Levels of Management

Tweet The term Levels of Management refers to a line of demarcation between various managerial positions in an organization. The number of levels in management increases when the size of the business and work force increases and vice versa. The level of management determines a chain of command, the amount of authority & status enjoyed by any managerial position. The levels of management can be classified in three broad categories: 1. Top level / Administrative level 2. Middle level / Executory 3. Low level / Supervisory / Operative / First-line managers Managers at all these levels perform different functions. The role of managers at all the three levels is discussed below:

LEVELS OF MANAGEMENT

1. Top Level of Management

It consists of board of directors, chief executive or managing director. The top management is the ultimate source of authority and it manages goals and policies for an enterprise. It devotes more time on planning and coordinating functions. The role of the top management can be summarized as follows a. Top management lays down the objectives and broad policies of the enterprise. b. It issues necessary instructions for preparation of department budgets, procedures, schedules etc. c. It prepares strategic plans & policies for the enterprise. d. It appoints the executive for middle level i.e. departmental managers. e. It controls & coordinates the activities of all the departments. f. It is also responsible for maintaining a contact with the outside world. g. It provides guidance and direction.

h. The top management is also responsible towards the shareholders for

the performance of the enterprise.

2. Middle Level of Management

The branch managers and departmental managers constitute middle level. They are responsible to the top management for the functioning of their department. They devote more time to organizational and directional functions. In small organization, there is only one layer of middle level of management but in big enterprises, there may be senior and junior middle level management. Their role can be emphasized as a. They execute the plans of the organization in accordance with the policies and directives of the top management. b. They make plans for the sub-units of the organization. c. They participate in employment & training of lower level management. d. They interpret and explain policies from top level management to lower level. e. They are responsible for coordinating the activities within the division or department. f. It also sends important reports and other important data to top level management. g. They evaluate performance of junior managers. h. They are also responsible for inspiring lower level managers towards better performance. 3. Lower Level of Management Lower level is also known as supervisory / operative level of management. It consists of supervisors, foreman, section officers, superintendent etc. According to R.C. Davis, Supervisory management refers to those executives whose work has to be largely with personal oversight and direction of operative employees. In other words, they are concerned with direction and controlling function of management. Their activities include -

a. b. c. d. e.

f. g. h. i. j. k. l. m.

Assigning of jobs and tasks to various workers. They guide and instruct workers for day to day activities. They are responsible for the quality as well as quantity of production. They are also entrusted with the responsibility of maintaining good relation in the organization. They communicate workers problems, suggestions, and recommendatory appeals etc to the higher level and higher level goals and objectives to the workers. They help to solve the grievances of the workers. They supervise & guide the sub-ordinates. They are responsible for providing training to the workers. They arrange necessary materials, machines, tools etc for getting the things done. They prepare periodical reports about the performance of the workers. They ensure discipline in the enterprise. They motivate workers. They are the image builders of the enterprise because they are in direct contact with the workers.

BCG MATRIX (GROWTH SHARE MATRIX)

The BCG matrix (aka B.C.G. analysis, BCG-matrix, Boston Box, Boston Matrix, Boston Consulting Group analysis, portfolio diagram) is a chart that had been created by Bruce Henderson for the Boston Consulting Group in 1968 to help corporations with analyzing their business units or product lines. This helps the company allocate resources and is used as an analytical tool in brand marketing, product management, strategic management, and portfolio analysis.[1] Like Ansoff's matrix, the Boston Matrix is a well known tool for the marketing manager. It was developed by the large US consulting group and is an approach to product portfolio planning. It has two controlling aspect namely relative market share (meaning relative to your competition) and market growth

To use the chart, analysts plot a scatter graph to rank the business units (or products) on the basis of their relative market shares and growth rates.

Cash cows are units with high market share in a slow-growing industry. These units typically generate cash in excess of the amount of cash needed to maintain the business. They are regarded as staid and boring, in a "mature" market, and every corporation would be thrilled to own as many as possible. They are to be "milked" continuously with as little investment as possible, since such investment would be wasted in an industry with low growth. Dogs, or more charitably called pets, are units with low market share in a mature, slow-growing industry. These units typically "break even", generating barely enough cash to maintain the business's market share.

Though owning a break-even unit provides the social benefit of providing jobs and possible synergies that assist other business units, from an accounting point of view such a unit is worthless, not generating cash for the company. They depress a profitable company's return on assets ratio, used by many investors to judge how well a company is being managed. Dogs, it is thought, should be sold off. Question marks (also known as problem child) are growing rapidly and thus consume large amounts of cash, but because they have low market shares they do not generate much cash. The result is a large net cash consumption. A question mark has the potential to gain market share and become a star, and eventually a cash cow when the market growth slows. If the question mark does not succeed in becoming the market leader, then after perhaps years of cash consumption it will degenerate into a dog when the market growth declines. Question marks must be analyzed carefully in order to determine whether they are worth the investment required to grow market share. Stars are units with a high market share in a fast-growing industry. The hope is that stars become the next cash cows. Sustaining the business unit's market leadership may require extra cash, but this is worthwhile if that's what it takes for the unit to remain a leader. When growth slows, stars become cash cows if they have been able to maintain their category leadership, or they move from brief stardom todogdom.[citation needed]

As a particular industry matures and its growth slows, all business units become either cash cows or dogs. The natural cycle for most business units is that they start as question marks, then turn into stars. Eventually the market stops growing thus the business unit becomes a cash cow. At the end of the cycle the cash cow turns into a dog. The overall goal of this ranking was to help corporate analysts decide which of their business units to fund, and how much; and which units to sell. Managers were supposed to gain perspective from this analysis that allowed them to plan with confidence to use money generated by the cash cows to fund the stars and, possibly, the question marks. As the BCG stated in 1970: Only a diversified company with a balanced portfolio can use its strengths to truly capitalize on its growth opportunities. The balanced portfolio has:

stars whose high share and high growth assure the future; cash cows that supply funds for that future growth; and question marks to be converted into stars with the added funds.

[edit] Practical use of the BCG Matrix

For each product or service, the 'area' of the circle represents the value of its sales. The BCG Matrix thus offers a very useful 'map' of the organization's product (or service) strengths and weaknesses, at least in terms of current profitability, as well as the likely cashflows. The need which prompted this idea was, indeed, that of managing cash-flow. It was reasoned that one of the main indicators of cash generation was relative market share, and one which pointed to cash usage was that of market growth rate. Derivatives can also be used to create a 'product portfolio' analysis of services. So Information System services can be treated accordingly.[citation needed]
[edit] Relative market share

This indicates likely cash generation, because the higher the share the more cash will be generated. As a result of 'economies of scale' (a basic assumption of the BCG Matrix), it is assumed that these earnings will grow faster the higher the share. The exact measure is the brand's share relative to its largest competitor. Thus, if the brand had a share of 20 percent, and the largest competitor had the same, the ratio would be 1:1. If the largest competitor had a share of 60 percent; however, the ratio would be 1:3, implying that the organization's brand was in a relatively weak position. If the largest competitor only had a share of 5 percent, the ratio would be 4:1, implying that the brand owned was in a relatively strong position, which might be reflected in profits and cash flows. If this technique is used in practice, this scale is logarithmic, not linear. On the other hand, exactly what is a high relative share is a matter of some debate. The best evidence is that the most stable position (at least in Fast Moving Consumer Goods FMCG markets) is for the brand leader to have a share double that of the second brand, and triple that of the third. Brand leaders in this position tend to be very stableand profitable; the Rule of 123.[3] The reason for choosing relative market share, rather than just profits, is that it carries more information than just cash flow. It shows where the brand is

positioned against its main competitors, and indicates where it might be likely to go in the future. It can also show what type of marketing activities might be expected to be effective.[citation needed]
[edit] Market growth rate

Rapidly growing in rapidly growing markets, are what organizations strive for; but, as we have seen, the penalty is that they are usually net cash users - they require investment. The reason for this is often because the growth is being 'bought' by the high investment, in the reasonable expectation that a high market share will eventually turn into a sound investment in future profits. The theory behind the matrix assumes, therefore, that a higher growth rate is indicative of accompanying demands on investment. The cut-off point is usually chosen as 10 per cent per annum. Determining this cut-off point, the rate above which the growth is deemed to be significant (and likely to lead to extra demands on cash) is a critical requirement of the technique; and one that, again, makes the use of the BCG Matrix problematical in some product areas. What is more, the evidence,[3] from FMCG markets at least, is that the most typical pattern is of very low growth, less than 1 per cent per annum. This is outside the range normally considered in BCG Matrix work, which may make application of this form of analysis unworkable in many markets.[citation needed] Where it can be applied, however, the market growth rate says more about the brand position than just its cash flow. It is a good indicator of that market's strength, of its future potential (of its 'maturity' in terms of the market life-cycle), and also of its attractiveness to future competitors. It can also be used in growth analysis.

