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What is management Different management Techniques How management applied effectively What is sustainability as a generic concept What is sustainable management Sustainable management practices
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Understanding org charts and your position in it. Understanding sustainable behavior. Understanding global goals of sustainability. Understanding sustainability culture in organizations.
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Classical Management Behavioural Management Quantitative management Modern management
The classical management movement has two fundamental thrusts – scientific management and general administrative management. Scientific management centers on ways to improve productivity. Administrative management theory examines organizations as total entities and focuses on ways to make them more effective and efficient.
The Soho Engineering Foundry in Great Britain was founded in 1796 by the inventors and developers of the steam engine. The management of the foundry was turned over to the sons, James Watt Jr and Matthew Robinson Boulton, who systematically implemented several management techniques including:
market research and forecasting; planned machine layout and work-flow requirements; planned site location; production planning; production process standards; and standardization of product components.
Frank and Lillian Gilbreth, are known for contributions in production and operation management. They are best known for their time and motion studies. From these studies, the Gilbreths developed the “laws of motion economy”, which involved principles dealing with:
the use of the human body; the workplace arrangement; and tools and equipment design.
Whereas scientific management focused on employees as individuals and their tasks, general administrative management theory dealt with total management organization. General management theory was an attempt to develop a much broader theory concerned with administrative management functions and is considered the forerunner of modern organization theory. As with scientific management, there were many contributors to general management theory.
Around the turn of the century, a Frenchman named Henri Fayol introduced the management world to “systematic management theory”. An executive and mining engineer, Fayol played an important role in the field of management from 1888 until the time of his death in 1915. According to Fayol, the basic functions of any manager incorporated planning, organizing, commanding, coordinating and controlling11. Fayol maintained that all activities involved with industrial projects could be separated into six sections:
Technical which involved production. Commercial which included buying, selling, and exchange. Financial which increased the search for, and optimum use of, capital. Security which provided protection of property and persons. Accounting which included statistical analysis. Managerial which encompassed planning, organization, command, coordination, and control.
Fayol carried the management process beyond the basic hierarchical model developed by Taylor. Under Fayol’s system, the command function continued to operate efficiently and effectively through a series of co-ordination and control methods. He recommended regular meetings of department heads and liaison officers to improve co-ordination of organizational operations.
The behavioural management movement looks at employee behaviour in the organizational setting. There are again two main thrusts – human relations and organizational behaviour. With the outset of industrial psychology, the human relations movement replaced scientific management as the primary management method during the 1930s and 1940s. Organizational behaviour surfaced in the late 1950s and is ongoing. In 1943, Abraham Maslow introduced a five-tiered hierarchy of needs. Needs were defined as internal states which make certain outcomes appear attractive. He believed that individuals are motivated by certain needs. Motivation was defined as the willingness to exert high levels of effort to reach certain goals. These needs were then arranged in a hierarchy from the lower-level physiological needs to the higher-level needs for self-actualization. The physiological needs were the highest priority because, until they were reasonably satisfied, other higher-level needs would not emerge to motivate new behaviour. Whereas Maslow’s hierarchy of needs stressed a uniform and pervasive set of needs, McClelland27 emphasized the fact that there are certain needs which are learned or socially acquired by an individual as he or she interacts with the environment. In his three-needs theory, McClelland suggested that there are three significant motives which are formed by the interaction of an individual’s needs with various environmental factors. They are:
the need for achievement; the need for power; the need for affiliation.
The “quantitative management movement” centers on adapting mathematical models and processes to management situations. There are three major areas:
management science; operations management; management information systems.
Management science deals specifically with the development of mathematical models to assist in decision making and problem solving. Operations management centers more on the application of management science to organizations. Management information systems are complex communication systems designed to provide information to managers.
Von Neumann’s game theory is a type of mathematical analysis which deals with abstract models of conflict situations. They are characterized by the fact that their outcomes are dependent on the collective action of the players and by chance effects as well. In a business situation, for example, two manufacturing firms producing the same item in competition with each other must make a wide variety of action-oriented business decisions. Decisions may include advertising, retooling machines, adding new products, or even merging. The results of the different interactions of the decisions made by both firms are apparent by the “pay-off”, which could be net profit, annual gross sales, or buyouts.
The “modern management movement” continues to evolve by integrating theories. The approaches to modern management include the process approach, the systems approach, the contingency approach, the strategic management approach, the Japanese style management approach, and the excellence approach. It is a synergistic product. The classical, behavioural and quantitative movements, along with systems and contingency management theory, become integrated to form the framework of the modern management movement.
