Nature of Management Essay

 

Chapter 1: Nature of Management

Management is a process where work activities are coordinated using available resources to effectively and efficiently achieve goals. The practice of managing is an art because it underlies knowledge and applications to obtain realistic results at the same time a science because it is an organized knowledge of concepts, theories, principles, and techniques. Management is needed in all levels of organizations, whether be it simple or hybrid structured, because its functions are very important in running day-to-day business operations. Tasked to implement the management process are managers, who are responsible in choosing the right goals for companies to pursue and to synchronize all work activities in order to complete various organizational objectives. Managers work in an organization, an arrangement of people working together to accomplish a distinct purpose. Today’s organizations adopt flexible work plans with open communications and superior responsiveness to change.

Levels of Management. First-Line Managers oversee non-managerial employees who are directly engaged in the daily production or creation of the organization’s products and services. Middle Managers, on the other hand, supervise First-Line Managers who are in charge of maximizing the means (resources) to attain the ends (goals). Top Managers are accountable for coming up with right decisions and establishing plans and goals for the entire organization.

Functions of Managers. Henri Fayol was the first to illustrate the four managerial functions when he was Chief Executive Officer of a mining company in the later 1800’s. Planning is used by managers to identify and define appropriate goals, develop course of actions, and institute plans to integrate activities in achieving goals. It determines the effectiveness and efficiency of the organization and its strategies. Top level managers mostly utilize strategic planning (long range planning) to analyze the organization’s mission, overall goals, and allocating resources. Strategic planning produces fundamental decisions and actions that shape and guide what an organization is, what it does, and why it does it. It requires broad-scale information gathering, an exploration of alternatives, and an emphasis on the future implications of present decisions. (Allen, 1998, ¶2). The planning process involves a series of logical steps such as defining mission, analyzing strengths and weaknesses, identifying threats and opportunities, setting goals and objectives, developing tactics and operations, and monitoring plans.

Organizing lets managers form structure that group employees into departments according to tasks and allow them to work together in attaining goals. It resolves clearly what tasks are to be done, how they will be performed, and who will do the job. In addition, the function establishes a chain of command, who reports to whom. The purpose of the organizing function is to make the best use of the organization’s resources to achieve organizational goals. (Dallas, 2006, ¶1). The steps in organizing process include the review of plans, listing of tasks, grouping of tasks into jobs, grouping jobs, assigning work, and delegating authority.

The function of Staffing mostly involves recruiting and selecting qualified people for the right job. It sets up structures of roles and positions and evaluates employees of their performance for further training and development and compensation benefits. It defines workforce to fill up positions in the organization structure.

Leading sets directions with a clear vision for employees to follow and make them understand the value of their role in achieving organizational goals. It influences workers to strive willingly toward a common group goal at the same time motivates and energizes all involved to work together for the good of the organization.

Controlling monitors work activities to make sure they go as intended and that plans are implemented correctly. It evaluates how well the organization is doing in attaining its goals and takes necessary actions to improve performance. The control process is a continuous flow between measuring, comparing and action. There are four steps in the control process: establishing performance standards, measuring actual performance, comparing measured performance against established standards, and taking corrective action. (DCCCD, 2006, ¶2).

Management Roles. Because of the high position a manager holds in the organization, he or she performs specific categories of managerial behavior. From his research and that of others Professor Henry Mintzberg of McGill University has identified three categories of roles. The Interpersonal Role provides supervision and direction to employees by establishing future goals at the same time bring together work activities from different departments. The role also gives managers the opportunity to be a good example for employees. As a figurehead, the manager performs ceremonial and social duties as the organization’s representative. He or she takes on the role of a leader that trains, counsel, mentor, and encourage high employee performance. As a liaison, the manager serves as the link with other people from within and outside the organization.

In the Informational Role, the manager receives, gathers, and disseminates information by evaluating the performance of work activities in various departments and informs subordinates about changes, internal or external, that may affect their work. He serves as a spokesperson by transmitting information that influences the way people respond to the organization.

