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Introduction to business and
management
J
...
Materials for these programmes are developed by academics at the
London School of Economics and Political Science (LSE)
...
londoninternational
...
uk

This guide was prepared for the University of London International Programmes by:
J
...
Timms, BA, MSocSci, Researcher at the Centre for the Study of Global Governance,
London School of Economics and Political Science
...
E
...

This is one of a series of subject guides published by the University
...
If you have any comments on this subject guide, favourable or unfavourable,
please use the form at the back of this guide
...
londoninternational
...
uk
Published by: University of London
© University of London 2002, reprinted August 2005, October 2005, and 2006 and 2009
with amendments
...

The University of London asserts copyright over all material in this subject guide except where
otherwise indicated
...
No part of this work may be reproduced in any form,
or by any means, without permission in writing from the publisher
...
If you think we have inadvertently used
your copyright material, please let us know
...
1
Aims of the course
...
2
Reading and learning resources
...
6
Developing a glossary
...
8
The structure of this course
...
11
Section 1: The development of business and management
...
15
Aims of the chapter
...
15
Essential reading
...
16
Beginning your study
...
1 The importance of key concepts
...
2 A closer look at business and organisations
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3 A closer look at management
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4 The evolution of business and management studies
...
25
A reminder of your learning outcomes
...
26
Advice on answering a question
...
29
Aims of the chapter
...
29
Essential reading
...
30
Introduction
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1 A multidisciplinary view of business and management
...
2 Sociological perspectives
...
3 The anthropology of organisations
...
4 The contributions of psychology
...
5 Economic approaches to organisations
...
6 The stakeholder model of the firm
...
39
A reminder of your learning outcomes
...
40
Advice on answering a question
...
43
Chapter 3: The management role
...
45
i

107 Introduction to business and management

Learning outcomes
...
45
Further reading
...
46
3
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46
3
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47
3
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50
3
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53
3
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55
3
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56
3
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61
3
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63
Chapter review
...
65
Sample examination questions
...
66
Chapter 4: Theoretical approaches to strategic decision making and
organisational change
...
67
Learning outcomes
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67
Further reading
...
68
4
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68
4
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71
4
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84
4
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88
4
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91
4
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93
4
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95
Chapter review
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97
Sample examination questions
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98
Chapter 5: Managing the main functional areas
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99
Learning outcomes
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99
Further reading
...
100
5
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100
5
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103
5
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108
5
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111
5
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113
5
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117
Chapter review
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120
Sample examination questions
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120
ii

Contents

Section 3: Business and the environment
...
125
Aims of the chapter
...
125
Essential reading
...
126
Introduction
...
1 Organisational dynamics
...
2 Type, ownership, strategy and size
...
3 Organisational structure
...
4 New technology and business organisations
...
5 Understanding organisational culture
...
147
A reminder of your learning outcomes
...
148
Advice on answering a question
...
151
Aims of the chapter
...
151
Essential reading
...
152
Introduction
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1 Studying business within its external environment
...
2 The economic environment
...
3 The political environment
...
4 The technological environment
...
5 The cultural environment
...
6 Analysing the business environment
...
7 Summing up
...
169
A reminder of your learning outcomes
...
170
Advice on answering a question
...
173
Aims of the chapter
...
173
Essential reading
...
174
Introduction
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1 The international context
...
2 Globalisation and business
...
3 Management of multinational companies (MNCs)
...
4 Small business organisations
...
190
A reminder of your learning outcomes
...
191
Advice on answering a question
...
193
Chapter 9: Contemporary issues; knowledge management, learning
organisations, e-business
...
195
Learning outcomes
...
195
Further reading
...
196
9
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196
9
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197
9
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203
9
...
207
Chapter review
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211
Sample examination questions
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212
Chapter 10: The social responsibilities of business organisations
...
215
Learning outcomes
...
215
Further reading
...
216
10
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216
10
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217
10
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223
10
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231
Chapter review
...
235
Sample examination questions
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236
Appendix 1: Sample examination paper
...
239

iv

Introduction

Introduction
Welcome to 107 Introduction to business and management
...
This is an introductory course, which is designed
to engage you with the key concepts, models, debates and problems in the
study of business and management
...

This introductory course is also a chance for you to develop your academic
skills, in particular your critical approach to the ideas you are presented
with
...
The subject of business
and management offers an ideal opportunity to develop this academic
approach, as a wide variety of groups, individuals and organisations offer
diverse opinions and theories regarding the workings of business and
successful management
...
It
is therefore helpful to view this introductory course as an opportunity to
develop a solid framework of knowledge, as well as a critical academic
approach
...

In the remainder of this introductory chapter you will be given advice and
guidance on the following:
• the course aims and learning outcomes
• the reading system
• your role in using the subject guide
• the structure of the course
• preparing for the assessment
...

The subject of business and management is an important and exciting
one
...
The subject also
includes how these business organisations are managed, including the
strategies used to guide them and the decisions involved in the role of the
manager
...


1

107 Introduction to business and management

Aims of the course
This course has three main aims, and these directly relate to the major
themes that will be emphasised throughout
...


Learning outcomes
On completion of this course, you should be able to:
• understand the evolution of the business organisation and management
thought, identifying the interconnections between developments in
these areas
• evaluate alternative theories of management critically, recognising the
centrality of decision making and strategic thinking to the managerial
role and functions
• discuss and compare different models and approaches to understanding
the firm, evaluating these in the context of the business environment
• explore the impact of key environmental factors on decision making
and organisational behaviour
• evaluate the significance of contemporary issues in business and
management
...

Many different people, organisations and groups hold widely differing
views on issues in this area
...

Reading is a vital and central part of your work and successful progress in
this course
...
This will really help you, because
it includes guidance on reading technique
...

This subject guide is designed to guide you through academic material in
the major areas of business and management, as set out in the syllabus
...
The reading system that will be employed consists of
three elements, which are explained below
...
It is from this material that the majority of your
knowledge will be gained
...

All the Essential reading will be listed at the beginning of each chapter
...

Therefore you will work from the guide and, at the most relevant points in
each chapter, you will be advised which is the relevant reading and when
to read it
...
It will be clear from the
subject matter of the section which passages you are intended to read
...

Key texts
One main key text has been selected for this course:
Mullins, L
...
Management and Organisational Behaviour
...


One secondary key text has been selected to supplement this, because not
all topics are covered by Mullins (2010) and this will also offer you an
alternative perspective
...
L
...
(Mason, Ohio: South Western: Cengage,
2008) second edition [ISBN 9780324537772]
...
New editions of one or more of these textbooks
may have been published by the time you study this course
...
Also check
the virtual learning environment (VLE) regularly for updated guidance on
readings
...
There may be a reordering of chapters
...

An alternative text which covers the course syllabus in most areas is:
Boddy, D
...
(Harlow: FT Prentice Hall, 2008)
fourth edition [ISBN 9780273711063]
...


Further reading
Please note that as long as you read the Essential reading you are then free
to read around the subject area in any text, paper or online resource
...
To help you
read extensively, you have free access to the VLE and University of London
Online Library (see below)
...
A selection is always presented, but none of them is compulsory
...
Therefore you should not be worried that this list is long: it is only
to give you a choice should you want one!
You may find it helpful to look at these readings if you are particularly
interested
...

Again, however, it should be noted that it is the Essential readings that
make up the course, and your efforts of analysis and evaluation should be
concentrated on these first and foremost
...
and D
...
995–1018
...
and S
...
138–45
...
D
...
F
...
535–50
...
, M
...
Nicolini ‘Organisational learning:
debates past, present and future’, Journal of Management Studies 38(7)
2001, pp
...

Gordan, G
...
and N
...
783–98
...
‘Leading horses to water? The impact of decentralisation on
management behaviour’, Journal of Management Studies 36(6) 1999,
pp
...

Jackson, T
...
349–69
...
, J
...
Wilkinson ‘A British factory, a Japanese factory and
a Mexican factory: an international comparison of front-line management
and supervision’, Journal of Management Studies 37(4) 2000, pp
...

Nutt, P ‘Decision-making success in public, private and third sector

...
77–108
...
‘What is strategy?’, Harvard Business Review 74(3) 1996, pp
...

Scholte, J
...
‘Globalisation, governance and corporate citizenship’, Journal of
Corporate Citizenship 1, Spring 2001, pp
...

Shimomurs, M
...
127–30
...
and H
...
913–21
...
and E
...
974–93
...
and R
...
(New York:
Oxford University Press, 1994) [ISBN 9780195078251]
...
Management: An Introduction
...

Cole, G
...
Management Theory and Practice
...

Douma, S
...
Schreuder Economic Approaches to Organizations
...

