Fie An overview of management CHAPTER Gavin Staude Te ey ‘ter studying this chapter, you should be able to: ‘+ Identify who managers are in an organisation * Understand that managers make decisions, ‘+ Explain what managers do manage change, and ensure that their organisations. * Understand the managerial process and the tasks behave responsibly of management * Understand the importance of management * Understand and classity the roles of managers * Identify the six key managerial competencies that according to Mintzberg managers need to master. * Debate the question as to whether the manager's jb is universal or not Key terms and concepts * Abundant organisation * Managerial roles: ~ Leading * Business functions 1 Entrepreneur = Contratting + Effectiveness 2 Disturbance handler * Managing change | + Efficiency 3 Resource allocator * Middle managers | + Ensuring responsible & Negotiator * Open system | organisational behaviour 5. Figurehead * Open talent economy * Environmental, social, and 6 Leader * — Operative /operational employee governance (ESG) 7 Liaison * Organisation * First-line managers 8 Monitor * Process | Fount Industria Revolution 9 Disseminator * Top managers | Gig economy 10 Spokesperson * Universality of the role of | * Globalisation * Managerial tasks: manager * Making decisions - Planning * Volatile, uncertain, complex, Manager = _ Organising and ambiguous (VUCA) cee Onn eer LE Prejay Lalla: CEO of Kansai Plascon Africa Kansai Plascon Africa has not had the easiest few years, but under the leadership of Chief Executive Officer (CEO) Prejay Lalta, the biggest coatings brand in Africa is being given the push it needs to continue its legacy inthe market. His influence and expertise have escalated, giving rise to growth and a renewal in consumer trust in Plascon's products, despite difficult times. “Kansai Plascon Africa has demonstrated that it has a powerful brand together with a resilient organisation. At Plascon, we are connected by one purpose, a purpose to ‘transform valued assets into legacies’ - lasting legacies which will endure and remain timeless,” Prejay says proudly. “We have become agile, dynamic, determined, ever-changing, optimistic, expansive, and passionate through our transformation. We are now the re-invented Plascon.” “We have re-imagined our future in the pursuit of excellence and will bring beauty, science, and innovation ‘together to create and enhance products so that they really add value to everyday life. Plascon has stood the test of time through a very difficult past few years and has emerged stronger.”4s | CHAPTER 1 An overview of management teadershi : st Fe was king bright heading ito 2020. Ten the Covd-19 pandemic truck. It has taken strong, decisive leadership onthe part of Prejay to pull the organisation through these dificult and unprecedented times, but what has resulted is testament to the leader Kansai Plascon Africa has at the helm. “Covid-19 forced Prejay to make some tough decisions. This was especially true of his leadership skills in the human capital department. We put in a great effort to ensure that we prevented the spread of the virus through introducing stringent safety protocols across the entire business. Production shift patterns were changed to align with Tockdown regulations and remote working forall became the norm. Regular virtual interaction resulted in stronger collaboration between employees, unions, customers, and suppliers. At Plascon, this created a strong sense of togetherness within the organisation, with the ultimate aim to exceed customer expectations during these uncertain times.” Strong leadership in the market While the African market is highly competitive, Prejay is determined to maintain his brand’s strong presence through reinventing Plascon to align itself with the competition, offer new products to cater for the market, and to streamline operations to ensure costs are kept manageable, therefore, bringing his premium brand to the masses at an affordable price point. “We were forced to make bold decisions to realign our business model in order to be resilient to current ‘and future economic realities and disruptions. A growth strategy was developed with a focus on streamlining, refocusing, and simplifying our entire business in order to be a sustainable, world-class coatings company,” Prejay explains. “Itis a proud achievement that Plascon has grown to the number one position in Africa. This has been achieved through a vision and passion to inspire and enable our customers and consumers to improve their lives and their surroundings,” he says. Sustainability and innovation With the constant climate change narrative and the need for a greener future, Plascon is committed to ensuring that they do business the right way. Recycling of waste at source, rainwater harvesting, and energy and water conservation are just some of the ways that Plascon continues to ensure that future generations are protected and adherence to green business is observed. “Kansai Plascon accepts and acknowledges our esponsibility, not only in creating quality products, but also in encouraging a culture that is dedicated to Progressive and sustainable solutions.” Plascon has also launched a number of new products around the sustainability theme, using their market- leading technologies. From eco-friendly coatings to their air purifying technology and APEO-free products, the innovative thinking and greener outlook are major contributing factors in creating not only a quality brand, but one that is seen as conscious of the issues the planet faces. The future of Plascon under Lalla Prejay thas big goals for the future. The