Management

1 The purpose and process of management

YouTube videoPlay video

We now turn to consider the subject of management. There are many possible definitions and here are two:

“Getting things done through other people”. Management implies that you are in some way organising what other people are doing, and indeed the idea of organising should make us consider what’s meant by an organisation.

“A social arrangement with a controlled performance of collective goals”. The important words here are “social,” “controlled,” and “collective.”

The word “social” recognises that we are not machines, that we are people, that we have an important social or human aspect to our characters. We will see that in the early theories of management, the social dimension was often rather understated.

The idea of “controlled” is important. Basically one of the roles of management will be to set some sort of goals or targets and then to try to ensure that people achieve that.

Finally, “collective”; the idea that in an organisation we should all be working together.

Supervision is giving employees specific instructions and monitoring their output. Typically, managers decide on the actions or goals and supervisors ensure employees carry out the necessary tasks.

Managers carry out administrative tasks potentially at a high level. They usually have power because they have the title ‘manager’ and it is their subordinates’ duty to carry out lawful managerial instructions. Managers ‘do things right’ ie primarily focus on current processes and strategies.

Leaders, on the other hand concentrate on ‘doing the right things’. They are focussed on the future direction and strategy of the business and managers, supervisors and subordinates should follow. The best leaders can also inspire people to follow other than simply relying on their title and position in the hierarchy.

2 Trait theory

Much of the discussion of management concerns what makes a good manager and what activities good managers should actually undertake.

One of the earliest theories is known as “trait theory.” Here the hope was that we could perhaps spot who will be a good manager through certain other traits that they might possess such as intelligence, initiative, self-assurance, even how tall the person was. This never really got very far; it was too subjective. For example, how would you balance intelligence versus charisma? Many good leaders are tall but then leaders such as Napoleon and many others were rather small and were perhaps overcompensating.

Trait theory was really a dead end: it proved to be no good whatsoever by predicting who the good managers might be.

3 Henri Fayol - Classical Management

One of the earliest management theorists was Henri Fayol who was active in the early 1900s. He believed that the management theories could be developed, then that management could be taught. He said that managers have five functions:

• Planning
  

• Organising
  

• Commanding
  

• Coordinating
  

• Controlling.
  

There are perhaps two things to note here. First of all, he really said nothing about inspiring or leading or motivating; much of the social aspects of management were missing. And secondly, although none of us is likely to deny that planning, organising, commanding, coordinating, and controlling are important aspects of management, dividing the management tasks into these five functions doesn’t necessarily help us to be better managers.

We are unlikely to set our diaries saying that from 9:00 to 10:00 in the morning we will do a bit of planning, from 10:00 to 11:00 perhaps a bit of commanding and so on. Knowing what you should do is very different from being able to do it at appropriate times.

Fayol’s work comes under the heading of “classical management” and classical management theories hold a view that there is a correct way of managing, just as classical architecture put forward the idea that there are proper proportions of buildings which please the eye and which are therefore correct. Classical management held a view that there was a set of ‘golden rules’ and if you obeyed these you would be a good manager. In general classical management is not believed, or at least not naively believed, any more.

4 Taylor – scientific management

Frederick Taylor was an American who developed his theories of scientific management in the late 1800s. He was the first man who deemed work deserving of systematic observation and study. You must remember that really until the late 1800s most businesses had been relatively small, often consisting of one or two people, perhaps within a family, making use of individual crafts and skills. As businesses grew in size, until Taylor came along, no one thought that employees should be told how to do something. That was simply not thought to be a function of management.

Taylor said that it is a function of management to study work, to develop a science of work, and from that to work out how jobs could be designed so that they could be carried out efficiently. This could allow employees to earn more. Rule of thumb methods should be replaced by methods based on scientific study of the tasks. Scientifically select, train, and develop each employee rather than letting them train themselves; provide detailed instructions and supervision of each worker; divide work nearly equally between managers and workers so that the managers apply scientific management principles to planning the work that the workers have to actually carry out.

Inevitably this led to task specialisation, which is basically the classic production line, because it was discovered that one of the most efficient ways of carrying out work was to do a relatively simple task over and over again. In later life Taylor was criticised for dehumanising work. But it’s important to remember that his ambition was not to do this: his ambition was to enable workers to earn more through working in a more efficient environment.

4.1 Potential benefits arising from Taylorism are:

• Increases in productivity,
  

• Fair and higher wage allocation based on output, and
  

• Workforce care programs because if you didn’t care for your work force, you have to waste money through additional recruitment, training, and inefficiencies.
  

On the downside it had a great capacity for dehumanising work.

5 Style theories

We have already said that trait theory has been discredited. We now come on to what’s known as “style theories”, in other words, a good manager becomes a good manager because of his style of management. Whether or not this information helps to be a good manager is another matter but you have to know the names and the key terms that they were associated with.

6 Drucker

First, Peter Drucker who stated that management has three functions. You have to

• Manage a business
  

• Manage other managers
  

• Manage the workers and the work.
  

He broke these down into five categories of activity.

Drucker said that a manager’s activities consist of:

• Setting objectives,
  

• Organising the group,
  

• Motivating and communicating,
  

• Measuring performance, and
  

• Developing people.
  

There are two important additions here to what Fayol suggested. First, Drucker said that motivation is a very important part of management, and secondly, developing people is also important, so they feel fulfilled, that they are growing, that they are gaining new skills, that they are achieving their maximum potential.

Really the rest of the list isn’t very much new on what Fayol suggested about planning, organising, controlling, coordinating, and communicating.

7 Mintzberg – managerial functions

Mintzberg divided up managerial functions in a slightly different way and again whether you find this useful or not is irrelevant and you must be able to associate the name of Mintzberg with the terms in bold below:

Once again, knowing that management might have these three functions - interpersonal, information processing and decisional - doesn’t necessarily help one be a better manager.

8 Power, authority, responsibility, delegation

There are four important terms regarding management:

Power. Power is the ability to influence people or events.

What gives people power? There are several sources:

• Rational-legal, that’s the power your manager has. You do what your manager tells you because that person is called “manager” and part of your contract of employment implies that you should do what your manager tells you provided that it’s legal.
  

• Coercive power - use of force.
  

• Reward power – offering you more pay or promotion if you do what you are told.
  

• Knowledge power - the power that some people have because they have specialist knowledge which they release selectively.
  

• Charismatic power - the power that some people have simply by their force of personality or their charm.
  

Authority. Of course having power doesn’t mean you have a right to exercise that power. If you have the right to exercise power then you have what’s known as authority. So for example, you will be well aware of the term “authority limits” where people may be able to buy non-current assets up to $1,000 but not beyond that. Having power without authority is poor but so is having authority without power. We probably all remember some school teachers who have the authority, the right to tell the class to sit down and be quiet, but when they try to exercise that authority, they had a complete lack of power over the class.

Responsibility. This is the same as accountability. If you are made responsible or accountable for something then as the saying goes “the buck stops with you”.

Delegation. This is the transfer of authority. Note that it is the transfer of authority: you cannot transfer responsibility. If your manager asks you to do something and you delegate that task to one of your staff members, and that staff member messes it up, when your manager reprimands you, you can’t blame that staff member. The task was yours and either you have to do it yourself or ensure that you delegated it properly to a staff member who had the time and skills, and whom you could supervise to make sure that the task was actually completed.