The Decisional Role gives a manager the duty to formulate organizational strategies by exploiting new ideas for goods and services, allocate resources, negotiate agreements, and solve unforeseen problems. He or she becomes an entrepreneur who decides what new projects to initiate, and a disturbance handler that assumes responsibility for solving crisis.

Managerial Skills. There are three basic skills a manager possesses, technical, human, and conceptual. A technical skill possesses the ability of using tools, techniques, and specific knowledge required to carry out organizational role such as method, process or procedures. Human skill, on one hand, is the ability to work well with other people by building positive interpersonal relationships, solve human relations problems, build acceptance of one’s co-workers, and relate to them in a way that their behavior is consistent with the needs of the organization. (Erven, 2006, ¶8). Conceptual skill sees the organization as a whole and analyzes a situation by distinguishing its cause and effect. It further solves problems that benefits the entire organization by understanding the relationships among subunits and visualizes how the organization can fit into its environment. Most of the time it is the top management that conceptualizes while the middle management handles the human relationships and the front-line management performs the technical skills.

Challenges and Rewards of Management. Being a manager is no easy task. In this age of increased globalization and technology, a manager has to deal with strong competitions by developing strategies that promote superior quality, efficiency, innovation and responsiveness. Modern managers are constantly faced with uncertainties, manage a diverse work force, and have to motivate employees to demand high productivity, improve quality of goods and services, create product and services that customers want, and increase customer satisfaction through high standards of customer service.

Being a manager has also its rewards. He or she can create an environment in the workplace where employees can explore their potentials and bring out their best talents. A manager can provide better opportunities for others to think and act creatively through empowerment (expands the duties and obligations of employees) and self-managed teams (giving a group of employees responsibility to supervise their own actions), two trends in contemporary management. Having a chance to work with a variety of people, a manager can help others find meaning and fulfillment in their jobs.

 

Chapter 2: Evolution of Management Theory

Different organizations have already existed for thousands of years ago wherein management has been practiced that resulted in many wonders of the world like the pyramids of Egypt and the Great Walls of China. However, it was only in the 1800, during the industrial revolution where formal management was given importance due to the emerging of large organizations. Through the years, views on management change significantly and many theories were practiced. Theory can help the manager learn what can be generalized from one unique experience and applied in another unique situation. Theory can also provide categorizations for the manager to be able to select and adapt from past learning to meet current needs and conditions. (Mailick, & Stumpf, 1998, p. 11, ¶2).

Scientific Management. Authored by Frederick W. Taylor, this theory advocates precise specifications and measurements of all tasks that have been standardized. It studies the relationships between people and tasks in order to design a more efficient work process. Taylor’s scientific approach to management embodies four fundamental principles: (1) to study how jobs are performed so that managers can find new ways of doing the routine, try different approaches, and apply which one works best, (2) to select and train the most qualified employee to do the job and later teach the new methods to all workers, (3) monitor the employees to make sure they follow the practice accordingly, and (4) to devise fair levels of performance and compensate employees with premium who work proficiently.

Administrative Management. This theory focuses on managing the whole organization by creating structures, authority, and relations that result in efficiency and effectiveness. German intellectual Max Weber came up with the concept of bureaucracy as a formal system, which became the foundation of contemporary organization. Weber’s ideal bureaucracy includes the following components: division of labor where jobs are broken into well defined-tasks, hierarchy of authority in which positions are created with a clear chain of command, formal selection where employees are chosen according to their technical qualifications, formal rules and regulations that establish written policy and standard operating procedures, impersonal relationships that apply rules and controls evenly, and career orientation where managers become professionals and not owners of units they manage.

