The words you are searching are inside this book. To get more targeted content, please make full-text search by clicking here.
Discover the best professional documents and content resources in AnyFlip Document Base.
Search
Published by odllab, 2019-12-21 00:47:21

BBM103/03 Principles and Practice of Management

COURSE MODULE
Course code: BBM103/03
PRINCIPLES and Practice of management
Course adapter by: Ms. Christine Khoo Geok Ling School of Business and Administration (SBA)


PROJECT ADVISOR
Professor Dr Zoraini Wati Abas
COURSE MODULE DEVELOPMENT TEAM
Content Adapter: Christine Khoo Geok Lin
Lead Instructional and Visual Designer: Fauziyah Md Aris Instructional and Visual Designers: Norliza Mhd Rodzi and Nurain Mohd Hassan Language Editor: Meilina Puteh
Margin Setting: Elaine Tan Xin Yi
Cover Page and Content Design: Norliza Mhd Rodzi
COURSE COORDINATOR
Christine Khoo Geok Lin
DESIGNED AND DEVELOPED BY
Online Digital Learning Lab (ODL Lab)
PRODUCED BY
Instructional Design for Engaging Experiences (IDeX) Wawasan Open University
Acknowledgement: This course module has been adapted by the
School of Business and Administration (SBA) from the Online Course Materials for the Principles and Practice of Management (BBM103/05) developed by Wawasan Open University.
First edition, December 2019
This course material was published to support the learning of students registered with Wawasan Open University. Wawasan Open University does not grant any degree, certification or credits based solely on your completion of this course material.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise,
without prior written permission from Wawasan Open University.
Wawasan Open University - DU013 (P)
Wholly owned by Wawasan Open University Sdn. Bhd. (700364-W)
54 Jalan Sultan Ahmad Shah, 10050 Penang, Malaysia
Tel: (604) 2180 333 Fax: (604) 226 9323 Email: [email protected] Website: www.wou.edu.my
© 2019 Wawasan Open University
Wawasan Open University is Malaysia’s first private not-for-profit tertiary institution dedicated to adult learners.


01
02
03
TABLE OF CONTENTS
Part 1 | About the Course
Part 2 | Course Overview
Course Synopsis
Course Contents
Course Learning Outcomes Study Schedule Assessment Methods
Part 3 | Study Guide
Unit 1: Management and The Evolution of Management Thought
Unit 2: Organisation Environment and Decision Making Unit 3: Planning
Unit 4: Organising and Leading
04 05
Part 4 | References
Part 5 | Feedback Form


Part 1
ABOUT THE COURSE
(Course Details & Allocation of Student Learning Time)
COURSE DETAILS
School
Course Type
Credit Hours
Learning Hours : 120 hours
: School of Business Administration (SBA) : Core Course
: 3 hours
Course Title : Principles and Practice of Management Course Code : BBM103/03
Course Coordinator Email
Contact No
: Ms. Christine Khoo Geok Ling : [email protected]
: 04-2180399
Core Reading Materials : BBM103/05 Principles and Practice of Management
ALLOCATION OF STUDENT LEARNING TIME
No
1
2 3
4
5 6
Activities
Study Learning Materials, Learning Activities and Self- Tests
Attending 5 Tutorial Classes (2 Hours per class) Participation in Online Forum Discussions
Completing the Course Assignments (CA1 & CA2) Exam Revision
Examination BUY NOW
No. of Hours
57
10 11
29
11 2
BBM103/03 Principles and Practice of Management
1
Total
120


Part 2
COURSE OVERVIEW
(Course Synopsis, Course Content, Course Learning Outcomes, Study Schedule & Assessment Methods)
Course Synopsis
This course is a 3-credit lower-level course within the Bachelor of Business (BB) programme. It is a core course and must be taken by students who wish to complete their BB degree.
Students will learn about both theories and applications dealing with the principles and practices of management. It introduces you to the concepts and theories that will help you them understand and analyse various aspects of business management.
COURSE LEARNING OUTCOMES (CLOS) y the end of this course, you will be able to:
1. Discuss the basic concept of management in Planning, Organising, Leading and Controlling and the key competencies needed to be an effective manager.
of a Business Organisation.
2. Demonstrate theoretical knowledge to resolve issues in real life settings. 3. Demonstrate the ability to work together in a team.
B
BBM103/03 Principles and Practice of Management 2


Course topics include :
1. Management and The Evolution of Management
2. Organisation Environment and Decision Making
3. Planning
4. Organising and Leading
5. Controlling
COURSE CONTENT
BBM103/03 Principles and Practice of Management 3


STUDY SCHEDULE
(Weekly topics and study activities for each unit)
Unit Week Topic Focus
Learning Activities/ Self-Assessment
Concepts and Meaning of Management
Meaning of Management
Functions of Management
The Roles Managers Play
Management by Level
Read Unit 1, pg 6-11
Self-Test 1.1, pg 12
Attempt Unit 1 Activity 1.2, pg 13 Attempt Unit 1 Activity 1.3, pg 15
Read Unit 1, pg 15 to 17
For extra reading, read Chapter 1, pg 9-12 (https://openstax.org/details/books/ principles-management)
Unit 1 Self – Test 1.2, pg 18
Read Unit 1, pg 13 to 14 and pg 18-19 Attempt Unit 1 Activity 1.3, pg 20 Attempt Unit 1 Activity 1.4, pg 21
1
1
Early Developments in Thinking
Classical Management Theories
Behavioral Approach
Read Unit 1, pg 26 to 32.
For extra reading, please read Chapter 3, pg 63 to 71 (Principles of Management, Open Stax) https://openstax.org/details/books/ principles-management
Please attempt Unit 1 Self-Test 1.4, pg 28
Please attempt the “Concept Check” at Chap 3 pg 68 and pg 71(Principles of Management, Open Stax) https://openstax.org/details/books/ principles-management
Please read Unit 1, pg 32 to 36.
For extra reading, please read Chapter 3, pg 71 to 73 (Principles of Management, Open Stax) https://openstax.org/details/books/ principles-management
Please attempt Unit 1 Activity 1.5, pg 37
1
2
Please read Unit 1, pg 37 to 40.
For extra reading, please read Chapter 3, pg 73 to 77 (Principles of Management, Open Stax) https://openstax.org/details/books/ principles-management
1
3
Early Developments in Thinking
BBM103/03 Principles and Practice of Management
4
Modern Management


