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BS Stage 6.1 - Biz Mgt - Mgt approaches

Classical, Behavioural and Contingency
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on 16 October 2017

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Transcript of BS Stage 6.1 - Biz Mgt - Mgt approaches

The classical management approach developed as factories began to
mass-produce
goods. Managers began to develop and test processes that were designed to find
the best way
of performing and managing tasks. The goal was to improve productivity, decrease costs and increase profits. E.G. Production Lines
Founder
This approach emerged during the 19th Century, thanks to Frederick W. Taylor. He believed that productivity would increase if workers were trained and specialised to perform simple, small and repetitive tasks effectively. He developed the
scientific management approach;
an approach that studies a job in great detail in order to discover the best way to perform it.

Taylor's four core principles were

1. Scientifically examine each part of a task to determine the most efficient method of performing the task. He used
time & motion
studies to analyse individual work processes. The goal was to reduce routine tasks into their most simple format
Management Approaches
By David Askew
Key Functions of Management
Planning
Planning is the preparation of a pre-determined course of action for a business. It involves the process of setting goals and deciding on the methods to achieve these goals There are three types of planning.

operational planning
– short term planning; up to 12 months. Provides specific detail about the way in which the business will operate in the short term. Involves control of the day to day operations of the business (e.g. production schedules)

tactical planning
– medium term planning; between 1 – 3 years. Flexible & Adaptable. Allows the business to respond to changes in it's market (e.g. new competitor). Emphasis is on allocation and/or use of resources

strategic planning
– long term planning; between 3 – 5 years. Determines where the business wants to position itself in the market & what the business wants to achieve. Undertaken at Board & Chief Executive levels of an organisation.
Organising
The process of arranging the resources of the business in order to achieve the goals. i.e. deciding what needs to be completed, how it needs to be done and who will do it. This is when managers arrange financial, human and material resources for the business’ success. 3 steps involved:
Determining the work activities
Classifying and grouping activities to improve efficiency
Assigning work & delegating authority
Controlling
Involves comparing what was intended to happen with what has actually happened. It involves the process of evaluating and modifying tasks to ensure that the set goals are being achieved. The
Control Process
involves comparing actual standards of production with the desired or intended standard of production and refining the process if the performance benchmark is not being achieved.
SUMMARY
STRICT CHAIN OF COMMAND
Describes the line of authority in a business. The Board of Directors, CEO and MD have the most authority (strategic planning), whilst team managers and supervisors have less authority. Most employees have no input into the business’ management or planning.
HIERARCHICAL ORGANISATIONAL STRUCTURE
(i.e. Pyramid Structure). Comprised of a small number of directors and managers at the top, a couple of middle-management teams and number of workers at the bottom.
Classical Management Approach
Behavioural Management Approach
Contingency Management Approach
Managers who follow the contingency approach usually exhibit both autocratic and democratic leadership styles, depending on the situation. They are strategic thinkers, adaptable to change and implement different ideas and strategies when circumstances alter.
The
contingency management approach
emphasises the need for flexibility & adaptation of management practices & ideas to suit changing circumstances. It stresses that there is no best way to manage a business and that managers should be flexible when attempting to develop strategies & resolve problems.

Contingency theorists believe that:
no 2 situations are identical. Each situation therefore requires it's own solution.
Managers need to be flexible & adaptable in their problem solving techniques.
Managers should borrow & blend from a wide range of management approaches ("smorgasboard approach")
Founder
Elton Mayo, is considered to be the founder of this approach. Mayo conducted an experiment (“Hawthorne effect”) where he discovered that workers productivity increased when social needs and job satisfaction were met. Workplaces are social environments and employees are often motivated by much more than self interest. Read the "Elton Mayo - Hawthorne Study" in section 7.3 of your text (p179) to find out more
Managers who practice the behavioural approach usually portray a
participative
or
democratic leadership style
. These types of Managers consult with employees before making a decision and seek to incorporate good suggestions when making decisions. They are excellent leaders, encourage employee participation, have high interpersonal skills and are team players.
Leading (Having a vision of where you want the business to be {both long & short term}
To become a successful leader, behavioural managers need to have an open mind and the confidence to
delegate tasks
(handing responsibility for a task to another person) to staff and earn their respect. Leaders empower the staff that work for them. They have good interpersonal skills and concentrate on building and maintaining high performing teams that exceed their objectives. They should have a clear vision of the business’ short and long term goals. If Managers do not possess these skills and only focus on profits & productivity, they are simply Managers, not Leaders.
Motivating {energising & encouraging employees to achieve the business's goals}
Motivation is a major determinant of an employee's productivity. Managers should always look for ways to motivate & energise their workers. This can be done by valuing and respecting workers and involving them in the business. Motivation is the individual, internal process that energises, directs and sustains an individual's behaviour. Management should do it's best to provide a work environment that maximises employee satisfaction
Communicating {exchanging information; sending & receiving messages}
Effective interpersonal and communication skills between managers and employees are critical. These skills allow Managers to communicate goals and establish co-operative work practices through teamwork. It also helps to resolve conflict and share best practice amongst team members. Leaders without these skills will find it difficult to influence others. Communication is one of the easiest and, at the time time, most difficult management tasks
“If you can’t empower, you can’t lead”
Varying structure (pyramid, flat or even decentralised)
dependent on the situation.