Management uses strategy for an organization’s survival by eliminating competitive threats and maximizing opportunities for increased organizational security and wealth. Strategic management is concerned primarily with the decision-making process and actions which determine an organization’s long run performance. It emphasizes monitoring and evaluating external and internal environmental opportunities and controls in view of an organization’s strengths and weaknesses. Business policy, on the other hand, maintains an integrative orientation and, therefore, tends to look inward. It focuses on the efficient use of an organization’s assets by formulating general guidelines which will assist the corporation in accomplishing its goals and objectives. Strategic management simply incorporates business policy with a heavier emphasis on environment and strategy.
A good method of defining strategy is to list the more generally approved elements which go into the making of a strategy statement. They are vision, mission, comparative advantage, goals and objectives, critical success factors, shared values or corporate culture, and action orientation. Strategic management involves four basic components:
environmental scanning; strategy formulation; strategy implementation; evaluation and control.
In 1950, Deming introduced a comprehensive management system which is the model for Japanese-style management, or total quality management (TQM). TQM uses statistics to analyze variability in production processes in order to improve the product quality continuously. Quality is whatever the customer needs and wants and, because the customer’s needs are always changing, the solution to defining quality in terms of the customer is to focus continually on customer research. Deming’s basic philosophy on quality is that productivity improves as variability decreases45. A statistical method of quality control is needed because of variations. He is an advocate of worker participation in decision making. Deming also claims that management is responsible for 94 percent of quality problems. He also points out that it is management’s job to help employees work smarter, not harder.
Another pioneer in the TQM field is Juran. Juran was the first to deal with the broad management features of quality, which distinguishes him from those who advocate specific techniques, statistical or otherwise. He believed that organizations did not understand how to manage for quality. Juran included three basic steps to progress:   
structured annual improvements; major training programs; upper management leadership.
Eastman Kodak Company was incorporated in New Jersey on October 24,1901, as successor to Eastman Dry Plate Company, the business originally established by George Eastman in 1880.The Dry Plate Company had been formed to massproduce the dry plates needed for early cameras. After George Eastman developed silver-halide paper-based photographic film and invented the first portable camera, he formed his new company to capitalize on his inventions.
From the beginning, Eastman was aware of the need to reduce costs to bring his products to the mass market, and he quickly adopted scientific management principles to improve production efficiency. However, Eastman developed a people-oriented approach in his company. Over the years Eastman Kodak became known as "Mother Kodak" because of the bonds that developed between the organization and its members. Until the 1980s, Kodak never had layoffs and turnover was very low. It was quite common for both managers and workers to spend their entire working careers with Kodak and for whole families or successive generations of families to be employed by the company at its Rochester, New York, headquarters and manufacturing plants. With success, however, decision making became centralized at the top of the organization. A group of long-term managers made all significant operating decisions and then communicated the decisions down a very tall hierarchy to managers at lower levels. When it came time to decide who would be promoted, seniority and loyalty to Mother Kodak were more important than a person's performance; fitting in and being a member of the "Kodak Team" were the keys to success.
This management approach worked well while Kodak had a virtual monopoly of the photographic products market, but it became a liability when Kodak faced stiff competition from foreign competitors like Germany's Agfa and Japan's Fuji Film. These companies, having found new ways to produce film and paper at costs lower than Kodak's, began to challenge Kodak's dominance. Managers at Kodak were slow to respond to the challenge. The organization's tall, centralized structure slowed decision making, and its conservative orientation made managers reluctant to change. In the 1980s things went from bad to worse for Kodak as its share of the market and profits fell. Top management had to address the problems. After much soul searching, top managers decided they had to totally change Kodak's organizational structure to make the company more competitive. They decided the company into four separate product divisions and began a massive downsizing of the workforce. Kodak's policy of lifetime employment was discontinued as managers announced the first layoffs in its history. Top management's goal was to flatten the organization's hierarchy and push authority and responsibility to employees at lower levels. Top management hoped that decentralized authority would help lower level managers become more entrepreneurial and more inclined to search for new ways to cut costs. These changes helped Kodak but were not enough to reverse its decline. In 1994, in a break with the past, Kodak appointed a CEO from outside the company to change the organization further. George Fisher, the former CEO of Motorola, took charge. Fisher was renowned for creating a climate of innovation at Motorola and for helping that company become a market leader in the cellular telephone industry. To increase the rate of new product development and to help the company regain market share, he has been striving to change Kodak managers' conservative management style into an entrepreneurial approach. Fisher also has continued to restructure the company, laying off thousands more employees and managers and selling many of Kodak's divisions. The Kodak of today is very different from the Kodak of ten years ago, and a new set of principles guides manages and workers.