The McKinsey 7S Framework

Ensuring that all parts of your organization work in harmony

How do you go about analyzing how well your organization is positioned to achieve its intended objective? This is a question that has been asked for many years, and there are many different answers. Some approaches look at internal factors, others look at external ones, some combine these perspectives, and others look for congruence between various aspects of the organization being studied. Ultimately, the issue comes down to which factors to study. While some models of organizational effectiveness go in and out of fashion, one that has persisted is the McKinsey 7S framework. Developed in the early 1980s by Tom Peters and Robert Waterman, two consultants working at the McKinsey & Company consulting firm, the basic premise of the model is that there are seven internal aspects of an organization that need to be aligned if it is to be successful. The 7S model can be used in a wide variety of situations where an alignment perspective is useful, for example to help you:

Improve the performance of a company. Examine the likely effects of future changes within a company. Align departments and processes during a merger or acquisition. Determine how best to implement a proposed strategy.

The McKinsey 7S model can be applied to elements of a team or a project as well. The alignment issues apply, regardless of how you decide to define the scope of the areas you study.

The Seven Elements

The McKinsey 7S model involves seven interdependent factors which are categorized as either "hard" or "soft" elements: Hard Elements Strategy Structure Systems Soft Elements Shared Values Skills Style Staff

"Hard" elements are easier to define or identify and management can directly influence them: These are strategy statements; organization charts and reporting lines; and formal processes and IT systems. "Soft" elements, on the other hand, can be more difficult to describe, and are less tangible and more influenced by culture. However, these soft elements are as important as the hard elements if the organization is going to be successful. The way the model is presented in Figure 1 below depicts the interdependency of the elements and indicates how a change in one affects all the others.

Let's look at each of the elements specifically:

Strategy: the plan devised to maintain and build competitive advantage over the competition. Structure: the way the organization is structured and who reports to whom. Systems: the daily activities and procedures that staff members engage in to get the job done. Shared Values: called "superordinate goals" when the model was first developed, these are the core values of the company that are evidenced in the corporate culture and the general work ethic. Style: the style of leadership adopted. Staff: the employees and their general capabilities. Skills: the actual skills and competencies of the employees working for the company.

Placing Shared Values in the middle of the model emphasizes that these values are central to the development of all the other critical elements. The company's structure, strategy, systems, style, staff

and skills all stem from why the organization was originally created, and what it stands for. The original vision of the company was formed from the values of the creators. As the values change, so do all the other elements.

How to Use the Model

Now you know what the model covers, how can you use it? The model is based on the theory that, for an organization to perform well, these seven elements need to be aligned and mutually reinforcing. So, the model can be used to help identify what needs to be realigned to improve performance, or to maintain alignment (and performance) during other types of change. Whatever the type of change - restructuring, new processes, organizational merger, new systems, change of leadership, and so on - the model can be used to understand how the organizational elements are interrelated, and so ensure that the wider impact of changes made in one area is taken into consideration. You can use the 7S model to help analyze the current situation (Point A), a proposed future situation (Point B) and to identify gaps and inconsistencies between them. It's then a question of adjusting and tuning the elements of the 7S model to ensure that your organization works effectively and well once you reach the desired endpoint. Sounds simple? Well, of course not: Changing your organization probably will not be simple at all! Whole books and methodologies are dedicated to analyzing organizational strategy, improving performance and managing change. The 7S model is a good framework to help you ask the right questions - but it won't give you all the answers. For that you'll need to bring together the right knowledge, skills and experience. When it comes to asking the right questions, we've developed a Mind Tools checklist and a matrix to keep track of how the seven elements align with each other. Supplement these with your own questions, based on your organization's specific circumstances and accumulated wisdom. 7S Checklist Questions Here are some of the questions that you'll need to explore to help you understand your situation in terms of the 7S framework. Use them to analyze your current (Point A) situation first, and then repeat the exercise for your proposed situation (Point B). Strategy:

What is our strategy?

How do we intend to achieve our objectives? How do we deal with competitive pressure? How are changes in customer demands dealt with? How is strategy adjusted for environmental issues?

Structure:

How is the company/team divided? What is the hierarchy? How do the various departments coordinate activities? How do the team members organize and align themselves? Is decision making and controlling centralized or decentralized? Is this as it should be, given what we're doing? Where are the lines of communication? Explicit and implicit?

Systems:

What are the main systems that run the organization? Consider financial and HR systems as well as communications and document storage. Where are the controls and how are they monitored and evaluated? What internal rules and processes does the team use to keep on track?

Shared Values:

What are the core values? What is the corporate/team culture? How strong are the values? What are the fundamental values that the company/team was built on?

Style:

How participative is the management/leadership style? How effective is that leadership? Do employees/team members tend to be competitive or cooperative? Are there real teams functioning within the organization or are they just nominal groups?

Staff:

What positions or specializations are represented within the team? What positions need to be filled? Are there gaps in required competencies?

Skills:

What are the strongest skills represented within the company/team? Are there any skills gaps?

What is the company/team known for doing well? Do the current employees/team members have the ability to do the job? How are skills monitored and assessed?

7S matrix questions Using the information you have gathered, now examine where there are gaps and inconsistencies between elements. Remember you can use this to look at either your current or your desired organization. Click here to download our McKinsey 7S Worksheet, which contains a matrix that you can use to check off alignment between each of the elements as you go through the following steps:

Start with your Shared Values: Are they consistent with your structure, strategy, and systems? If not, what needs to change? Then look at the hard elements. How well does each one support the others? Identify where changes need to be made. Next look at the other soft elements. Do they support the desired hard elements? Do they support one another? If not, what needs to change? As you adjust and align the elements, you'll need to use an iterative (and often time consuming) process of making adjustments, and then re-analyzing how that impacts other elements and their alignment. The end result of better performance will be worth it.

Tip: For similar approaches to this, see our articles on the Burke-Litwin Change Model, and the Congruence Model. You may also find our articles on the Change Curve, Impact Analysis and Lewin's Change Management Model useful.

Key Points
The McKinsey 7Ss model is one that can be applied to almost any organizational or team effectiveness issue. If something within your organization or team isn't working, chances are there is inconsistency between some of the elements identified by this classic model. Once these inconsistencies are revealed, you can work to align the internal elements to make sure they are all contributing to the shared goals and values. The process of analyzing where you are right now in terms of these elements is worthwhile in and of itself. But by taking this analysis to the next level and determining the ultimate state for each of the factors, you can really move your organization or team forward.

Hawthorne effect
From Wikipedia, the free encyclopedia Jump to: navigation, search

The Hawthorne effect is a form of reactivity whereby subjects improve or modify an aspect of their behavior being experimentally measured simply in response to the fact that they are being studied,[1][2] not in response to any particular experimental manipulation. The term was coined in 1955 by Henry A. Landsberger[3] when analysing older experiments from 1924-1932 at the Hawthorne Works (a Western Electric factory outside Chicago). Hawthorne Works had commissioned a study to see if its workers would become more productive in higher or lower levels of light. The workers' productivity seemed to improve when changes were made and slumped when the study was concluded. It was suggested that the productivity gain was due to the motivational effect of the interest being shown in them. Although illumination research of workplace lighting formed the basis of the Hawthorne effect, other changes such as maintaining clean work stations, clearing floors of obstacles, and even relocating workstations resulted in increased productivity for short periods. Thus the term is used to identify any type of short-lived increase in productivity.[3][4][5]

Contents
[hide]

1 History o 1.1 Relay assembly experiments o 1.2 Interviewing program o 1.3 Bank wiring room experiments 2 Interpretations and criticisms of the Hawthorne studies 3 See also 4 References 5 External links 6 Further reading

[edit]History
The term gets its name from a factory called the Hawthorne Works,[6] where a series of experiments on factory workers were carried out between 1924 and 1932. This effect was observed for minute increases in illumination. Evaluation of the Hawthorne effect continues in the modern era.[7][8][9]

Most industrial/occupational psychology and organisational behavior textbooks refer to the illumination studies. Only occasionally are the rest of the studies mentioned.[10] In the lighting studies, light intensity was altered to examine its effect on worker productivity.
[edit]Relay assembly experiments

In one of the studies, experimenters chose two women as test subjects and asked them to choose four other workers to join the test group. Together the women worked in a separate room over the course of five years (1927-1932) assembling telephone relays. Output was measured mechanically by counting how many finished relays each dropped down a chute. This measuring began in secret two weeks before moving the women to an experiment room and continued throughout the study. In the experiment room, they had a supervisor who discussed changes with them and at times used their suggestions. Then the researchers spent five years measuring how different variables impacted the group's and individuals' productivity. Some of the variables were:

changing the pay rules so that the group was paid for overall group production, not individual production giving two 5-minute breaks (after a discussion with them on the best length of time), and then changing to two 10-minute breaks (not their preference). Productivity increased, but when they received six 5-minute rests, they disliked it and reduced output. providing food during the breaks shortening the day by 30 minutes (output went up); shortening it more (output per hour went up, but overall output decreased); returning to the first condition (where output peaked).

