Dealing With
Management Challenges
Management is the process of getting
things done through other people. Some individuals carry the title of manager
but are not managers in the true sense of the word. They may have people
reporting to them, but they tend to work alone, seeming to manage their
subordinates as an afterthought. Such individuals are basically entrepreneurs,
and it is likely that they will find themselves unable to cope with the dynamic
changes now confronting modern organizations.
In studying these changes, it is possible
to examine them in waves. The first wave started around 8000 B.C. and was
characterized by the agricultural revolution. The second began in the early
eighteenth century with industrialization. This wave was characterized by
standardization, specialization, synchronization, concentration, maximization,
and centralization.
The third wave, which is now striking the
shores of industrial nations, is bringing dramatic changes and challenges. Some
of the major factors which affect the modern manager's ,job are changes in the
technological environment, new methods of information handling, new employee
demands in the world of work, a decline in organizational loyalty, the
evolution of adaptive organizational structures, a redefinition of
organizational purpose, and the continued growth of multinational corporations.
The impact of these events on the modern manager will be studied throughout
this book, with attention directed toward explaining how these changes can be
handled. A past-present-future framework will be used.
Early Management
Thought in Perspective
Management is not a new concept. It has
been employed for thousands of years, as seen in the practices of the
Sumerians, the Romans, and the Roman Catholic Church. However, the emergence of
the factory system. presented
management with a new challenge. With industrialization it became necessary to
develop rational, scientific principles for handling workers, materials, money,
and machinery. The scientific managers played a major role in helping attain
this objective.
The primary goal of these managers was
that of achieving the highest productivity possible by devising efficient work
methods and encouraging employees to take advantage of these new techniques. In
the United States, scientific management was made famous by people such as
Frederick W. Taylor. His experiments at Bethlehem Steel illustrated the
importance of time-and-motion study, and his difFerential piece-rate system
provides students an insight into the types of wage incentive payment plans
used during this period. Another important scientific manager of the day was
Frank Gilbreth, renowned for his work in time-and-motion study and for a large
body of work in management in which he collaborated with Lillian Gilbreth.
The success of the scientific managers
brought about changes in the worker-manager ratio and moved the focus of
attention farther up the hierarchy. The result was two distinct levels of
inquiry about management. The first sought to identify generally the purview of
management. The second sought to examine both individual and group behavior in
organizations.
The most famous of the early management
theorists was Henri Fayol. Fayol's outstanding contribution was the conceptual
framework he provided for analyzing the management process. In the behavioral
area, Elton Mayo studied group behavior in organizations. The Hawthorne
studies, however, had an even greater impact on the field, and they became the
single most important foundation for the behavioral approach to management.
Meanwhile, Chester Barnard, whose acceptance theory of authority is still
regarded as a major landmark in the development of management theory, made the
most memorable contribution to early behavioral knowledge.
In perspective all three groups-the
scientific managers, the classical theorists, and the human relationists-had
shortcomings. Yet it must also be realized that they complemented each other,
helping to form the basis for modern management theory and practice. The
efficiency goals of the scientific managers and classical theorists led to the
human relations philosophy of treating people well, which in turn has been
replaced, as seen in Figure 2-4, by a human resources philosophy of using
people well.
Modern Schools of
Management Thought
Modern management theory is currently in
the schools phase. Three schools of management thought are management process,
quantitative, and behavioral.
The management process, or classical,
school traces its ancestry to Fayol. One of its major tenets is that by
analyzing management along functional lines, a framework can be constructed
into which all new management concepts can be placed. This framework consists
of a process of interrelated functions such as planning, organizing, and
controlling. Another belief of the process school is that management principles
can be derived through an analysis of managerial functions. A third tenet is
that the basic management functions are performed by all managers, regardless
of enterprise, activity, or hierarchical level. Additionally, the process
school stresses the development of a management philosophy.