Managers must adaptable & prepared to utilise the most appropriate management response/practice for the situation as no two situations are the same.
Key Functions of Behavioural Management
Organisational Structure
Leadership Style
The
Behavioural management approach
focuses on human behaviour and interaction. The
Behavioural Approach
emphasises that people should be the main focus in terms of the way a business is organised. Successful businesses depend on a manager's ability to understand, work with and motivate a wide variety of people. This is also known as the “we” or “human relations” approach to management.
Flatter Structure
Teamwork tends to reduce or eliminate hierarchical boundaries (e.g. Google). The
span of control
is also wider, as supervisors have direct contact with many more workers. Elimination of many middle-management levels results in ‘de-layering’, the outcome of which is a
flatter organisational structure.
Teams
Behavioural Management
Theorists value
teamwork
(involves people interacting and co-ordinating regularly in order to achieve a common goal). It is seen as a catalyst for higher performance. It involves all staff members working together to reach a common goal. Understanding the group dynamic of teams is vitally important for BMT. Benefits include lower staff turnover and absenteeism and a more collaborative workforce.
Leadership Style
Organisational Structure in Contingency Management
DIVISION OF LABOUR WITH CLEAR LINES OF AUTHORITY
This is to the degree in which a job can be broken down into smaller simpler tasks. People with no qualifications often filled these roles
DISCIPLINE AS A FEATURE OF LEADERSHIP
with clear rules and procedures
PRODUCTION LINE METHODS
McDonalds is an example of a business that uses the classical approach in the way they prepare food, like a cheeseburger. Workers are expected to perform and repeat a set number of steps.
Time & motion studies used to reduce inefficiencies
The army would be expected to fall under the contingency management approach. Depending on the situation, soldiers will have to follow orders from their superiors, but on other occasions, may be asked for opinions and input. Similarly, leaders will have to switch between an autocratic and democratic leadership style. Whichever the case, they must strive to achieve their business goal; complete the mission at hand.
JB Hi-Fi is an example of business that have adopted the
behavioural management approach
. Its management have revolutionised the business in the way it has connected with its employees, through implementing suggestion boxes, questionnaires, surveys and feedback from employees. This presents staff with the sense of belonging and reinforces the idea of the 'we' approach.
What is it?
4. Divide work & responsibility so that management is responsible for planning, orgainising & controlling the scientific work methods (using rigid rules & regulations based on a heirarchy of control) whilst workers were responsible for carrying out the work. Henry Ford was one of the 1st entrepreneurs to implement
Classical Scientific Approach.
Other eg's include McDonalds
2. Select suitable workers & train them to use the scientifically developed work methods
Workers would be assigned to certain tasks best suited for them. Taylor advocated a
division of labour
into function-related units (i.e. small specialised activities)
3. Supervise and train workers to guarantee they use the production methods developed

What is it?
What is it?
MANAGEMENT
Management has been practiced for thousands of years (e.g. Pyramids)
Management is the use of people and resources to accomplish organisational objectives

The role and responsibilities of Managers can differ from organisation to organisation.

Typically there are 3 levels of management in organisations (
Top Level Managers
SET GOALS & DETERMINE STARTEGY {e.g. Executives; C.E.O., C.F.O., C.O.O.})
Middle Level Managers

IMPLEMENT STRATEGY {e.g. Department Heads, Regional Manager, State Manager}) and
Lower Level Managers
SUPERVISORY & REPORTING FUNCTION {e.g. Branch Managers, Store managers})
Management Theory in large Organisations (6 min)www.youtube.com/watch?v=iB334D7-jOY&list=PLSJnyH6TwvIRSdMttTe9Dll4iXXiEVbtK&index=6
MANAGEMENT THEORY
It was only since the Industrial Revolution (late 18th Century) that the development of Management Theory has taken off.

The growth in the number of factories acted as a catalyst for developing management theories in order to co-ordinate activities and improve productivity
MANAGEMENT THEORIES outline the main functions of Management

PLANNING
ORGANISING
LEADING
MOTIVATING
COMMUNICATING
NEGOTIATING and
CONROLLING
MANAGEMENT THEORIES cont
Management approaches have tended to reflect the customs & traditions of the society at the time

Consequently as social and economic traditions changed new approaches were developed

NO SINGLE APPROACH IS UNIVERSALLY ACCEPTED TODAY. EACH APPROACH HAS SOMETHING OF VALUE FOR TODAY'S MANAGERS
MANAGEMENT APPROACHES
The management approach adopted by the business will have an enormous impact on all aspects of the business
In particular management approaches influence:
the organisation & allocation of tasks to staff
the organisational structure
levels of management &
management styles
YouTube video on Classical M'Ment Theory (4 min) www.youtube.com/watch?v=kE9XvUWgwaI&list=PLSJnyH6TwvIRSdMttTe9Dll4iXXiEVbtK&index=1
Development of the production line (3 min) www.youtube.com/watch?v=cxjZ2VT9lFU
CLASSICAL BUREAUCRATIC APPROACH
Developed & refined by Max Weber & Henri Fayol. They believed that a
bureaucracy
(the set of rules & regulations that control a business) was the most efficient form of organisation.
They believed an organisation should have:
a strict hierarchical organisational structure
clear lines of communication & responsibility
specialisation (i.e. jobs broken down into simple tasks)
rules & procedures and'
impersonal evaluation of employee performance to avoid bias
MANAGEMENT FUNCTIONS
Fayol identified a number of management functions including PLANNING, ORGANISING & CONTROLLING
CLASS ACTIVITY
Complete exercise 7.1 (Page 169) of your text "Business Studies in Action - preliminary Course"
AUTOCRATIC LEADERSHIP STYLE
. is typical of the classical management approach. It is characterised by directive autonomous leadership with little, if any, input from workers
3 METHODS OF QUALITY CONTROL
QUALITY CONTROL:

Traditional method involving inspection and checking of finished products. Defective or sub-standard products are scrapped.

QUALITY ASSURANCE:
Occurs both DURING and POST production. It is less wasteful that Quality Control. Goal is to stop problems before they occur. Employees rather than inspectors are responsible for QA.

TOTAL QUALITY MANAGEMENT
:
The most comprehensive form of control management. Focused on every employee in the workplace evaluating and refining the the quality of their work or the quality of the production process they control. Customer needs are at the core of the TQM process.
IT IS CRITICALLY IMPORTANT FOR A BUSINESS TO ENSURE IT'S PRODUCTS OR SERVICES MEET SPECIFIED STANDARDS
Ikea Megafactories documentary (47 min) www.youtube.com/watch?v=pDK04fiAs7k
Accenture video on TQM (2 min) www.youtube.com/watch?v=uJ_dX7gL5hk
Education Portal video on TQM (6 min) www.youtube.com/watch?v=85Y8iBhzqwk
HIERARCHICAL ORGANISATIONAL STRUCTURE
This management structure is found in the majority of medium to large businesses. Traditionally hierarchical organisations group people according to the specialised functions they perform (e.g. marketing, operations, finance & human resources)

The
MANAGEMENT HIERARCHY
is a model of management that provides increased authority and responsibility at higher levels of management
Note the
chain of command
(i.e. system that determines responsibility, supervision and accountability for different members of the organisation) & the
specialisation of labour
(i.e. degree to which tasks are divided into seperate jobs).This is done to improve performance and capitalise on people's strengths