Changing a variable usually increased productivity, even if the variable was just a change back to the original condition. However it is said that this is the natural process of the human being to adapt to the environment without knowing the objective of the experiment occurring. Researchers concluded that the workers worked harder because they thought that they were being monitored individually. Researchers hypothesised that choosing one's own coworkers, working as a group, being treated as special (as evidenced by working in a separate room), and having a sympathetic supervisor were the real reasons for the productivity increase. One interpretation, mainly due to Elton Mayo,[citation needed] was that "the six individuals became a team and the team gave itself wholeheartedly and spontaneously to cooperation in the experiment." (There was a second relay assembly test room study whose results were not as significant as the first experiment.)
[edit]Interviewing program

The workers were interviewed in attempt to validate the Hawthorne Studies. The participants were asked about supervisory practices and employee morale. The results proved that upward

communication in an organisation creates a positive attitude in the work environment. The workers feel pleased that their ideas are being heard.
[edit]Bank wiring room experiments

The purpose of the next study was to find out how payment incentives would affect productivity. The surprising result was that productivity actually decreased. Workers apparently had become suspicious that their productivity may have been boosted to justify firing some of the workers later on.[11] The study was conducted by Mayo and W. Lloyd Warner between 1931 and 1932 on a group of fourteen men who put together telephone switching equipment. The researchers found that although the workers were paid according to individual productivity, productivity decreased because the men were afraid that the company would lower the base rate. Detailed observation between the men revealed the existence of informal groups or "cliques" within the formal groups. These cliques developed informal rules of behavior as well as mechanisms to enforce them. The cliques served to control group members and to manage bosses; when bosses asked questions, clique members gave the same responses, even if they were untrue. These results show that workers were more responsive to the social force of their peer groups than to the control and incentives of management.

[edit]Interpretations and criticisms of the Hawthorne studies

H. McIlvaine Parsons (1974) argues that in the studies where subjects had to go for long drives with no toilet breaks, the results should be considered biased by the feedback compared to the manipulation studies. He also argues that the rest periods involved possible learning effects, and the fear that the workers had about the intent of the studies may have biased the results. Parsons defines the Hawthorne effect as "the confounding that occurs if experimenters fail to realise how the consequences of subjects' performance affect what subjects do" [i.e. learning effects, both permanent skill improvement and feedback-enabled adjustments to suit current goals]. His key argument is that in the studies where workers dropped their finished goods down chutes, the "girls" had access to the counters of their work rate. It's possible that the illumination experiments were explained by a longitudinal learning effect.[citation needed] It is notable however that Parsons refuses to analyse the illumination experiments, on the grounds that they haven't been properly published and so he can't get at details, whereas he had extensive personal communication with Roethlisberger and Dickson. But Mayo says it is to do with the fact that the workers felt better in the situation, because of the sympathy and interest of the observers. He does say that this experiment is about testing overall effect, not testing factors separately. He also discusses it not really as an experimenter effect but as a management effect: how management can make workers perform differently because they feel differently. A lot to do with feeling free, not feeling supervised but more in control as a group. The experimental manipulations were important in convincing the

workers to feel this way: that conditions were really different. The experiment was repeated with similar effects on mica splitting workers.[citation needed] Richard E. Clark and Timothy F. Sugrue (1991, p.333) in a review of educational research say that uncontrolled novelty effects cause on average 30% of a standard deviation (SD) rise (i.e. 50%-63% score rise), which decays to small level after 8 weeks. In more detail: 50% of a SD for up to 4 weeks; 30% of SD for 58 weeks; and 20% of SD for > 8 weeks, (which is < 1% of the variance). A psychology professor at the University of Michigan, Dr. Richard Nisbett, calls the Hawthorne effect 'a glorified anecdote.' 'Once you've got the anecdote,' he said, 'you can throw away the data.'"[12] Harry Braverman points out in Labor and Monopoly Capital that the Hawthorne tests were based on industrial psychology and were investigating whether workers' performance could be predicted by pre-hire testing. The Hawthorne study showed "that the performance of workers had little relation to ability and in fact often bore an inverse relation to test scores...". Braverman argues that the studies really showed that the workplace was not "a system of bureaucratic formal organisation on the Weberian model, nor a system of informal group relations, as in the interpretation of Mayo and his followers but rather a system of power, of class antagonisms". This discovery was a blow to those hoping to apply the behavioral sciences to manipulate workers in the interest of management.[13] The Hawthorne effect has been well established in the empirical literature beyond the original studies. The output ("dependent") variables were human work, and the educational effects can be expected to be similar (but it is not so obvious that medical effects would be). The experiments stand as a warning about simple experiments on human participants viewed as if they were only material systems. There is less certainty about the nature of the surprise factor, other than it certainly depended on the mental states of the participants: their knowledge, beliefs, etc. Research on the demand effect also suggests that people might take on pleasing the experimenter as a goal, at least if it doesn't conflict with any other motive,[14] but also, improving their performance by improving their skill will be dependent on getting feedback on their performance, and an experiment may give them this for the first time. So you often won't see any Hawthorne effectonly when it turns out that with the attention came either usable feedback or a change in motivation. Adair (1984): warns of gross factual inaccuracy in most secondary publications on Hawthorne effect and that many studies failed to find it. He argues that it should be viewed as a variant of Orne's (1973) experimental demand effect. So for Adair, the issue is that an experimental effect depends on the participants' interpretation of the situation; that this is why manipulation checks are important in social sciences experiments. So he thinks it is not awareness per se, nor special attention per se, but participants' interpretation must be

investigated in order to discover if/how the experimental conditions interact with the participants' goals. This can affect whether participants believe something, if they act on it or don't see it as in their interest, etc.

Maslow's hierarchy of needs

From Wikipedia, the free encyclopedia Jump to: navigation, search

An interpretation of Maslow's hierarchy of needs, represented as a pyramid with the more basic needs at the bottom.[1]

Maslow's hierarchy of needs is a theory in psychology, proposed by Abraham Maslow in his 1943 paper A Theory of Human Motivation.[2] Maslow subsequently extended the idea to include his observations of humans' innate curiosity. His theories parallel many other theories of human developmental psychology, all of which focus on describing the stages of growth in humans. Maslow studied what he called exemplary people such as Albert Einstein, Jane Addams, Eleanor Roosevelt, and Frederick Douglass rather than mentally ill or neurotic people, writing that "the study of crippled, stunted, immature, and unhealthy specimens can yield only a cripple psychology and a cripple philosophy."[3] Maslow also studied the healthiest 1% of the college student population.[4] Maslow's theory was fully expressed in his 1954 book Motivation and Personality.[5] Maslow's hierarchy of needs is often portrayed in the shape of a pyramid, with the largest and lowest levels of needs at the bottom, and the need for self-actualization at the top, also the needs for people.[1][6]

[edit]Deficiency needs
This section needs additional citations for verification.
Please help improve this article by adding reliable references. Unsourced material may be challenged and removed. (July 2010)

The lower four layers of the pyramid contain what Maslow called "deficiency needs" or "dneeds": esteem , friendship and love, security, and physical needs. With the exception of the lowest (physiological) needs, if these "deficiency needs" are not met, the body gives no physical indication but the individual feels anxious and tense.In other words, the hierarchy level of need moves upward as soon as the previous level of need is satisfied.
[edit]1. Self-actualization