The quantitative, or management science,
school consists of theorists who see management as a system of mathematical
models and processes. Relying heavily on the application of scientific analysis
to managerial problems, economic effectiveness criteria, and the use of computers
adherents of this school have promoted understanding of the need to goal
formulation and the measurement of performance.
The behavioral school consists of two
branches: interpersonal behavior and group behavior. The former is heavily
psychological in orientation; the latter is heavily sociological. While this
school lacks the type of framework used by management process advocates, it
does not lack structure. However, there is a major difference in method Instead
of working from functions to activities and principles, as the management
process advocates do, the behaviorists work in the opposite direction. They
start with human behavior research and build up to topics or functions.
Today there is no unified theory of
management. Several reasons can be cited, among them semantics, differing
definitions of management, and lack of research. Advocates of each school claim
that the others have serious flaws. The process school is seen as being too
static; the quantitative school is seen as a series of useful tools but not a
school; the behaviorists are attacked as failing to see the total picture.
It is still unclear whether the three
schools will ever be synthesized. For this reason, the student of management is
well advised to, understand all three.
The Planning
Process
In this chapter comprehensive planning,
which consists of strategic, intermediate, and operational plans, has I been
examined. Prime attention was given to long-run considerations, with the
observation that most firms tend to be oriented too much toward the short run.
The chapter also examined the roles played by the determination of the firm's
basic socioeconomic mission, values of the top 'management, and analysis of the
organization's strengths and weaknesses in the formulation of the strategic
plan. The analysis of strengths requires accurate economic and sales
forecasting coupled with a frank, honest evaluation of the company's material
resources and personnel competencies. Only in this way can a firm identify a
niche and formulate long-range objectives.
Although the long-range plan provides
general direction, the intermediate-range and especially the operational plans
are also important because they offer specific direction. The operational plan
often consists of derivative functional plans such as marketing, production,
and finance plans, designed to attain short-run objectives while harmonizing
with the previously determined long-range goals. such short-range plans provide
management with a method for gauging progress, serving as a basis from which to
adapt or modify current plans and construct future ones.
The Organizing
Process
This chapter examined the nature,
purpose, and function of organizing, Organizing involves the assignment of
duties and the coordination of efforts among all organizational personnel to
ensure maximum efficiency in the attainment of predetermined objectives. The
process covers a broad area and offers the manager many alternatives in both
routine and critical situations. The numerous forms of departmentalization
include functional, product,
territorial, simple numbers, time, customer, and equipment or process. Another
common organizational form, often used in conjunction with departmentalization,
is committees. The two general types of committees are ad hoc and standing. The
chapter showed that committees can be effectively used to complement the basic
organizational structure
Span of control is the phrase used to
refer to the number of people reporting to a given superior. A wide span of
control results in a flat organization chart, while a narrow span results in a
tall organization chart.
There are three basic types of authority:
line, staff, and functional. Line authority is direct authority, as illustrated
by a manager who gives orders directly to a subordinate. Staff authority is
auxiliary authority to supportive in nature, as in the case of the lawyer who
has authority to advise the president on legal matters. Functional authority is
authority in a department other than one's own, as in the case of the
vice-president of finance who can give orders to the head of a product division
in regard to financial matters.
The chapter devoted particular attention
to problem areas such as line-staff' conflicts, which shown that organizing is
certainly no mechanical function. For example, line people tend to be highly
action-oriented, while staff people are concerned with studying problems in
depth before making recommendations.
The last part of the chapter examined the
topics of decentralization and the informal organization. Decentralization is
influenced by a number of factors, including cost, uniform policy, company
size, philosophy of top management, philosophy' of subordinate managers, and
the functional area in which one works. The informal organization is the
organizational arrangement created by the individuals who work in the
structure. Their informal relationships supplement formal authority. Authority thus
consists of two factors: formal authority, which is delegated by one's
superior, and personal power, which can be attained in a number of different
ways, including experience, drive, and education.