4

Introduction
Grint, K
...
(Cambridge: Blackwell,
1995) [ISBN 9780745611495]
...
The Sociology of Work
...

Held, D
...
McGrew, D
...
Perraton Global Transformations:
Politics, Economics and Culture
...

Hofstede, G
...
(London: Sage Publications, 1980; abridged edition, 1984) [ISBN
9780803913066]
...
and D
...

(London: Prentice Hall, 2008) sixth edition [ISBN 9780273708353]
...
and K
...
(London: Prentice
Hall Europe, 2005) seventh edition [ISBN 9780273687399]
...
, S
...
Knight The Global Electronic Commerce
...

Massie, J
...
Essentials of Management
...

Miller, G
...
(Cambridge:
Cambridge University Press, 1997) [ISBN 9780521457699]
...
The Nature of Managerial Work
...

Needle, D
...

(London: Business Press, 2004) fourth edition [ISBN 9781861529923]
...
Integrity in Organisations: an Alternative Business Ethic
...

Perman, R
...
Scouller Business Economics
...

Robbins, P Greening the Corporation: Management Strategy and the

...
(London: Earthscan Publications, 2001) [ISBN
9781853837715]
...
A
...
(Basingstoke: Palgrave,
2005) second edition [ISBN 9780333977026]
...

Organization
...

Sklair, L
...
(Oxford: Blackwell, 2001) [ISBN
9780631224624]
...
, J
...
Campbell and T
...
(Chichester: John Wiley and Sons,
2000; second edition, 2004) [ISBN 9780470851265]
...
, D
...
Deprez The Knowledge Dividend: Creating
High-Performance Companies Through Value-Based Knowledge Management
...

Waters, M
...
(London: Routledge, 1995; second edition 2001)
[ISBN 9780415238540]
...
The Anthropology of Organizations
...


Supplementary literature
As well as the readings that will be specified within each chapter, you will
find it helpful to read up on current issues in major journals, specialist
magazines and the business sections of newspapers, etc
...


Other learning resources
Gathering case material on particular companies and countries will also
help you to develop a critical approach to the theories as you relate them
to practice
...
Remember that reading is key
to progress on this course
...
As well as this, if you know other
people studying the subject, it is very helpful to talk through your ideas
and to discuss what you are learning
...
If
you have access to this, you should start to collect relevant websites
and become familiar with searching for company information on them
...
Unless otherwise stated, all websites in this
subject guide were accessed in 2009
...

In addition to the subject guide and the Essential reading, it is crucial that
you take advantage of the study resources that are available online for this
course, including the VLE and the Online Library
...
londoninternational
...
uk
You should receive your login details in your study pack
...
support@
london
...
uk quoting your student number
...
It forms an important part of your study experience
with the University of London and you should access it regularly
...

• Electronic study materials: The printed materials that you receive from
the University of London are available to download, including updated
reading lists and references
...

• A student discussion forum: This is an open space for you to discuss
interests and experiences, seek support from your peers, work
collaboratively to solve problems and discuss subject material
...

• Recorded lectures: For some courses, where appropriate, the sessions
from previous years’ Study Weekends have been recorded and made
available
...

• Feedback forms
...


Making use of the Online Library
The Online Library contains a huge array of journal articles and other
resources to help you read widely and extensively
...
com/ollathens
The easiest way to locate relevant content and journal articles in the
Online Library is to use the Summon search engine
...

For further advice, please see the online help pages:
www
...
shl
...
ac
...
php

Developing a glossary
A glossary is an alphabetical listing of all the words and phrases that you
come across that relate to one subject
...
It will be helpful for you to keep
a record of these in the form of a glossary
...

Mullins (2010) provides a glossary, as do Daft (2008) and Boddy (2008)
...
If a word is not listed, look in
other books or in a dictionary
...

Your own glossary is very helpful for reference throughout your studies
and also for your examination revision
...
However, it will be
helpful for you to get started with your glossary now, in preparation
...
You can use these to
7

107 Introduction to business and management

start your glossary
...
You will find lots of definitions in books and, when
you do, add good ones to your glossary
...
You can start this process immediately by
looking in your own dictionary and adding to these definitions from there
...
The
treatment of others; moral conduct
...
[Psychology] the response (of a person or animal,
etc
...
(Mullins has a number of entries for the adjective
‘behavioural’: copy these in now
...
Buying and selling
...
A
series of things needing to be dealt with
...

Something that involves dealing, operations, undertakings
...

• Businessman and businesswoman – COD: people engaged in
trade or commerce, especially at a senior level
...

• Concept – COD: a notion or an idea that helps us understand some
subject
...
(See what Mullins has in his glossary for ‘conceptual
ability’
...
Add
this to your glossary when you come across it
...

(This word is used a lot in sociology and also in literary criticism
...
)
• Manage – COD: organise; regulate; be in charge of (a business,
household, team, a person’s career, etc
...
To
take charge of or control (for example, an animal, especially cattle)
...
The idea here is that you have a growing
record of useful terms and that you start the habit of adding to this from
1
the very beginning of the course
...
You
should spend at least seven hours on this course each week
...
This subject guide has been designed to help you to
work through these topics in a systematic and thorough manner
...

It is essential that studying this guide is done in conjunction with the
reading system outlined above
...


Introduction

own set of notes as you work through the subjects, and that you engage
with the material in a critical way
...
However, it is important for
you to have familiarised yourself with your academic and study skills
handbook Strategies for success before you embark on the first chapter
...
It is not
sufficient to view each topic in an isolated way and only to be able to
describe what you read about
...
This will make the
issues come to life
...

Remember that there is rarely one correct answer or approach to a
question
...
Your role
is, first, to grasp what each source is saying, but then to question, evaluate
and compare it to alternative explanations
...

You can begin to develop these skills as soon as you start the first chapter
...
Actually building
into your notes your own reflections and your own responses can be a
useful method of developing this skill, and will also be valuable when you
come to revise
...
You should note that there is further guidance on
thinking critically in Strategies for success
...

• Each chapter begins by setting out what it aims to achieve, so that it is
clear what you should learn
...

• The Essential reading is then set out
...

• There is a chapter review section at the end of each chapter, including:
• the key points that have been made in the chapter
• a range of sample examination questions to help test what you have
learnt
• suggestions as to how one of the examination questions could be
answered
...

9

107 Introduction to business and management

Interactive format
In addition to these key features of every chapter, exercises have been
provided throughout the guide to help you engage and interact with the
material you are studying
...
Different
activities have been designed, each with a specific purpose, as follows:
• questions, to test your understanding of what you have read
• readings, to direct you to relevant sections of the Essential reading
and instruct you when to do your reading, as well as sometimes
offering questions to ensure that you understand the texts
• case studies, to encourage you at specific points to learn about the
case of a particular business or to think about the ones you know
...

It is strongly recommended that you complete these activities as you work
through the course
...
Take an active role from the beginning
and develop this active learning throughout
...


The structure of this course
It is important to understand how your course is structured, so that it is
easier for you to navigate around the topics and this guide
...

Each section deals with several major topics and an indication is given
below of the elements that each will include
...

Section 1: The development of business and management
Concepts, definitions and origins; understanding the business organisation
– a multidisciplinary approach
...

Section 3: Business and the environment
Key internal elements of the firm; key external elements of the business
environment; the diverse and dynamic nature of the business context
...


10

Introduction

Examination advice
Important: the information and advice given here are based on the
examination structure used at the time this guide was written
...
Because of this
we strongly advise you to always check both the current Regulations for
relevant information about the examination, and the VLE where you
should be advised of any forthcoming changes
...

Remember, it is important to check the VLE for:
• up-to-date information on examination and assessment arrangements
for this course
• where available, past examination papers and Examiners’ commentaries
for the course which give advice on how each question might best be
answered
...
It is essential that you make
use of your academic and study skills handbook Strategies for success,
which gives vital information about the examination process and guidance
on preparing for all your examinations
...

In addition, guidance for the examination for the 107 Introduction to
business and management course has been built into this subject
guide
...

At the end of the guide, in Appendix 1, you will also find a sample
examination paper
...

It is important to remember that the examination is the end-method
of assessment, rather than the focus of the course
...


11

107 Introduction to business and management

Notes

12

Section 1: The development of business and management

Section 1: The development of business
and management
Chapter 1 focuses on the concepts, definitions and origins of the subject
you are studying
...
Each of the
sections will represent a different focus, and so the introductions to each
section are designed to prepare you for this change
...

The first section will serve two purposes:
• The first is to equip you with the understanding you will need of the
main key terms you are going to be working with
...
The idea is to offer you a way of developing
your own understanding of key concepts and to be able to evaluate the
meanings others attach to the terms you will meet
...
The different
influences on its development are important
...
Therefore this section is a foundation for the rest of the
course
...
Several different disciplines are considered; it can
be seen from this that the business organisation is an integral part of our
social lives and can be studied in many different ways
...