What a man can be, he must be.[7] This forms the basis of the perceived need for selfactualization. This level of need pertains to what a person's full potential is and realizing that potential. Maslow describes this desire as the desire to become more and more what one is, to become everything that one is capable of becoming.[8] This is a broad definition of the need for self-actualization, but when applied to individuals the need is specific. For example one individual may have the strong desire to become an ideal parent, in another it may be expressed athletically, and in another it may be expressed in painting, pictures, or inventions.[9] As mentioned before, in order to reach a clear understanding of this level of need one must first not only achieve the previous needs, physiological, safety, love, and esteem, but master these needs. Below are Maslows descriptions of a self-actualized persons different needs and personality traits. Maslow also states that even though these are examples of how the quest for knowledge is separate from basic needs he warns that these two hierarchies are interrelated rather than sharply separated (Maslow 97). This means that this level of need, as well as the next and highest level, are not strict, separate levels but closely related to others, and this is possibly the reason that these two levels of need are left out of most textbooks.
[edit]2. Esteem

All humans have a need to be respected and to have self-esteem and self-respect. Also known as the belonging need, esteem presents the normal human desire to be accepted and valued by others. People need to engage themselves to gain recognition and have an activity or activities that give the person a sense of contribution, to feel accepted and self-valued, be it in a profession or hobby. Imbalances at this level can result in low self-esteem or an inferiority complex. People with low self-esteem need respect from others. They may seek fame or glory, which again depends on others. Note, however, that many people with low self-esteem will not be able to improve their view of themselves simply by receiving fame, respect, and glory externally, but must first accept themselves internally. Psychological imbalances such as depression can also prevent one from obtaining self-esteem on both levels. Most people have a need for a stable self-respect and self-esteem. Maslow noted two versions of esteem needs, a lower one and a higher one. The lower one is the need for the respect of others, the need for status, recognition, fame, prestige, and attention. The higher one is the need for self-respect, the need for strength, competence, mastery, self-confidence, independence and freedom. The latter one ranks higher because it rests more on inner

competence won through experience. Deprivation of these needs can lead to an inferiority complex, weakness and helplessness.
[edit]3. Love and belonging

After physiological and safety needs are fulfilled, the third layer of human needs are social and involve feelings of belongingness. This aspect of Maslow's hierarchy involves emotionally based relationships in general, such as:

Friendship Intimacy Family

Humans need to feel a sense of belonging and acceptance, whether it comes from a large social group, such as clubs, office culture, religious groups, professional organizations, sports teams, gangs, or small social connections (family members, intimate partners, mentors, close colleagues, confidants). They need to love and be loved (sexually and non-sexually) by others. In the absence of these elements, many people become susceptible to loneliness, social anxiety, and clinical depression. This need for belonging can often overcome the physiological and security needs, depending on the strength of the peer pressure; an anorexic, for example, may ignore the need to eat and the security of health for a feeling of control and belonging.[citation needed]
[edit]4. Safety needs

With their physical needs relatively satisfied, the individual's safety needs take precedence and dominate behavior. These needs have to do with people's yearning for a predictable orderly world in which perceived unfairness and inconsistency are under control, the familiar frequent and the unfamiliar rare. In the world of work, these safety needs manifest themselves in such things as a preference for job security, grievance procedures for protecting the individual from unilateral authority, savings accounts, insurance policies, reasonable disability accommodations, and the like. Safety and Security needs include:

Personal security Financial security Health and well-being Safety net against accidents/illness and their adverse impacts

[edit]5. Physiological needs

For the most part, physiological needs are obviousthey are the literal requirements for human survival. If these requirements are not met (with the exception of clothing, shelter, and sexual activity), the human body simply cannot continue to function.

Physiological needs include:

Breathing Food Homeostasis Sex

Air, water, and food are metabolic requirements for survival in all animals, including humans. Clothing and shelter provide necessary protection from the elements. The intensity of the human sexual instinct is shaped more by sexual competition than maintaining a birth rate adequate to survival of the species

Henri Fayol (Istanbul, 29 July 1841Paris, 19 November 1925) was a French mining engineer, director of mines, and management theorist, who developed independent of the theory of Scientific Management, a general theory of business administration[1] also known as Fayolism. He was one of the most influential contributors to modern concepts of management.

Contents
[hide]

1 Biography 2 Work o 2.1 Fayolism 3 See also 4 Publications 5 References

[edit]Biography
Fayol was born in 1841 in a suburb of Istanbul, Turkey, where his father, an engineer, was appointed superintendent of works to build a bridge over the Golden Horn[1] (Galata Bridge). They returned to France in 1847. Fayol studied at the mining school "cole Nationale Suprieure des Mines" in Saint-tienne. When 19 years old he started as an engineer at a mining company "Compagnie de Commentry-Fourchambeau-Decazeville" in Commentry. He became director in 1888, when the mine company employed over 1,000 people, and held that position over 30 years until 1918. By 1900 the company was one of the largest producers of iron and steel in France and was regarded as a vital industry.[1]

In 1916 he published his experience in the book "Administration Industrielle et Gnrale", only a few years after Frederick Winslow Taylor had published his theory of Scientific Management. [edit]Work
[edit]Fayolism

Fayolism is one of the first comprehensive statements of a general theory of management,[2] developed by Fayol. He has proposed that there are six primary functions of management and 14 principles of management[3]
1. 2. 3. 4. 5. 6. forecasting planning organizing commanding coordinating controlling

Controlling is described in the sense that a manager must receive feedback about a process in order to make necessary adjustments. Principles of Management

1. Division of work. This principle is the same as Adam Smith's 'division of labour'. Specialisation increases output by making employees more efficient. 2. Authority. Managers must be able to give orders. Authority gives them this right. Note that responsibility arises wherever authority is exercised. 3. Discipline. Employees must obey and respect the rules that govern the organisation. Good discipline is the result of effective leadership, a clear understanding between management and workers regarding the organisation's rules, and the judicious use of penalties for infractions of the rules. 4. Unity of command. Every employee should receive orders from only one superior. 5. Unity of direction. Each group of organisational activities that have the same objective should be directed by one manager using one plan. 6. Subordination of individual interests to the general interest. The interests of any one employee or group of employees should not take precedence over the interests of the organisation as a whole. 7. Remuneration. Workers must be paid a fair wage for their services.

8. Centralisation. Centralisation refers to the degree to which subordinates are involved in decision making. Whether decision making is centralised (to management) or decentralised (to subordinates) is a question of proper proportion. The task is to find the optimum degree of centralisation for each situation. 9. Scalar chain. The line of authority from top management to the lowest ranks represents the scalar chain. Communications should follow this chain. However, if following the chain creates delays, crosscommunications can be allowed if agreed to by all parties and superiors are kept informed. 10.Order. People and materials should be in the right place at the right time. 11.Equity. Managers should be kind and fair to their subordinates. 12.Stability of tenure of personnel. High employee turnover is inefficient. Management should provide orderly personnel planning and ensure that replacements are available to fill vacancies. 13.Initiative. Employees who are allowed to originate and carry out plans will exert high levels of effort. 14.Esprit de corps. Promoting team spirit will build harmony and unity within the organisation. Fayol's work has stood the test of time and has been shown to be relevant and appropriate to contemporary management. Many of todays management texts including Daft[4] have reduced the six functions to four: (1) planning; (2) organizing; (3) leading; and (4) controlling. Daft's text is organized around Fayol's four functions.

Management by objectives
From Wikipedia, the free encyclopedia Jump to: navigation, search

Management by Objectives (MBO) is a process of agreeing upon objectives within an organization so that management and employees agree to the objectives and understand what they are in the organization.