With the introduction of the informal
organization, it becomes obvious that organizing is a dynamic process. While
this chapter has set forth some of the basic ideas every manager must know
about organizing, nevi: organization structures are now emerging. Drawing upon
the ideas presented here, modern structures are novo' adapting these concepts
to meet the demands of' the external environment. The result has been the
emergence of adaptive structures, the focus of attention in the next chapter.
Adaptive
Organization Structures
The use of bureaucratic structures has
begun to decline. One reason for this decline is that the inherent assumptions
underlying bureaucracy are unrealistic. The organization cannot function with
mechanical rules and regulations that have limited value in motivating and
leading the modern worker.
In overcoming bureaucratic deficiencies,
many firms are turning to adaptive organization structures, new designs based
on a number of assumptions. One such assumption is that the organization
operates in a dynamic environment. A second is that personnel, task, and
environment are related and must be fit together properly for the best
structure and output. This chapter initially' directed attention to the impact
of technology and its effect on organizational personnel, from the workers
right up to the managers. At the worker level, technology affects social
relationships as well as job content. At the managerial level, it encourages
greater integration of colleagues and of planning effort.
Technology also affects the organization
structure by causing changes in such factors as the length of the line of
command, the span of control of the chief executive, and the ratio of managers
to total personnel. In addition, mechanistic designs tend to give way to
organic ones, as has been seen in the research of Woodward, Zwerman, Lawrence
and Lorsch, and Meyer, to name only five prominent researchers in the
organization-study boom of recent times.
What do these new organic structures look
like? How do they work? Exactly when are they used? These questions are
answered through examinations of project, matrix, and free-form designs. The
project organization form entails "the gathering of the best available
talent to accomplish a specific and complex understanding within time, cost
and/or quality parameters, followed by the disbanding of the team upon
completion of the undertaking. Project organization has been employed in
numerous and diverse ways, from building dams and weapon systems to conducting
research and development and designing bank credit-card systems. The major
advantage of' this organizational form is that it allows conducting research
and development and designing bank credit-card systems. The major advantage of
this organizational form is that it allow's the project manager and team to
concentrate their attention on one specific undertaking.
The matrix structure is a hybrid form of
organization, containing characteristics of both project and functional
structures. In a matrix design, employees are in a sense on partial loan to the
matrix project manager. These employees, therefore, have a dual
responsibility-to the line manager who lent them to the project and to the
project manager for whom they work for the life of the project. The result is a
uniquely horizontal and vertical flow of authority. Since the project manager
has only project authority, this individual must rely on human relations assets
and skills-for example, negotiation, personality, persuasive ability, the aura
of competence, and the brokering of reciprocal favors. While the matrix
structure has advantages, the organization considering its use must also weigh
the disadvantages inherent in it. Only after considering both aspects of the
matrix can an organization make an intelligent decision regarding its overall
value.
Another adaptive organization design is
the free-form, or organic, structure. This design can take any shape, but it
always has two prime characteristics: the downplay of rigid bureaucratic rules
and an emphasis on self-regulation. A number of conglomerates have adopted this
organization form. There are four basic models of matrix structures: project,
product-function, product-region, and multidimensional. Perhaps the greatest
advantage of a free-form structure is its value to the manager who must cope
with change.
What kind of structure is best? The
question has no single right answer. "Best" depends on the situation.
For that reason, the area of contingency organization design is currently very
important. Some firms need a mechanistic structure; others work better with an
organic one. The answer to the question thus depends on forces operating on
managers, subordinates task and environment.
This chapter has examined the ways in
which organizations are redesigning their structures in order to adapt more
effectively to their environments. However, the organizing process only helps
bring together the workers and the work. Management still needs a basis for
comparing the plan and the results. This subject is discussed in the next
chapter.
