and superior managerial abilities, the Romans gained control Europe, Syria and all the north of Africa. In the year 284 AD, Diocletian initiated a system of successive delegation of authority to effectively manage the vast territory. He divided the entire empire into 101 provinces. 1.1.7 Industrial Revolution The most important influence that changes the basic principles of management during the last three centuries has been the industrial revolution. This revolution began after the mid of 18th century in Great Britain. Machine power started replacing human power rapidly more noticeably in the industrial sector and therefore it required managerial skills, thus understanding and practice of principles of management became necessary. 1.2 Modern Principles of Management 1.2.1 Henry Fayol’s Theory The French industrialist Henry Fayol was born in 1841. With taking position of Managing Director in 1888, he listed 14 principles of management (Fayol, 1930). Fayol’s theory emphasizes on specialisation of task and as administrative point of view it confirms that the person must be given authority if he is held responsible for some specific job. It declares the discipline and equity as hall mark of productivity under one boss for common objectives. The theory also involves the importance of organisational structure and rational approach of management. This theory confirms the concept of decentralized organization under centralized command. Fayol says that not only employees should be rewarded with suitable remunerations and job continuity but employees should also give preference to general interest of the organisation against their own. Fayol’s theory also satisfies the behavioural approach by highlighting the scientific management of worker’s activities and discussing the importance of motivation to enhance the performance. 1.2.2 Taylor’s Principles of Scientific Management Frederick Taylor presented his four famous principles of management in 1911. His theory was mainly based on scientific studies, best standard operating procedures, carefully selection and scientifically training of employees and social interaction and support to the staff at work places. He highlighted that managers are responsible for distribution and planning of work while workers are answerable for functioning the work (Taylor, 1911). 2.0 Leadership Leadership is the dynamic way to encourage the people and support them to perform their role passionately to achieve common objectives. It is the human ability that unites a group of people together and motivates it toward goals. Leadership is the ultimate act that brings to success all the potential that is in an organization and its people. 2.1 The Great Men Approach It helps in understanding the phenomenon of leadership with the help of the desirable traits or qualities of great leaders. The approach mainly focused on different traits of great leaders, such as vision, enthusiasm, emotional stability, courage, wisdom, inspirational power, foresight, etc as essential prerequisites. Later on, the focus of studying leadership shifted from traits of leaders to their styles. 2.2 Styles of Leadership Lewin et al (1939) suggested a continuum theory of leadership that identified three basic styles of leadership as illustrated below. At one end of the spectrum is the autocrat, an individual who has little trust in group members, believes that money is the only reward that will motivate workers, and issues orders to be obeyed with no questions asked. At the other end of the continuum is the laissez-faire leader, who has little or no self-confidence in his or her leadership ability, sets no goals for the group, and minimizes communication and group interaction. Autocrat Democrat Laissez-faire Benevolent Autocrat The democratic leadership, suggested as the most effective and productive style, shares decision making with colleagues, explains to the group reasons for decisions when necessary, and objectively communicates criticism and praise to subordinates. Somewhere between autocrat and democrat, there is benevolent autocrat leader who listens carefully to followers, gives the impression of being democratic, but always makes his or her own personal decisions. He argues that the democratic leadership style is too slow and unworkable in our fast-moving business world. A benevolent autocrat is powerful, prestigious, and respected and therefore is more likely to be able to move faster and more effectively in an organisation. 2.3 Path-Goal Model of Leadership Path-Goal Leadership means that the leader can affect the performance, satisfaction, and motivation of a team member by making route to goal easier. The essence of theory is that leaders to be effectively engage in behaviours that complement subordinates environment and abilities in a manner that compensates for deficiencies of performance of both individual and the team. The path goal leadership reflects the dominant paradigm of leadership and supervision. It is the relationship of managers and people working under them because the manager or superior affect the moral and satisfaction level of subordinates. 