13

107 Introduction to business and management

Notes

14

Chapter 1: Concepts, definitions and origins

Chapter 1: Concepts, definitions and
origins
Aims of the chapter
Each chapter has specific aims
...


Learning outcomes
By the end of this chapter, and having completed the Essential readings
and activities, you should be able to:
• define and evaluate the concepts: management, business organisations
and organisational behaviour, and appreciate the variety of possible
meanings
• develop an understanding of the subject’s origins, including the key
stages of evolution and the work of the main contributors
• identify and evaluate the influence of the subject’s historical context on
contemporary developments
...

Start by reading the subject guide and you will be directed to the readings
listed below at the appropriate stage in the chapter
...
J
...
(Essex: Pearson
Education Limited, 2010)
...
xix–xxiv
...
Also familiarise
yourself with the features and resources of the book, such as the useful
‘critical reflections’ at the end of each chapter
...
2–8, ‘The meaning
and study of organisational behaviour, Influences on behaviour’, and
pp
...

Chapter 2 ‘Approaches to organisation and management’
...
77–81, 94–96,
‘Perspectives of the organisation’, ‘Formal and informal organisations only’
...
426–36, From ‘The meaning of
management’ up to and including ‘Management in private enterprise and
public sector organisations’
...
The
structure of the book is explained in its Preface:
Daft, R
...
New Era of Management
...


Further reading
The following are the texts which you may like to refer to for additional
material
...

Boddy, D
...
(Marlow: FT Prentice Hall, 2008)
Chapters 1 and 2
...
A
...
(London: DP Publications, 2000)
Chapters 1 and 2
...
L
...
(Mason, Ohio: South Western: Cengage,
2008) Chapters 1 and 2
...
L
...
(Upper Saddle River, NJ: Prentice Hall,
1987) Chapters 1 and 2
...
This is where we shall begin
...
To help you discover a pattern of working that suits you
best
...
Also try moving between this study guide
and the textbooks you have obtained
...

2
...
Since they have
an important role in the course, now spend 15–30 minutes looking
through the books
...
When there is an
Essential reading from, say, pp
...
5–10
and 20–25 as well
...


1
...
A concept is a notion or an idea, and in this context it
refers to the key terms used to describe our subject
...
Beyond these major concepts many others exist,
and you will be continually meeting new ones
...
Go back to p
...

One of the aims of this chapter is to provide you with the tools for
understanding and evaluating the different concepts you come across,
both in this course and elsewhere
...
By the end of the course you may well have quite widely
differing definitions recorded in your glossary
...
Before evaluating a theory or putting
forward your own view, it is important to question how the key terms are
being used
...

For example, how would you construct an entry in your glossary for
‘Production manager’?
First, make sure you have the noun ‘product’ and both the noun
‘management’ and the verb ‘to manage’ in your glossary
...
Finally, enter a definition for a
production manager
...

As you can see, a glossary is going to be an important learning tool for
you, because understanding the key concepts and being clear about how
you use them is vital
...


1
...
Many definitions are
possible, but most of these include the characteristics of people, goals and
structures
...
Originally people
formed simple family and tribal structures
...
For our purposes, then, we can define an organisation as:
a social entity that provides the necessary structures to achieve
specific aims
...

A further point to consider is whether organisations that do not aim to
make a profit, e
...
in the voluntary sector, including charities, are included
in a discussion of businesses
...
g
...


17

107 Introduction to business and management

However, the complication of using a general definition emerges again
...
Therefore
the argument can be made that non-profit making organisations can also
be regarded as businesses, at least a certain type of business
...
82–83, ‘Private and public organisations’
and pp
...
Pulling together aspects of
different definitions, we can again devise a meaning to suit our needs
...


Activity 1
...
2–8
...
77–81,
94–96
...
3–7
...

The second reading is an explanation of organisations to be found in the sections entitled
‘The context of organisations’; ‘perspectives of the organisation’; ‘the formal organisation
and basic components of an organisation’ on pp
...
94–96 in Mullins’ book
...

Boddy (2008) Chapter 1, pp
...

Activity 1
...


a multinational company

2
...


a local football supporters club

4
...


a religious group who worship together
...
1
b
...
4
...


18

Chapter 1: Concepts, definitions and origins

Increasingly, in practice, the line between a business and a non-business
becomes harder to draw
...
Also,
some government departments have business activities, which may be run
as separate business organisations
...
It was not until about 100 or so years ago that people
started writing about how to manage them
...
However, the principles discussed are mostly relevant
to not-for-profit business organisations as well
...


1
...

The term is used in many different ways by people from a wide variety
of backgrounds
...

The result is that no one accepted definition of management exists, but
many of the definitions do include similar elements
...
Often writers try to capture the dynamic element of management
in their definition
...


Different definitions of management
Managing is deciding what should be done and getting other
people to do it
...
12)
The first definition of management is therefore that it is an
economic organ, indeed the specifically economic organ of an
industrial society
...

(Drucker, 1955, p
...

(Massie, 1987, p
...

(Armstrong, 1995, p
...

(Fayol, 1930, p
...
78) for inspiration
...
2) that ‘it is important
to recognise the role of management as an integrating activity in an
increasingly global business environment’?

1

All recommended

reading
...
The title of his
original work was Administration industrielle et générale
...
In 1949 a new translation changed the word
administration in the quote to management, and the title to General and
Industrial Management
...

This decision can be seen to reflect a narrowing of the meaning of
administration, while the concept of management was seen to have wider
application
...

It is important not to confuse administration with management
...
Administration is only one of these functions,
but the managers of big concerns spend so much of their time on it
that their jobs sometimes seem to consist solely of administration
...
9)

In the 1930s translation Fayol saw these two concepts of management and
administration as having different meanings, despite one later being used
as a direct translation of the other, owing to changing usage
...


Defining management
Activity 1
...
12–14,
‘Management as an integrating activity’
...
426–36, ‘The meaning
of management’ up to and including ‘management in private enterprise’ and ‘public
sector organisations’
...
9–11 for a discussion of meanings of
management
...
As you go through these readings, as part of your note taking,
make a list of all the definitions of management you come across
...
All of this can make
debates very interesting, but how is it possible to study or employ a
concept if defining it is such a problem? This is something which all
writers and students face, and recognising that this is an important issue is
the first step in getting to grips with a concept
...

Step 1
When trying to understand the use of a concept by a particular author, it is
important always to look for a definition
...
It can also be helpful to consider how an author
uses a concept in comparison to the definition employed by others
...

Step 2
When trying to understand a concept in general use, it is important to
remember that there is no correct or single definition
...
Let us take the concept of management
...

It is by taking account of these different views that the definition given
in our sample glossary in the introduction was developed
...


Understanding management in this way stresses the importance of strategy
...
Resources
and actions will then need to be directed strategically
...
The manager needs to make decisions about the
goals to be set, the strategy to achieve them and the best use of resources,
including people
...

Step 3
When using a concept yourself, it is important to be very clear about how
you are defining it
...
It can be helpful
to discuss why you are using this definition, in comparison to the others
available
...


1
...
Chapter 2 of Mullins is Essential reading
for this chapter
...
The
stages outlined by Mullins are:
• classical (including scientific) management and bureaucracy
• human relations
• systems
• contingency
...

21

107 Introduction to business and management

Why do you think it is important to study the evolution of management
thinking? Jot down your thoughts and then look at Mullins, p
...

Take a critical approach as you read Mullins
...
You will learn more about this in the next chapter of
the subject guide
...
The classical school was predominantly
concerned with the development of universal principles to achieve
successful management, leading to a prosperous business
...
One of the
most important classical theorists was Frederick Taylor (1868–1915)
...
Some of the most
significant principles he developed include the following:
• The planning of a task should be separated from the doing of the task –
this principle further justifies the need for managers and their planning
role
...

• Tasks should be simplified, standardised and require the minimum of
movements – this principle can still be seen as important, but in some
industries more than others
...

The approach outlined here became known as ‘scientific management’
or ‘Taylorism’ after its most important exponent
...
The
Gilbreths concentrated on the reduction of movements within tasks, with
the aim of increasing production by overcoming fatigue
...
For
example, if one worker was responsible for each of these tasks they would
not need much training, and would be able to repeat the task many times
...
The use of technology can also play an important part
in minimising the level of skill and number of movements made, and also in
standardising both the task and the product
...
Here are two more
...
Weber was a German sociologist and
important links can be made here if you study the course on sociology
...