On the other hand, Fayol has developed guidelines for managers consisting of 14 principles for effective management. They are as follows: (1) Division of Labor – job specialization, (2) Authority and Responsibility – managers able to give orders responsibly, (3) Unity of Command – employees should have only one superior, (4) Line of Authority – a clear chain of command from top to bottom, (5) Centralization – the extent which authority is concentrated and dispersed rests from the top of the organization, (6) Unity of Direction – a single plan of action to for the organization to pursue, (7) Equity – fair and impartial treatment of employees, (8) Order – placing employees where they are most valuable and provide them career development, (9) Initiative – empowering employees to become creative and innovative, (10) Discipline – respectful and obedient employees are vital to the functions of the organization, (11) Remuneration of Personnel – equal and uniform payment to motivate employees, (12) Stability of Tenure – employees develop more skills with long-term employment that will improve organizational performance, (13) Subordination of Interests – individual interests must not precede the interest of the organization, and (14) Esprit de Corps – a need for teamwork,  communication, and comradeship for a common cause of the organization.

Behavioral Management. This theory studies the conduct of employees while performing their duties and focuses on how managers personally motivate their employees and encourage them to do better and become committed to the goals of the organization. It believes that people are the most valuable asset of the organization, which became the basis for many human resource management programs. Mary Parker Follett cited that employees should get involve in analyzing their jobs and since they have relevant knowledge, employees should take control of their own tasks.

In the Hawthorne Studies conducted at the Western Electric Company from 1924 to 1932, workers’ productivity was measured at various levels of illumination. The findings noted that intensity of illumination is not related to productivity. There was increased in productivity not because the light levels were raised or lowered but because the test group began to be noticed, to feel important. Researchers found, in general, that the improvement in productivity was due to such social factors as morale. This phenomenon, arising basically from people being noticed, has been known as the “Hawthorne Effect”. (Koontz, O’Donnell, & Weihrich,1981, p. 50, ¶3, line 8). Social standards have become important determinants of work behavior.

Quantitative Management. This approach employs mathematical representations or quantitative techniques in making decisions and maximizes the use of organizational resources. It also explores the application of statistics, computer simulations, modeling, linear programming that enhances resource allocation decisions, and critical-path scheduling analysis that improves work scheduling. Another method is the operations management that assists organizations to come up with techniques in producing more efficiently products and services. Total Quality Management, on the other hand, analyzes inputs, conversion, and output activities to increase quality products. It focuses on the customers, continued improvement, and empowerment of employees. The Management Information Systems provide critical and accurate information to aid managers in decision making.

Contemporary Management. Contemporary theories of management tend to account for and help interpret the rapidly changing nature of today’s organizational environments. (McNamara, 2002, ¶1).  Organizational environment is a set of conditions or forces beyond the boundaries of the organization but still affects how managers make the most of resources. This approach utilizes the theory of contingency asserting that when managers make decisions, they take into account all aspects of the situation and depend on the characteristics of the external environment where the organization operates. The systems theory contributes significantly to the understanding of organizations. A system is a collection of interrelated parts to pursue an overall goal. The organization as a system includes resources (raw materials, money, technologies, and people) as inputs, products and services as outputs, higher productivity as outcomes, and reactions from customers or employees as feedback. This overall system framework is applicable in the whole organization and connected to attain goals.

 

Chapter 3: Decision Making

The essence of a manager’s duty is to make decisions and solve problems. Decision making is a comprehensive process where managers take course of actions to opportunities and threats by making choices among several options. The importance of decision-making in management is generally recognized. But a good deal of the discussion tends to center on problem-solving, that is, on giving answers. (Drucker, 1954, p. 351, ¶3). The two kinds of decision making are programmed and non-programmed. Programmed decisions are routine where situations occur often and managers have already made the same decisions many times. Based on repeated decisions rules can now be formulated and applied to guide subordinates. Non-programmed decisions are poorly defined and unstructured in response to threats and unpredictable situations. Managers make this kind of decisions based only on raw information and then rely mostly on his or her intuition and judgment.