2.4 Hersey and Blanchard’s Situational Leadership Theory A number of leadership research studies have approved the thesis that successful leadership depends on the relationship between the organisational situation and the leader’s style. The organisational situation can include such variables as the climate, attitudes, experiences and social values of managers as well as the managed ones, and the nature of the particular job to be performed, including time and money. Paul Hersey and Kenneth Blanchard have presented a leadership theory which stresses that the most effective leadership style should vary with the maturity level of the subordinates. According to their theory, two dimensions of leadership concern are identified as task behaviour and relationship behaviour. Task behaviour of a leader induces him to interact with subordinates on such matters as what, when, where and how to perform a task. The subordinate gets proper information and guidance from the leader to do his job. On the other hand, relationship behaviour highlights the need for two-way communication between leader and his followers. The leader adopts the relationship behaviour as he knows that his subordinates are mature enough to perform their assigned duties adequately and they do not need minute details and step by step guidance from the leader. 3.0 Motivation Motivation may be defined as a dynamic strength and a kind of internal energy that initiates the behaviour to achieve a common goal. It has been observed universally that motivated staff is generally positive and has quick response to make sure the happenings of actions. No specific theory or strategy can be applied to all organizations and people because each organization and individual has its own norms and environment. 3.1 Need Theories The theme of these theories is the understanding of needs that encourage people, and then application of reward systems that carries out those needs with appropriate behavior. 3.1.1 Maslow’s Theory Abraham Maslow presented the hierarchy of needs theory with two conclusions. First, human needs are always desire or avoidance based. Secondly, after the satisfaction of one desire, another desire developed in human ((Daft, 1997; McCoy, 1992; Quick, 1985). Maslow discussed the following factors that motivate the staff in the workplace. (a) Physiological Factors. Food, drink, sleep, salary compensation and sex (b) Social Factors. Love and belonging among colleagues (c) Security Factors. Safe and secure work place environment with job security (d) Ego Factors. High status, job recognition and increased responsibility (e) Self-actualization. Accepting challenging assignment, training and creativity 3.1.2 ERG Theory ERG theory presented by Clayton Alderfer, is based on Maslow's hierarchical theory. The following 03 need categories indicate that failure of an individual to meet a higher-order need may enforce him to a lower-order need. He discussed existing, related and growth needs of employees at the work place (Daft, 1997). 3.1.3 Herzberg’s Two Factor Theory This theory is also known as Motivation-Hygiene Theory and was propounded by Dr Frederick Herzberg in 1959. From a primary data of interviewing about 200 accountants and engineers in Pittsburgh, USA, Herzberg surprisingly found that most of the respondents did not consider high pay, good working conditions, company policy and administration, and relations with co-workers as highly motivating factors. Instead, the respondents said that they felt highly motivated and satisfied with their jobs when the factors like achievement, recognition, responsibility and opportunities of advancement were present in their job situations. Herzberg’s identifies the 05 strong determinates of the job satisfaction and 05 of job dissatisfaction. The theory has been described pictorially on page 18 as Appendix-I. Hygiene Factors Motivation Factors Company policy and administration Supervision Salary Interpersonal relations Working Achievement Recognition Work itself Responsibility Advancement (Herzberg, 1959) 3.1.4 Theory X and Theory Y This theory described two sets of assumptions, the first one as Theory X and second as Theory Y (Bruce and Pepitone, 1999; Quick, 1985). Theory X assumes the people that avoid work either it don't like it or don't want responsibility. Generally they take interest just in job security. On the other hand, Theory Y assumes the people of who are self-sufficient to pull off the objectives. They are creative, ambitious and desire responsibility. The main application and contribution of McGregor's theory was the recognition of employee on these two perspectives where their work was a motivator. 3.2 Process Theories Process theories provide concepts of cognition and rational selection of employed as well as explain the individuals’ behaviors toward their needs. According to Petri (1996), cognition, "is generally used to describe those intellectual or perceptual processes occurring within us when we analyze and interpret both the world around us and our own thoughts and actions (p. 236). 