COURSE STUDY SCHEDULE (Weekly topic and study activity for each unit) ... continued
Unit Week Topic Focus
Learning Activities/ Self-Assessment
Read Unit 2, pg 3-5
Read Unit 2. pg 11-13
Attempt Unit 2 Activity 2.1, pg 13-14 Attempt Unit 2 Self-Test 2.1, pg 15
2
4
Organisational Culture
Levels of Culture
How does Organisational Culture Start?
2
2
5
6
The Environment
Social Responsibility and Ethics
Internal Environment
External Environment
Approaches to Corporate Social Responsibility
Ethical and Unethical Behaviours
Factors Affecting Managerial Ethics
Decision Making
Read Unit 2, pg 17-25
For extra reading, please read Chapter 4, pg 84 to 88 (Principles of Management, Open Stax) https://openstax.org/details/books/ principles-management
Read Unit 2, pg 47 – 53
Read Unit 2, pg 55-60
Attempt Unit 2 Activity 2.6, pg 51 Attempt Unit 2 Activity 2.8, pg 60
Read Unit 2, pg63-65
For extra reading, please read Chapter 2, pg 28 to 30 (Principles of Management, Open Stax) https://openstax.org/details/books/ principles-management
Attempt Activity 2.9, pg 65
Please attempt the “Concept Check” at Chap 2 pg 31(Principles of Management, Open Stax) https://openstax.org/details/books/ principles-management
Planning
Levels of Planning
Types of Plans
The Process of Developing Plan
Read Unit 3, pg 3-7
Read Unit 3, pg 8-11
For extra reading, please read Chapter 17, pg 560 to 563 (Principles of Management, Open Stax) https://openstax.org/details/books/ principles-management
Attempt Unit 3 Activity 3.1, pg 7 Attempt Unit 3 activity 3.3, pg 11-12 Attempt Unit 3 Self-Test 3.1, pg 13
3
7
BBM103/03 Principles and Practice of Management
5


COURSE STUDY SCHEDULE (Weekly topic and study activity for each unit) ... continued
Unit Week Topic Focus
Learning Activities/ Self-Assessment
Read Unit 3, pg 40-46
For extra reading, please read Chapter 9, pg 281 / pg 284 to pg285 (Principles of Management, Open Stax) https://openstax.org/details/books/ principles-management
Please attempt the “Concept Check” at Chap 9 pg 281(Principles of Management, Open Stax) https://openstax.org/details/books/ principles-management
3
8
Strategic Management
Levels of Strategy
Strategic Management Process
Organisational Structure and Design
Elements of Organisational Design
Departmentalis ation
Matrix Organisation
Mechanistic and Organic Structure
Types of Group
Read Unit 4, pg 4 – 10
For extra reading, please read Chapter 10, pg 310 to 311 / pg 312 to pg 313 (Principles of Management, Open Stax) https://openstax.org/details/books/ principles-management
Attempt Unit 4 Activity 4.1, pg 5-6 Attempt Unit 4 Activity 4.2, pg 7 Attempt Unit 4 Activity 4.3, pg 10-11 Attempt Unit 4 Activity 4.6, pg 27
Please attempt the “Concept Check” at Chap 15 pg 504(Principles of Management, Open Stax) https://openstax.org/details/books/ principles-management
4
9
BBM103/03 Principles and Practice of Management 6


ASSESSMENT METHODS
COURSE ASSIGNMENT 1 (CA1)
Online Quiz, Individual Assignment
30%
TOTAL 100%
COURSE ASSIGNMENT 2 (CA2)
Individual Presentation Individual Assignment
30%
The student will be assessed through the following methods:
Note: The grade for a course is assigned based on the overall score, which combines both the contiuous assessment and the final examination compoents (please refer to the Student Handbook for details).
BBM103/03 Principles and Practice of Management 7
FINAL EXAM 40%


PART 3
LIST OF CONTENTS
U1 : MANAGEMENT AND EVOLUTION OF MANAGEMENT
1.1 Concepts and Meaning of Management
1.2 The Roles Managers Plays
1.3 Management by Level
1.4 Historical Background of Management Thought
1.5 The Classical Management Thought
1.6 Behavioural Approaches
1.7 Modern Management
U2: ORGANISATION ENVIRONMENT AND DECISION MAKING
2.1 Organisational Culture
2.2 The Environment
2.3 Social Responsibility and Managerial Ethics
2.4 Managerial Decision Making
U3: PLANNING
3.1 What is Planning?
3.2 The Process of Developing a Plan
3.3 Strategic Management
U4: ORGANISING AND LEADING
4.1 Organisation Structure
4.2 Defining and Classifying Groups 4.3 Motivating People at Work
4.4 Foundations of Leadership
4.5 Communications
U5: CONTROLLING
5.1 Foundation of Control
5.2 Types of Control
BBM103/03 Principles and Practice of Management 8