The organizational environment is a set of forces and conditions outside the organization's boundaries that have the potential to affect the way the organization operates.1 These forces change over time and thus present managers with opportunities and threats. Changes in the environment, such as the introduction of new technology or the opening of foreign markets, create opportunities for managers to obtain resources or enter new markets and thereby strengthen their organizations. In contrast, the rise of new competitors, an economic recession, or an oil shortage pose a threat that can devastate an organization if managers are unable to obtain resources or sell the organization's goods and services. The quality of managers' understanding of forces in the organizational environment, and their ability to respond appropriately to those forces, are critical factors affecting organizational performance. Forces in the task environment result from the actions of suppliers, distributors, customers, and competitors (Figure 1), These four groups affects a manager’s ability to obtain resources and dispose of out-puts on a daily, weekly and monthly basis and thus have a significant impact on short-term decision making.
Suppliers are the individuals and organizations that provide an organization with the input resources (such as raw materials, component parts, or employees) that it needs to produce goods and services. In return, the supplier receives compensation for those goods and services. An important aspect of manager's job is to ensure a reliable supply or input resources. Distributors are organizations that help other organizations sell their goods or services to customers. The decisions that managers make about how to distribute products to customers can have important effects on organizational performance.
Customers are the individuals and groups that buy the goods and services that an organization produces. Changes in the number and types of customers or changes in customers' tastes and needs also result in opportunities and threats. A school too must adapt to the changing needs of its customers.
Competitors One of the most important forces that an organization confronts in its task environment is competitors. Competitors are organizations that produce goods and services that are similar to a particular organization's goods and services. In other words, competitors are organizations that are vying for the same customers. Compaq's competitors include other domestic manufacturers of PCs (such as Apple, AST, Dell Computer, Gateway 2000, IBM) as well as foreign competitors (such as NEC and Toshiba in Japan and Group Bull in France).
An important determinant of the nature and strength of the forces in an organization's task environment (and thus of the nature of opportunities and threats) is the industry life cycle— the changes that take place in an industry as it goes through the stages of birth, growth, shakeout, maturity, and decline (Figure 3). Each stage in the life cycle is associated with particular kinds of forces in the task environment. Managers need to understand which life-cycle stage their organization is in, if they are to accurately perceive the opportunities and threats that it faces.
Job design is the process of determining what procedures and operations are to be performed by the employee in each position. For example, a new employee does not simply sit down and start working. Instead, the manager shows the new employee how to do the job. Thus, Job Design is concerned with structuring jobs in order to improve organization efficiency and employee job satisfaction. The design of a job should reflect both technological and human consideration. It should facilitate the achievement of organizational objectives and the performance of the work the job was established to accomplish. At the same time, the design should recognize the capacities and needs of those who are to perform it.
Job Rotation. Employees participate in job rotation when they do entirely different jobs on a rotating schedule. Systematically moving employees from one job to another in an attempt to reduce employee boredom. Most frequent use today is as a training device for skills and flexibility.
Job Enlargement. It consists of increasing the number and variety of tasks a job include. The tasks that are added are similar to current job duties; however, the new duties relieve boredom by offering additional variety to the jobholder.
Job Enrichment. Any effort that makes more rewarding or satisfying by adding more meaningful tasks to an employee's job. It can be accomplished by increasing the autonomy and responsibility of employees.
Work Teams. Are groups of employees who rotate jobs as they complete the production or service process. Team members acquire multiple skills, enabling them to perform a variety of job tasks. Participation can also include joint decision making in which employees are encouraged to help solve organizational problems.
The width of the span of management determines the number of hierarchical levels in an organization. On average, a tall structure has a narrow span of management, so the organization has more hierarchical levels. In contrast, a flat structure has fewer hierarchical levels because the average span of management is wide. (Figure 2) Even when two organizations have the same number of members, their vertical structures look vastly different when each applies a different span of management.