3.2.1 Expectancy Theory The theory, introduced by Victor Vroom (1959), is based on cognition i.e. individuals’ thinking process as well as concentration toward the product associated with their high performance, called valence. The valence can be determined by analyzing how important is the goal to them and whether or not they can accomplish a goal and what strategy will lead to the best compensation (Daft, 1997; Quick, 1985). This theory can be applicable by utilizing incentive systems, identifying required results, and by providing same opportunities to all. 3.2.2 Equity Theory The theory, developed by J. Stacy Adams, was based on justice in the comparison of staff. He said that people judge others who perform same jobs with better compensation having same education, ability, experience and effort. An inequity occurs when the discrimination occurs in organization and it may cause extra ordinary challenges to managers. According to Daft (1997), by the following steps are generally involved in the apparent inequity. (a) Change Inputs. By increasing or reducing effort (b) Change Outcomes. By increase in salary or better working environment (c) Leave the Job. It occurred due to continued inequity 3.3 Reinforcement Theories These theories are based on need as well as relationship between behaviour and its outcomes. In the place of work, the application of these theories brings out the modification of organisational culture. Reinforcement theory, as presented by B. F. Skinner, states that the frequency of the desired behaviours can be increased by linking those behaviours with positive rewards and undesired behaviours can be decreased by linking them with negative consequences (Skinner, 1938). Skinner further says that individuals can be motivated by proper design of their work environment and praise for their performance, and that punishment for poor performance produces negative results. Therefore, a leader should analyze the work situation of his people by eliciting their opinions in order to determine and pinpoint the troublesome areas and obstructions to performance. 4.0 The Change Management In the contemporary world, the word ‘change’ has become buzz-word. It is now-a-days fashionable to talk, sometimes even brag about sweeping changes occurring around us. During the last few years, markets have been hit by a number of best-sellers on this topic. Books like Future Shock, the Third Wave, Preparing for the 21st Century and Seven Habits of the Highly Effective People are some of the famous books which tend to focus on the concept of change either on global and regional level or on individual level. 4.1 How Could We Affect the Change? There are several viewpoints with regards to our ability to influence the change. Many of us believe that we can change this world by talking about the change. More o`ptimists of us think that the desirable changes could be brought about by preaching and trying to change other people. A very small percentage of people think that it is much better to change the self before embarking on to change the world. Covey (1996) has described this thinking as reactive model. 4.2 Practical Guidelines for Personal Change In respect of bringing about the positive changes and make the lives more happy and meaningful, few guidelines are suggested given on page 19 as Appendix-II. 5.0 Synthesis between Principles and Practices of Management Managers assume a variety of roles when they perform their basic management practices which are predetermined sets of behaviours, tasks, and actions that managers are expected to perform. 5.1 Fundamental Principles of Modern Practices of Management An explicit mission statement or set of objectives. Ability of making consistent decisions. Credible resources, both human and financial. Effective and efficient process of external evaluation with suitable recommendations. Standardized and effective communication and correspondence. Collaboration with other agencies and quality assurance. According to Henry Mintzberg, managers perform three types of practices in organizations i.e. interpersonal, informational and decisional (Mintzberg, 1973). 5.2 Practices of Management Henry Mintzberg (1973) presented five principal functions or practices of managers which are to plan, organize, direct, coordinate and control so that the employees can do the actual work. 5.2.1 Planning. Planning is the process of setting goals and deciding how to allocate resources to achieve those goals. 5.2.2 Organizing. The second managerial function is to organize people. Organizing is the grouping of activities necessary to achieve common objectives. Organizing also involves the assignment of each grouping to a manager with the authority necessary to supervise the people performing the activities. 5.2.3 Directing. Directing is the third managerial function. It involves guiding, overseeing, motivating and leading people. 5.2.4 Coordinating. It is securing and maintaining the co-operation of organizational elements, both within and outside the manager’s jurisdiction that influence, or are influenced by his plan of operation. 5.2.5 Controlling. The final management function is controlling. Controlling is the process of monitoring, measuring, and evaluating employees’ performance based on set goals. 6.0 Examples of Practices of Management 6.1 Interpersonal Practices 6.1.1 Leadership. As a leader, the manager provides vision to the organisation, speaks to his people about his aspirations and dreams, criticizes or praises an employee’s work, hires, trains, guides, promotes or even dismisses subordinates. But, most importantly, as a leader, the manager inspires and motivates his people toward common objectives by integrating individual needs and organisational goals. 6.1.2 Figurehead. In the role of figurehead, manager is the symbol of formal authority; thus he is often called upon to chair meetings, sign the formal agreements with managers of other organisations, or simply requested to be the Chief Guest of an important ceremony. 