The major influence Weber’s writing has had on the study of business has
mainly centred around understanding the need for stability and consistency
in achieving efficiency
...


Fayol’s principles of management
Finally, Henri Fayol (1841–1925), whom we have already come across, made
another significant contribution that has influenced the development of this
subject
...
Working as a manager, industrialist and theorist in France, he
developed a set of General Principles for managing organisations
...

Activity 1
...
429–31, which contain the principles of
management mentioned above
...
How many of these principles apply? We will return to
this in the next chapter of this guide, where we consider the role of a manager
...
Nowadays we are used to
hearing statements like ‘people are the life-blood of an organisation’, and
with businesses describing their people as their most important asset
...
The few employers who tried to manage in a
more people-friendly way were regarded as mavericks
...
Criticisms came from
management theorists, social scientists and managers, and from workers
who were alienated and exhausted by doing mind-numbing, repetitive
tasks
...

23

107 Introduction to business and management

The most famous studies conducted were the Hawthorne Experiments,
associated with Elton Mayo (1880–1949) who studied workers under
different conditions
...
This was used to describe a rather surprising result of
the research – that increases in productivity were actually found to be
related to the fact that the employees were being studied rather than to
the working conditions per se
...

According to scientific management principles the researchers should
have reduced productivity by getting in the way
...
This finding questioned the value of the
scientific management, which did not consider the social and interaction
needs of workers
...
Maslow cast doubt on the simplicity of scientific management
...
Although economic
needs are a major motivating factor, other higher-order needs are
important to people at work
...
These include a
range of needs: physiological, safety, love, esteem, and finally the need for
self-actualisation
...
5
Reading
• Look now at Mullins (2010) pp
...


Systems and contingency approaches
The human relations approach remains popular but there have been other
recent developments
...

Because organisations are open to the outside world, these ‘open systems’
have to be complex
...
Furthermore, as open systems, organisations are seen to interact
with the external environment
...

This idea has links with another related approach, that of contingency
theory
...
They claim
that the specific variables of each situation need to be considered and
decisions made in light of this analysis
...
Proponents of this theory focus on the need for good
communication and information flows
...
Again, the business organisation is defined as a system and,
as in all three approaches, it is seen as vital to recognise the complexity
of the organisation
...
However, unlike Weber’s bureaucratic approach for
predictability and stability, decision making theory accepts that complexity
means uncertainty and so is more focused on managing this uncertainty
...
6
Imagine that you are a sales manager and you have to make a decision
...
Do not
spend more than 15 minutes on this
...
What information would you need in order to make this decision?
2
...
Think of three possible decisions you could make, and write a few lines on the different circumstances under which you may have made each decision
...
The story certainly
does not stop here! In fact the story continues at an ever-faster pace
...
(For details, see Mullins, 2010, pp
...
Their results have
been criticised – unfortunately, also, most of the ‘excellent companies’ they
identified did not survive the 1980s, for one reason or another!
Other influential contributors to management theory and science worth
looking out for when you are browsing in the library, include Philip Kotler,
Henry Mintzberg, Rosabeth Kanter and Michael Porter and Peter Drucker
...
Have a quick look through the
index to Mullins’ book and see how many you can find
...
The final chapter in the guide looks at
current trends and emerging issues
...

Developing an understanding of the subject’s origins, as discussed here and
in Chapter 2 of Mullins, can really help you to investigate the new themes
we discuss later in the subject guide
...
Doing so
will not only help your understanding of the new development, but will
also assist you in your attempts to evaluate its worth
...
7
Reading
Now read the following part of your main key text:
• Mullins (2010) Chapter 2 ‘Approaches to organisation and management’
...


Chapter review
Key points
• Concepts are contested and usage can change over time, so no single or
correct definition can exist
...

25

107 Introduction to business and management

• The origins of business and management have a long history, tied to
the progress of human society
...

• The evolution of ideas about business and management has included
a number of important stages, including classical approaches,
perspectives that focus on the human element, and a range of theories,
which stress the complexity of the subject
...


Sample examination questions
When considering these, remember the guidance given in the Introduction
about examination preparation
...

1
...
Which do
you consider to be most relevant to business management today?
2
...
One of the approaches to management theory found under the
classical heading is bureaucracy
...

b
...

3
...
Reinforce your arguments
with reference to appropriate theory and practice
...
Evaluate the contributions made by three key contributors to the
development of business and management as a distinct area of study
...
However, it is very important to
remember that there is no model or correct answer to any of the questions
...

4
...

Examples of the contributors you could consider would include Fredrick
Taylor, Henry Gantt, the Gilbreths, Max Weber, Henri Fayol, Elton Mayo,
Abraham Maslow, Peters and Waterman, and others you have read about
...

It would be relevant to show that you understand the main points of the
work of each, including the way that each one of the three contributors
has used concepts, but approaching this in a critical way, showing the
merits and problems
...

It would also be useful to consider how their contribution influenced
future developments in business and management, and the relevance of
their work today
...


27

107 Introduction to business and management

Notes

28

Chapter 2: Understanding the business organisation – a multidisciplinary approach

Chapter 2: Understanding the business
organisation – a multidisciplinary
approach
Aims of the chapter
The aims of this chapter are to:
• explore the multidisciplinary nature of the study of business and
management
• identify the disciplines that have significantly influenced our
understanding of business organisations and the behaviour of people
• evaluate the contributions made by sociology, anthropology, psychology
and economics
• assess the stakeholder model of the organisation
• appreciate the interconnections and conflicts between different
disciplinary approaches
...


Essential reading
The Essential readings for this chapter are taken from the key text:
Mullins, L
...
Management and Organisational Behaviour
...

Chapter 1 ‘The nature of organisational behaviour’, pp
...
14–18, ‘The psychological contract’ and ‘The
changing nature of the psychological contract’
...

Chapter 8 ‘The nature of work groups’
...


29

107 Introduction to business and management

Further reading
You are strongly advised that the Essential reading should be the focus of
your study, and that these additional texts (apart from Boddy, which is a
more general text) are suggested to deepen your knowledge only if you
have the time after fully analysing the Essential reading
...
Management: An Introduction
...
489–92, Chapter 17, ’Teams’
...
and H
...
(London:
Prentice Hall, 2008)
...
Management: A Sociological Introduction
...

Grint, K
...
(Cambridge: Polity, 2005) Chapters 3 and 4
...
and J
...
(Oxford: Oxford University
Press, 1999) Chapter 4
...
The Anthropology of Organizations
...


Introduction
In Chapter 1 we looked at the conceptual foundations for studying business
organisation and management and the evolution of theory
...
In this chapter we try to understand why it
is such a complex area of study with so many different, often competing,
perspectives
...

Given this scenario, it is not difficult to see that the subject is of interest
to many academic disciplines, in particular the social sciences: sociology,
psychology, economics and anthropology, all of which have, and are
contributing to, the development of theory and practice
...
Finally, taking this idea even further,
we can see that as business and management is of fundamental importance
to all members of society, we all – individually and in groups – have
different views on how business organisations are structured and managed
...
1 A multidisciplinary view of business and
management
Activity 2
...
Can you think of
any significant events that have happened to you that did not involve an organisation of
some kind? For example, when you were born, how your basic needs were provided for,
how you were educated, who looks after your money, how you travel around, and so on
...
For example, who you have bought from or sold
to? What services have you experienced?
We are going to focus, in this chapter, on sociology, psychology,
anthropology (the behavioural sciences) and economics, as they will
provide the major theoretical foundations for other chapters in the
guide
...
Politics is an
area that is particularly relevant to understanding power and control in
30

Chapter 2: Understanding the business organisation – a multidisciplinary approach

organisations – this will come up in later chapters of this subject guide
...
As you will
see in Chapter 4, mathematics in particular has offered models and aids for
decision making and for providing statistical information to managers
...
A good
example of this is the contribution that Frederick Taylor made through the
idea of scientific management
...

You will see in your next reading (Mullins, pp
...
For example, the use of different
imaginative metaphors for organisations shows just how many ways writers
have conceptualised organisations, for example a brain, a machine or a
psychic prison
...
To some people commitment to the organisation they work for
is central to their lives; to others it is being part of a group at work that is
important, and for others work and the organisations are merely a means
to an end
...

Activity 2
...
2–10
...
How we view the world of work will influence what discipline we prefer to use to
understand business
...
Also look at the orientations mentioned in Section 3
...

2
...
2 Sociological perspectives
Sociology is concerned with the study of human society, its origins, how
it is organised and how people interact
...
As part of your studies, you may complete course 21 Principles of
sociology
...

31

107 Introduction to business and management

Sociologists view organisations as ‘social constructs’, i
...
they exist because
of the efforts of people and because people decide to recognise that they
exist
...
It is not viewed as an object that has
a solid outline
...

The classical theories of sociology are concerned with understanding the
organisation of social life, change and significant institutions
...
He studied government
organisations in Europe and helped us to understand how administrative
structures, hierarchies and authorities could improve the efficiency of
organisations
...
Interaction between organisations and the life of individuals and
groups in the wider society is a major concern
...

This will be discussed further in Chapter 4 when we look at organisational
change
...
3
Reading
Read this short section of your main key text:
• Mullins (2010) Chapter 4 ‘Individual differences’, pp
...

Remember this when you look at the issue of organisational change examined in
Chapter 4
...

Studies in the 1950s and 1960s were mainly conducted within the factory
setting; hence the name industrial sociology
...
(1968)
...
This suggests that a rise in the
income levels of working-class employees results in their adopting middleclass values
...

1

More recently, Grint (1995) uses a sociological approach for management
...
He treats concepts such as
leadership, control and culture as social constructs
...

32

1

Recommended reading
...

Activity 2
...
161–62
...

As you read this, think about the organisations that you know and remember this when
you reach Chapter 3 where we introduce the issue of women and management
...
Do you think that there are differences in the type of work that male and female
employees do?
2
...
How can the approach of sociology help us to explain any differences? Think about
the wider differences and changes in social relations
...
3 The anthropology of organisations
Anthropology is the study of cultures and societies throughout the world,
and shares many of the features of sociology
...
Anthropologists developed different
methods of research from sociologists, because they faced different
challenges by studying cultures that were significantly different from their
own
...

2

Wright (1994) in her book The Anthropology of Organizations draws together
a number of anthropological studies that have been done in Western and
non-Western organisations, in both the public and private sectors
...
The detailed descriptive accounts made possible by this
method, and the collection of data over a significant time length, can yield
useful results for understanding problems with organisational efficiency
and social relations within the organisation
...
We explore the
contribution of anthropology later in Chapters 6 and 7 of the subject guide
...


Activity 2
...
For example, Mouly and
Sankaran (1995) studied research and development departments in Indian organisations
...
This is defined as a study of organisations that tries to understand the
behaviour of people within it from ‘the member’s point of view’ (1995, p
...

1
...
What benefits did the researchers have?
3
...

There are also practical limitations on the approach because employees may not welcome
such in-depth observation
...

Finally, the use of the conclusions may only extend to understanding internal or group
culture, but may not offer any practical solutions for improvements
...
4 The contributions of psychology
Psychology is concerned with the study of the human mind
...
The processes that are studied include those seen to be
determined by the inner mechanisms of the mind and include the processes
of perception, memory and learning
...


Individual differences
Activity 2
...
130–44, ‘Personality’ and up to
and including the section on ‘Ability’
...
Be aware of some of the dimensions of
personality, especially those that are relevant to the management job
...

In this section about psychology, Mullins looks at theories of personality types in detail, and
also points to the significance of key psychologists such as Sigmund Freud and Carl Jung
...
Also, the
functional area of human resource management that is examined in Chapter 5 is relevant,
as it is this area that is mostly responsible for the selection and training of staff
...

The approach of psychology is most useful for issues that are determined
by the processes of the mind
...
When exploring individual
differences in relation to organisations, the personality is important
...

Theories of how we develop personalities cite a range of possible sources,
some hereditary, and so biologically gained, and others social, such as from
interactions with family, other groups to which we belong, and culture
...

The research methods employed by psychologists have helped business a
great deal
...
Tests
are also useful to assess the attitudes of employees, and so to try to identify
conflicts with group or organisational goals
...

Secondly, the experimental methods of psychology have been used to observe
the effect of changes in the workplace, such as in working conditions, or
changes to the benefits received by employees
...

Chapter 3 of this guide will introduce one of the most important
contributions that psychological approaches have made to the
understanding of organisational behaviour
...

Psychologists have done many studies of what motivates employees to
work or to work well
...

Examples of these theories that we will consider include those put forward
by Hertzberg, Maslow and Vroom (see Chapter 3)
...


3

Refer to Chapter 3 and

your glossary
...
The
concept of the psychological contract is used to describe the unwritten
agreement of what the organisation and the employee will both give and
receive
...
Therefore the complexity of employee relations can be understood
and this approach can also provide a means of trying to identify threats to
the contract and understanding the consequences if the contract is broken
...
7
Reading
Read the following section of your main key text:
• Mullins (2010) Chapter 1, ‘The nature of organisational behaviour’, pp
...

• See also Boddy (2008) Chapter 15, ’Motivation’, pp
...

As you read, think about the need for organisational change, which is discussed in
Chapter 4
...

35

107 Introduction to business and management

Work groups
The final contribution of psychological approaches to be mentioned here
is that made to our understanding of groups within organisations
...

This is true whether the groups are formally recognised by the
management, such as a production work team or department, or whether
they are an informal group, such as can develop within an official work
group
...

As teamworking has become an important tool of management, this
contribution of psychology is particularly important
...
Can you see the
relationship between this and the need to understand personality types?
Groups are made up of individuals and so the interaction of different
personalities can have a significant impact on the success of group work
...
This results in a view of the organisation that emphasises
the interaction and interdependences of individual personalities
...
8
Reading
Read these two chapters, which consider groups within the organisation:
• Mullins (2010) Chapter 8 ‘The nature of work groups and teams’
...

It is important that you spend some time reading Chapter 8
...

• Another source is Boddy (2008) Chapter 17 ’Teams’
...

The aim of these readings is to show you, in a general way only, the importance of
understanding human behaviour, both at a social and psychological level
...
This task should not take longer than an hour of
study time
...
5 Economic approaches to organisations
Economic theory is concerned with understanding the mechanism for
the allocation of limited resources to achieve unlimited wants
...
Thus, markets allow the interaction of
producers and consumers
...
This
assumes that the overall mission of the organisation is ultimately to create
as much profit as possible, for as long as possible
...

Within the traditional approach of economics, only a simple model of
the business organisation is used to facilitate the theories employed by
economists
...
Douma and Schreuder (2002) offer such a
contribution, stating that:
economic approaches to organisations are fruitful whenever the
problem to be studied has an economic aspect, that is to say
whenever part of the problem deals with the (optimal) allocation
of scarce resources
...
2)

4

Recommended reading
...

The aim of management is to achieve goals through the coordination of
available resources
...
For example, how likely do you think it would be that a manager
would have an unlimited budget or an unlimited supply of employees?
Therefore, economic approaches to organisations could help managers
make decisions about the most efficient or optimal distribution of staff, or
the most effective division of available funds
...


Economic approaches to organisations
1
...
agency theory – this approach centres on the idea of the decision
making process being delegated to an agent, while the principal or
manager is only able partially to observe the agent
3
...
economic approaches to strategic management – an example
of this is game theory, discussed in Chapter 3
...

These overlap with economic approaches
...
evolutionary approaches expand on the idea that business
existence is an example of ‘survival of the fittest’ – as in biology
...
An example is stakeholder theory, considered in
the next section
...
6 The stakeholder model of the firm
This final section does not relate to a specific discipline, but considers
a particular way of viewing the business organisation
...
All these groups have a ‘stake’ or a claim in the
business, and are referred to as stakeholders:
any individuals or groups that may affect or be affected by the
organisation’s policies or actions
...


Identifying stakeholders
Activity 2
...
Consider the example of an organisation you know or belong to
...
Who holds a stake in this example organisation?
2
...
Who has an impact on what the organisation does?
4
...

• Primary stakeholders include all those directly involved on a
permanent basis with the organisation, for example employees,
managers and shareholders
...

With regard to the primary and secondary categories, both of these involve
stakeholders who are internal and external to the organisation
...
Within this view, each participant or stakeholder is seen to receive
inducements from the organisation; for example, in the case of employees
this would be their payment
...
However, this view has significant implications for
decision making, as each participant or participant group is seen to have
their own objectives, and so bargaining is needed to arrive at the decision or
goal that satisfies the different objectives to the greatest extent
...
It also
addresses one of the main problems of economic approaches, the focus
on one goal (such as profit maximisation)
...
Thus it is easier to
argue that the organisation has more than one objective
...


38

Chapter 2: Understanding the business organisation – a multidisciplinary approach

Shareholders

Distributors

Employees
Competitors
The
business

Government

Suppliers

The community

The general public
Consumers

Pressure groups

Figure 2
...
1 shows stakeholder groups that could
be divided again, depending on the individual business
...
Each
group will also have different amounts of power or involvement in the
organisation
...
) Furthermore, the term
stakeholder can be used to represent the natural environment, which may
also be affected by the operations of the business
...
Keep in mind the overlap
between these contributions
...

