Keys to Management

A great deal of studies were directed by Elton Mayo, a Harvard University psychologist. He directed a series of experiments on how working conditions affected output. It was found out that there was an increase in productivity whether conditions such as lunch times, rest periods, wall colors, pay and temperature were made better.

The researchers later came to conclusion that social relation

s among workers, and between workers and their bosses affect output, the quality of work and motivation. The good relationships and social contacts make the work more enjoyable. Another important finding was that a worker need more than money and good working conditions to be productive. The feeling of belonging to a group and his status within that group, strongly affect his behavior.

It is said that Elton Mayo founded the Human Relations School, whose offspring is the QWL movement, and he changed the course of management thinking completely/entirely.

4. Decision-making

In carrying out management functions, such as planning, organizing, motivating and controlling a manager will be continually making decisions. Decision-making is a key management responsibility. Some decisions are of the routine kind. They are decisions which are made fairly quickly, and are based on judgement. Other decisions are often intuitive ones. They are not really rational. The manager may have a hunch or a gut feeling that a certain course of action is the right one. He will follow that hunch and act accordingly.

Many decisions are more difficult to make since they involve, problem-solving. Very often they are strategic decisions involving major courses of action which will affect the future direction of the enterprise. In practice, decisions are usually made in circumstances which are not ideal. They must be made quickly, with insufficient info. It is probably rare that a manager can make an entirely rational decision.

When a complex problem arises, the manager has to collect facts and weight up courses of action. A useful approach to decision-making is as follows: the process consists of 4 phases:

1) defining the problem. The manager must identify and define the problem. And it is important that manager does not mistake the symptoms of a problem for the real problem he must solve. At the early stage, he must also take into account the rules and principles of the company which may affect the final decision. These factors will limit the solution of the problem. Rules and policies of the company act as constraints, limiting the action of the decision-taker.

2) analyzing and collecting information. The second step is to analyze the problem and decide what additional information is necessary before a decision can be taken. Getting the facts is essential in decision-making, because making decisions involves a degree of risk. It is the manager’s job to minimize that risk.

3) working out options. Once the problem has been defined and the facts collected, the manager should consider the options available for solving it. This is necessary because there are usually several ways of solving a problem (a number of actions): introducing new products, advertising, refurbishment etc. In some situations, one of the options may be to take no action at all.

4) deciding on the best solution. Before making decision, the manager will carefully assess the options, considering the advantages and disadvantages each one. Having done this, he will have to take a decision.

Before making a decision, the manager has to carefully assess the options, considering the advantages and disadvantages of each one. Perhaps he will compromise, using more than one option. Having done this, he will have to take a decision.

5. Top management – planning and strategy

The top management of a company have certain unique responsibilities. One of their key tasks is to make major decisions affecting the future of the organization. These strategic decisions determine where the company is going and how it will get there. For example, top managers must decide which markets to enter and which to pull out of; how expansion is to be financed end so on.

Before doing any kind of strategic planning, the management must decide what is the mission and purpose of their business and what it should be in the future. In other words, they must know why the business exists and what its main purpose is. Deciding the mission and the purpose is the foundation of any planning exercise.

One example will make this point clear. Most people have heard of Marks and Spencer, one of the biggest and most successful retailers in the world. Michael Marks, as the owner of penny bazaars, and his cashier Tom Spencer became public company after opening 9 market stores. At that point, they could have rested on their laurels. However, around that time, they developed a clear idea of M&S mission and purpose. Their later success was founded on this idea. Their company was in business to provide goods of excellent quality, at reasonable prices, to customers from the working and middle classes. This became the overall objective of M&S company. Providing value for money was their mission and their purpose.

Having decided on its mission and purpose, an organization will have worked out certain more specific objectives. It could be increasing market share, producing new model of car in the medium-price range and so on.

As soon as company has established its medium-term objectives, it can draw up a corporate plan. Its purpose is to indicate the strategies the management will use to achieve its goals.

Before deciding strategies, the planners have to look at the company’s present performance, and at any external factors which might affect its future. To do this, it carries out an analysis, sometimes called SWOT analysis (strengths, weaknesses, opportunities and threats). First organization examines its current performance, assessing its strength and weaknesses. It looks at performance indicators like market share, sales revenue, output and productivity. And also examines its resources – financial, human, products and facilities. Next, the company looks at external factors, from the point of view of opp. and threats. It is trying to assess technological, social, economic and political trends in the market where it is competing.

Having completed the SWOT analysis the company can now evaluate its objectives and perhaps work out new ones. They will ask themselves questions about growth rate, new markets to break into etc. The remaining task is to develop appropriate strategies to achieve the objectives. So that is why company planning and strategic decision-making are key activities of top management.

6. Goal-setting (MBO)

Management by Objectives (MBO) is a system which was first described by Peter Drucker in his book ‘The practice of management’. Since then, MBO has attracted enormous interest from the business world.

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