The term "management by objectives" was first popularized by Peter Drucker in his 1954 book 'The Practice of Management'.[1] The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employees actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities. The principle behind Management by Objectives (MBO) is basically for employees to have clarity of the roles and responsibilities expected of them. They then understand the objectives they must do and the over all achievement of the organization. They also help with the personal goals of each employee. Some of the important features and advantages of MBO are: 1. Motivation Involving employees in the whole process of goal setting and increasing employee empowerment increases employee job satisfaction and commitment. 2. Better communication and Coordination Frequent reviews and interactions between superiors and subordinates helps to maintain harmonious relationships within the enterprise and also solve many problems faced during the period. 3. Clarity of goals 4. Subordinates have a higher commitment to objectives that they set themselves than those imposed on them by their managers. 5. Managers can ensure that objectives of the subordinates are linked to the organisation 's objectives. [edit]Domains and levels Objectives can be set in all domains of activities (production, marketing, services, sales, R&D, human resources, finance, information systems etc.). Some objectives are collective, for a whole department or the whole company, others can be individualized. [edit]Practice Objectives need quantifying and monitoring. Reliable management information systems are needed to establish relevant objectives and monitor their "reach ratio" in an objective way. Pay incentives (bonuses) are often linked to results in reaching the objectives [edit]Limitations There are several limitations to the assumptive base underlying the impact of managing by objectives, including:

1. It over-emphasizes the setting of goals over the working of a plan as a driver of outcomes. 2. It underemphasizes the importance of the environment or context in which the goals are set. That context includes everything from the availability and quality of resources, to relative buy-in by leadership and stake-holders. As an example of the influence of management buyin as a contextual influencer, in a 1991 comprehensive review of thirty years of research on the impact of Management by Objectives, Robert Rodgers and John Hunter concluded that companies whose CEOs demonstrated high commitment to MBO showed, on average, a 56% gain in productivity. Companies with CEOs who showed low commitment only saw a 6% gain in productivity. 3. Companies evaluated their employees by comparing them with the "ideal" employee. Trait appraisal only looks at what employees should be, not at what they should do. When this approach is not properly set, agreed and managed by organizations, in selfcentered thinking employees, it may trigger an unethical behavior of distorting the system of results and financial figures to falsely achieve targets that were set in a short-term, narrow, bottom-line fashion.How corporate culture impacts unethical distortion of financial numbers: managing by Objectives and Results could be counterproductive and contribute to a climate that may lead to distortion of the system, manipulation of accounting figures, and, ultimately, unethical behavior|. The use of MBO needs to be carefully aligned with the culture of the organization. While MBO is not as fashionable as it was before the 'empowerment' fad, it still has its place in management today. The key difference is that rather than 'set' objectives from a cascade process, objectives are discussed and agreed, based upon a more strategic picture being available to employees. Engagement of employees in the objective setting process is seen as a strategic advantage by many. Theory X and Theory Y are theories of human motivation created and developed by Douglas McGregor at the MIT Sloan School of Management in the 1960s that have been used in human resource management, organizational behavior, organizational communication and organizational development. They describe two very different attitudes toward workforce motivation. McGregor felt that companies followed either one or the other approach. He also thought that the key to connecting self-actualization with work is determined by the managerial trust of subordinates.

Theory X
In this theory, which has been proven counter-effective in most modern practice, management assumes employees are inherently lazy and will avoid work if they can and that

they inherently dislike work. As a result of this, management believes that workers need to be closely supervised and comprehensive systems of controls developed. A hierarchical structure is needed with narrow span of control at each and every level. According to this theory, employees will show little ambition without an enticing incentive program and will avoid responsibility whenever they can. According to Michael J. Papa (Ph.D., Temple University; M.A., Central Michigan University; B.A., St. Johns University), if the organizational goals are to be met, theory X managers rely heavily on threat and coercion to gain their employee's compliance. Beliefs of this theory lead to mistrust, highly restrictive supervision, and a punitive atmosphere. The Theory X manager tends to believe that everything must end in blaming someone. He or she thinks all prospective employees are only out for themselves. Usually these managers feel the sole purpose of the employee's interest in the job is money. They will blame the person first in most situations, without questioning whether it may be the system, policy, or lack of training that deserves the blame. A Theory X manager believes that his or her employees do not really want to work, that they would rather avoid responsibility and that it is the manager's job to structure the work and energize the employee. One major flaw of this management style is it is much more likely to cause Diseconomies of Scale in large businesses.

[edit]Theory Y
In this theory, management assumes employees may be ambitious and self-motivated and exercise self-control. It is believed that employees enjoy their mental and physical work duties. According to Papa, to them work is as natural as play[1]. They possess the ability for creative problem solving, but their talents are underused in most organizations. Given the proper conditions, theory Y managers believe that employees will learn to seek out and accept responsibility and to exercise self-control and self-direction in accomplishing objectives to which they are committed. A Theory Y manager believes that, given the right conditions, most people will want to do well at work. They believe that the satisfaction of doing a good job is a strong motivation. Many people interpret Theory Y as a positive set of beliefs about workers. A close reading of The Human Side of Enterprise reveals that McGregor simply argues for managers to be open to a more positive view of workers and the possibilities that this creates. He thinks that Theory Y managers are more likely than Theory X managers to develop the climate of trust with employees that is required for human resource development. It's here through human resource development that is a crucial aspect of any organization. This would include managers communicating openly with subordinates, minimizing the difference between superior-subordinate relationships, creating a comfortable environment in which subordinates can develop and use their abilities. This climate would include the sharing of decision making so that subordinates have say in decisions that influence them. This theory is a positive view to the employees, meaning that the employer is under a lot less pressure than some one who is influenced by a theory X management style.

[edit]Theory X and Theory Y combined

For McGregor, Theory X and Y are not different ends of the same continuum. Rather they are two different continua in themselves. Thus, if a manager needs to apply Theory Y principles, that does not preclude them from being a part of Theory X & Y.

[edit]McGregor and Maslow's hierarchy

McGregor's work was based on Maslow's hierarchy of needs. He grouped Maslow's hierarchy into "lower order" (Theory X) needs and "higher order" (Theory Y) needs. He suggested that management could use either set of needs to motivate employees. As management theorists became familiar with Maslow's work, they soon realized the possibility of connecting higher level needs to worker motivation. If organizational goals and individual needs could be integrated so that people would acquire self-esteem and, ultimately, self-actualization through work, then motivation would be self-sustaining. Today, his Theory Y principle influences the design of personnel policies, affects the way companies conduct performance reviews, and shapes the idea of pay for performance. According to the Douglas McGregor: Theory X and Theory Y article, "He is the reason we use the term 'human resources' instead of personnel department" says Brzezinski. "The idea that people are assets was unheard of before McGregor."[2]

Strategic planning
Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. Various business analysis techniques can be used in strategic planning, including SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats ), PEST analysis (Political, Economic, Social, and Technological), STEER analysis (Socio-cultural, Technological, Economic, Ecological, and Regulatory factors), and EPISTEL (Environment, Political, Informatic, Social, Technological, Economic and Legal). Strategic planning is the formal consideration of an organization's future course. All strategic planning deals with at least one of three key questions:
1. "What do we do?" 2. "For whom do we do it?" 3. "How do we excel?"

In business strategic planning, the third question is better phrased "How can we beat or avoid competition?". (Bradford and Duncan, page 1).

In many organizations, this is viewed as a process for determining where an organization is going over the next year or more -typically 3 to 5 years, although some extend their vision to 20 years. In order to determine where it is going, the organization needs to know exactly where it stands, then determine where it wants to go and how it will get there. The resulting document is called the "strategic plan." It is also true that strategic planning may be a tool for effectively plotting the direction of a company; however, strategic planning itself cannot foretell exactly how the market will evolve and what issues will surface in the coming days in order to plan your organizational strategy. Therefore, strategic innovation and tinkering with the 'strategic plan' have to be a cornerstone strategy for an organization to survive the turbulent business climate.

[edit]Vision statements, Mission statements and values

Vision: Defines the desired or intended future state of an organization or enterprise in terms of its fundamental objective and/or strategic direction. Vision is a long term view, sometimes describing how the organization would like the world in which it operates to be. For example a charity working with the poor might have a vision statement which read "A world without poverty" Mission: Defines the fundamental purpose of an organization or an enterprise, succinctly describing why it exists and what it does to achieve its Vision. It is sometimes used to set out a 'picture' of the organization in the future. A mission statement provides details of what is done and answers the question: "What do we do?" For example, the charity might provide "job training for the homeless and unemployed" Values: Beliefs that are shared among the stakeholders of an organization. Values drive an organization's culture and priorities and provide a framework in which decision are made. For example, "Knowledge and skills are the keys to success" or "give a bread and feed him for a day, but teach him to farm and feed him for life". These example values may set the priorities of self sufficiency over shelter. Strategy: Strategy narrowly defined, means "the art of the general" (from Greek stratigos). A combination of the ends (goals) for which the firm is striving and the means (policies)by which it is seeking to get there.

Organizations sometimes summarize goals and objectives into a mission statement and/or a vision statement. Others begin with a vision and mission and use them to formulate goals and objectives.

While the existence of a shared mission is extremely useful, many strategy specialists question the requirement for a written mission statement. However, there are many models of strategic planning that start with mission statements, so it is useful to examine them here.

A Mission statement tells you the fundamental purpose of the organization. It defines the customer and the critical processes. It informs you of the desired level of performance. A Vision statement outlines what the organization wants to be, or how it wants the world in which it operates to be. It concentrates on the future. It is a source of inspiration. It provides clear decision-making criteria.