6.1.3 Liaison. In the liaison frame of sphere, the manager develops and maintains a web of relationships with numerous individuals and groups outside his own organisation. Thus, here managers keep senior positions serving on external boards of directors, maintaining memberships of elite clubs, or just attending important marriage or funeral parties. These “exchange relationships” allow managers to get favours and information in return for their time and expertise. In its essence, the liaison practice permits a manager to link himself and his organisation with the external environment. 6.2 Informational Roles 6.2.1 Monitor. In practices as monitor, the manager seeks information to detect changes, to identify problems and opportunities and to build up knowledge about his milieu. 6.2.2 Disseminator. As disseminator, he sends external information into the organisation and internal information from one subordinate to another. 6.2.3 Spokesman. As a spokesman, the manager transmits information out to the external environment of his organisation. 6.3 Decisional Roles 6.3.1 Entrepreneur. In the entrepreneur role, the manager acts as initiator and designer of much of the controlled changes in his organisation. While the entrepreneur practices focus on voluntary action by the manager to bring about controlled changes in the organisation. 6.3.2 Disturbance Handler. As a disturbance handler, manager deals with involuntary situations and changes that are partially beyond the manager’s control. 6.3.3 Allocator. In his capacity as resource allocator, the manager oversees the system by which organisational resources are allocated. 6.3.4 Negotiator. The manager’s final practice concerns participation in the negotiations. As a negotiator, the manager leads the contingent of his organisation in major, non-routine negotiations with other organisations or individuals. Table of Contents Contents Page No Introduction 4 1.0 Principles of Management 4 1.1 Historical Review of Principle of Management 5 1.1.1 Sumerian Civilization (5,000 B.C.). 5 1.1.2 Egyptian Civilization (5,000-525 BC). 5 1.1.3 Babylonian Civilization. 5 1.1.4 Indus Civilization. 5 1.1.5 Greek Civilization Concept. 5 1.1.6 Roman Civilization Concept. 6 1.1.7 Industrial Revolution 6 1.2 Modern Principles of Management 6 1.2.1 Henry Fayol’s Theory 6 1.2.2 Taylor’s Principles of Scientific Management 7 2.0 Leadership 7 2.1 The Great Men Approach 7 2.2 Styles of Leadership 7 2.3 Path-Goal Model of Leadership 8 2.4 Hersey and Blanchard’s Situational Leadership Theory 8 3.0 Motivation 9 3.1 Need Theories 9 3.1.1 Maslow’s Theory 10 3.1.2 ERG Theory 10 3.1.3 Herzberg’s Two Factor Theory 10 3.1.4 Theory X and Theory Y 11 3.2 Process Theories 11 3.2.1 Expectancy Theory 11 3.2.2 Equity Theory 12 3.3 Reinforcement Theories 12 4.0 The Change Management 13 4.2 How Could We Affect the Change? 13 4.3 Practical Guidelines for Personal Change 13 5.0 Synthesis between Principles and Practices of Management 13 5.1 Fundamental Principles of Modern Practices of Management 14 5.2 Practices of Management 14 5.2.1 Planning 14 5.2.2 Organizing 14 5.2.3 Directing 14 5.2.4 Coordinating 15 5.2.5 Controlling 15 6.0 Examples of Practices of Management 15 6.1 Interpersonal Practices 15 6.1.1 Leadership 15 6.1.2 Figurehead 15 6.1.3 Liaison 15 6.2 Informational Roles 16 6.2.1 Monitor 16 6.2.2 Disseminator 16 6.2.3 Spokesman 16 6.3 Decisional Roles 16 6.3.1 Entrepreneur 16 6.3.2 Disturbance Handler 16 6.3.3 Allocator 16 6.3.4 Negotiator 16 Bibliography 17 Appendix-I 18 Appendix-II 19 Bibliography Bruce, Anne, and Pepitone, James, S. (1999) Motivating Employees. New York: McGraw-Hill. Covey, Stephen R. (1996). The Seven Habits of Highly Effective People. Lahore: Combine Printers (Pvt) Ltd., p. 101 Daft, Richard L. (1997). Management, 4th ed. Orlando, Fl.: Harcourt Brace. Fayol, H. (1930). Industrial and General Administration. Translated from French by J. A. Coubrough. Pitman. Herzberg, F., Mausner, B. & Snyderman, B.B. (1959). The Motivation to Work. John Wiley, New York. Lewin, K., Lippitt, R., White, R.K. (1939). “Patterns of Aggressive Behavior in Experimentally Created Social Climates”. The Journal of Social Psychology. Vol.10, pp.271 - 299. Mintzberg, H. (1973). The Nature of Managerial Work. McGill University, Harper & Row, New York. Petri, Herbert L. (1996). Motivation: Theory, Research, and Applications, 4th Ed. Pacific Grove, CA: Brooks/Cole. Quick, Thomas L. (1985). The Manager's Motivation Desk Book. New York: Wiley. Skinner, B.F. (1971). Beyond Freedom and Dignity. New York: Alfred A Knopf, Inc. Taylor, F. (1911). Principles of Scientific Management. New York and London, Harper & brothers. Vroom, V. H. (1959). “Some Personality Determinants of the Effects of Participation,” Journal of Abnormal and Social Psychology vol 59, November, 1959. Appendix-I Herzberg’s Two Factor Theory Appendix-II Practical Guidelines for Personal Change Good Habits Bad Habits Listen to others with full attention. Listen to others half-heartedly Appreciate others’ good deeds. Adopt fault-finding attitude. Speak with humbleness. Speak sternly & pass curt remarks. Manage one’s anger. Display anger frequently. Seek forgiveness on committing a mistake. Try to justify one’s mistakes by blaming others. Share opinions instead of advice. Sermonise and provide endless advices Concentrate on correcting own behaviour. Concentrate on correcting others. Try to adopt the habit of learning. Feel proud of being uneducated or ignorant. Try to be patient in the wake of unacceptable behaviour of others. Display impatience due to unacceptable behaviour of others. Read More