The Controlling
Process
In this chapter the controlling process
has been examined. The three basic steps in this process are the establishment
of standards, the comparison of performance with these standards, and the
correction of deviations. The key to the entire process rests on effective
feedback.
In attaining feedback, the manager can
use various control techniques. Some of the more traditional include budgeting,
break-even analysis, personal observation, and personnel performance
evaluation. Some of the more specialized entail information design and
time-event analyses, such as PERT and milestone scheduling. Since these
analytic techniques are not designed to control overall performance, the
manager needing overall performance control can simply turn to such other
techniques as profit and loss, return on investment, key area control, and
auditing.
Fundamentals of
Decision Making
This chapter has examined the
fundamentals of decision making. The decision-making process consists of: (a)
identifying the problem (b) diagnosing the situation, (c) collecting and
analyzing data relevant to the issue, (d) ascertaining solutions that may be
used in solving the problem, (e) analyzing these alternative solutions, (f)
selecting the one that appears most likely to solve the problem, and (g)
implementing it. Yet the decision making process is much more than simply
following a list of steps; a great deal of subjective as well as objective
evaluation must take place. For example, the personal values of the top manager
will play a significant role in the assignment of risk and uncertainty
probabilities. In many cases even modern managerial decision making may well be
75 percent subjective, 25 percent objective.
Nevertheless the manager must be as
rational as possible, drawing upon all available techniques and guidelines in
choosing among the various alternatives Some of the techniques that are most
useful in this process include the Laplace criterion, the maximin criterion,
the maximize criterion marginal analysis financial analysis, and the Delphi
technique. And these represent only a few of the techniques available to the
modern manager Modern decision making is notable for the great variety of
decision-making aids it has discovered.
The last part of the chapter examined
creativity and decision making, creative thinking has four stages: preparation,
incubation, illumination, an d verification There are a number of techniques
that can be used to help stimulate creative thinking. Two of the most popular
are brainstorming and the Gordon technique. Recent interest has also been
generated in the area of whole,brain thinking: teaching managers to use both
sides of their brain Left,brain thinkers are being taught to be more creative;
right-brain thinkers are being shown how to approach problem solving more
logically an d sequentially, This latter area is extremely important in
decision making and is the focus of attention in the next chapter.
Modern Quantitative
Decision Making Tools and Process
This chapter introduced operations
research (OR) and some of its distinguishing characteristics. It then presented
five of the main areas of concern for operations management personnel. The
chapter next examined some of the modern quantitative decision-making tools and
processes, most of them falling under the heading of operations research. These
varied in complexity and mathematical rigor, but all are of value to managers
in the decision-making process.
Linear programming assists the manager in
determining price-volume relationships for effective utilization of the
organization's resources. The example used in this chapter illustrated how the
technique could be employed to allocate scarce resources while simultaneously
maximizing profit. The second technique discussed, the economic order quantity
formula, helps the decision maker determine at what point and in what
quantities inventory should be replenished. The third technique discussed game
theory, is useful in providing the manager with important insights into the
elements of competition. Sometimes this competition is best represented as a
zero-sum game with a saddle point, but more often it is typified by a
non-zero-sum game without a saddle point, in which case it is necessary to use
a mixed strategy in solving the problem. A fourth quantitative technique is queuing
(waiting line) theory, which employs mathematical equations in balancing
waiting lines and service. When it becomes difficult to evaluate alternatives
by means of equations alone, many managers turn to the Monte Carlo technique,
which uses a simulation approach and provides the decision maker with an
opportunity to evaluate the effect of numerous decisions within the simulated
environment On the basis of simulation results, the manager is in a position
to make the decision that best attains
the objective.
Still another OR tool, and one that has
been receiving increased attention in recent years, is the decision tree. This
technique, which is less mathematical than those already mentioned, helps the
manager weigh alternatives based on immediate and long-run results by
encouraging the individual to: (a) identify the available courses of action;
(b) assign Probability estimates to the events associated with these
alternatives; and (c) calculate the payoffs corresponding to each act-event
combination. Heuristic Programming, which was examined last, is the least
mathematical of all OR techniques. Yet it is used far more often by the manager
in every-day decision making (through rules of thumb and the use of trial and
error) than any of the other OR tools.