main concern now is ensuring that the business strategically manoeuvres the: Imicro- and macro-environment to ensure stability for Plascon to continue as close to normal as possible. “This year, we plan to implement more changes as part of our strategic plan and will deliver further improvements in efficiency and profitability. ..Thereafter, market share growth throughout Africa will form a huge part of our strategic agenda,” Prejay concludes. With a brand the size of Plascon, Prejay's job was never going to be plain sailing. Having been in the job for ‘almost four years, he has already achieved over a 100 er cent improvement in operating profits and has proven that a sound footing from a leadership perspective is vital in bringing about ‘change and, ultimately, prosperity. Source: Leadership (2021)!1.1 Managers and their place in an organisation Why study management? In answering this question, we need to start by identifying who ‘managers are and discovering what they do and why they do it. Managers work in organisations, So, before we discuss who managers are and what they do, it is necessary to clarify what an organisation is. “Organisations are collections of people who work together and coordinate their actions to achieve a wide variety of goals or desired future outcomes.” In so doing, the members of an organisation are able to accomplish tasks that are far beyond the reach of anyone acting alone. Listed below are a number of entities that meet our definition of an organisation. You will note that they vary from companies listed on a stock exchange, such as the Johannesburg Stock Exchange ISE), to a small business, to small township spaza shops, to a not-for-profit organisation, to a law firm, and to a municipality. + Unilever, a global organisation whose products are sold in over 190 countries around the world ([Link] and [Link]). + Altron Ltd, a large South African organisation listed in the information and communications technology sector on the JSE since 1967 ([Link]). * Clover S.A. (Pty) Ltd, a large South African organisation that is not listed on the JSE (https:/ /[Link]). + Prag Leather and Luggage, a small family run business in Somerset West ([Link] + Spaza shops. ‘Spaza’ means hidden in Zulu. They developed in South African townships during the apartheid era when black people were not allowed to . They still exist today, ip residents. They usually stock basic products, such as produce, drinks, i \d bread own business ofien within the homes of towns cigarettes MANAGEMENT SIXTH EDITION | 5 Shepstone and Wylie, a large legal practice in Durban, South Africa ([Link]). + All Saints Anglican Church in Somerset West ([Link]). + Wordworks, a not-for-profit organisation (NGO) that focuses on early language and literacy development in the first eight years of children’s lives (www. [Link] za). + The municipality of the Gity of Cape ‘Town ([Link]). ‘The first characteristic is ey each have a purpose. The purpose of an organisation is expressed in terms of goals. The broadest statement of an onganisation’s goal is its vision. The vision. of Clover S.A, for example, is “To be a leading branded food and beverages group in South Africa and selected other African countries, providing accessible nutrition to all consumers”,* while the vision of Wordworks is “Changing lives through literacy”.*As indicated in the South African Insight at the beginning of this chapter, the higher purpose of Kansai Plascon Africa, a paint company, is to “Transform assets into legacies” © + The second characteristic is that they are each made up of people (employees). No purpose or goal can be achieved without people making decisions and performing a variety of goal-driven activities. As indicated in the South African Insight, the CEO of Kansai Plascon Africa, Prejay Lalla, recognised this and took careful steps to develop the best employee culture possible, and to build a more engaging workforce. + The third characteristic is that organisations group people together in some way or other. When more than one person is involved in helping to achieve a goal, they need to be grouped together in some structure or other that defines and6 | CHAPTER 1 An overview of management limits their behaviour. This may include such things as writing rules and policies, putting some people into supervisory positions over other people, writing job descriptions, or forming work teams. In Chapter 8, you will see how ‘structure’ is an important tool for ensuring that people are grouped together, that they are allocated tasks and responsibilities, and that they relate to one another in the best possible way. 1.1.1. Organisations as systems When studying the field of management and developing an understanding of what managers do and why they doit, itisimportant to recognise that an organisation is a system. on hhe organisation functioning as an open system is illustrated in Figure 1.1. In Figure 1.1 there are four key elements: These typically include the human, physical, material, financial, information as well as entrepreneurial resources that enter a transformation process. Ata university, for example, inputs include students, academic staff, research knowledge, money, books, and buildings, among others. In a manufacturing organisation, inputs may include raw materials, factory workers, machinery, and mon: comprise the technologies and methods used to convert inputs into outputs. Ata university, the transformation processes include lectures, tutorial sessions, research programmes, examinations. and experiments in a laboratory, In a manufacturing organisation, transformation processes might involve a