COURSE MODULE
UNIT 1
MANAGEMENT AND EVOLUTION OF MANAGEMENT


U1
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8 1.9
Concepts and Meaning of Management
Learning Activity 1.1 Self-Check 1.1
UNIT STRUCTURE
The Roles Managers Plays
Learning Activity 1.2 Self-Check 1.2
Management by Level
Learning Activity 1.3 Self-Check 1.3
Historical Background of Management Thought
Learning Activity 1.4 Self-Check 1.4
The Classical Management Thought
Learning Activity 1.5 Self-Check 1.5
Behavioural Approaches
Learning Activity 1.6 Self-Check 1.6
Modern Management
Learning Activity 1.7 Self-Check 1.7
Summary References
BBM103/03 Principles and Practice of Management 10
MANAGEMENT AND EVOLUTION OF MANAGEMENT


U1 Management and Evolution of Management INTRODUCTION
Do you know that with the fast-changing business environment and the advancement in information technology, the role of a manager has become more challenging than ever?
One of the most important tasks of managers is managing people and getting things done through them. Specifically, this course will provide you with an insight into how to be an effective manager. Management is about how to make good decisions, formulate strategies,
motivate, and communicate effectively with everyone in the organisation.
When you progress through the course, you will learn that apart from the traditional functions, managers today are required to perform a wide range of activities thus transforming the organisation as well as the society at large.
Managing is a practical approach and there are no best or simple solutions in theory that you can study and then apply to on your work environment. However, the study of organisation, structure and functions gives an insight into how managers work, and you can further integrate these concepts and theories with your own experience and apply them in real-life situations.
UNIT LEARNING OUTCOMES
You should be able to:
1. Explain what management is and how management thought has developed during the 20th century.
2. Distinguish between different theories of management and understand the limitations of these for practical purposes.
BBM103/03 Principles and Practice of Management 11


1.1 CONCEPTS AND MEANING OF MANAGEMENT
Meaning of Management
One of the earliest definitions was given by Mary Parker Follet (1920) "management can be defined as the art of getting things done through people in organisations”.
Management is about:
• Integration of people in a common venture.
• Defining the goals clearly.
• Developing the human resources continuously.
• Cearly communicating the individual’s responsibility towards the organisation and the
people working with them.
• Performance and results of a business.
Management Function
The term ‘function’ in this context refers to the managers do and the nature of work in any department. The various functions performed by the managers may vary from manager to manager depending upon their position; however, essentially all
managers carry out these functions (POLC).
BBM103/03 Principles and Practice of Management 12


Planning
Controlling MANAGEMENT FUNCTIONS
Organising
Figure 1.1. Management functions
Click on the function for more details
Learning Activities 1.1
Learning Activity 1.1
Please read Unit 1, pg 6-11
BBM103/03 Principles and Practice of Management
13
Leading


Please watch the following video on:
Title : Definition of Management
Duration : 2.39 minutes
Instruction : Please watch the video on the Definition of Management
Source: https://www.youtube.com/watch?v=_OBqwhYLEJo
Title : Function of Management
Duration : 3.53 minutes
Instruction : Please watch the video on the Function of Management
Source: https://www.youtube.com/watch?v=aWV8w-coyhM
BBM103/03 Principles and Practice of Management 14


Self Check 1.1
Please attempt Self-Test 1.1, pg 12 Please attempt Unit 1 Activity 1.2, pg13 Please attempt Unit 1 Activity 1.3, pg 15
1.2 THE ROLES MANAGERS PLAYS
In Mintzberg’s seminal study of managers and their jobs, he found the majority of them clustered around three core management roles.
• Monitor - Seek and receive information from a variety of sources (web, industry journals, reports and contacts)
• Disseminator - Pass information on to others in the organization through memos, emails, phone calls, etc.
• Spokesperson - Transmit information to people outside the organizations through speeches, interviews and written communication.
• Figurehead - Perform formal duties like greeting visitors and signing contracts and other legal documents.
• Leader - Motivate, train, counsel, communicate and direct subordinates.
• Liaison - Maintain and manage information links inside and outside the organization.
• Entrepreneur - Initiate projects that lead to improvements; delegate idea-generation responsibilities to others
and identify best ideas to act on.
• Disturbance Handler - Take corrective action during conflicts and crises; resolve disputes among subordinates.
• Resource Allocator - Decide who receives resources, manage schedules and budgets, and set priorities.
• Negotiator - Represent a team, department, or organization regarding contracts, union negotiations, etc.
Figure 1.2. Management roles
BBM103/03 Principles and Practice of Management 15
I
l
n
a
t
n
e
o
r
i
p
t
e
a
r
s
m
r
o
o
n
f
a
n
I
l
s
i
c
e
D
i
o
n
a
l


Learning Activities 1.2
Please read Unit 1, pg 15 to 17
For extra reading, please read Chapter 1, pg 9 to 12 (Principles of Management, Open Stax)
https://openstax.org/details/books/principles-management
Please watch the following video on:
Title : Managerial Role & skills
Duration : 9.52 minutes
Instruction : Please watch the video on the Basic Managerial Role & skills
Source: https://www.youtube.com/watch?v=3gIquZu1rjQ
Self-check 1.2
Please attempt Unit 1 Self-Test 1.2, pg 18
Please attempt the “Concept Check” at Chap 1 pg 12 (Principles of Management, Open Stax)
https://openstax.org/details/books/principles-management
BBM103/03 Principles and Practice of Management 16