Information Systems
and Decision Making
This chapter has examined two topics:
information systems and the computer. Many information systems are
computerized, but this is not universal. Nevertheless the two areas have one
common characteristic: They help relate the departments and units of the
organization into a harmonious system.
The primary goal of any information
system is to provide decision making information to the manager. For this
reason, a well-designed system must be planned with the needs of management in
mind and must follow a from-the-top-down philosophy. In addition, the system
must discriminate by organization level, providing the right kinds of
information to each. For example, top management will need general information
from which to formulate strategic plans. Middle management will need more
specific data for drawing up budgets and measuring and appraising managerial
performance Lower-level management will need very specific data for use in areas
such as production scheduling and inventory control.
The modern computer is often employed as
part of an information system, providing necessary information to managers
throughout the hierarchy. In addition to performing bookkeeping and arithmetic
functions, it is also being used for such functions as inventory control and
airline reservations processing. Another one of its latest applications is
answering "what if" questions through simulation.
Despite their great value computers have
some important drawbacks, of which management must be aware. First, many
companies tend to buy more complex computers than they need. Second, many
managers place too much faith in computer printout results. Third, many
managers tend to overrate the capabilities of the computer. There are a large
number of things people still do much better than any machine and qualitative
decision making is one of them.
The introduction of an information system
into an organization can bring about dysfunctional behavior such as aggression,
projection, and avoidance. In order to overcome these problems, management must
be willing to adopt a participative decision-making approach that introduces
the new system, relates its advantages to the personnel, and assures that any
persons replaced because of it will have employment secured for them elsewhere.
This chapter has also noted how
management information and computer systems help managers do better planning
and controlling, thereby establishing the fact that there is a link between the
quantitative and process schools. Likewise, it has been noted that information
systems can bring about dysfunctional behavior, thus illustrating that any
advocate of the quantitative school must also be aware of the behavioral side
of enterprise; there is thus a link
between the quantitative and behavioral schools. Another area where many of
these decision-making ideas are put into action is that of operations research.
This will be the focus of our attention in the next chapter.
Operations
Management
Operations management is the process of
designing, operating, an, controlling a production system that takes physical
resources and transforms them into goods and services. This system has three
basic phases: input, transformation process, and output.
At the present time there are two major
operations management are; that are getting a great deal of attention:
productivity and technology, Productivity is measured by the equation:
output/input. The major reason that American productivity has declined
vis-a-vis other nations is management ineffectiveness. Too often companies have
used a piece-meal approach to their productivity efforts, provided inadequate
coordination among the various departments, and allocated insufficient
investment in management and supervisory training and development. Today,
efforts are under way to correct these mistakes. Meanwhile, in the area of
technology, business firms are now turning to robots and other state-of-the-art
inventions, including supersonic welders and lower-powered ultra sound.
There are a number of important
operations management functions. One is product design, which consists of
planning products to meet customer demand. A second is production planning,
which ties together demand forecasts with scheduled resource outputs. A third
is purchasing and inventory control, in which management is now making wide use
of just-in-time inventory, material requirements planning, and hierarchial
production planning. A fourth is quality control, which many firms are pursuing
by the use of quality circles. Taken together these four major areas of
operations research are helping management meet the challenge for low costs,
high quality output being demanded by today's customers.
Interpersonal and
Organizational Communication
This chapter has examined interpersonal
and organizational communication. It noted that the communication process
entails four steps: attention, understanding, acceptance, and action and that
implementation of the process occurs in two basic channels: the formal and the
informal. The astute manager uses both to advantage, keeping in mind that there
tends to be an overemphasis on downward communication and an under emphasis on upward.