Approaches to Decision Making. Rational Decision Making is based on logic and objectivity, a well-defined problem with clear and specific goal wherein decisions are made consistent and choices are maximized. The assumptions of rationality state that there should be a definite goal to achieve, the problem must be clear, final choice must maximize payoff, there should be no constraint on cost and time, preferences must remain stable, and all alternatives and consequences must be known. Bounded Rationality exists when there is numerous alternatives and vast information that managers cannot consider all but limited only to his or her ability to process data. It acknowledges solutions that are good enough but refuse to consider that the previous decisions may be wrong. Intuitive Decision Making is solely based on the manager’s experience and accumulated judgment, which does not rely on systematic analysis of the problem. These experienced-based decisions depend on emotions and feelings; skills, knowledge and training; subconscious; and ethical values.

Conditions in making decisions involve uncertainty, knows what objectives to achieve but not sure what will be the outcome because of incomplete information about alternatives; certainty, knows the outcome of every alternative; and risk, able to make educated-guess on the outcomes from every alternative but are subject to chance. Styles in making decisions consist of being directive (fast, efficient, and logical), analytical (can adapt to new situations), conceptual (able to find creative solutions), and behavioral (seek acceptance for decisions made).

Decision Making Process. This process involves the following steps: define the problem, look at the potential cause of the problem, come up with alternatives, select an alternative, implement the best alternative as the action plan, monitor its implementation, and evaluate if the problem has been resolved.

Group Decision Making. This method collects the combined skills of group members that generate feasible alternatives and allows managers to process more information in order to formulate the best solutions to the problem. This practice embraces a broader perception, provides member a support system for decisions, lowers uncertainty about options, and evaluates more alternatives.

The different techniques for this approach are as follow: (1) Interactive Group or staff meeting – members regularly meet to discuss specific agenda and decision objectives, (2) The Nominal Group – a group member can took part in the decision-making process where each can present his or her ideas in solving the problem. Through a secret ballot the idea that receives the most votes is then adopted. (3) The Delphi Group – a group leader solicits written expert opinion about the problem detailed through questionnaires. The opinions are then summarized and given to members for analysis. New questionnaires on the same problem are continuously circulated until the group reached a consensus.

To further improve the effectiveness of group decision making process several other methods have been developed. The Devil’s Advocacy assigns a member to criticize and question the group’s assumptions, which then forces the group to review their solutions to the problem and come up with better alternatives. In the Dialectical Inquiry, two groups tackle the same problem and study each other’s chosen alternatives. Top managers will then hear the presentation of both groups and each side can likewise challenge the other’s choice of alternatives. Lastly, Promoting Diversity increases the chances of a group to have a wider set of alternatives.

 

Chapter 4: Organizational Planning

Planning defines the mission, selects appropriate goals for the organization, and analyzes present conditions in order to develop strategies, policies, programs and procedures for achieving them. The purpose of planning is for management to coordinate all work activities. It helps managers reduce overlapping of jobs, diminish uncertainties, and prepare for the future. It also identifies the organization’s kind of business and who are its customers. Establishing major goals provide directions for all management decisions while plans outline how these goals are to be attained. Those involve in planning are divisional managers in both Corporate and Business levels. They approve plans in all levels to make them consistent with the corporate plan.

Types of Goals and Plans. Organizations devise multiple goals to cover every aspect of their operations and ensure success. These goals are financial which relates to economic performance, strategic which concerns about all areas of business operations, stated goals which are the official goals of the organization, and the real goals which the organization actually pursues. On the other hand, plans are classified as follow: strategic plans (the overall goals of the entire organization), operational plans (details on how the overall goals are to be achieved), long-term plans (plans that can be sustained beyond five years), short-term plans (only covers a year or less), specific plans (well-defined with clear course of actions), directional plans (designed as a general guidelines with limitless courses of actions), standing plans (serve as regulations for on-going activities done repeatedly like rules, procedures and policies), single-use plans (intended for one purpose in addressing a unique situation), and contingency plans (creates future scenarios and analyzes how to respond effectively, preparing for possible outcomes).

Steps in Planning. The first stage is to determine the mission and goals of the organization by defining its business – who are the customers, how they are being satisfied, and what needs are being satisfied. A mission is a statement that describes the organization’s purpose, its products and customers giving it a distinct identity from its competitors. Targets are then put together through challenging and realistic goals to give the organization directions to meet the needs of the customers. Second, managers must design strategies to achieve its mission by carefully examining current trends both inside and outside the organization. The best practice for this is the SWOT analysis where managers examine the organization’s strengths and weaknesses like its marketing skills or the conditions of its production facilities as well as its external opportunities (entry of new related products in the market) and threats (increased competitions). Lastly, managers must implement strategies by allocating resources, develop specific plan of actions, establish a timetable for the implementation, and assign people for carrying out courses of actions to meet the organizational goals.

Levels of Planning. In the Corporate Level, plans are formulated towards the kind of industries and national markets the organization wants to compete. In the Business Level, plans are developed with respect as to how a division intends to compete with its rivals in the market. In the Department Level, plans are mainly focused on how employees can help the division achieved its business-level goals. Some of the planning techniques used by managers to obtain their objectives are: environmental scanning that evaluates data to anticipate a change surrounding the organization, forecasting that predicts future events to facilitate decision making, and benchmarking that searches for the best practices to improve performance.

Chapter 5: Organizational Structure and Design

Organizational Structure is a formal system of arrangement where tasks are divided and grouped to ensure effective communication and coordination. Organizational design, on the other hand, is a process of changing an organization’s structure to help corporations achieve effectively its goals. Technology, human resources, strategy and organizational environment determines the design of organizational structure. Organizational structure is classified in two, mechanistic and organic. Mechanistic organization or traditional design is commonly used in medium and large corporations because it has rigid departmentalization with clear chain of command, a precise hierarchal composition and a tall structure where employees are confined to their own area of specialization. Organic organization is highly adaptive and flexible where employees are empowered to handle various tasks at the same time welcomes new opportunities. It is a flat structure that stressed a decentralized approach to management giving employees to take part in decision making.

Traditional Organizational Designs. Functional Organization assembles job into functions. It groups similar occupational specialties into departments such as marketing, manufacturing, finance, and research among others. Business goals are attained through specialization. For managers, this method is easy in terms of evaluating workers and monitoring their performance. However, the organization runs the risks of losing its overall goals since every department has its own goals to pursue.

Divisional Organization is an independent structure under a larger corporate umbrella and composed of different self-contained strategic business units. Its work activities are coordinated and controlled to produce a single product for a specific customer. Division builds smaller and manageable sections that can develop a business-level strategy to compete. However, there is a tendency that work activities among divisions may be duplicated.

Departmentalization is the groundwork where work activities and employees are grouped into manageable entities. There are five traditional methods for groupings and they include: (1) By Function – jobs are grouped in accordance with the nature of functions that reflects the kind of business an organization undertakes, (2) By Product – groupings of work activities in view of certain product lines or services, (3) By Process – classifying jobs around the flow of customers where each process uses particular skills like a patient undergoing various procedures of diagnostic tests, (4) By Customer – assembles jobs on the basis of the customers’ specific needs and problems, and (5) By Geographical Regions – groups jobs on the basis of territory where customers with different needs are served by local autonomous division that produces goods and services.

Contemporary Organizational Designs. The Matrix Structure employs grouping of people and resources by function and product simultaneously usually for developing a new product and making sure its success since many departments are directly involved. The design is flexible and can easily adapt to changes. The practice has a complex network of reporting relationships between managers and subordinates wherein employees serve two superiors. When a project structure is placed over the functional structure, a matrix organization is formed that takes advantage of new opportunities. This concept creates a dual chain of command.

Boundaryless Organization is not limited nor defined by external boundaries imposed by existing structures. It seeks to remove the hierarchy of command, to operate with unlimited span of control (number of employees a manager can govern effectively), and to substitute departments with empowered employees to strengthen relationships through joint ventures, distribution channels or financial resources with customers, suppliers and competitors. It streamlines work activities by forming strategic alliances and using information technologies.

Learning Organization has a capacity to continuously adapt and respond to change where all group members participate in identifying and resolving work-related problems. Empowerment is important in this design because it gives employees the best chance of upgrading their skills and knowledge and applying their know-how in decision making and improved performance. Managers generate a shared vision for the future while the organizational culture builds community and open communication, a sense of belongingness for employees.

 

Chapter 6: Human Resource Management

Organizations today are increasingly recognizing the importance of developing their human resources. The training function, now popularly referred to as human resources development (HRD), coordinates the organization’s efforts to provide training and development experiences for its employees. (Sims, 2002, p. 165). This managerial function is vital because it plays a major role in accomplishing organizational goals by retaining and attracting qualified employees to perform efficient services and produce quality goods. Strategic Human Resource Management (HRM) aims to device a system that will improve the efficiency, quality, innovation and customers’ response of the organization. The legal implication of HRM is for everyone to find equal opportunity for employment regardless of gender, age, race, religion, or disabilities. Human Resource Planning allows managers to review current and future needs of their workforce, make forecasts by estimating the number and qualifications of employees the organization will need, and check the availability of qualified employees in the labor market. This plan, however, must be completed before the process begins.

The HRM Process. Every component of an HRM system must complement and influence each other so that it will retain quality employees and increase motivation resulting to high performance work practices. The programs of HRM are necessary for staffing the organization with competent employees. This involves recruitment, selection and placement, training and development, performance appraisal and feedback, pay and benefits, and labor relations.

The process of recruitment locates and identifies possible candidates for the job. External recruitment seeks applicants who have not work from the organization while internal recruitment searches for contenders within the organization to fill up vacant positions. Job analysis is a recruitment tool used by HRM to identify tasks, duties and responsibilities and the required skills and knowledge to perform the job.

Selection is the process of obtaining and using information about job applicants in order to determine who should be hired for short- or long-term positions. Placement involves matching individuals to jobs, based on the demands of the job and the competencies, preferences, interests, and personality of the individual. (Sims, p. 139, ¶3). Selection screens job applicants to ensure that the organization hires the right people. Devices used in this process generally include written tests that measure intelligence, performance-simulation tests that utilizes actual job presentation, interviews that size up the applicant’s reasoning and communication ability, and checking of background information such as education, employment record, and references.

Training helps employees upgrade their technical, interpersonal, and problem solving skills to make them more effective performers. Development reinforces the employee’s know-how and capabilities so that they could take on new duties and responsibilities.

Performance Appraisal evaluates the job performance and contributions of employees whether they are effective enough or deficient in their duties. Trait appraisal assesses employees on their personal characteristics that are significant to their jobs while behavior appraisal studies employees on how they perform their jobs. Results appraisal grades workers on their accomplishments while doing their jobs. In contrast performance feedback gives employees the opportunity to examine their own performance and make corrections to do better and develop plans for the future.

The goal of pay and benefits is to motivate, rewarding employees for their competencies and skills, in order to keep and get talented individuals who can make a positive impact on the overall strategies of the organization.

Labor Relations strengthens the working relationships between management and labor unions through negotiation of collective bargaining agreement, resolve conflicts and disputes as well as other concerns of the employees such as working hours, working conditions, wages, and job security.

 

Chapter 7: Motivating and Rewarding

Motivation is a satisfying process that intensifies high levels of efforts so that organizational goals are achieved. It draws employees to invest their time, skills, knowledge and work behavior so that they could have job security, pay, and fulfillment. Motivation is high when employees believe that their hard work will lead in the attainment of desired outcomes. Financial satisfaction is the biggest motivator for employees to exert their best performance. Examples of pay plans are the piece-rate pay where employees are paid on the number of units they produce; commission pay is given to employees based on the percentage of sales they made, and the profit sharing where employees get a share of the organization’s profits. Effective performance of your employees is your highest priority as a manager [and] . . . ultimately your success as a leader is measured by how well you enable your employees to achieve your and the organization’s goals, to work up to their potential, to become even more valuable assets to the organization, and to identify and promote the well-being of the operation of which they are a part. (Harris, 1993, p. 425, ¶3).