1.3 MANAGEMENT BY LEVEL
Generally, there are three levels of management: Top, Functional and Front-line Management. Top Managers are at the top of the hierarchy and are responsible for the entire organisation, especially its strategic direction. Functional Managers, who are at the middle of the hierarchy, are responsible for major departments and may supervise other lower level managers. Finally, Front-line Managers supervise rank-and-file employees and carry out
day-to-day activities within departments.
To be successful managers, one has to master a number of skills that are technical, human and conceptual in nature. The uses of these skills differ at various levels in an organisation.
Technical Skills
It is the knowledge and ability to perform a specific activity involving methods, processes or techniques. It involves proficiency in a particular area such as accounting, computing or manufacturing. This is of more importance at the lower level of management.
Human Skills
Human skills are associated with the managers’ ability to work effectively as a group member and as a leader who gets things done through others. The human skills that managers need include communication, motivation and leading people. These skills are equally important at all levels of management.
Conceptual Skills
Conceptual skills are those skills related to the ability to visualise the organisation as a whole, and its interrelationships among organisation parts. This is usually found at the top management level. The design skill is combined with the conceptual skill at the higher level. It involves the ability to see the ‘big picture, to visualise the organisation as a whole, to understand how the various parts of the organisation affect each other, and conceptualise how these parts can be organised to improve the overall performance of the organisation.
BBM103/03 Principles and Practice of Management 17


Top Managers
Functional Managers First Line Managers
Conceptual
Conceptual
Conceptual
Human
Human
Human
Technical
Technical
Technical
Figure 1.3. Difference in skills required according to level of hierarchy
Learning Activitie
Learning Activity 1.3
Please read Unit 1, pg 13 – 14 and 18-19
Please read Chap 1, pg 14 – 16 (Principles of Management, Open Stax) https://openstax.org/details/books/principles-management
BBM103/03 Principles and Practice of Management 18


Please watch the following video on:
Title : Basic Skills in Management
Duration : 3.55 minutes
Instruction : Please watch the video on Basic Skills in Management
Source: https://www.youtube.com/watch?v=EH0K6sAV6ew
Self-check 1.3
Please attempt Unit 1 Activity 1.3, pg 20 Please attempt Unit 1 Activity 1.4, pg 21
Please attempt the “Concept Check” at Chap 1 pg 17 (Principles of Management, Open Stax)
https://openstax.org/details/books/principles-management
BBM103/03 Principles and Practice of Management 19


1.4 HISTORICAL BACKGROUND OF MANAGEMENT THOUGHTS
Although the practice of management dates back to centuries, it is only from the beginning of the 20th century that management has evolved as a discipline. During the early industrialisation period, the only large permanent organisation around was the army, hence their command-and control structure became the model of the new manufacturing industries.
In order to get a balanced and proper understanding of the theories, we will look into the three main schools of thought as follows:
1. The Classical Management Theories: this includes the bureaucratic management approach, scientific management approach and administrative management approach.
2. The Behavioural Approaches: this includes the human relations approach, and human resources approach.
3. Modern Approaches: this includes the quantitative approach, the systems approach, and the contingency approach.
1.5 THE CLASSICAL MANAGEMENT THEORIES
The classical theories are one of the oldest, and universally accepted. According to the classical theorists, organisations may vary from one another but the management of all organisations requires the same management process. They placed emphasis on the concept of division of labour and specialisation.
Bureaucratic Management
Max Weber (1864 – 1920), a German sociologist developed the theory of bureaucratic management. According to Weber, organisations employing large numbers of workers would require specific rules and regulations to control its activities. He considered bureaucracy as an ideal form that based on rules and procedures within the organisation.
BBM103/03 Principles and Practice of Management 20


The following characteristics are Weber’s model:
1. Division of labour
Tasks and activities are assigned to employees depending on their abilities, skills and aptitude. Repeated performance of the same task would lead to high degree of specialisation.
2. Hierarchy of authority
The organisation follows the principle of hierarchy, where each lower person/office, is under the control and supervision of a higher one.
3. Impersonality
In a bureaucratic organisation there is no place for emotions, personal attachment, or sentiments. The employees share a very formal relationship among themselves. They work in accordance with a system of rules laid down in order to avoid arbitrary decisions.
4. Rationality
It applies to a system of rules, which aims to provide an efficient and impersonal operation. The system of rules is generally stable, though it may be changed or modified at times. Rules control and regulate the working behaviour of employees.
5. Technical competence
This is an important aspect of the ideal bureaucracy, where people are hired based on technical competence. Promotions of employees are according to seniority and / or achievement. In addition, protection of employees against arbitrary dismissal is given.
BBM103/03 Principles and Practice of Management 21


Scientific Management
Frederick W. Taylor (1856 – 1915) is the Father of Scientific Management. He advocated various scientific methods to improve operational efficiency of workers. He felt that instead of following the traditional work methods, the job should be broken down into various components and there should be ‘one best way of doing it’. Taylor’s approach to management
are:
1.
2.
3. 4.
5.
Scientific study and planning of the work determine a fair day work for each worker. He emphasised that scientific studies like time and motion study, speed study, work-study should be conducted on the various aspects of the work. This will help the workers on what to do and how
to do it efficiently.
Scientific selection, placement and training: Selection based on the knowledge and skills required for the job. Training should be imparted regularly to enhance their capability.
Division of work and responsibility between management and workers to ensure benefits.
Functional foremanship suggests instead of having one supervisor for the entire production department, all activities be split into two groups. Each group should have four supervisors to command the activities of the workers, each dealing with different aspects of the job.
Wage incentives: Taylor suggested that incentives is link to productivity. Workers producing more are entitled to a higher pay. He devised a ‘differential piece-rate plan’, which means different rates of wages for different levels of efficiency of workers.
BBM103/03 Principles and Practice of Management 22


The Administrative Approach
Henry Fayol (1841 – 1925) developed 14 management principles, which help managers to increase the efficiency and effectiveness of the organisation. Below are the 14 management principles:
01
02
03
04
05 06
07
Division of labour: divide work into specialised tasks in order to perform more efficiently.
Authority: managers must give orders to get things done.
Discipline: everyone must follow rules.
Unity of command: in order to avoid conflicts, an employee should receive orders from one superior only.
Unity of direction: only one manager to direct various operations to achieve organisational objectives.
Remuneration: both worker and company must be satisfied with the payment of salary/wages.
Subordination of interest: the interest of employees should not take precedence over the interest of the organisation.
08 09
10 11
12 13
14
Centralisation: optimal level of centralisation is necessary for organisational effectiveness.
Hierarchy: positions must be in the order from top management to the lowest level.
Order: materials and people should be in the right place at the right time.
Equity: managers should be both friendly and fair to subordinates.
Stability of staff: a high employee turnover rate undermines the efficient functioning of an organisation.
Initiative: initiative of all workers should be encouraged and welcomed.
Esprit de corps: unity is strength for the company.
BBM103/03 Principles and Practice of Management 23


Learning Activities 1.5
Please read Unit 1, pg 27 to 32.
Please read Chapter 3, pg 63 to 71 (Principles of Management, Open Stax) https://openstax.org/details/books/principles-management
Please watch the following video on:
Title : Henri Fayol's Principles of Management
Duration : 8.24 minutes
Instruction : Please watch the video on Henri Fayol's Principles of Management
Source: https://www.youtube.com/watch?v=90qpziPNRnY
BBM103/03 Principles and Practice of Management 24


Please watch the following video on:
Title : Max Weber Bureaucracy
Duration : 9.52 minutes
Instruction : Please watch the video on Max Weber Bureaucracy
Source: https://www.youtube.com/watch?v=zp554tcdWO8
Title : Frederick Taylor Scientific Management
Duration : 9.52 minutes
Instruction : Please watch the video on the Frederick Taylor Scientific Management
Source: https://www.youtube.com/watch?v=vNfy_AHG-MU
BBM103/03 Principles and Practice of Management 25


Self-check 1.5
Please attempt the “Concept Check” at Chap 3 pg 68 and pg 71(Principles of Management, Open Stax) https://openstax.org/details/books/principles-management
1.6 BEHAVIOURAL APPROACHES
This approach emphasises the human dimension. Behavioural theorists believed that a better understanding of human behaviour at work, such as motivation, conflict, expectations and group dynamics would help improve productivity.
The Human Relations Approach
The behavioural school emerged partly because the classical theorists ignored the human factor. The classical theorists’ main focus was on improving working conditions and monetary
incentive to increase productivity and achieve organisational efficiency.
However, during the 1920s and 30s, there were many social and cultural changes in the industrial nations. This period marked the formation of unions, which was perceived as a threat by many managers during that period of time. The findings of the Hawthorne studies
form the basis for this approach.
The major findings of the studies are:
1. Worker behaviour and productivity is strongly influenced by social factors.
2. The studies discovered that informal group relations among workers influenced
productivity.
3. It was discovered that productivity of workers was less affected by change in the physical
working conditions than by the relationship between work groups, workers and
supervisors.
4. Workplace was considered as a social system made up of interdependent parts.
BBM103/03 Principles and Practice of Management 26


The Human Resource Approach
This approach focuses both on the social needs as well as the technological aspects, for example, the leadership, communication and group dynamics which help the individuals to perform better. They were particularly interested in groups and the impact on an individual’s behaviour. It is the job of the managers to identify each and every individual’s needs, and
satisfy them.
Theory X and Theory Y
Douglas McGregor (1960) provided another angle on motivation. According to McGregor, there are two basic assumptions about people and their approach to work, which are called
Theory X and Theory Y.
Theory X asserts that people must be constantly coaxed to work better, whereas Theory Y assumes that people who relish work eagerly approach their work as an opportunity
to develop their creative capacities.
Learning Activities 1.6
Please read Unit 1, pg 32 to 36.
For extra reading, please read Chapter 3, pg 71 to 73 (Principles of Management, Open Stax)
https://openstax.org/details/books/principles-management
BBM103/03 Principles and Practice of Management 27


Please watch the following video on:
Title : Hawthorne Studies
Duration : 1.48 minutes
Instruction : Please watch the video on Hawthorne Studies
Source: https://www.youtube.com/watch?v=tyfotFDdHmg
Title : Douglas McGregor's Theory X and Theory Y
Duration : 7.37 minutes
Instruction : Please watch the video on Douglas McGregor's Theory X and Theory Y
Source: https://www.youtube.com/watch?v=CXAzZRnJo2o
BBM103/03 Principles and Practice of Management 28


Self-check 1.6
Please attempt Unit 1 Activity 1.5, pg 37
1.7 MODERN MANAGEMENT
The Modern Approaches to management are the latest development that took place after 1950. With the fast-changing global environment, organisations experienced many problems which the managers were finding extremely difficult to solve. Therefore, many theories have been developed which have powerful influence on our understanding of situations.
The Systems Approach
The Systems Approach to management was developed during the 1950s, placing emphasis on interdependence and inter relationships which exist among the various components of an organisation.
Re-energising System
Input
1. Human
2. Capital
3. Technology
Transformation
Process Management Process
Output
1. Product Services
2. Task, performance,
profits
External Environment
1. Government regulations 2. Opportunities
3. Constraints
Figure 1.4. System Approach Source: Panigrahi, S. (2015).
Principles and Practice of Management. Wawasan Open University
The term ‘system’ may be defined as a set of interrelated and interacting components assembled in a particular sequence so as to produce some results. It consists of inputs,
transformation process, outputs and feedback.
BBM103/03 Principles and Practice of Management 29


