Introduction to Business – 198
Management And
Organizational History
Pre Reading Comment Page 144 – 165, Chapter 6 & 9
There is much material in these chapters that we will
not cover. Read these lecture notes
first, and then read the appropriate portions of the textbook.
Lecture Notes
Lecture
Summary
The key components of this
lecture are:
What Is management
Activity 1:
How is being a manager different than any other employee? What do managers do that other employees
don’t?
“Management is the art of getting things done
through others.” – Mary Parker Follet
Creating an environment
where others can be productive is very different than being productive yourself. Unfortunately, we often promote individuals
into management – not because they have the skills to manage others – but
because they have been very good at getting the job done as a line worker. However, the best machinist is often not a
good choice to be the manager of other machinists; the best professor may not a
good choice to be a dean.
Managers need to learn to
move from being very good at getting things done to very good at getting others
to get things done. Humans are the only input
into the production process that has to be actively managed, has to be
motivated. If you have a computer with a
specific set of characteristics – it does what that type of computer does. With people it is not so straight
forward. At some level humans have to
want to work.
Think back on the jobs you
have had – did you work harder at some and not as hard, maybe even as little as
possible, in some other jobs? Human
motivation is a fascinating and complex subject.
The complexity of managing
human beings in organizations is largely a result of the unique nature of each
human being. There are no hard and fast
rules that apply to all people all the time.
Think of the simple decision to come to class today. There are probably a dozen different reasons
why students came to this class today. Ranging from: I paid for the class, to I
would feel guilty if I did not come, to I might learn something, to the person
I sit next to is fun to chat with. And these motivations change over time – what
motivates you today may not motivate you 10 years from now.
We will spend little time in class discussing
this question. However, most of chapter
9 is devoted to this topic.
What Is
Organizational Behavior?
Organizational Behavior is
the systematic study of how people interact in organizations. The term “systematic study” is critical. Many people think they know a lot about human
behavior. We have all observed ourselves
and our fellow human beings and believe we know something of why we act the way
we do.
Unfortunately
many of our perceptions of how human’s act is not based on systematic study but
is instead based on anecdotal evidence and cultural myths.
Purposes of Organizations?
What is the purpose of an
organization?
The easy answer in some
cases is profit maximization. While this
is at least partially true for many for-profit organizations, it is clearly not
the case for not-for-profit and governmental organizations. Even with many for-profit organizations,
there are competing objectives beyond profit -- continuity of the business,
environmental awareness, providing employment for the general community or
specifically for family members, et cetera.
The purpose of any organization
should be described in the organization’s mission statement, but it may also be
more privately understood (as in “we are keeping this business running so our
grandchildren will have jobs when they move into the business.”
Related to the issue of multiple
purposes is the question of multiple constituencies. We often think in terms of the stakeholders
of an organization. Who are the
individuals or groups of individuals who are influenced by the actions of the
organization? Who has a stake in the future
of the organization?
Activity 3
Identify all of the stakeholders that are affected by a local pizza company
that sells into the university community.
Note the length of the
lists.
Managers need to maintain
relationships with all of these groups and need to consider the impact on each
group of the actions of the managers.
While the purpose of the organization may not be to meet the needs of
each of the stakeholders, if stakeholders become dissatisfied with the
organization, it typically creates problems for the organization.
Organizational Structure
The text has a good
discussion of the areas of management – operations, marketing, et cetera. One of the biggest challenges that managers
face is connecting all of these areas of management into one coordinated
organization.
Line and staff managers
In addition to managers
being characterized by their functional area, they can also be split into being
either line or staff. Line managers
are directly in the chain of command from the top to the bottom of the
organization. Staff managers
however do not have authority because they are in the chain of command – their
authority comes from their having responsibility and expertise regarding an
aspect of the organization (marketing, human resource management or information
systems)
As chapter 6 discusses,
there are multiple ways to organize the people in an organization – each of the
alternatives has various advantages and disadvantages. For example, an organization can be
relatively flat with authority highly delegated throughout the
organization. This will result in fewer
layers of management, lower costs, and potentially more rapid response to
changes in the operating environment.
However, the level of supervision and oversight in the organization will
be greatly reduced.
Departmentalizing an organization
To best assign responsibility,
limit complexity, and provide the optimal service to customers, businesses
often break themselves into departments.
There are five major approaches used.
Here is an example of how each might be used in a company:
Customer
departmentalization: You organize around who you sell to. A department store often has Men’s wear,
children’s clothing, etc. Oshkosh Truck
has a department for military sales, one for municipal sales, etc. You assume your customers want very different
things from you, so you organize yourself to respond to specific customer
needs.
Product
departmentalization: Your products are so unique, that the best
way to support them is to have a separate unit for each. Best Buy does this with a department for
computers, one for TVs, etc. You also
find this with manufacturing companies like Kimberly Clark, where they have a
division for medical products, one for baby products, etc, since each is
manufactured very differently.
Process
departmentalization: This is newer. You look at fundamental business processes
and organize around them. An example is
Geographic Departmentalization: As companies
go global or cover large regions of the
Functional
Departmentalization: This is the oldest form of department and is
represented by your business major. We
break a company down into an accounting department, a marketing department,
operations, information systems, etc. This
has the advantage of letting people work with people who have a background
similar to their own, but it may be an artificial break and fuel internal
rivalries (which function is most important?)
Activity #5: What kind of departmentalization have you
seen in places where you were employed? What
recommendations would you make about this form of organization?
Activity #6: One important aspect of management is
accountability and control. How would
you know if a manager was being successful in each one of these department
models? What kind of accountability
standards could you set? What
performance measures might you use as part of the manager’s performance review
and pay incentives?
Management Issues in the Business Plan
Many new businesses are so
small that you may think there is no need for departments or even for any
organization. But you will discover even
very small businesses organize products or processes or expenses. This organization is then connected to
accounting efforts and to information systems.
Review the departmental table from Activity 5 and 6. Review your business from each
perspective. For instance, will you
review your sales and expenses by product, or by type of customer or by
geography? Will you compete based on
process efficiency? Will you hire
workers based on functional expertise?
Will you manage some functions internally (like production) and
outsource other functions (like advertising, debt collection, employee
training)? Create an organizational chart that illustrates how you will
organize your business information.
Summary of Beyond the Book – expectations for the
final
You should understand: