Basic Management Principles Unit 1

COURSE MODULE Course Code : BBM 003/03 Course Name : BASIC MANAGEMENT PRINCIPLES

Diploma In Business Management

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BASIC MANAGEMENT PRINCIPLES UNIT 1 – MANAGEMENT AND THE EVOLUTION OF MANAGEMENT THOUGHT Course Writer: Christine Khoo Geok Ling Produced by Online Digital Learning Lab (ODL Lab) Instructional Design for Engaging Experiences (IDeX)

Table of Contents Part 1 – COURSE DETAILS Part 2 – COURSE OVERVIEW

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Unit 1: Management and the Evolution of Management Unit 2: Organisation and Decision Making Unit 3: Planning Unit 4: Organising and Leading Unit 5: Controlling

Part 4 - REFERENCES

Part 1: COURSE DETAILS

COURSE DETAILS School School of Business Administration (SBA) Course Type Core Course Credit Hours 3 hrs Offer in Semester 1 Course Title

Learning Hours

Basic Management Principles

120 hrs Pre-Requisite

Course Coordinator

None

Christine Khoo Geok Ling Course Code BBM003/03

Direct Line

Email

04 – 2180 399

glkhoo@wou.edu.my

Allocation of Study Hours ACTIVITIES

HOURS

1. Lecture and tutorial (including Exam)

32

2. Assessment Preparation and Completion

20

3. E-Learning

18

4. Self-Study

50

Total Study Hours

120

Part 2: COURSE OVERVIEW

COURSE SYNOPSIS This course is a 3-credit lower-level course within the Diploma in Business Management programme. It is a core course and must be taken by students who wish to complete their diploma. This course contains five (5) study units. Each unit has been designed to take about 12 hours, so to complete the whole course; the students will need about 60 hours. There are no pre-requisites for this course.

Students will learn both theories and applications dealing with the principles and practice of management. It introduces you to the concepts and theories that will help you to understand and analyse various aspects of business management.

COURSE OBJECTIVES The course focuses on: 1. Equipping students with basic knowledge in broad areas of Basic Management disciplines especially in business.

2. Providing students an understanding of the general principles in managing an organization in relation to the human capital and physical assets and the ever dynamic business environment.

3. To be aware of and understand the modern trends in management.

4. Have the basic skills to analyse managerial issues and propose recommendations to meet these issues.

5. Preparing the students for higher level tertiary education.

COURSE CONTENT Course topics include …

•

Management and the Evolution of Management Thoughts

•

Organization and Decision Making

•

Planning

•

Organising and Leading

•

Controlling

COURSE LEARNING OUTCOMES (CLO) The student should be able to: 1. Outline the relevant concepts and theories 2. Apply practical and theoretical understanding to solve business problems.

3. Demonstrate teamwork, interpersonal, effective communication and social skills.

4. Display professional and ethical business conduct.

5. Use the skills and principles of lifelong learning in their academic and career development.

COURSE STUDY SCHEDULE (Weekly topic and study activity for each unit)

UNIT

WEEK

1

1

Concepts and Meaning of Management

-

1

2

Early Development in Management Thinking

- The Classical Management Theories - The Behavioral Approaches - Modern Approaches

2

3

The External and Internal Environment

- The Task Environment - The General Environment - The Internal Environment

2

4

Managerial Ethics

- Meaning of Ethics - Ethical and Unethical Behaviour - Factors affecting Managerial Ethics

Activity 2.8 (pg 60) Activity 2.9 (pg 65)

Managerial Decision Making

- Decision Making Process - Analysing Decision Alternatives - Group Decision Making

Self-Test 2.3 (pg 73)

Foundations of Planning

- Definition and Purpose of Planning - Planning Process - Contingency Planning

2

5

TOPIC

FOCUS Defining Management Management Functions Managerial Roles Managerial Skills

SELF-ASSESSMENT Self-Test 1.1 (pg 12) Self-Test 1.2 (pg 18) Self-Test 1.3 (pg 20)

Self-Test 1.4 (pg 28) Question for Thought (pg 36)

Activity 2.2 (pg 18) Activity 2.4 (pg 26)

Activity 3.3 (pg 11) Self - Test 3.1 (pg 13)

UNIT

WEEK

3

6

4

7

4

5

8

9

FOCUS

SELF-ASSESSMENT

Strategic Planning and Management

- Introduction to Strategic Management - Levels of Strategy - Strategic Management Process

Activity 3.4 (pg 20) Question for Thoughts (pg 22)

Organisational Structure and Design

- Elements of Organisational Design - Mechanistic and Organic Structure

Organisational Motivation

- Motivating people at work - Theories of Motivation - Extrinsic and Intrinsic Rewards

Activity 4.7 (pg 37 -39) Activity 4.8 (pg 40) Self-Test 4.5 (pg 40-41)

Foundation of Leadership

- Leadership Defined - Leadership Styles - Leadership Qualities

Activity 4.9 (pg 52) Self-Test 4.6 (pg 53)

Foundation of Control

- The Importance of Control - The Control Process - Types of Control

Activity 5.1 (pg 7) Activity 5.2 (pg 10-11)

TOPIC

Activity 4.1 (pg 5-6)

LEARNER ASSESSMENT METHODS The student will be assessed through the following method:

Assessment Method

Weightage

Aligned Course Learning Outcomes

20%

2, 4

30%

3, 5

−

20%

1

The Final Examination will cover Unit 1 to Unit 5

30%

1, 2

Description

ASSIGNMENT

Mini Case Study

PRESENTATION

One (1) Individual Presentation One (1) Group Presentation

MID TERM FINAL EXAMINATION

Total

100%

Note: The grade for a course is assigned based on the overall score, which combines both the continuous assessment and the final examination components (please refer to the Student Handbook for details).

Part 3: COURSE STUDY GUIDE

THE STUDY GUIDE STRUCTURE

Unit 1: MANAGEMENT AND THE EVOLUTION OF MANAGEMENT THOUGHTS Concept and Meaning of Management Early Development in Management Thinking

Unit 2: ORGANIZATION AND DECISION The External and Internal Environment Managerial Ethics Managerial Decision Making

Unit 3: PLANNING Foundations of Planning

Unit 4: ORGANISING AND LEADING Organisation Structure and Design Organisational Communication Foundation of Leadership

Unit 5: CONTROLLING Foundation of Control

Unit 1 − MANAGEMENT AND THE EVOLUTION OF MANAGEMENT THOUGHTS

UNIT OVERVIEW This Unit 1 focuses on the basic understanding and the different functions of management. This unit is divided into two sections. The first section introduces you to the concept of management, the required roles and the essential skills for managers to carry out the management functions. The second section look into the evolution of management thought through this century. You will learn various functions and roles of a manager. 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.

UNIT LEARNING OUTCOMES You should be able to:

Aligned CLOs

1. Define management with appropriate examples

1

2. Describe the various management theories that shaped management thoughts

1

INTRODUCTION Think of your daily activities, the moment you wake up to performing at workplace and getting off work braving the traffic jam to reach home after a hectic day. Does this require you to manage and decide the schedule? The answer is Yes. That makes you a manager, someone who plans your time, organise the tasks based on priorities, motivating your colleagues at work and ensure that the tasks are completed on time.

Unconsciously, you have performed the four functions of management though you may not hold the position title.

Next, have you ever thought why the Starbucks Coffee, Wendy’s or Tea Live has the same taste and quality whether you buy it in Johor, Kuala Lumpur or Kuching? One thing is for sure; all these outlets have a standard operating procedure that guides them in preparing that cup of caramel macchiato, mushroom melt burger or pearl milk tea. What is the underlying theory that eventually leads to the development of what we know today as standard operating procedure?