The Contingency Approach
Contingency theory emphasises ‘situation’. When managers take a decision, it solely depends on the current situation. The contingency approach claims that there is no one best way of taking decisions by the managers. Instead the course of action is dependent upon the
internal and external situation.
Managers find it extremely difficult to manage organisations based on a universal principle and practice. Instead it was realised that every managerial practice depends on circumstances such as in a contingency or situation. Managers, instead of applying managerial practice in a uniform manner to every situation, should study, analyse and diagnose the situation, and then
prepare a set of techniques and practices to deal with the problem effectively.
Please read Unit 1, pg 37 to 40.
For extra reading, please read Chapter 3, pg 73 to 77 (Principles of Management, Open Stax)
https://openstax.org/details/books/principles-management
Title : System & Contingency Approach - Modern School of Management thought
Duration : 7.52 minutes
Instruction : Please watch the video on System & Contingency Approach
Source: https://www.youtube.com/watch?v=rAtOcIFJEPQ
Learning Activities 1.7
Please watch the following video on:
BBM103/03 Principles and Practice of Management 30


1.8 SUMMARY
Now that you have completed Unit 1, and you should be able to:
1. Illustrate the concept of management and the various processes and functions of management.
2. Comprehend the evolution of management of thoughts.
1.9 REFERENCES
EasyMBA (2018, Jan 22). System & contingency approach ; modern school of management thought [Video file]. Retrieved from https://www.youtube.com/watch?v=rAtOcIFJEPQ
Gregg Learning (2017, Nov 8). Basic skills in management [Video file]. Retrieved from https://www.youtube.com/watch?v=EH0K6sAV6ew
Hartzell, Sherri (2017, Aug 13). Basic managerial role & skills [Video file]. Retrieved from https://www.youtube.com/watch?v=3gIquZu1rjQ
Leadership Unleashed (2017, Feb 26). Function of management [Video file]. Retrieved from https://www.youtube.com/watch?v=aWV8w-coyhM
OpenStax. (2019). Principles of management. Rice University. Retrieved from https://openstax.org/details/books/principles-management
Organizational Communication Channel (2017, Nov 13). Henri Fayol's principles of management [Video file]. Retrieved from https://www.youtube.com/watch?v=90qpziPNRnY
Organizational Communication Channel (2016, Oct 18). Max Weber bureaucracy [Video file]. Retrieved from https://www.youtube.com/watch?v=zp554tcdWO8
Organizational Communication Channel (2016, Sep 12). Douglas McGregor's Theory X and Theory Y [Video file]. Retrieved from https://www.youtube.com/watch?v=CXAzZRnJo2o
Organizational Communication Channel (2016, Sep 1). Frederick Taylor scientific management [Video file]. Retrieved from https://www.youtube.com/watch?v=vNfy_AHG-MU
Panigrahi, S. (2015). Principles and practice of management. Penang: Wawasan Open University. BBM103/03 Principles and Practice of Management 31


ThingsYouNeedToKnowAbout (2015, Sep 14). Definition of management [Video file]. Retrieved from https://www.youtube.com/watch?v=_OBqwhYLEJo
V. Keerthi (2016, Mar 23). Hawthorne studies [Video file]. Retrieved from https://www.youtube.com/watch?v=tyfotFDdHmg
BBM103/03 Principles and Practice of Management 32


COURSE MODULE
UNIT 2
ORGANISATIONAL ENVIRONMENT AND DECISION MAKING


U2
2.1
2.2
2.3
2.4
2.5 2.6
Organisational Culture
Learning Activity 2.1 Self-Check 2.1
UNIT STRUCTURE
The Environment
Learning Activity 2.2 Self-Check 2.2
Social Responsibility and Managerial Ethics
Learning Activity 2.3 Self-Check 2.3
Managerial Decision Making
Learning Activity 2.4 Self-Check 2.4
Summary References
BBM103/03 Principles and Practice of Management 34
ORGANISATIONAL ENVIRONMENT AND DECISION MAKING


U2
Source: https://www.youtube.com/watch?v=WNVnq8KxssY
INTRODUCTION
In this unit, you will get to know the various forces that may either act as opportunities or threaten the very existence of an organisation. This unit will introduce you to some of the conditions faced by managers in their jobs.
In Section 2.1, you will learn the concept of organisational culture and the different types of culture that exist in an organisation. Similarly, an organisation’s culture is a reflection on how it operates. You will be studying the impact of cultural differences on managerial practices.
In Section 2.2, we will discuss the effect of the external and internal environment on
managerial actions. Then, in Section 2.3, we will examine the different approaches to social respon- sibility and the concept and importance of managerial ethics.
In the final Section 2.4, we will discuss the decision making process and ways of analysing alterna- tives under three different conditions.
Organisational Environment and Decision Making
BBM103/03 Principles and Practice of Management 35