An advantage of having a statement is that it creates value for those who get exposed to the statement, and those prospects are managers, employees and sometimes even customers. Statements create a sense of direction and opportunity. They both are an essential part of the strategy-making process. Many people mistake the vision statement for the mission statement, and sometimes one is simply used as a longer term version of the other. The Vision should describe why it is important to achieve the Mission. A Vision statement defines the purpose or broader goal for being in existence or in the business and can remain the same for decades if crafted well. A Mission statement is more specific to what the enterprise can achieve itself. Vision should describe what will be achieved in the wider sphere if the organization and others are successful in achieving their individual missions. A mission statement can resemble a vision statement in a few companies, but that can be a grave mistake. It can confuse people. The mission statement can galvanize the people to achieve defined objectives, even if they are stretch objectives, provided it can be elucidated in SMART (Specific, Measurable, Achievable, Relevant and Time-bound) terms. A mission statement provides a path to realize the vision in line with its values. These statements have a direct bearing on the bottom line and success of the organization. Which comes first? The mission statement or the vision statement? That depends. If you have a new start up business, new program or plan to re engineer your current services, then the vision will guide the mission statement and the rest of the strategic plan. If you have an established business where the mission is established, then many times, the mission guides the vision statement and the rest of the strategic plan. Either way, you need to know your fundamental purpose - the mission, your current situation in terms of internal resources and capabilities (strengths and/or weaknesses) and external conditions (opportunities and/or threats), and where you want to go - the vision for the future. It's important that you keep the end or desired result in sight from the start.[citation needed] . Features of an effective vision statement include:

Clarity and lack of ambiguity Vivid and clear picture

Description of a bright future Memorable and engaging wording Realistic aspirations Alignment with organizational values and culture

To become really effective, an organizational vision statement must (the theory states) become assimilated into the organization's culture. Leaders have the responsibility of communicating the vision regularly, creating narratives that illustrate the vision, acting as role-models by embodying the vision, creating short-term objectives compatible with the vision, and encouraging others to craft their own personal vision compatible with the organization's overall vision. In addition, mission statements need to be subjected to an internal assessment and an external assessment. The internal assessment should focus on how members inside the organization interpret their mission statement. The external assessment which includes all of the businesses stakeholders is valuable since it offers a different perspective. These discrepancies between these two assessments can give insight on the organization's mission statement effectiveness. Another approach to defining Vision and Mission is to pose two questions. Firstly, "What aspirations does the organization have for the world in which it operates and has some influence over?", and following on from this, "What can (and /or does) the organization do or contribute to fulfill those aspirations?". The succinct answer to the first question provides the basis of the Vision Statement. The answer to the second question determines the Mission Statement.

[edit]Strategic planning outline

The preparatory phase of a business plan relies on planning. The first chapters of a business plan include Analysis of the Current Situation and Marketing Plan Strategy and Objectives. Analysis of the current situation - past year

Business trends analysis Market analysis Competitive analysis Market segmentation Marketing-mix SWOT analysis Positioning - analyzing perceptions Sources of information

Marketing plan strategy & objectives - next year

Marketing strategy

Desired market segmentation Desired marketing-mix TOWS-based objectives as a result of the SWOT Position & perceptual gaps Yearly sales forecast

[edit]Methodologies
There are many approaches to strategic planning but typically a three-step process may be used:

Situation - evaluate the current situation and how it came about. Target - define goals and/or objectives (sometimes called ideal state) Path - map a possible route to the goals/objectives

One alternative approach is called Draw-See-Think

Draw - what is the ideal image or the desired end state? See - what is today's situation? What is the gap from ideal and why? Think - what specific actions must be taken to close the gap between today's situation and the ideal state? Plan - what resources are required to execute the activities?

An alternative to the Draw-See-Think approach is called See-Think-Draw

See - what is today's situation? Think - define goals/objectives Draw - map a route to achieving the goals/objectives

In other terms strategic planning can be as follows:

Vision - Define the vision and set a mission statement with hierarchy of goals and objectives SWOT - Analysis conducted according to the desired goals Formulate - Formulate actions and processes to be taken to attain these goals Implement - Implementation of the agreed upon processes Control - Monitor and get feedback from implemented processes to fully control the operation

[edit]Situational analysis
When developing strategies, analysis of the organization and its environment as it is at the moment and how it may develop in the future, is important. The analysis has to be executed at an internal level as well as an external level to identify all opportunities and threats of the external environment as well as the strengths and weaknesses of the organizations.

There are several factors to assess in the external situation analysis:

1. 2. 3. 4. 5. 6. 7. Markets (customers) Competition Technology Supplier markets Labor markets The economy The regulatory environment

It is rare to find all seven of these factors having critical importance. It is also uncommon to find that the first two - markets and competition - are not of critical importance. (Bradford "External Situation - What to Consider") Analysis of the external environment normally focuses on the customer. Management should be visionary in formulating customer strategy, and should do so by thinking about market environment shifts, how these could impact customer sets, and whether those customer sets are the ones the company wishes to serve. Analysis of the competitive environment is also performed, many times based on the framework suggested by Michael Porter.

[edit]Goals, objectives and targets

Strategic planning is a very important business activity. It is also important in the public sector areas such as education. It is practiced widely informally and formally. Strategic planning and decision processes should end with objectives and a roadmap of ways to achieve them. One of the core goals when drafting a strategic plan is to develop it in a way that is easily translatable into action plans. Most strategic plans address high level initiatives and overarching goals, but dont get articulated (translated) into day-to-day projects and tasks that will be required to achieve the plan. Terminology or word choice, as well as the level a plan is written, are both examples of easy ways to fail at translating your strategic plan in a way that makes sense and is executable to others. Often, plans are filled with conceptual terms which dont tie into day-to-day realities for the staff expected to carry out the plan. The following terms have been used in strategic planning: desired end states, plans, policies, goals, objectives, strategies, tactics and actions. Definitions vary, overlap and fail to achieve clarity. The most common of these concepts are specific, time bound statements of intended future results and general and continuing statements of intended future results, which most models refer to as either goals or objectives (sometimes interchangeably). One model of organizing objectives uses hierarchies. The items listed above may be organized in a hierarchy of means and ends and numbered as follows: Top Rank Objective

(TRO), Second Rank Objective, Third Rank Objective, etc. From any rank, the objective in a lower rank answers to the question "How?" and the objective in a higher rank answers to the question "Why?" The exception is the Top Rank Objective (TRO): there is no answer to the "Why?" question. That is how the TRO is defined. People typically have several goals at the same time. "Goal congruency" refers to how well the goals combine with each other. Does goal A appear compatible with goal B? Do they fit together to form a unified strategy? "Goal hierarchy" consists of the nesting of one or more goals within other goal(s). One approach recommends having short-term goals, medium-term goals, and long-term goals. In this model, one can expect to attain short-term goals fairly easily: they stand just slightly above one's reach. At the other extreme, long-term goals appear very difficult, almost impossible to attain. Strategic management jargon sometimes refers to "Big Hairy Audacious Goals" (BHAGs) in this context. Using one goal as a stepping-stone to the next involves goal sequencing. A person or group starts by attaining the easy short-term goals, then steps up to the medium-term, then to the long-term goals. Goal sequencing can create a "goal stairway". In an organizational setting, the organization may co-ordinate goals so that they do not conflict with each other. The goals of one part of the organization should mesh compatibly with those of other parts of the organization.

Scientific management [1]

Scientific management is a theory of management that analyzes and synthesizes workflows, with the objective of improving labor productivity. The core ideas of the theory were developed by Frederick Winslow Taylor in the 1880s and 1890s, and were first published in his monographs, Shop Management (1905)[2] and The Principles of Scientific Management (1911).[3] He began trying to discover a way for workers to increase their efficiency when he was the foreperson at the Midvale Steele Company in 1875. Taylor believed that decisions based upon tradition and rules of thumb should be replaced by precise procedures developed after careful study of an individual at work. Its application is contingent on a high level of managerial control over employee work practices. Taylorism is a variation on the theme of efficiency; it is a late 19th and early 20th century instance of the larger recurring theme in human life of increasing efficiency, decreasing waste, and using empirical methods to decide what matters, rather than uncritically accepting pre-existing ideas of what matters. Thus it is a chapter in the larger narrative that also includes, for example, the folk wisdom of thrift, time and motion study, Fordism, and lean manufacturing. It overlapped considerably with the Efficiency Movement, which was the broader cultural echo of scientific management's impact on business managers specifically. In management literature today, the greatest use of the concept of Taylorism is as a contrast to a new, improved way of doing business. In political and sociological terms, Taylorism can be seen as the division of labor pushed to its logical extreme, with a consequent de-skilling of the worker and dehumanisation of the workplace.

