LECTURE #3-5: KINDS OF MANAGEMENT

• Henry Fayol

  • Shaped companies from the shop floor up.
  • best known for developing the 5 functions of managers and 14 principles of management.
• 5 Managerial Functions

  • planning
  • organizining
  • coordinating
  • commanding
  • controlling
• Division of Work


  Increase production by dividing work so that each worker completes smaller tasks or job elements.
• Authority and Responsibility

  a manager’s authority, which is the “right to give orders”, should be commensurate with the manager’s responsibility.
• Discipline

  clearly defined rules and procedures are needed at all organizational levels to ensure order and proper behavior.
• Unity of command


  Each employee should report to and receive orders from one boss.
• Unity of direction


  One person and one plan should be used in deciding the activities to be carried out to accomplish each organizational objective.
• Subordination of individual interests

  employees must put the organization’s interests and goals before their own.
• Remuneration

  compensation should be fair and satisfactory to both employees and the organization; that is, don;t overpay or underpay employees.
• Centralization

  avoid too much centralization or decentralization. Strike a balance depending on the circumstances and employees involved.
• Scalar Chain

  from top to button of an organization, each position is part of a vertical chain of authority in which each worker reports to just one boss.
• Order

  to avoid confusion and conflict, order can be obtained by having a place for everyone and having everyone in his or her place; in other words,  there should be no overlapping responsibilities. 
• Equity

  kind, fair, and just treatment for all will develop devotion and loyalty. This does not exclude discipline, if warranted, and consideration of the broader general interests of the organization. 
• Stability

  low turnover, meaning a stable workforce with high tenure, benefits an organization by improving performance, lowering costs, and giving employees, especially managers, time to learn their jobs.
• Initiative

  managers should encourage development of initiative because it is a great source of strength in business.
• Esprit de corps

  develop a strong sense of morale and unity among workers that encourages coordination of efforts.
• Information Management


  Reduce the cost or increase the speed with which they can acquire information.
• Printing Press


  The 1st to truly revolutionalize the business use of information.
• Johannes Gutenburg


  he invented the printing press.
• Typewriter


  used for daily communication.
• Messenger


  the telegraph, telephone, and internet.
• Employment Security 


  ultimate form of commitment companies can make to their workers.
• Selective Hiring

  • If employees are the basis for a company’s competitive advantage, and those employees have employment security, then the company needs to aggressively recruit and selectively screen applicants.
• Self-managed Teams and Decentralization

  • Self-managed teams are responsible for their own hiring, purchasing, job assignments, and production.
• High Wages Contingent on Organization Performance

  • High wages are needed to attract and retain talented workers and to indicate that the organization values its workers.
• Training and Skill Development

  • a company whose competitive advantage is based on its people must invest in the training and skill development of its people.
• Reduction of Status Differences


  A company should treat everyone, no matter what job, as equal.
• Sharing Information

  • If employees are to make decisions that are good for long-term success, they need to be given information about costs, finances, productivity, development times, and strategies that were previously known only by company managers.
• Operations Management 


  uses a quantitative approach or mathematical approach to find ways to increase productivity, improve quality, and manage or reduce costly inventories.
• Tools

  • quality control 
  • forecasting techniques
  • capacity planning
  • productivity measurement and improvement
  • linear programming
  • inventory systems
  • cost-benefit analysis.
• Inventories


  stock of materials
• Scientific Management

  • thoroughly studies and tests different work methods to identify the best, most efficient way to complete a job.
• Principles of Scientific Management

  science, full potential, cooperate, divide
• Systems Management


  One way to deal with organizational and environmental complexity is to take a systems view of organization.
• System


  is a set of interrelated elements or parts that function as a whole.
• Subsystems


  composed of parts which are simply smaller systems within larger systems.
• Synergy


  occurs when 2 or more subsystems working together can produce more than they can working apart.
• Closed Systems


  can function without interacting with their environment
• Open Systems 


  interact with their environments and depend on them for survival
• Environment


  organizations as part of the subject to the competitive, economic, social, technological, and legal/regulatory forces in their environaments.