This is unfortunate, for without some form of upward communication the manager
suffers from a lack of feedback. Many
managers overlook the need for this feedback, tending to follow the old conveyor theory of communication. They send
their subordinates a message and expect them to act accordingly. However,
communication does not work that way. People do not always interpret messages
in the same way. There are many reasons for this, and all constitute barriers
to effective communication. Some of the more important are perception,
language, abstraction, inference,
status, and resistance to change. In order to overcome these barriers, the
manager must take steps to establish lines of feedback. Some of the more effective
techniques are sensitivity; under-
standable, repetitive language; credibility; the avoidance of bad
listening habits; and a general adherence to the commandments of good
communication. Although many people may think these ideas appear obvious, it is
really quite difficult to practice an adherence to them.
Modern Motivation
Theory
This chapter has examined modern
motivation theory. The first part of the
chapter reviewed some of the reasons for declining worker motivation in
America. Then the relationship between needs and behavior was shown through the
use of Maslow's hierarchy. These ideas were then refined and applied to the
workplace through Herzberg's model. Both theories provide important general
insights into workers behavior, because they stress the importance of examining
the causes of human activity and partly answer the question of what specific
things motivate people.
Managers must also be concerned with
explaining how behavior is initiated, directed, sustained, or halted. To do
this they must understand process theories. This chapter examined four of these
theories: Vroom's expectancy-valence theory, Porter and Lawler's motivation
model, equity or social comparison theory, and reinforcement theory. All four
place great emphasis on individual motivation.
In the past few years, increased
attention has been given to these process theories because of their value in
applying general motivation theory to specific situations. Currently there is
interest in the formulation of a contingency theory of motivation that would
integrate content and process ideas. Yet whatever approach managers use, one
question must remain foremost@what will motivate the workers to attain
organizational objectives? When this question is answered, managers are enabled
to examine the area of leadership. When people who manage know what will
motivate the people they manage, they can focus attention on leading them. This
subject is the topic of the next chapter.
Leadership
Effectiveness
This chapter has defined leadership as the process of influencing people
to direct their efforts toward the attainment of some particular goal or goals.
What makes an individual an effective leader? Some people feel the answer rests
with personal traits and, to some degree, they are right. However, situational
theory is more commonly accepted today-that is, some leadership styles are more
effective than others; "best" depends on the situation.
One way of studying leadership is by
placing the elements of leadership on a continuum. Rensis Likert's research,
for example, shows that an employee-centered manager is more effective than a
job-centered manager. But in recent years scholars and practitioners alike have
found a two-dimensional model more realistic, since it sidesteps an either-or
approach and allows consideration of two factors. The Ohio State leadership
research and the Blake-Mouton grid are illustrations of the two dimensional
approach.
The most widely accepted approach now is
probably Fred Fiedler's contingency model, which places prime emphasis on three
major situational variables: leader-member relations, task structure, and
position power. Fiedler's model is important because it stresses effectiveness,
illustrates that no one leadership style is best, and encourages management to
match the leader with the situation. More recently, Robert House has postulated
the path-goal theory. Meanwhile, at the Center for Leadership Research at Ohio
University, a life cycle theory of leadership has been formulated. All three of
these theories emphasize the importance of the adaptive leader who can rise to
the demands of the situation.
The last part of the chapter examined new
dimensions in leadership inquiry. Particular attention was given to the
declining work ethic, the importance of matching the leader and the strategy,
and the role of corporate culture. All three are of importance in the study of
leadership effectiveness. A related area is that of human resource development,
a topic that will be the focus of attention in the next chapter.
Human Resource
Development
This chapter has examined some of the
latest tools and techniques for managing the firm's human assets. After the
chapter described the staffing process, where human resource development
efforts first begin, it noted that these efforts are designed to change things.
The change process has three phases: unfreezing the old ways, introducing new
behaviors, and refreezing the new equilibrium.