[edit]General approach

Shift in decision making from employees to managers Develop the one best way as a standard method for performing each job Select workers with appropriate abilities for each job Train workers in the standard method previously developed Support workers by planning their work and eliminating interruptions Provide wage incentives to workers for increased output

[edit]Contributions

A slide rule created by Carl G. Barth, a coworker of Frederick W. Taylor, for turning work, about 1904

Scientific approach to business management and process improvement Importance of compensation for performance Began the careful study of tasks and jobs Importance of selection criteria by management Perspective of improving the productivity and efficiency of manual workers

[edit]Elements

Labor is defined and authority/responsibility is legitimised/official Positions placed in hierarchy and under authority of higher level Selection is based upon technical competence, training or experience Actions and decisions are recorded to allow continuity and memory Management is different from ownership of the organization Managers follow rules/procedures to enable reliable/predictable behavior

[edit]Criticisms

The strongest reaction against scientific management methods was from the workers who found the work boring and requiring little skill. The strike at Watertown Arsenal led to an investigation of Taylor's methods by a House of Representatives Committee which reported in 1912. The conclusion was that scientific management did provide some useful techniques and offered valuable organisational suggestions, but gave production managers a dangerously high level of uncontrolled power.[4] Taylor's methods were banned by the Senate after an attitude survey was held among the workers, which revealed a high level of resentment and hostility towards scientific management.[4]

Did not appreciate the social context of work and higher needs of workers. Did not acknowledge variance among individuals. Tended to regard workers as uninformed and ignored their ideas and suggestions.

[edit]Mass production methods

Taylorism is often mentioned along with Fordism, because it was closely associated with mass production methods in manufacturing factories. Taylor's own name for his approach was scientific management. This sort of task-oriented optimization of work tasks is nearly ubiquitous today in industry, and has made most industrial work menial, repetitive and tedious; this can be noted, for instance, in assembly lines and fast-food restaurants. Taylor's methods began from his observation that, in general, workers forced to perform repetitive tasks work at the slowest rate that goes unpunished. This slow rate of work has been called by various terms, including "soldiering",[5] (reflecting the way conscripts may approach following orders), "dogging it"[6], or "goldbricking"[7]. Managers may call it by those names or "loafing" or "malingering"; workers may call it "getting through the day" or "preventing management from abusing us". Taylor used the term "soldiering" and observed that, when paid the same amount, workers will tend to do the amount of work that the slowest among them does. This reflects the idea that workers have a vested interest in their own well-being, and do not benefit from working above the defined rate of work when it will not increase their compensation. He therefore proposed that the work practice that had been developed in most work environments was crafted, intentionally or unintentionally, to be very inefficient in its execution. He posited that rational analysis and synthesis could uncover one best method for performing any particular task, that prevailing methods were seldom equal to these best methods, and that if the best methods were taught to workers and their compensation was linked to output, their productivity would go up. Taylor introduced many concepts that were not widely accepted at the time. For example, by observing workers, he decided that labor should include rest breaks so that the worker has time to recover from fatigue. He proved this with the task of unloading ore: workers were taught to take rest during work and as a result production increased. Today's armies employ scientific management. Of the key points listed, all but wage incentives for increased output are used by modern military organizations. Wage incentives rather appear in the form of skill bonuses for enlistments.
[edit]Division of labor

A machinist at the Tabor Company, a firm where Frederick Taylor's consultancy was applied to practice, about 1905

Unless people manage themselves, somebody has to take care of administration, and thus there is a division of work between workers and administrators. One of the tasks of administration is to select the right person for the right job:
the labor should include rest breaks so that the worker has time to recover from fatigue. Now one of the very first requirements for a man who is fit to handle pig iron as a regular occupation is that he shall be so stupid and so phlegmatic that he more nearly resembles in his mental make-up the ox than any other type. The man who is mentally alert and intelligent is for this very reason entirely unsuited to what would, for him, be the grinding monotony of work of this character. Therefore the workman who is best suited to handling pig iron is unable to understand the real science of doing this class of work. Taylor 1911, 59

This viewmatch the worker to the jobhas resurfaced time and time again in management theories.[citation needed] Many theories have been applied to the business. Management in all business areas and organizational activities are the acts of getting people together to accomplish desired goals and objectives. Management comprises planning, organizing, staffing, leading or directing, and controlling an organization (a group of one or more people or entities) or effort for the purpose of accomplishing a goal. Resourcing encompasses the deployment and manipulation of human resources, financial resources, technological resources, and natural resources. Because organizations can be viewed as systems, management can also be defined as human action, including design, to facilitate the production of useful outcomes from a system. This view opens the opportunity to 'manage' oneself, a pre-requisite to attempting to manage others Management can also refer to the person or people who perform the act(s) of management.

Corporate social responsibility

From Wikipedia, the free encyclopedia Jump to: navigation, search Corporate social responsibility (CSR), also known as corporate responsibility, corporate citizenship, responsible business, sustainable responsible business (SRB), or corporate social performance,[1] is a form of corporate self-regulation integrated into a business model. Ideally, CSR policy would function as a built-in, self-regulating mechanism whereby business would monitor and ensure its support to law, ethical standards, and international norms. Consequently, business would embrace responsibility for the impact of its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere. Furthermore, CSR-focused businesses would proactively promote the public interest by encouraging community growth and development, and voluntarily eliminating practices that harm the public sphere, regardless of legality. Essentially, CSR is the deliberate inclusion of public interest into corporate decision-making, and the honoring of a triple bottom line: people, planet, profit.

The practice of CSR is much debated and criticized. Proponents argue that there is a strong business case for CSR, in that corporations benefit in multiple ways by operating with a perspective broader and longer than their own immediate, short-term profits. Critics argue that CSR distracts from the fundamental economic role of businesses; others argue that it is nothing more than superficial window-dressing; others yet argue that it is an attempt to preempt the role of governments as a watchdog over powerful multinational corporations. Corporate Social Responsibility has been redefined throughout the years. However, it essentially is titled to aid to an organization's mission as well as a guide to what the company stands for and will uphold to its consumers. Development business ethics is one of the forms of applied ethics that examines ethical principles and moral or ethical problems that can arise in a business environment. In the increasingly conscience-focused marketplaces of the 21st century, the demand for more ethical business processes and actions (known as ethicism) is increasing. Simultaneously, pressure is applied on industry to improve business ethics through new public initiatives and laws (e.g. higher UK road tax for higher-emission vehicles). Business ethics can be both a normative and a descriptive discipline. As a corporate practice and a career specialization, the field is primarily normative. In academia, descriptive approaches are also taken. The range and quantity of business ethical issues reflects the degree to which business is perceived to be at odds with non-economic social values. Historically, interest in business ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and within academia. For example, today most major corporate websites lay emphasis on commitment to promoting non-economic social values under a variety of headings (e.g. ethics codes, social responsibility charters). In some cases, corporations have re-branded their core values in the light of business ethical considerations (e.g. BP's "beyond petroleum" environmental tilt). The term "CSR" came in to common use in the early 1970s, after many multinational corporations formed, although it was seldom abbreviated. The term stakeholder, meaning those on whom an organization's activities have an impact, was used to describe corporate owners beyond shareholders as a result of an influential book by R Freeman in 1984.[2] ISO 26000 is the recognized international standard for CSR (currently a Draft International Standard). Public sector organizations (the United Nations for example) adhere to the triple bottom line (TBL). It is widely accepted that CSR adheres to similar principles but with no formal act of legislation. The UN has developed the Principles for Responsible Investment as guidelines for investing entities.

Frederick Winslow Taylor

Born 20 March 1856 Philadelphia, Pennsylvania U.S. 21 March 1915 Philadelphia, Pennsylvania U.S.

Died

Cause of death

pneumonia

Resting place

West Laurel Hill Cemetery Bala Cynwyd, Pennsylvania U.S. American efficiency expert management consultant "Father" of the

Nationality

Occupation

Known for

Scientific management & Efficiency Movement

Spouse(s)

Louise M. Spooner Kempton, Robert and Elizabeth (all adopted orphans) Franklin Taylor Emily Annette Winslow Elliott Cresson Medal (1902)

Children

Parents

Awards

Frederick Winslow Taylor (March 20, 1856March 21, 1915), widely known as F. W. Taylor, was an American mechanical engineer who sought to improve industrial efficiency. He is regarded as the father of scientific management and was one of the first management consultants.[1] Taylor was one of the intellectual leaders of the Efficiency Movement and his ideas, broadly conceived, were highly influential in the Progressive Era.