UNIT LEARNING OUTCOMES
You should be able to:
1. Explain organisational culture and its importance for organisations.
2. Explain how the various forces of environment affect an organisation.
3. Explain the importance of social responsibility in an organisation.
4. Explain the decision making process.
2.1 WHAT IS ORGANISATIONAL CULTURE
People learn and adopt the culture in which they live. As one grows up, he or she will begin to internalise culture as a socialisation process. Similarly, people working in a particular organisation will learn the values, beliefs of that organisation.
According to Schein (1992), organisational culture consists of the values and assumptions shared within an organisation. It represents those values and norms held by all the members of the organisation. These values have a strong influence on employee behaviour as well as organisational performance.
An organisation’s culture may be one of its strongest assets or its biggest liability. Organisations should develop and maintain cultures that fit with the demands of the company’s environment.
For example, if a company is in the telecom industry, having a culture that encourages innovativeness and adaptability will support its performance. However, if a company in the same industry (telecom industry) has a culture characterised by stability, a high respect for tradition and a strong preference for holding rules and procedures, the company may suffer. Therefore, having the “right” culture may be a competitive advantage for an organisation, whereas having the “wrong” culture may lead to performance difficulties and even organisational failure (Saylor, 2014).
BBM103/03 Principles and Practice of Management 36


Levels of Organisational Culture
Artifacts
Values Assumptions
Figure 2.1. Schein’s organisational culture model Source: https://en.wikipedia.org/wiki/Edgar_Schein
As shown in Figure 2.1, Assumptions occupy the deepest (lowest) level. Assumptions are unconscious perceptions or beliefs that are taken for granted and reflect both human nature and reality.
The next level is where values exist. Values are shared principles, standards and goals that tell us what we “ought to do”. Assumptions and values are invisible.
Finally, the artefacts, which exist at the surface, are visible tangible aspects of organisational culture.
We may understand an organisation’s culture by first observing its artefacts. For instance, we can observe its physical environment, company policies, reward systems and other observable characteristics.
However, mere understanding of these visible aspects is not adequate to give a full picture, rather values and assumptions are to be understood. This can be done by observing how employees interact and make choices, all of which may help in understanding the prevailing organisational culture.
BBM103/03 Principles and Practice of Management 37


How does Organisational Culture Start?
1. Actions of founders and leaders
Founders or leaders establish an organisational culture. A leader serves as role model, and sets standards for others to follow. Sometimes a company’s culture reflects the founder’s personality. Leaders can also reshape the existing culture. Leaders through their words and actions can shape an organisation’s culture.
2. Aligning artefacts
Artefacts are the visible indicators of a company’s culture. Managers can shape the culture by altering these artefacts. One of the most effective ways of communicating with new employees and organisational members is the skillful way of narrating employee experiences to them. The stories motivate employees and instill a sense of belonging in them.
Rituals are the programmed routines of daily organisational life. It includes how people communicate, how they greet visitors and so on. Ceremonies are planned activities specifically for an audience, such as awards ceremony and New Year celebration.
The size, shape and layout of offices, speaks a lot about the company’s emphasis on teamwork, environmental friendliness, flexibility and so on. For example, a company that has an open design and colourful decor symbolises an open egalitarian and creative culture, whereas companies where high-level managers occupy separate floors indicates a higher level of hierarchy.
Learning Activities 2.1
Please read Unit 2, pg 3 – 5 Please read Unit 2, pg 11-13
BBM103/03 Principles and Practice of Management 38


Please watch the following video on:
Title : What is Organizational Culture?
Duration : 4.23 minutes
Instruction : Please watch the video on what is organizational culture.
Source: https://www.youtube.com/watch?v=4cBN8xH-5Qw
Title : Leadership and Management | Part 4 of 4:The Iceberg of Organizational Culture
Duration : 3.48 minutes
Instruction : Please watch the video on the level of organisational culture.
Source: https://www.youtube.com/watch?v=cjziCs-R2S4
BBM103/03 Principles and Practice of Management 39


Self-check 2.1
Please attempt Unit 2 Activity 2.1, pg 13 – 14 Please attempt Unit 2 Self –Test 2.1, pg 15
2.2 THE ENVIRONMENT
Business environment is the combination of internal and external factors that influence a company’s operations. Therefore, if you are a manager, you will operate in a complex environment made up of constantly changing factors “both external and internal that affect the operations of the organisation.
The External Environment
The external environment includes everything outside a firm that might affect the ability of an organisation to attain its goals. Managers develop, plan and make decisions by taking into consideration the various forces of the external environment. The external environment comprised of two parts: the task environment and the general environment.
The Task Environment
The task environment includes the actions of suppliers, competitors, buyers (such as customers or distributors), which exert a significant impact on the managerial activities. The task environment has a more direct effect on the organisation’s competitiveness and profits.
The likelihood of firms making profits in a given industry depends on five factors:
1. The threat of entry.
2. Bargaining power of buyers.
3. Bargaining power of suppliers.
4. Threat from substitutes.
5. The intensity of rivalry.
The General Environment
The general environment is the larger environment that influences an organisation through the medium of task environment. It is composed of dimensions in the broader society that influence an industry and the firms within it (Walters and Priem, 1999). These dimensions are political and legal, macroeconomic, demographic forces, socio-cultural and technological forces.
BBM103/03 Principles and Practice of Management 40


Political and legal forces
These are laws and regulations of a particular country. Governments set regulations and legislations in order to increase the competitiveness and boost the economy while keeping in pace with other economically advanced countries.
Macroeconomic forces
Macroeconomic forces affect the economy of a country. Hill and McShane (2013) discusses four important factors in the macro economic environment "growth rate, interest rates, currency exchange rates, and inflation (or deflations rate)”.
Demographic forces
Demographic forces are the resultant outcomes of changes in population, such as age, gender, ethnic origin, race, sexual orientation and social class.
Socio-cultural forces
These include the changing social norms and values that affect an industry. For example, people are increasingly becoming health conscious, so companies such as BMS organics started to introduce health drinks for kids and adults.
Technological forces
Technological forces play an important role in shaping business today. It has lowered entry barriers and reduced customer switching costs, increasing the intensity of rivalry in many industries and lowering both prices and profits.
BBM103/03 Principles and Practice of Management 41