These differences can have profound effects on the organization. In a tall structure, communications and decisions may be slower because of the many levels. In addition, the higher number of managers may raise overall costs. In a flat structure, managers are challenged by comparatively more responsibility and authority, but the outlook for upward movement is dimmer because the hierarchical levels are fewer. Still, organizational effectiveness may be enhanced in a flat organization because fewer layers separate managers from the customer and from the external environment, allowing managers to monitor customer needs and environmental changes more closely.
Competence of supervisor and subordinates (the greater the competence, the wider the potential span). Physical dispersion of subordinates (the greater the dispersion, the narrower the potential span). Extent of nonsupervisory work in a manager’s job (the more nonsupervisory work, the narrower the potential span). Degree of required interaction (the less required interaction, the wider the potential span). Extent of standardized procedures (the more procedures, the wider the potential span). Similarity of tasks being supervised (the more similar the tasks, the wider the potential span). Frequency of new problems (the higher the frequency, the narrower the potential span Preferences of supervisors and subordinates.
Sustainable management takes the concepts from sustainability and synthesizes them with the concepts of management. Sustainability has three branches: the environment, the needs of present and future generations, and the economy. Using these branches, it creates the ability to keep a system running indefinitely without depleting resources, maintaining economic viability, and also nourishing the needs of the present and future generations. From this definition, sustainable management has been created to be defined as the application of sustainable practices in the categories of businesses, agriculture, society, environment, and personal life by managing them in a way that will benefit current generations and future generations. The manager can take some credit for the cultural changes in his or her program, but overall the organization’s culture reflects dominant conceptions of the public at that time. This is exemplified through the managerial actions taken during the time periods that lead up to the present day. These examples are given below: This was a time period in which, even though there were outside concerns about the environment, the industries were able to resist pressures and make their own definitions and regulations. Environmentalists were not viewed as credible sources of information during this time and usually discredited.
The norms of this period radically shifted with the creating of the U.S. Environmental Protection Agency (EPA) in 1970. The EPA became the mediator between the environmentalists and the industry, although the two sides never met. During this period, the environment for the majority of industry and business management teams was only important in terms of compliance with law. In 1974 a conference board survey found that the majority of companies still treated environmental management as a threat. The survey noted a widespread tendency in most of industry to treat pollution control expenditures as non-recoverable investments. According to the consensus environmental protection was considered at best a necessary evil, and at worst a temporary nuisance.
By 1982, the EPA had lost its credibility, but at the same time activism became more influential, and there was an increase in the funding and memberships of major non-governmental organizations (NGOs). Industry gradually became more cooperative with government and new managerial structures were implemented to achieve compliances with regulations.
During this period, industry progressed into a proactive stance on environmental protection. With this attitude, the issue became one in which they felt qualified to manage on their own. Although there was advancement in organizational power, the concern for the environment still kept being pushed down the hierarchy of important things to do.
In 1995 Harvard professor Michael Porter wrote in the Harvard Business Review that environmental protection was not a threat to the corporate enterprise but rather an opportunity, one that could increase competitive advantage in the marketplace. Before 2000, companies generally regarded green buildings as interesting experiments but unfeasible projects in the real business world. Since then several factors, including the ones listed below, have caused major shifts in thinking. The creation of reliable building rating and performance measurement systems for new construction and renovation has helped change corporate perceptions about green. In 2000, the Washington D.C.-based United States Green Building Council launched its rigorous Leadership in Energy and Environmental Design (LEED) program. Hundreds of US and international studies have proven the financial advantages of going green: lower utility costs, higher employee productivity. Green building materials, mechanical systems, and furnishings have become more widely available, and prices have dropped considerably. As changes are made to the norms of what is acceptable from a management perspective, more and more it becomes apparent that sustainable management is the new norm of the future. Currently, there are many programs, organizations, communities, and businesses that follow sustainable management plans. These new entities are pressing forward with the help of changing social norms and management initiatives.
In business, time and time again, environmentalists are seen facing off against industry, and there is usually very little "meeting in the middle" or compromises. When these two sides agree to disagree, the result is a more powerful message, and it becomes one that allows more people to understand and embrace.
The economic system, like all systems, is subject to the laws of thermodynamics, which define the limit at which the Earth can successfully process energy and wastes. Managers need to understand that their values are critical factors in their decisions. Many of current business values are based on unrealistic economic assumptions; adopting new economic models that take the Earth into account in the decision-making process is at the core of sustainable management. This new management addresses the interrelatedness of the ecosystem and the economic system. The strategic vision that is based on core values of the firm guides the firm’s decision-making processes at all levels. Thus, the sustainable management requires finding out what business activities fit into the Earth’s carrying capacity, and also defining the optimal levels of those activities. Sustainability values form the basis of the strategic management, process the costs and benefits of the firm’s operations, and are measured against the survival needs of the planets stakeholders. Sustainability is the core value because it supports a strategic vision of firms in the long term by integrating economic profits with the responsibility to protect the environment.