The remainder of the chapter was devoted
to the study of some of the human resource development programs currently being
used in modern organizations. Job enrichment is one that has been getting a
great deal of attention. It is currently employed in a number of firms,
including TI, AT&T, GM's Cadillac division, and overseas in Volvo plants.
In essence, job enrichment places primary emphasis on Herzberg's motivators:
advancement growth, and responsibility. Yet despite wide acceptance, the
technique has a number of vociferous critics who claim that it does not always
work Three of the primary reasons cited are that some workers do not find
satisfaction in the work place; some people prefer boring, unpleasant jobs with
good social interaction to enriched jobs that reduce the opportunity or such
interaction; and some workers react to the technique with feelings of
inadequacy and fears of failure.
One of the primary ways of redesigning
jobs is by building core job dimensions into them. It has been found that these
dimensions are frequently correlated with such outcomes as high work
motivation, high quality performance, high satisfaction, low turnover, and low
absenteeism.
Another technique that has also gained a
great deal of popularity because of its potential for helping the manager carry
out decision-making. communication, and control functions is management by
objectives. In essence, MBO entails a meeting of superior and subordinate for
deciding: (a) what the subordinate will do, (b) length of time needed, and (c)
how performance will be evaluated. In addition to its participative decision
making feature, subordinates like the technique because it tells them what is
expected of them, thereby reducing ambiguity and anxiety.
Sensitivity training is designed to make
managers more aware off their own actions and their effect on others, in
addition to obtaining better insight into what makes subordinates tick. Another
approach, which is less emotive but just as valuable to managers who need help
communicating with their people, is transactional analysis. A number of
companies, including American Airlines, have used this technique to help their
managers communicate more effectively with their subordinates.
The last technique examined was human resources
accounting. This technique suggests that the company evaluate its personnel and
that this evaluation be reflected in the firm's financial statements.
Well-trained, well-motivated people are an asset. Another approach is to
evaluate personnel on a periodic basis by measuring causal, intervening, and
end-result variables. This technique gives management a reading on the kind of
performance it can expect from its people in the near future.
Management Theory:
Current Status and Future Direction
This chapter has examines the so-called
systems school or management. attention was first focused on general systems
theory because of the importance assigned to it by systems school advocates.
Then the applied concepts of the systems approach, likewise presented from its
advocates' point of view, were reviewed. Finally, the question of whether the
systems approach is a new school or a subsystem of a current one was examined.
Although it is difficult to deny the existence of a systems body of knowledge,
it appears that the systems school is actually part of the quantitative school.
Attention was then focused on the general
value of understanding the systems concept, beginning with the organization as
an open, adaptive system. Since business organizations are contrived systems,
they can survive the onset of entropy and, unlike their biological
counterparts, exist indefinitely, depending, of course, on how well they are
managed. On the one hand, they must be responsive to change (adaptive
mechanisms); on the other hand, they must not change so quickly that they are
seriously thrown out of equilibrium (maintenance mechanisms). Finding the right
balance is one of the keys to indefinite survival.
The systems concept was next used to
examine managerial systems. Three levels exist in the managerial system of a
complex organization: technical, organizational, and institutional. The
technical level is concerned with producing the goods or services. The
organizational level coordinates and integrates the technical and institutional
levels. The institutional level relates the activities of the organization to
the environmental system. Within this system are three types of managers, one
for each of the levels. Within this system are three types of managers, one for
each of the levels. The technical manager is a nuts-and-bolts individual; the
organization manager is more like a political mediator; and the institutional
manager is a conceptual-philosophical decision maker. Yet, although there are
different levels and interests within the structure, all three must combine
their talents and energies in the attainment of overall organizational
objectives.
In order to achieve this blending of
talent and energy, managers must plan, organize, and control. They must also
make decisions and employ the latest quantitative methods where applicable; and
they must understand and utilize the abilities of their subordinates through
effective communication, motivation, and leadership. In short, the management
process, quantitative, and behavioral schools are all still important to modern
managers. In fact, managers today draw on the concepts of all three in carrying
out their duties. The systems approach encourages this.