[edit]Biography
Taylor was born in 1856 to a wealthy Quaker family in Germantown, Philadelphia, Pennsylvania. Taylor's ancestor, Samuel Taylor, settled in Burlington, New Jersey, in 1677. Taylor's father, Franklin Taylor, a Princeton-educated lawyer, built his wealth on mortgages.[2] Taylor's mother, Emily Annette Taylor (ne Winslow), was an ardent abolitionist and a coworker with Lucretia Mott. Educated early by his mother, Taylor studied for two years in France and Germany and traveled Europe for 18 months.[3] In 1872, he entered Phillips Exeter Academy in Exeter, New Hampshire. Upon graduation, Taylor was accepted at Harvard Law. However, due to rapidly deteriorating eyesight, Taylor had to consider an alternative career. After the depression of 1873, Taylor became an industrial apprentice patternmaker, gaining shop-floor experience at a pumpmanufacturing company, Enterprise Hydraulic Works, in Philadelphia. Taylor's career progressed in 1878 when he became a machine shop laborer at Midvale Steel Works. At Midvale, Taylor was promoted to gang-boss, foreman, research director, and finally chief engineer of the works. Taylor became a student of Stevens Institute of Technology, studying via correspondence[4] and obtaining a degree in mechanical engineering in 1883. On May 3, 1884, he married Louise M. Spooner of Philadelphia. From 1890 until 1893 Taylor worked as a general manager and a consulting engineer to management for the Manufacturing Investment Company of Philadelphia, a company that operated large paper mills in Maine and Wisconsin. He spent time as a plant manager in Maine. In 1893, Taylor opened an independent consulting practice in Philadelphia. His business card read "Systematizing Shop Management and Manufacturing Costs a Specialty". In 1898, Taylor joined Bethlehem Steel, where he, Maunsel White, and a team of assistants developed high speed steel. For his process of treating high speed tool steels he received a personal gold medal at the Paris exposition in 1900, and was awarded the Elliott Cresson Medal that same year by the Franklin Institute, Philadelphia. Taylor was forced to leave Bethlehem Steel in 1901 after antagonisms with other managers. In 1901, Frederick and Louise Taylor adopted three orphans Kempton, Robert and Elizabeth. On October 19, 1906, Taylor was awarded an honorary degree of Doctor of Science by the University of Pennsylvania.[5] Taylor eventually became a professor at the Tuck School of Business at Dartmouth College.[6] Late winter of 1915 Taylor caught pneumonia and one day after his fifty-ninth birthday, on March 21, he died. He was buried in West Laurel Hill Cemetery, in Bala Cynwyd, Pennsylvania.

[edit]Work
Taylor was a mechanical engineer who sought to improve industrial efficiency. Taylor is regarded as the father of scientific management, and was one of the first management consultants and director of a famous firm. In Peter Drucker's description,
Frederick W. Taylor was the first man in recorded history who deemed work deserving of systematic observation and study. On Taylor's 'scientific management' rests, above all, the tremendous surge of

affluence in the last seventy-five years which has lifted the working masses in the developed countries well above any level recorded before, even for the well-to-do. Taylor, though the Isaac Newton (or perhaps the Archimedes) of the science of work, laid only first foundations, however. Not much has been added to them since - even though he has been dead all of sixty years.[7]

Taylor was also an accomplished tennis player, who won the first doubles tournament in the 1881 U.S. National Championships, the precursor of the U.S. Open, with Clarence Clark.[8]
[edit]Scientific management

Taylor believed that the industrial management of his day was amateurish, that management could be formulated as an academic discipline, and that the best results would come from the partnership between a trained and qualified management and a cooperative and innovative workforce. Each side needed the other, and there was no need for trade unions. Future U.S. Supreme Court justice Louis Brandeis coined the term scientific management in the course of his argument for the Eastern Rate Case before the Interstate Commerce Commission in 1910. Brandeis debated that railroads, when governed according to the principles of Taylor, did not need to raise rates to increase wages. Taylor used Brandeis's term in the title of his monograph The Principles of Scientific Management, published in 1911. The Eastern Rate Case propelled Taylor's ideas to the forefront of the management agenda. Taylor wrote to Brandeis "I have rarely seen a new movement started with such great momentum as you have given this one." Taylor's approach is also often referred to, as Taylor's Principles, or frequently disparagingly, as Taylorism. Taylor's scientific management consisted of four principles:
1. Replace rule-of-thumb work methods with methods based on a scientific study of the tasks. 2. Scientifically select, train, and develop each employee rather than passively leaving them to train themselves. 3. Provide "Detailed instruction and supervision of each worker in the performance of that worker's discrete task" (Montgomery 1997: 250). 4. Divide work nearly equally between managers and workers, so that the managers apply scientific management principles to planning the work and the workers actually perform the tasks. [edit]Managers and workers

Taylor had very precise ideas about how to introduce his system:
It is only through enforced standardization of methods, enforced adoption of the best implements and working conditions, and enforced cooperation that this faster work can be assured. And the duty of enforcing the adoption of standards and enforcing this cooperation rests with management alone.[9]

Workers were supposed to be incapable of understanding what they were doing. According to Taylor this was true even for rather simple tasks.
'I can say, without the slightest hesitation,' Taylor told a congressional committee, 'that the science of handling pig-iron is so great that the man who is ... physically able to handle pig-iron and is

sufficiently phlegmatic and stupid to choose this for his occupation is rarely able to comprehend the science of handling pig-iron.[10]

The introduction of his system was often resented by workers and provoked numerous strikes. The strike at Watertown Arsenal led to the congressional investigation in 1912. Taylor believed the labourer was worthy of his hire, and pay was linked to productivity. His workers were able to earn substantially more than those in similar industries and this earned him enemies among the owners of factories where scientific management was not in use.
[edit]Propaganda techniques

Taylor promised to reconcile labor and capital.

With the triumph of scientific management, unions would have nothing left to do, and they would have been cleansed of their most evil feature: the restriction of output. To underscore this idea, Taylor fashioned the myth that 'there has never been a strike of men working under scientific management', trying to give it credibility by constant repetition. In similar fashion he incessantly linked his proposals to shorter hours of work, without bothering to produce evidence of "Taylorized" firms that reduced working hours, and he revised his famous tale of Schmidt carrying pig iron at Bethlehem Steel at least three times, obscuring some aspects of his study and stressing others, so that each successive version made Schmidt's exertions more impressive, more voluntary and more rewarding to him than the last. Unlike [Harrington] Emerson, Taylor was not a charlatan, but his ideological message required the suppression of all evidence of worker's dissent, of coercion, or of any human motives or aspirations other than those his vision of progress could encompass.[11] [edit]Management theory

Taylor thought that by analyzing work, the "One Best Way" to do it would be found. He is most remembered for developing the time and motion study. He would break a job into its component parts and measure each to the hundredth of a minute. One of his most famous studies involved shovels. He noticed that workers used the same shovel for all materials. He determined that the most effective load was 21 lb, and found or designed shovels that for each material would scoop up that amount. He was generally unsuccessful in getting his concepts applied and was dismissed from Bethlehem Steel. It was largely through the efforts of his disciples (most notably H.L. Gantt) that industry came to implement his ideas. Nevertheless, the book he wrote after parting company with Bethlehem Steel, Shop Management, sold well.
[edit]Relations with ASME

Taylor was president of the American Society of Mechanical Engineers (ASME) from 1906 to 1907. While president, he tried to implement his system into the management of the ASME but was met with much resistance. He was only able to reorganize the publications department and then only partially. He also forced out the ASME's long-time secretary, Morris L. Cooke, and replaced him with Calvin W. Rice. His tenure as president was troubleridden and marked the beginning of a period of internal dissension within the ASME during the Progressive Age.[12]

In 1912, Taylor collected a number of his articles into a book-length manuscript which he submitted to the ASME for publication. The ASME formed an ad hoc committee to review the text. The committee included Taylor allies such as James Mapes Dodge and Henry R. Towne. The committee delegated the report to the editor of the American Machinist, Leon P. Alford. Alford was a critic of the Taylor system and the report was negative. The committee modified the report slightly, but accepted Alford's recommendation not to publish Taylor's book. Taylor angrily withdrew the book and published Principles without ASME approval.[13]