Changing industrial processes so that they actually replenish and magnify the stock of natural capital is another component of sustainable management. One way managers have figured out how to do this is by using a service model of business. This focuses on building relationships with customers, instead of focusing on making and selling products. This type of model represents a fundamental change in the way businesses behave. It allows for managers to be aware of the lifecycle of their products by leaving the responsibility up to the company to take care of the product throughout the life cycle. The service model, because the product is the responsibility of the business, creates an avenue in which the managers can see ways in which they can reduce the use of resources through recycling and product construction.
The concept of sustainable development has received growing recognition, but it is a new idea for many business executives. For most, the concept remains abstract and theoretical. Protecting an organization’s capital base is a well-accepted business principle. Yet organizations do not generally recognize the possibility of extending this notion to the world’s natural and human resources. If sustainable development is to achieve its potential, it must be integrated into the planning and measurement systems of business enterprises. And for that to happen, the concept must be articulated in terms that are familiar to business leaders. The following definition is suggested: For the business enterprise, sustainable development means adopting business strategies and activities that meet the needs of the enterprise and its stakeholders today while protecting, sustaining and enhancing the human and natural resources that will be needed in the future. It has become a clichÊ that environmental problems are substantial, and that economic growth contributes to them. A common response is stricter environmental regulation, which often inhibits growth. The result can be a tradeoff between a healthy environment on the one hand and healthy growth on the other. As a consequence, opportunities for business may be constrained. However, there are some forms of development that are both environmentally and socially sustainable. They lead not to a trade-off but to an improved environment, together with development that does not draw down our environmental capital. This is what sustainable development is all about - a revolutionary change in the way we approach these issues. Businesses and societies can find approaches that will move towards all three goals - environmental protection, social wellbeing and economic development at the same time.
Sustainable development is good business in itself. It creates opportunities for suppliers of ‘green consumers’, developers of environmentally safer materials and processes, firms that invest in eco-efficiency, and those that engage themselves in social well-being. These enterprises will generally have a competitive advantage. They will earn their local community’s goodwill and see their efforts reflected in the bottom line.
The concept of sustainable development needs to be incorporated into the policies and processes of a business if it is to follow sustainable development principles. This does not mean that new management methods need to be invented. Rather, it requires a new cultural orientation and extensive refinements to systems, practices and procedures. The two main areas of the management system that must be changed are those concerned with:
• A greater accountability to non-traditional stakeholders; • Continuous improvement of reporting practices. Developing an effective management framework for sustainable development requires addressing both decision-making and governance. The concept of sustainable development must be integrated both into business planning and into management information and control systems. Senior management must provide reports that measure performance against these strategies. Governance is increasingly important because of the growing accountability of the corporation and its senior management. Information and reporting systems must support this need. Decision-making at all levels must become more responsive to the issues arising from sustainable development. Seven steps are required for managing an enterprise according to sustainable development principles. These are set out below. A. B. C. D. E. F. G.
Perform a stakeholder analysis Set sustainable development policies and objectives Design and execute an implementation plan Develop a supportive corporate culture Develop measures and standards of performance Prepare reports Enhance internal monitoring processes
The United Nations Development Programme (UNDP) has been one of the leading organizations working to achieve the MDGs. Present in more than 170 countries and territories, we funded projects that helped fulfl the Goals. We championed the Goals so that people everywhere would know how to do their part. And we acted as “scorekeeper,� helping countries track their progress. And the progress in those 15 years has been tremendous. Hunger has been cut in half. Extreme poverty is down nearly by half. More kids are going to school and fewer are dying. Now these countries want to build on the many successes of the past 15 years, and go further. The new set of goals, the Sustainable Development Goals (SDGs), aims to end poverty and hunger by 2030. World leaders, recognizing the connection between people and planet, have set goals for the land, the oceans and the waterways. The world is also better connected now than it was in 2000, and is building a consensus about the future we want.
That future is one where everybody has enough food, and can work, and where living on less than $1.25 a day is a thing of the past. UNDP is proud to continue as a leader in this global movement.