Sporting teams use the principle of specialisation to improve performance
LEADERSHIP STYLES
An organisation's goals can only be accomplished by working with and through other people. Managers must select a leadership style that is appropriate for the environment in which they operate
A Manager's Leadership Style is essentially their way of doing things-their behaviour & attitude
Leadership Styles cont'
AUTOCRATIC LEADERSHIP STYLE
"Do it the way I tell you"
More suited to the
Classical Scientific Approach
Directive style of Management
Makes all the decisions
Dictates work methods & roles
Frequently checks an employee's work
Employee input is limited or non-existent
Control & Compliance culture
FUNCTIONS OF MANAGEMENT (6 min) www.youtube.com/watch?v=AeHuH39M4QQ
Watch the following video then in groups of 2 create a table that describes each management style. Your table should:
Define each style of leadership
Detail situations when it should be used
Describe advantages & disadvantages
CLASS ACTIVITY
YouTube video on Leadership Styles (6 min) www.youtube.com/watch?v=hPfRKu05bkQ
CLASS ACTIVITY
Complete questions 1 -16 in section 7.2 of your text (p176-177)
WHY?
Scientific Management Theory (SMT) didn't always lead to an increase in productivity due to the repetitive boring nature of the process.
Approx 50 years after the emergence of the SMT behavioral/human relations approaches began to emerge
The Behavioural school of thought believed that worker participation and involvement in the production process was required to improve productivity
SUMMARY
Youtube video Human Relations (6 min) www.youtube.com/watch?v=F2k018hctZQ
Behavioural Approach to Management

focuses on human behaviour and relationships with an organisation.
HUMANISTIC APPROACH TO MANAGEMENT
ECONOMIC & SOCIAL NEEDS OF EMPLOYEES SHOULD BE SATISFIED
EMPLOYEE PARTICIPATION IN DECISION MAKING
TEAM BASED STRUCTURE
MANAGERS NEEDS GOOD INTERPERSONAL SKILLS
DEMOCRATIC LEADERSHIP STYLE
MAIN FEATURES
Manager's CONTROL
Leader's EMPOWER
Richard Branson (10 min) www.youtube.com/watch?v=DCXOnloZyYk
Steve Jobs on managing people (2min) www.youtube.com/watch?v=f60dheI4ARg
SUCCESSFUL LEADERS
Keep an open mind; seeks out new ideas and freely shares information
Builds & communicates a clear vision
Sets an example and earns the respect of others
Delegates tasks
Is a good communicator
Conveys the goals of the business in a way that motivates employees
Demonstrates flexibility when dealing with situations
Understands the industry in which they operate
CLASS ACTIVITY
INTERNAL (HUMAN) MOTIVATORS
EXTERNAL MOTIVATORS
MOTIVATORS
IF YOU CAN'T COMMUNICATE YOU'LL FIND IT DIFFICULT TO INFLUENCE OTHERS
CLASS ACTIVITY
Complete exercise 7.3 (p184) in your text
Funny YouTube on teamwork (10 min) www.youtube.com/watch?v=bdaLsonTAs0
Flatter org' structures reduce the levels of Management & give individual's greater responsibility.
MANAGERS BECOME FACILITATORS RATHER THAN CONTROLLERS
INDIVIDUAL ACTIVITY
Complete the "What is a Team?" exercise on page 187 of textbook.
PARTICIPATIVE OR DEMOCRATIC MANAGERS
ADVANTAGES
Share their decision making authority with subordinates. Power is shared.
Communication is two-way. The contribution of employees is valued
Employer-employee relations are usually positive as there is a high level of trust
Motivation & job satisfaction are usually higher as employees feel valued and generally have more opportunities to acquire new skills
DISADVANTAGES
Decision making can be time consuming as a result of increased consultation
The quality of decisions may suffer because of the compromises that may be made
The control of the Manager may be weakened/undermined by employees
Internal conflict/disagreement can arise as a result of shared opinions
The organisational structure may be undermined resulting in a possible collapse in management
Not all employees will contribute or get involved
DEVELOPMENT OF MANAGEMENT THEORIES
Over the last few decades other contemporary management theories have emerged.
One of the main theories to have developed is the
Contingency Management Theory

MANAGEMENT THEORIES SUMMARY
MANAGEMENT THEORIES SUMMARY
CLASS ACTIVITY
Complete exercise 7.4 (questions 1 to 9) in your textbook "Business Studies in Action". Handout workbook.
Clickview video "Tough at the top" (13 min) http://online.clickview.com.au/MyLibrary/Play?Id=63565c1a-1917-5e1e-bfa5-2c5291bd0eac
Full transcript