As we are focusing on business and the business environment in this
section of the course, the stakeholder approach in particular can help us to
understand the complexity of the organisational context
...

It has been developed further by attempts to understand the different
groups to which the organisation has responsibilities, and this will be
examined in Chapter 10
...


Chapter review
Key points
• The study of business and management is not a subject with clearly
defined boundaries
...

• Sociological approaches emphasise the importance of social relations
within organisations
...

• Psychological approaches emphasise the importance of individual
differences and personalities for understanding employee capability,
motivation and group interaction
...

• Viewing the business organisation as a coalition of stakeholders can
help us to understand the complexity of the organisational context
...


Sample examination questions
When considering these, please remember the guidance given in the
Introduction about examination preparation
...

1
...

2
...
Explain what you understand by the term ‘personality’
...
Discuss four factors that might affect the development of a person’s
personality
...
Discuss four personality characteristics that you consider necessary
in an entrepreneur
...

3
...
’ Discuss
...
a
...

b
...

Illustrate your answer with relevant examples
...
However, it is very important to
remember that there is no model or correct answer to any of the questions
...

3
...
’ Discuss
...
However, all answers would need to state whether you
think that it actually is multidisciplinary
...

The evolution of the subject could be considered and also those who
contributed to its becoming an area of study; links could be made here to
Chapter 3
...

Your answer could be expanded
...


41

107 Introduction to business and management

Notes

42

Section 2: Decision making

Section 2: Decision making
This section of the guide contains three chapters
...
Decision making
is a key activity in the management of business organisations, ranging
from the daily decisions related to operations in the workplace, to the
long-term decisions which will affect the future direction of the business
organisation
...
It will be helpful to think about the managers that
you know and what you think they do
...
Decision making
is seen as central to all of these roles
...
We will also consider change in the
organisation, which both results from decisions and demands further ones
...

Chapter 5 allows you to explore the different functions that a business can
be made up of, such as marketing, human resource management, finances,
communications and operations
...


43

107 Introduction to business and management

Notes

44

Chapter 3: The management role

Chapter 3: The management role
Aims of the chapter
As the first chapter in Section 2, this chapter focuses on the role of the
manager
...


Learning outcomes
By the end of this chapter, and having completed the Essential readings
and activities, you should be able to:
• identify factors that contribute to differences between types of
management, the attributes valued in managers and the expectations
placed on the work of the manager
• understand the limits of management behaviour theories, and
appreciate the practical constraints that managers face in reality
• discuss the idea of managerial effectiveness and evaluate approaches to
measuring how successful a manager is
• identify the types of decisions relevant to the different areas of the
manager’s job
...

Mullins, L
...
Management and Organisational Behaviour
...

Chapter 7 ‘Work motivation and job satisfaction’, pp
...
265–67, ‘Herzberg’s two-factor theory, pp
...

Chapter 10 ‘The nature of leadership’, pp
...
386–87, ‘Vroom
and Yetton contingency model’, pp
...
391–95,
‘Transformational leadership’, and ‘Inspirational and transformational
leadership’, pp
...

Chapter 11 ‘The role of the manager’, pp
...

Chapter 12 ‘Managerial behaviour and effectiveness’, pp
...
467–77,
‘Management by objectives’ up to and including ‘Measures of effectiveness’,
pp
...

Chapter 14 ‘Organisational strategy, ethics and responsibilites’, pp
...

45

107 Introduction to business and management
Chapter 17 ‘Organisational control and power’ pp
...
673–691,
‘Characteristics of an effective control system’, up to and including ‘The
concept of empowerment’
...
Management: An Introduction
...

Daft, R
...
New Era of Management
...

Mullins, L
...
Management and Organisational Behaviour
...

Huczynski, A
...
Buchanan Organizational Behaviour: An Introductory Text
...

Mintzberg, H
...
(Upper Saddle River, NJ: Prentice
Hall, 1990)
...
In other words, what role or roles do managers play? Once
more we focus on business management
...
We
look at them in greater detail in Chapter 4 of this guide
...
The
third section considers each of the main ‘roles’ played by managers – making
decisions, planning, providing leadership, motivating and controlling
...
1 Organisational goals and objectives
This section is purposely kept short
...
How they go about achieving those
goals is the subject of the rest of this chapter
...
If a manager does not
have goals, how can he or she hope to be effective?
Activity 3
...
542–50
...
194–98
...
You can look back at this reading when you move on to Chapter 4
...
2 What is a manager?
Activity 3
...

According to our definition, managers:
• are involved with leading people to achieve goals
• need to coordinate the actions of people, together with other resources, such as
money, materials and technology
...
They are a group of people who have in
common their responsibility of achieving goals through the coordination of all resources
...
3
Next, think what factors make for differences between managers
...

In general, differences that occur can be attributed to:
• the type of organisation and its size and structure
• the level (junior, middle, senior) of management
• what it is that is being managed (products, services, finance, etc
...

We explore some of these differences below
...

Now, look at Mullins (2010) p
...
5
...


Differences between managers
1
...
Figure 3
...
Modern
thinking has reduced the layers of management, especially ‘stripping out’
middle managers and ‘empowering’ junior managers
...


47

107 Introduction to business and management

Top, strategic or
board -level managers

Senior-level
management

Middle-level
management

Junior-level
managers

General and functional managers such as production,
sales, distribution, purchasing, marketing, sales, finance
administration, personnel and human resources, etc
...
1 Common terms used to describe managers in an organisational
hierarchy
Note that in a hierarchy such as illustrated above, many managers are
in the middle of chains of communication and command
...

The first-line managers are those who are directly responsible for
and oversee the production of goods and services
...
This last type of
manager is responsible for the achievement of goals at a more strategic
level, and would include the chief executive officer (CEO)
...
Functional managers are responsible for
managing a particular section of operations, such as marketing, finance or
communications
...

Activity 3
...
Look at Mullins (2010)
p
...
1 to see how different types of managers share the responsibility for one
functional area, that of HR, in an organisation
...
However, there is
another significant variable: a manager’s individual style and how factors
such as attitude, culture and the individual qualities that make a good
manager influence this style
...
Qualities of the individual manager
This issue has been the subject of a great deal of research, to discover what
qualities are needed to be a successful manager
...
Also, new recruits can be tested to see if
they have potential
...
5
Think about all the different types of managers that exist
...

1
...
In your opinion, what attributes or qualities would
each sort of manager need in order to be successful? Make a list of these next to each
...
Read the following section of your main key text:
• Mullins (2010) Chapter 11 ‘The role of the manager’, pp
...
683–693
...

As you read these pages, compare the qualities mentioned in the text with the list of
attributes that you developed for each of your three example managers above
...

Example: gender differences
Historically, business management has been predominately a male profession (not so
household management!)
...
However, a particularly relevant issue
with regard to management has been the different attributes and also values assigned to
the sexes
...

Examples of these include rationality, competition, control and self-assertion being
seen as male and positive for management potential
...

However, much has been done to counter this view and to prevent discrimination again
women
...
Furthermore, those traits believed to be common in women can be seen as an aid
rather than a hindrance to successful management
...

Despite changes in attitude and the law regarding women and work generally, when it
comes to management the concept of a ‘glass ceiling’ is used
...
However, at a certain point on the hierarchy,
especially before the higher levels of management, they hit a ‘glass ceiling’: although they
can see above them, they are not able to progress further
...
However, it
is also important to recognise that issues of this kind also vary in different parts of the world
...
We need to
recognise that these exist so that we avoid making inappropriate generalisations and
also avoid creating unhelpful stereotypes
...
It was mentioned that
business and management as a field of study have developed at varying rates and under
different influences, in different areas of the world
...
Here, it is appropriate to introduce the importance of
culture, specifically in relation to management
...

For instance:
• in Malaysia, all administrative and managerial personnel are described as managers
• in France, executives and professional employees are not included as managers
• in South Korea, graduates recruited to white-collar jobs would be defined as managers even though they would not be promoted to managerial work until later in their
career
...
6
Think for a moment about management in your own country
...

Having read this section, ask yourself if there is a simple answer to the questions:
• What is a manager?
• What makes a good manager?
Feedback
The answers seem to be complex and ambiguous
...
Therefore it can be
seen that the definition we began with is purposefully broad, so it can account for this
variation
...


3
...
But how
do managers do this? What activities are involved?

50

Chapter 3: The management role

Looking back at the first reading in Activity 3
...
442–48), see how Mullins defines
‘managerial roles’ and look also at the roles suggested by Mintzberg
(1990) in Figure 11
...
438
...

Writers vary in the roles they identify as managerial
...
An example of this is provided by Gulick
and Urwick (1937) who, under the influence of the classical school,
developed the ideas of Henri Fayol
...