The last section of the chapter examined
management theory in the future, noting
that some synthesis among the schools of management thought appears to be going
on. Ten specific reasons were cited. However, it was also noted that this synthesis
is unlikely to result in a major change in the three schools of thought
explored in this textbook. The management process school, the quantitative
school, and the behavioral school of management thought will continue to endure
into the indefinite future.
Social
Responsibility: A Continuing Challenge
Social responsibility is a continuing
challenge to modern business. Realizing that business is actually serving its
own long-run interests by aiding the community, many firms today are actively
meeting the three major social challenges of the day: equal opportunity,
ecology, and consumerism.
The Equal Pay Act of 1963, the Civil
Rights Act of 1964, and the Age Discrimination in Employment Act of 1967 were
all landmarks in helping ensure equal opportunity in the workplace. However,
business has also played a key role in helping find work for minorities and the
handicapped and many firms have also helped minority capitalists by providing
them with both technical assistance and business contracts.
Yet in these areas, and particularly in
the area of discrimination against women, a great deal remains to be done. Many
working women today, despite the law, are subjected to sexual harassment and
often do not receive equal pay for equal work. Nor are their chances for management
promotion as good as those of their male counterparts. Fortunately, many
companies are aware of these conditions and are taking steps to rectify them.
The second major area of consideration in
this chapter was ecology, with concerns ranging from air pollution to water and
noise pollution. In each instance, demands on business firms have resulted in
attempts to respond positively to the challenge.
Finally, today's consumers want to know
what they are buying and what they are getting for their dollar. Such
legislation as the Truth in Packaging Act and the Truth in Lending Act has
helped provide consumers with some important information and assistance. Yet
the consumer movement is more than just a need for more data. Consumers also
want product safety; and when it is overlooked by manufacturers, lawsuits are
likely. As a result more and more companies have begun in recent years to pay
close attention to liability laws and the development of safety checklists that
help ensure the requisite quality in their products.
The future of social responsibility was
discussed in the last part of this chapter. Recent evidence, in the form of
codes of conduct and employee assistance programs, indicates that the challenge
of social responsibility is going to be here indefinitely. Further, all signs
indicate that business is both willing and able to respond to it.
International
Management: Challenges and Opportunities
This chapter has examined areas of
international management. U.S. firms account for a significant percentage of
all international business. The student of management thus needs a working
knowledge of this area.
In deciding whether or not to go
international, a firm must evaluate many factors. lt can begin analyzing the
possible advantages and disadvantages associated with such an undertaking. On
the positive side are profit, stability, and the possibility of a foothold in
an economic union, of which the European Common Market is a famous example. On
the negative side are unfamiliar customs and cultures, delicate
company-government relations, risks, expropriation, and the possibility of
having to bring in foreign partners, which, for many businesses, constitutes
the biggest drawback. In an effort to hedge their risks, many firms are turning
to joint ventures.
If a company decides to go ahead with a
foreign operation, it must find an appropriate organization structure, which
will depend, of course, on the amount of involvement it is willing to
undertake. For some firms a branch organization will do; for others a
subsidiary is necessary.
The next question is one of control.
Which is best: heavy, intermediate, or light? Most firms opt for intermediate.
Then comes staffing, which entails identifying qualified people and offering
them sufficient monetary incentive and upward mobility to get them to go
abroad.
The last section of this chapter examined
the multinational corporation. Most multinational firms are American, and they
carry a good deal of economic power in the international arena. However, with
this power comes responsibility, and the challenge of the 1980s is to continue
incorporating foreign nationals into the upper ranks of management and to see
that the interests of the host country, as well as the corporation, are
properly served. In so doing, the multinational firms will become truly
international in nature.