The Internal Environment
An organisation’s internal environment is composed of elements within the organisation. These include the organisation of the firm (its structure, culture, controls and incentives), the employees (human capital), and the resources (tangible and intangible assets). These elements together can create either opportunities or threats to the organisation and the managers.
Employees (Human capital)
Becker (1993) defines employees as human capital of an organisation, which means the knowledge, skills and capabilities embedded in individuals. Employees are the source of competitive advantage.
Resources
There are generally two kinds of resources: Tangible Resources and Intangible Resources. Tangible resources are those which have physical existence such as land, buildings, equipment, inventories and money, whereas intangible resources are non-physical entities that are the creation of the company or managers such as corporate images, brand names or intellectual properties of the company, like patents, copyrights and trademarks.
Learning Activities 2.2
Please read Unit 2, pg 17-25
For extra reading, please read Chapter 4, pg 84 to 88 (Principles of Management, Open Stax)
https://openstax.org/details/books/principles-management
BBM103/03 Principles and Practice of Management
42


Please watch the following video on:
Title : The General Environment: What It Is and How To Evaluate It Duration : 9.54 minutes
Instruction : Please watch the video on the general environment
Source: https://www.youtube.com/watch?v=Rfn_gfWJloQ
2.3 SOCIAL RESPONSIBILITY AND MANAGERIAL
Social responsibility is an evolving concept. Business organisations must undertake those activities, which are beneficial to society. This includes their employees, customers, investors, suppliers and the community as a whole. It has become more of a moral obligation to give something back to the society.
David Bowen (2003) presents a model of “The corporate citizen” which is based on a company’s relationship with its stakeholders. Stakeholders include employees, suppliers, and the communities where the firms do business. Customers have a special place in this model because they provide revenues to the firm.
BBM103/03 Principles and Practice of Management 43


Let us examine one by one, how companies can be “socially responsible”, while considering the interest of various stakeholders.
Owner Employees Customers
Supplier Communities
Click on each stakeholders for more details
Approaches to Corporate Social Responsibility
An organisation can adopt a variety of approaches to social responsibility. There are four different approaches to CSR. They are obstructionist, defensive, accommodative and the proactive approach.
Obstructionist Defensive
Accommodative Proactive
Click on each approaches for more details
BBM103/03 Principles and Practice of Management 44


Managerial Ethics
Ethics concern everyone whether in business, government, university or any other enterprise and adherence to higher ethical standards is necessary.
In our society, ethics and ethical behaviour are guided by our values, education system, and rules prescribed by the society. Similarly, in business there are laws that govern and monitor an organisation’s functions. Violating these laws is unethical.
Ethical and Unethical Behaviour
Managers face ethical dilemmas when they have difficulty in choosing what is ‘right’ and what is ‘wrong’. For example, there are times when managers face a situation where some suppliers brought them gifts before Christmas. How will they react? Will they accept it or treat it as a bribe? This kind of situation arises very often. However, managers can do certain things to ensure that basic ethical principles are followed while taking business decisions.
Hill and McShane (2013) have identified seven areas that businesses and managers can do to make sure that ethical issues are considered:
1. Hiring and promotion (selecting the eligible candidate, promotion based on performance).
2. Organisational culture, high on ethical behaviour.
3. Leadership (respecting follower, and communicating all decisions with everyone).
4. Ethical decision-making process (encouraging participation, and listening to feedback).
5. Strong governance process.
6. Appoint ethics officers.
7. Act with moral courage.
BBM103/03 Principles and Practice of Management 45


Unethical behaviour may arise when managers prioritise their personal goals or the goals of the organisation above the rights of the stakeholders. Some examples of such behaviour are:
Self-dealing
This kind of situation occurs when a manager tries to fulfil his personal goals at the cost of the organisation’s funds by manipulating or influencing the senior management.
Information manipulation
Managers use their control over corporate data to hide relevant financial information from investors and stakeholders to enhance their competitive position in the market.
Anti-competitive behavior
Sometimes firms use their monopoly and power to do things which may harm potential competitors.
Substandard Working Conditions
Firms employ workers to work in unsafe working conditions, employ child labour or pay employees below market rates to reduce costs of production. For example, Wal-Mart is deemed to have unsafe employment conditions in China.
Environmental Degradation
It happens when managers take actions that directly or indirectly result in pollution and other forms of environmental harm.
Corruption
It happens when managers take actions that directly or indirectly result in pollution and other forms of environmental harm.
BBM103/03 Principles and Practice of Management 46


Factor Affecting Managerial Ethics
Some managers are subject to cheating, lying or fraud due to poor personal code of ethics. Two main factors that influence managerial ethics are individual or manager’s character and structural design and culture of the organisation, including its code of ethics.
Ethical or unethical behaviour does not attribute only to an individual; rather the organisational climate may have an influence. Sometimes an organisational climate de-emphasises business ethics and encourages people to take decisions purely on economic factors. Organisation behaviour that is judged as unethical by society appears legitimate or ethical to them because they are more concerned with maximising profits, no matter what the costs might be.
Even though one realises that something wrong is happening, everyone else is doing it and on top of that, the whole organisation is in favour of such an action, so will it be fine for everyone to accept such an action?
In such a situation, a person (manager) violates his/her own personal ethics and engages in unethical behaviour. However, the opposite can also happen. An organisational culture can reinforce the need for ethical behaviour.
Learning Activities 2.3
Please read Unit 2, pg 47 – 53 Please read Unit 2, pg 55 – 60
BBM103/03 Principles and Practice of Management 47


Click to View FlipBook Version