But how do these ideas translate into what a manager does from day to
day? What is involved in each activity and how much priority is it given?
Are these relevant to all types of managers?

Mintzberg’s ‘folklore and facts’ of management
Henry Mintzberg (1989) studied real managers at work and from his
findings he distinguishes the ‘folklore and facts’ of the manager’s job
(‘folklore’ means traditional beliefs)
...


Study after study has shown that managers
work at an unrelenting pace, that their
activities are characterised by brevity, variety,
and discontinuity, and that they are strongly
oriented to action and dislike reflective
activities
...


3

The senior manager needs
aggregated information, which a
formal management information
system best provides
...


4

Management is, or at least is
quickly becoming, a science and a
profession
...


Table 3
...
10–14
51

107 Introduction to business and management

Lawrence’s results
Another piece of research done on this issue was a comparative study
between the work of managers in Germany and Britain
...
He calculated the time given to different
activities to discover what managers really do
...
78

15
...
62

14
...
07

17
...
87

17
...
56

7
...
56

11
...
45

13
...
02

4
...
2 Lawrence’s results from his German-British comparison of managers’
use of time
Activity 3
...
2 of this chapter of the guide
...
Are the results shown here consistent with cultural differences between Germany and
Britain?
2
...
Suppose you compared China
and Russia, or Japan and Korea
...
However, it is also important to recognise that similarities do exist as
well, such as the time managers spend in their offices
...

Look again at the four folklores of management in Table 3
...
Can you see how
the evidence presented by Lawrence can be used to support Mintzberg’s
claims? Think about this before reading on
...
Consider
for a few minutes the folklore that managers need information via a formal management
information system
...
Once you have tried this, read on
...
This is also
52

Chapter 3: The management role

supported by Lawrence’s results
...
Also, look at the time they spent in ad hoc
(informal) talks
...
Which other points made
by Mintzberg are supported by Lawrence’s research results?
The result of this discussion is that managers may in practice do different
things to what the theory states: the ‘roles’ of a manager may not be what
actually happens in practice
...

This is how Mintzberg deals with the problem, as Mullins (2010) explains
on pp
...

One role that the management literature has tended to emphasise is
the manager as someone who delegates to others
...
Delegating refers to a manager passing on a task to a
subordinate, but with the manager retaining responsibility for the task being
done
...
4
...

Activity 3
...
Study what a manager you know
actually does over a period of time, then complete Assignment 1 on p
...

Next we consider some specific roles of a manager
...


3
...

Decision making is very important, because it is not a separate role that
managers take on: it can actually be seen as integrated and essential to all
their roles and the activities involved with them
...
9
Think, for a moment, about how many decisions you make in a day to ‘get things done’
...

Then think of the decisions you have already made about the next year, what you want to
achieve, decisions about your studies and career
...

Most things we do involve making decisions and, as we have established,
the main job of a manager is to get things done – not only by his or her
own actions, but also by the coordination of the actions of others and of all
available resources
...
However, here we are focusing on
the role of the manager, and analysing the specific managerial roles of
planning, leading, motivating and controlling; it is important to focus on
the decision making involved in each of these
...
It is important
to note that is not necessarily the same as being efficient
...
It is much easier to assess how
effective a manager is than to try to find out how efficient he or she is!
Making effective decisions is essential for effective management
...
As we
have been establishing the complexity of management, involving many
different definitions, types and goals, then it is not surprising that what
constitutes effective management is also contested
...

Activity 3
...
457–64;
‘Managerial style’ up to and including ‘The managerial/leadership grid’, pp
...
480–90; ‘The management of time’ up to the end of Chapter 12
...
You
should spend no more than three hours studying it
...
Use the synopsis and review questions at the end of the
chapter in the book as a checklist
...

The case studies presented give you a good idea of how to use the ideas in the chapter
...
Relate the style of these managers to what you read
...
Explain why
...
It is
important, because ineffective managers can be trained to change their behaviour and thus
become more effective
...
476–77
...


54

Chapter 3: The management role

3
...
11
Begin by reflecting on these questions for five minutes
...
How do managers plan?
2
...
What needs to be planned?
Remember that management involves coordinating for the achievement of goals
...
Managers at all levels need to
make decisions about the goals they need to achieve, or about setting the
goals that their subordinates should achieve
...

The topic of goal setting will be revisited in Chapter 4 when we discuss
strategic decision making
...
This is where the coordination of resources
comes in – not only including the actions of others, but also the actions of
the manager as well
...

Approaches to planning vary immensely, but different models often have
some key elements in common
...

1
...
Gathering information
3
...
Setting targets to be reached on the way to achieving the goal
5
...
Evaluation and reviewing the goal and the plan
...

Think for a few minutes about what these constraints might be
...

Think back to the developments in the history of the subject that came to
view the organisation as a complex open system; see ‘Incorporating the
human element’ in Chapter 1 of this guide where the need for information
flows is stressed
...
In particular,
the cost of implementing a plan and the time involved are often the most
crucial constraints for developing the best scheme of action
...
Managers plan at all levels, but it is often emphasised more at
the strategic level because it is at this level that management is concerned
with looking forward rather than concentrating on today’s problems (and
worrying about yesterday’s mistakes!)
...
Maybe planning is important in theory but not in
practice
...

Activity 3
...
You may already know one, but if you do
not, there are several options available to you
...
Think about the places that you have
worked or the places you have studied at
...
Talking to a manager
now can provide another valuable perspective on what a manager is and what managers
actually do, and this will also give you an example of a manager in your own country
...
Ask the manager to describe a typical day at work
...
How does this description compare to the research done on how managers spend
their time?
3
...

4
...

Note that if you are unable to talk to a manager then it can be useful to consult the
biography of a manager from your country
...


3
...
13
We began this chapter by making a distinction between a leader and a manager
...

Feedback
A manager is involved in more than leading people because managers work to achieve
goals by the coordination of all resources, the actions of people being only one type of
resource
...
Decisions within this role are mainly concerned
with choosing the most effective and appropriate type or style of leadership
...


56

Chapter 3: The management role

Leaders come in all shapes and sizes
...

As you read on, consider what sort of leadership styles you have in:
• your country’s government
• your present or past school, college or university
• your family
...
Others argue that leadership can be learned
...
Mullins (2010), Chapter 10
p
...
We will
look briefly at these approaches in the following pages
...

The broad classification of autocratic, democratic and laissez-faire is useful
to remember (see Mullins, 2010, Chapter 10, p
...

The differences in style are often analysed within a continuum that places
autocratic management at one end and democratic management at the
other
...


Autocratic leadership
At this end of the spectrum the manager
makes all decisions
The manager suggests decisions and invites
comments, and then the manager decides
The manager asks for suggestions and then
makes a decision
Toward this end of the spectrum the manager
permits subordinates to make decisions within
set limits

Democratic leadership
Figure 3
...
381–83 of Mullins (2010),
although he emphasises power rather than decision making as the central
issue
...
Look at Figure 10
...
382
...


57

107 Introduction to business and management

Activity 3
...
372–83, 386–87, 387–89,
391–95, 397–402
...

• Read also Mullins (2010) Chapter12, pp
...

An alternative reading is Boddy (2008) Chapter 14 ‘Influence and power’, pp
...

From your reading you will have a better understanding of the differences in approaches
to the study of leadership
...
The different approaches to leadership theory look at different elements
...

Now read on
...
Early
researchers listed those characteristics to be found in recognised ‘good’
leaders
...
It was felt that although certain traits
may be necessary in a leader, they were not sufficient for good leadership
...


Behavioural approach
In this approach it is the behaviour, not the personality, that is important
...
For instance, should a manager act in a task-centred or employeecentred manner to get the best out of subordinates? There is some
evidence that employee-centred (supportive) leadership style is related to:
subordinate satisfaction, lower turnover, absenteeism and grievance rates
(other things being equal) and less intergroup conflict
...

There are various theories, some of which consider the two extremes:
authoritarian versus democratic styles
...
3
on p
...
(See also Boddy, 2008, pp
...

You have already read about the managerial/leadership grid in Mullins
(2010) Chapter 12, pp
...
(See also Boddy, 2008, pp
...
)
This was developed by Blake and Mouton (1985)
...
The various
combinations of styles are plotted on a two dimensional grid
...
There are five basic models for
leadership
...
The team
style (9,9), which is high on both scales, is deemed to be preferable
...
It proved to be more complex than just isolating a
set of desirable traits or behaviours for leaders
...


Contingency approach
Different types of personality and behaviour are effective in different
situations
...
If jobs are intrinsically satisfying, the considerate style will
not make much difference
...
There are
several different models that demonstrate this approach
...
(See Mullins, 2010, pp
...
466–68
...