Not only this, many more theories have emerged during the 19th century and influenced the business management of today’s business. At the end of this unit, you will understand the concept of management and the underlying theories that provide guidance to how an organisation can be managed.

1.1 Concept and Meaning of Management Definition 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.

Jones and George (2011) defined Management as the Planning, Organising, Leading and Controlling or POLC of human and other resources to achieve organisational goals efficiently and effectively.

Source: https://www.youtube.com/watch?v=WvQBfaA1b9s

*Please read Unit 1, pg 6 to 7 for more information.

1.1 Concept and Meaning of Management Management Functions (i) Planning: Developing the business’s mission and objectives and determining how to achieve the mission and objectives. (ii) Organising: Involves deciding on the roles of people working within an organisation, coordinating their activities, and putting together resources in a systematic manner to pursue common goals. (iii) Leading: Leading is the process of motivating, influencing, and directing others in the organisation to work productively in pursuit of organisational goals. (iv) Controlling: Ensuring that performance does not deviate from the established standards * Please read Unit 1, pg 9 to 11 for more information. * Self Test 1.1, Unit 1, pg 12 Managerial Roles In Minzberg’s research, he concluded that managers have to perform ten (10) common roles which are classified into three (3) categories. They are: (i) Interpersonal Roles: It is roles that involve interacting with other people inside and outside the organization. Mintzberg has identified three (3) types of interpersonal roles: a Figurehead, a Leader and a Liaison role. (ii) Informational Roles: It involves collecting, processing and disseminating information. Managers perform three (3) roles: Monitor, Disseminator, and Spokesperson. (iii) Decisional Roles: Managers translate people and information into processes for achieving the organisational goals. Mintzberg identified four (4) Decisional Roles: Entrepreneur, Disturbance Handler, Resource Allocator and Negotiator. * Please read Unit 1, pg 15 to 17 for more information. * Self Test 1.2 Unit 1, pg 18

1.2 Early Developments in Management Thinking Historical Background of Management Thought During the early industrialisation period, people from various areas formulated their own set of theories. These management theories served as guidelines for the practising managers.

Let’s look into the three (3) main schools of thoughts as below: I. The Classical Management Theories: this includes the Bureaucratic Management approach, Scientific Management approach and Administrative Management approach.

II. The Behavioural Approaches: this includes the Human Relations approach and Human Resources approach.

III. Modern Approaches: this includes the Quantitative approach, the Systems approach and the Contingency approach.

Source: https://www.youtube.com/watch?v=rAtOcIFJEPQ

(I) THE CLASSICAL MANAGEMENT THEORIES The classical theories are one of the oldest, and universally accepted. They placed emphasis on the concept of division of labour and specialisation. Attention is given to hierarchy of management and formal organisational relationships. They wanted to make people more productive and increase the organisational efficiency.

1.2 Early Developments in Management Thinking 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. The Model of Weber is based on the following characteristics: (a) Division of Labour and Specialisation: Tasks and activities are assigned to employees depending on their abilities, skills and aptitude. (b) 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. (c) Impersonality: In a bureaucratic organisation there is no place for emotions, personal attachment, or sentiments. The employees share a very formal relationship among themselves. (d) Rationality: It applies the system of rules which aims to provide efficient and impersonal operation. (e) Technical Competence: This is an important aspect of the ideal bureaucracy, where people are hired on the basis of technical competence. * Please read Unit 1, pg 27 to 28 for more information. * Self Test 1.4 pg 28 The Scientific Management Approach Frederick W. Taylor (1856 – 1915) is acknowledged as the Father of Scientific Management. He advocated various scientific methods to improve operational efficiency of workers and there should be “one best way of doing a particular job.