Early Theories of Motivation. The Hierarchy of Needs theory of Abraham Maslow centers on what needs employees find satisfying during the performance of their work and how those needs will be satisfied. They are motivated to obtain results at work to satisfy their needs. That is why it is critical for managers to identify those needs and ensure that employees receive the outcomes when they perform effectively. The hierarchy consists of the following: (1) physiological – human basic needs like food, drink, shelter, clothing, and sexual satisfaction; (2) Safety – protection from physical danger and lost of job, property or shelter; (3) Social – the sense of belongingness and the need to be accepted by others; (4) Esteem – internal factors like self-respect and independency that could result to power, prestige, and self-confidence; (5) Self-actualization – desire to maximize potentials and accomplish something. All levels of the hierarchy are interconnected so that each must be satisfied first before activating the next level.

The Herzberg Motivation-Hygiene Theory believes that results bring higher motivation and job satisfaction and that those outcomes are said to prevent dissatisfactions. In this theory, Herzberg considered achievement, recognition, responsibility, advancement, the work itself, and growth as great motivators that extremely satisfy employees. On the other hand, the hygiene factors such as company policy and administration, supervision, working conditions, interpersonal relations, salary, status, job security, and personal life resulted only to extreme dissatisfaction.

Douglas McGregor used two assumptions Theory X and Theory Y to illustrate the nature of people. He suggested that in managing managers must be able to see themselves in relations to others. In Theory X people have no ambition to work because they do not willingly assume responsibilities and are just forced to work. Few subordinates take part in planning and in setting objectives. There is low commitment to achieving goals. That is why there is a need to practice autocratic leadership for tight control of work activities. Though employees obey orders, there exists hidden mistrust and resistance. In Theory Y, people take work as a natural activity where they assume responsibilities and exercise self direction. Just the opposite of Theory X, there is much enthusiasm between managers and subordinates in doing all aspects of the organization’s strategic performance.

Contemporary Theories of Motivation. As a contribution to the understanding of motivation, David McClleland developed the Three-Needs Theory and classified them into the need for power, the need for affiliation, and the need for achievement. According to the author, these drives are significant to management since all three must be acknowledged for the organization to function well. In need for achievement there is a strong feeling to excel in meeting personal standards and the desire for success. Employees fear failure and want more challenges. The need for affiliation advocates close interpersonal relationships where employees derive pleasure from being loved, getting along and not be rejected. The need for power exercises the desire to influence and control others wherein such employees seek a leadership position.

The Goal Setting Theory identifies the kinds of goals that produce effective results and the desire to work towards those goals serves as a job motivator. Managers feel more confident that employees are focusing their inputs in achieving organizational goals. Goals define what is valuable to the organization and that employees should be encouraged to direct their minds in attaining such goals. Managers use feedback to determine what needs to be done and come up with strategies to address inconsistencies.

Motivating employees by putting theories into practice, managers must take into account that employees’ skills should match to their job, use goals to encourage subordinates and make sure that these goals are attainable, reward employees individually, link rewards to performance, ensure that the reward system is fair, do not ignore financial rewards, and try to recognize individual differences.

The Motivation Equation. Employees invest their time, effort, education, experience, skills, knowledge, and work behavior in order to contribute to the organizational efficiency, effectiveness, and the attainment of goals. As a result they receive pay, job security, benefits, vacation leave, job satisfaction, independency, responsibility, a feeling of accomplishment, and the pleasure of doing interesting work.

Current Trends in Motivation. To motivate a diverse workforce, managers should be flexible in devising reward systems that will satisfy a variety of personal needs and goals. He must be able to come up with working schedules that are best suited to the employees like a compressed work week that allows personnel to work long hours per day but lesser days per week. Besides the fixed hours of work in a day, employees must be given the chance to vary their working hours but only to certain limits. With Open-Book Management, employees are now considered business partners where they can freely participate in decision making and can receive bonuses when profits improve. This management style is said to mold employees to think and act like owners. Lastly, positive reinforcement without punishment motivates employees by praising their good performance and properly designing their work environment.

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