Vroom – Yetton model
This is sometimes known as the leader-participation model
...
This model argues against inflexibility of
leadership behaviour – the leader should adjust his/her behaviour to the
situation or task
...
This model has been tested by researchers with
encouraging results as to its validity
...

(If you are interested, see Mullins, 2010, p
...
)
Path – Goal model
The leaders’ style should be appropriate to needs of subordinates and
situation task characteristics
...
It describes four styles of management: achievement
oriented, directive, participative and supportive
...
The leader/
manager should clarify the path or means by which subordinates can
attain both high job satisfaction and high performance
...
See
Mullins (2010), pp
...
The leader is concerned with three areas of
need within the work group: the need to achieve a common task, the need
for team maintenance, and the individual needs of the members of the

59

107 Introduction to business and management

group
...
e
...
Also the leader needs the understanding and skill to
determine when a particular action is required
...

Transactional versus transformational leadership
There has been interest in differentiating transformational leaders from
transactional leaders
...
(Since transformational leaders are considered to be charismatic
or inspirational, there is a certain overlap between this approach and
the next one
...
Evidence suggests that transformational
leadership can be superior to transactional leadership
...
Characteristics
such as unconventional behaviour, having strong convictions about
their idealised goal or vision, environment sensitivity, etc
...


Leadership and gender
There is no evidence to suppose that one sex is better at leadership than
another, but it has been noted that women tend to exhibit a different
style of leadership, very often more interactive in nature
...


Leadership power
Power is central to the leadership process
...
g
...
g
...
The leader may
have one or more of the following power bases: legitimate, reward, expert,
coercive, referent, etc
...

Activity 3
...
397–99
...
469–78, ‘Sources of power to influence others’, ‘Using
positional power to influence others’ and ‘Influencing through networks’
...
Who holds the power?
What sort of power is it? What are your power bases?
You will meet the subject of power again when the controlling role is considered
...
7 Motivating role
Activity 3
...

The role of a manager as a leader is closely related to their role as a motivator
...

Again, in this role the manager is concerned with the human aspect of
the resources available for achieving goals
...
Leadership can
be done without this, but it can be argued that more effective leadership,
and so management, will involve taking the role of motivator, so goals will
be achieved more effectively
...

Three of these are offered here as examples
...
17
Reading
This reading will look at the concept of motivation, get an overview of the main theories,
and look at three specific theories:
• Mullins (2010) Chapter 7 ‘Work motivation and job satisfaction’, pp
...
265–67, Herzberg’s two-factor theory; pp
...

The rest of Chapter 7 explains a number of other motivation theories and looks at job
satisfaction
...

(An alternative reading is Boddy, 2008, Chapter 15 ‘Motivation’, pp
...
)
The inherent differences between individuals means that what motivates
one person may not motivate another
...
They require more interesting and challenging work, and
managers who will make them feel valued, give them regular feedback
and rewards for increased performance
...

The terms ‘motives’ and ‘motivation’ can be used in several contexts:
the goals that people have, e
...
status, power, friends etc
...

Motivation is important because:
• individual performance is a function of ability, motivation and
situational factors
• the less the workforce is motivated, the more controls management has
to exercise – and these can be self-defeating
...

There have been attempts to explain how people are motivated, what
motivates them and their different attitudes to work
...
There are several
different approaches to understanding motivation:
• Content approaches emphasise needs that motivate people
...

• Reinforcement approaches focus on how employees learn to behave
...


Maslow’s hierarchy of needs (1943)
This model has already been discussed in Chapter 1 – you should have
read about this in Activity 1
...
Go back and look at it again
...
(1959) offered a two-factor theory of motivation, where
research was done on what factors can affect job satisfaction levels
...
The first set is called hygiene factors, which
are the elements needed to prevent dissatisfaction
...
The second set is called motivation factors, which
are the elements that affect satisfaction levels but that cannot lead to
dissatisfaction
...

Hygiene factors are seen to be the most crucial, but both types have to be
present together to motivate workers fully
...
18
What stage of development, in the study of management, do you think influenced
Herzberg’s theory? Think about this for a moment
...


Expectancy theory
A different type of theory is offered by Vroom (1982): the expectancy
theory
...
Vroom uses
the term ‘valence’ to describe what the employee anticipates will be the
satisfaction gained from the outcome of a particular action
...
The
theory suggests that motivational force results from the combination of
anticipated outcomes (performance and need-related) and the expectancy
the subordinate has that the predicted outcome will actually be realised
...
,
1968)
...
The main
findings were that motivation could be influenced by factors outside of
work, so different workers will be motivated in different ways
...
However,
three main types of workers were described and could be identified as:
1
...
professional workers – bureaucratic in approach and so motivated by
position
3
...

It seems, then, that managers have again to make important decisions in
their role as motivators
...

How would you motivate the telephonists in the next example?
Activity 3
...
Try to use one of the theories you have just read about
...
Staff must answer problems about household equipment (vacuum
cleaners, gas boilers, kitchen appliances) from consumers in Texas
...
They know the sports results and weather
in Texas so they can chat in a friendly way
...
Many move on to other jobs once their language skills are improved
...

Feedback
To help you get started, you may find the following answer outline useful
...
Expectancy theory or Herzberg
are quite appealing for this problem
...
These may include a mixture of measures such as promotions
and bonuses for long-serving staff
...

There might even be a scheme to lend long-serving staff money to buy an apartment; this
would certainly tie staff to the company
...

Look at the theories and see how they suggest one can motivate young, educated
employees that want independence, flexible working conditions and an interesting work
life
...

The important thing is to decide on a theoretical framework and use that to analyse the
problem
...
8 Controlling role
The final role to be considered is that of the manager as controller
...

Managers are required to control the actions of individuals, but
management is also more than this
...
Other areas of control include the plans developed to achieve

63

107 Introduction to business and management

the goals and all delegated activities, for example budgetary control
...
Define the necessary standards or goal to be achieved
...
Decide upon and implement a measure of outcomes
...
Make an ongoing comparison of current activities with the standards
set
...
Make changes to current behaviour if needed to ensure standard or
goal attained
...
668, for a more detailed discussion
...
20
Reading
This final reading gives an overview of why it is important to have control in
organisations
...
The issue of
power is considered again and there is an extensive discussion of delegation and why it is
so important for a manager to delegate effectively
...
665–71, ‘The
controversial nature of control’, up to and including ‘Forms of control’; pp
...

An alternative reading for this topic can be found in Boddy (2008) Chapter 18
‘Performance measurement and control’, pp
...
You can read the remainder of the
chapter but do not spend much time on it
...
Keep in mind the manager that you met and what he
or she told you about their job
...
Again, decision making is crucial to
this role, and is an integral part of each stage of the controlling process
...

We also established that many different types of management exist, and
so it is necessary to recognise that the roles a manager has will depend on
what type of manager they are
...

In reality we have learnt that the job of a manager can be very complex
and demanding, and can depend on external constraints
...

• Many different types of manager exist and no one set of attributes can
be agreed on
...

What is seen to make a good manager is dependent on the context, and
this can change over time
...

• Theories of what managers should do often conflict with research into
what managers actually do
...

• Goal setting and decision making are central to the effective
performance of the manager
...


Sample examination questions
When considering these, remember the guidance given in the Introduction
about examination preparation
...

1
...
The jobs of individual managers will differ widely, even though they
all have to perform similar general activities
...
Use examples to
illustrate your answer
...
One of the functions of management is that of planning
...
Illustrate with reference to a specific situation in the
business context
...
Discuss why decision making is central to the role of the manager
...

3
...
Briefly discuss the purposes of management control in a work
organisation
...
Describe the essential elements in a management control system
...

4
...
Discuss what measures you would use – both qualitative and
quantitative – to assess the effectiveness of a manager
...

b
...
How might the changing demands present problems
for the manager?

65

107 Introduction to business and management

Advice on answering a question
To help you further with your exam preparation we offer below some
suggestions for one of the answers
...

It is more important to demonstrate what you have learnt by developing
your own response to the question, supported by evidence from the
relevant parts of the chapter
...
Discuss why decision making is central to the role of the manager
...

A brief introduction to the role of the manager and how this depends on
the type of manager would be a useful starting point
...

The managerial roles, and their dependence on the type of manager
we are discussing, could be demonstrated by introducing your example
managers at an early point
...
The sorts of examples that would be relevant would be a
front-line manager in a fast-food outlet; the CEO of an airline company; or
a branch manager for a chain of tailors
...

It could also be useful to consider how the constraints and the reality of
the manager’s job could affect their decision making, therefore recognising
the complexity involved in understanding the role of a manager

---