He believed that workers were primarily motivated by money which in turn contributed to higher productivity and efficiency.Taylor’s approach to management is expressed in the following principles: (i) Replacing rules of thumb with science: managers should adopt scientific thinking and methods for solving a problem. (ii) Obtaining harmony rather than discord in group action - all workers should work together in harmony within the organisation to achieve a common goal. There should be no conflict of interests. (iii) Achievement of cooperation as opposed to chaotic individualism group efforts should be encouraged. (iv) Working for maximum output rather than restricted output in order to decrease the production cost, production of goods has to be maximised. (v) Developing all workers to the fullest extent. * Please read Unit 1, pg 28 to 30 for more information.

1.2 Early Developments in Management Thinking The Administrative Management Approach Henri Fayol (1841 – 1925) developed 14 Management Principles which help managers to increase the efficiency and effectiveness of the organization. Below are the 14 Management Principles: 1. Division of Labour: divide work into specialised tasks in order to perform more efficiently.

2. Authority: managers must give orders to get things done.

3. Discipline: rules must be followed by everyone.

4. Unity of Command: in order to avoid conflicts, an employee should receive orders from one superior only.

5. Unity of Direction: various operations having the same objective must be directed by only one manager using one plan.

6. Remuneration: both worker and company must be satisfied with payment of salary/wages.

7. Subordination of Interest: the interest of employees should not take precedence over the interest of the organisation.

8. Centralisation: optimal level of centralisation is necessary for organisational effectiveness.

9. Hierarchy: positions must be in the order from top management to the lowest level.

10. Order: materials and people should be in the right place at the right time.

11. Equity: managers should be both friendly and fair to subordinates.

12. Stability of Staff: a high employee turnover rate undermines the efficient functioning of an organisation.

13. Initiative: initiative of all workers should be encouraged and welcomed.

14. Esprit de Corps: unity is strength for the company * Please read Unit 1, pg 31 to 32 for more information. .

1.2 Early Developments in Management Thinking (II) THE BEHAVIOURAL APPROACHES This approach emphasises the human dimension. An efficient manager is one who understands work as well as people who come from different backgrounds, having different needs, values, perceptions, and personality. 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 findings of the Hawthorne studies form the basis for this approach. The experiments were conducted at the Western Electric plant in U.S.A (1924 – 1932). A team of researchers from Harvard Business School headed by Elton Mayo was also involved in the experiment. The experiment was conducted to determine the effect of illumination on workers’ productivity.

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.

The Hawthorne Effect is a phenomenon where productivity increased, not by modifying the working conditions but due to management’s effort in bringing improvements. According to Koontz and Weihreich (2013), the phenomenon basically due to people being “noticed” has been named the “Hawthorne effect”. This is a feeling where workers consider themselves as part of a team and develop a sense of belonging. * Please read Unit 1, pg 32-35 for more information. * Please answer “Question for Thought” Unit 1 pg 36

SUMMARY At the beginning of the unit, you have learnt the concept of management, the various processes and functions associated with management. Management is the process of accomplishing organisational objectives efficiently and effectively.

Managers are the persons who carry out the management functions of planning, organizing, leading and controlling.

In the second section of this unit, you explored the gradual evolution of management thoughts. Numerous researchers and practitioners have contributed to the development of management thought over the centuries. We have looked into the various approaches, under the classical, administrative, behavioural and modern management approaches.

The scientific management focused on improving productivity, whereas the administrative theorist advocates ideal principles of good management for the whole organisation. The behaviour theorists focused on addressing the needs of employees and improving human relations at work. The quantitative approach calls for using statistical and mathematical methods, whereas the contingency approach depends on current practice and situations. An organisation is an open system which interacts with the external environment. You should gain a brief understanding of the system’s approach.

REFERENCES 1. Wawasan Open University, Basic Management Principles 2. Norlida Kamaluddin, Za’faran Hassan, Rabiah Abdul Wahab, and Rohaya Mohd Hussein. (2014). Principles of Management Second Edition. Shah Alam: Oxford University Press.

3. Robbins, S.P. & Coulter, M. (2014). Management, 12th Edition. Pearson Education Limited.

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