production line in a factory. + Outputs: These are the result of the original inputs as changed by a transformation process. At a university, outputs include such elements as students who graduate and research findings. In a manufacturing organisation, outputs will include finished products. . “Péedbadk: Feedback is information about how the system has performed. If it has not performed as expected, managers will then take steps to change the inputs or the transformation processes, or both, to get a better result in future. At a university, a form of feedback is the ability of its graduates to get jobs, and the level of their performance in those jobs. In a manufacturing organisation, feedback may take the form of marketing surveys, financial reports, production records, and performance appraisals. Customer feedback in particular is important to an organisation in measuring the extent to which consumers are satisfied. If the level of consumer satisfaction is not very high, they may well stop buying from that organisation. In the context of Figure 1.1, a manager’s role is to guide the conversion of inputs into outputs in the best possible way, by planning, organising, leading, and controlling. These four tasks of management are explained briefly in Section 1.2.2 of this chapter and in significant detail in Parts Two, Three, Four, and Five of this book. Systems theory also emphasises that an organisation is one system in a series of subsystems. For example, FlySafair, as an organisation, is a subsystem of the airline industry and the flight crews who work for FlySafair are, in turn, a subsystem of FlySafair. Systems theory points out that each subsystem is a component of the wholeand is interdependent with other subsystems. The systems viewpoint is further discussed in Chapter 4 Itisbecause organisations are open systems that it isalso vitally important for managers to MANAGEMENT SIXTH EDITION | 7 monitor the external environment regularly and closely in order to identify threats and opportunities that it might present for the organisation, This is explored further in Chapters 5 and 6. (seme) 7 INPUTS ‘Human, physical, financial, and. |-->> ‘TRANSFORMATION OUTPUTS information resources PROCESS Prnducs asl Senden Pree Feedback loops Figure 1.1. Basic systems view ofan organisation Source: Hellriegel (2005: §2)° 1.1.2 Managers versus operational employees While are a key part of organisations, not everyone working in an organisation is a manager. In general, people working in organisations may be broadly divided into two categories: operational employees and managers. Operational employees, also referred to as operatives, are normally those people who work on a particular task, but who do not have any supervisory role or authority over other people within the organisation. The employee who rings up your sale at the check-out till in n Pay, for example, is an operative, as is the messenger in a small legal practice and the assistant hair stylist cutting your hair in a hair EH, oe on the other hand, who are typically ‘gorised as either top-, middle-, or first-line managers, are responsible for super managers ng both operational employces and lower-level managers, What sets managers apart from operational employees is the fact that managers are evaluated according to how well ‘he people they supervise, do their jobs. anagers achieve organisational goals by enabling people to do their jobs effectively and efficiently — and not by performing all the tasks themselves — they must find ways to keep employees motivated. Refer to Chapter 12 for a more in-depth discussion on how managers should motivate employees. ‘The fact that managers are mainly responsible for supervising the work of those under them, does not mean, of course, that managers never work directly on particular tasks. Many managers have operational responsibilities aswell as managerial responsibilities. For example, the dealer principal of PhilWest Volkswagen, a Volkswagen dealership in Somerset West, is directly responsible for servicing certain clients in addition to his oversight responsibility for the various managers and operative employees working for him. Chapters 2 and 3 address additional ki competencies and skills of effective managers as well as whether management is an art or a science.8 | CHAPTER 1 An overview of management 1.1.3 Management levels While it would not be difficult to establish who the managers in any particular organisation are, they can have a variety of titles, which may also differ between organisations. In an organisation, for example, first-line managers scganrualycalledgsvneiou although they can also go by the title of team Ieader, In a university, however, academic first-line managers are usually referred to as heads of department. Thus, the head of the department of business management, for example, is a first-line manager. First- Jine managers are responsible for supervising the day-to-day activities of operational employees. The head of the department of business management is thus responsible for directing the day-to-day activities of the senior lecturers, lecturers, junior lecturers, and the administrative support staff under them. Middle management refers to that level of management between top management and first-line management. Middle m: uusiness organisation, the marketing manager, for example, would be a middle manager responsible for managing the various brand managers (first-line managers) under them. In a university, the dean of commerce would be a middle manager responsible for managing the heads of the departments of accounting, business man: The most ement and economics. jor management level of an organisation consists of top managers. People, such as Prejay Lalla, CEO of Kansai Plascon Affica (see the South African Insight at the beginning of this chapter), Andre de Ruyter (CEO of Eskom), and Patrice Motsepe (Executive Chairman of African Rainbow ¢ plan and they must develop a strategii oaea such as which markets constantly make choices, to become involved in and how to manage the competition. In organisations, titles, such as managing director or chief executive officer, ical of the top manager. In universities, are typi a is used for the title of vice-chancellor or rector is the institution’s top managers. While the top manager is ultimately responsible for the overall performance of the organisation, there may be various other | top managers who participate in setting the direction for the organisation and who might also, therefore, be deemed to be part of the top management group. Examples of these positions are the marketing director, financial director,andthe human resources director. The role of the chairman of the board of directors also needs to be highlighted. As with the rest of the board, this role is less about the day- to-day running of the organisation. Instead, their focus is on the results of these day-to- day actions and whether the organisation is living up to its potential. They must also pay attention to the organisation’s corporate social responsibility (CSR) goals and environmental, social, and governance (ESG) concerns, as well as deal with external investors. 1.2\3 Management and the tasks and roles of managers Just as organisations have characteristics in common, so too do managers, regardless of whether they are the head nurse of the cardiac surgery unit at Netcare Greenacres Hospital in “Gqeberha or Luc-Olivier Marquet, Executive Vice President of Unilever Southern Africa, which employs over 3.000 full-time employees.’ t, Outline the classical tasks of management, review research on managerial roles, and consider whether management principles are the same in all organisations, or not.1.2.1 Defining management ‘The term management refers to the process of getting things done, effectively and efficiently, through and with other people." When analysing this definition, we need to focus on three components: + The term process refers to the main tasks and activities that managers perform: planning, organising, leading, and controlling. These activities, referred to as managerial tasks, are discussed in the next section. + The term effectiveness refers to identifying and performing those activities that are going to ensure that the organisation achieves its goals and fulfils the purpose for which it exists. Another way of putting it is that effectiveness is concerned with the organisation ‘doing the right things’ + The term efficiency refers to how well tasks are done. Another way of putting itis that efliciency is concerned with the organisation ‘doing things right’. The measurement of efficiency is the ratio of inputs to outputs. Thus, if you get more output for a given input or if you get the same output for fewer inputs, then efliciency has increased. Where resources, such as people, equipment, materials, and money, are scarce, a focus on efficiency is MANAGEMENT SIXTH EDITION | 9 essential. Two of the major priorities of managers are the reduction of resource costs and the increase in productivity. It stands to reason that good management is concerned with both improving effectiveness (doing the right things in the first place) and increasing efficiency (doing the right things well). The question arises as to whether it is possible for an organisation to be efficient and yet not be effective. In other words, can it do the ‘wrong things’ well? The answer, of course, is, ‘yes’. Pick n Pay could be considered a case in point. In a move to boost profit and increase their market share, Pick n Pay implemented a phased centralisation of supply distribution, Pick n Pay was the last of the major supermarket chains to introduce centralised distribution, which resulted in an increase in their operating costs.!! The organisation was essentially using an outdated method of distribution (in other words, doing the wrong thing) but doing it very efficiently. To sum up, Figure 1.2 indicates that managers should strive at all times to operate in the top right-hand quadrant where the organisation is both very effective and very efficient, In Figure 1.2, ‘goal attainment’ is a measure of effectiveness and ‘productivity’ is a measure of efficiency. in “ Effective and efficient: Effective, but not efficient: - ce High Goals achieved, but eee aor resources wasted wees in Zone of high productivity Goal attainment — — Low Neither effective nor efficient: Efficient, but not effective: Goals not achieved; No wasted resources, resources wasted in the process bur goals not achieved Poor Good Figure 1.2 Productivity and organisational performance Source; Productivity10 | CHAPTER 1 An overview of management 1.2.2 The tasks of managers The successful manager performs four basic managerial tasks that make up the managerial process: planning, organising, Jeading, and controlling. This description of the tasks of management is attributed to Henri Fayol,'’ the French industrialist, in the carly part of the 20th century. Regardless of their level within the organisation, most managers perform the four managerial tasks more or less simultaneously — rather than in a rigid, pre-set order ~ to achieve various organisational goals. Figure 1.3 illustrates this point and also reinforces the open systems view of the organisation with the inclusion of ‘resources’ as inputs and ‘performance’ as outputs. Let’s briefly examine the four managerial tasks without looking at their interrelationships. Throughout this book, however, we do refer to the interrelationships between the four managerial tasks to help explain exactly how managers do their jobs. [Link] Planning Planning generally involves two key aspects. First, deciding on the organisational objectives, ‘the what?’, and then deciding Resources Human Financial Controlling Raw materiats Monitor activities and Technological make corrections Information [* Figure 1.3 Basic managerial tasks Management functions = | Select goals and ways toattain them Leading Use influence to motivate employees on the best way to achieve them, ‘th how? Planning activities generally include the following: é 7 ‘Analysing the current situation + Anticipating the future + Determining objectives Choosing appropriate corporate and business strategies to achieve the objectives + Determining the resources needed to achieve the organisation's goals. Historically, planning was a top-down process in which top managers worked out business plans for the organisation, and then told other employees to carry them out. This approach, however, no longer works in the current business environment, which is increasingly competitive, hostile, and turbulent. Currently, planning is a continuous process in which people throughout the organisation use their knowledge and experience, and relationships with stakeholders, to identify opportunities in order to create, capture, strengthen, and sustain competitive advantage as a means of delivering value to customers. Aspects of planning are discussed in greater detail in Chapters 5 and 6. Organising Assign responsibility for task accomplishment[Link] Organising After managers have prepared plans, they must translate these relatively abstract ideas into reality. Sound organising is essential to achieve this. The organising task takes the tasks identified during planning and assigns them to individuals and groups within the organisation so that the objectives set by planning can be achieved. “Organising is the process by which managers establish the structure of working relationships among employees to allow them to achieve organisational goals efficiently and effectively.” More specifically, organising activities include the following: + Attracting the right people to the right jobs within the organisation + Specifying job responsibilities + Grouping jobs into work units + Getting and allocating resources + Creating conditions so that people and things work together to achieve the greatest level of success. Aspects of organising are covered in further detail in Chapters 8 and 9. [Link] Leading After management has made plans, created a structure, and hired the right personnel, someone must lead the — organisation. Leadership is discussed in greater detail in Chapter 11. Leading involves motivating and inspiring others to perform the tasks hecessary to achieve the organisation or department's goals within the context of a Supportive organisational culture. Motivation is discussed in greater detail in Chapter 12. Leaders also have to effectively manage Change, as further discussed in Chapter 14. Lea not done only after planning and organising ends; it is, in fact, an integral Clement of those managerial tasks as well. MANAGEMENT SIXTH EDITION | 11 [Link] Controlling The process by which a person, group, or organisation consciously monitors performance and takes corrective action, if needed, is known as controlling. Just as a thermostat sends signals to a heating system that the room temperature is too high or too low, similarly, a management control system sends signals to managers that things are not working out as planned and that corrective action is needed. In the control process, managers do the following: + Establish performance standards + Measure actual performance and ‘compare results against those set performance standards + Take action to correct any deviations, if necessary + Adjust performance standards when necessary. In Chapter 15, we present and discuss control as an important managerial task used for managing performance and taking corrective action. Closely associated with controlling, is the management of risks in an organisation. As such, in Chapter 16, risk management is discussed in detail. To enhance your understanding of the managerial process, please watch the following video on YouTube, Understanding the managerial process, available at: [Link] watch?v=PSbMVIToYdg [Accessed + October 2021]. Breaking down the managerial process into four mafiagerial tasks is appealing because of its clarity and simplicity. But is it an accurate description of what managers do? Do managers only plan, organise, lead, and control? Fayol’s original analysis was not based on empirical research, but on his observations of what went on in the French mining industry. In the 1960s, Henry Mintzberg, on the other hand, undertook empirical research to identify the various roles that managers perform in the process of12 | CHAPTER 1 An overview of management carrying out the tasks of planning, organising, Ieading, and controlling. Mintzberg’s findings are outlined in the following section. 1.2.3 The roles of managers A role is a behaviour pattern expected of an individual within a unit or position. Managers probably fulfil many different roles every day. For instance, as well as leading their teams, they might find themselves resolving conflicts, negotiating new contracts, representing their departments at board meetings, or approving requests for new computer systems. Put simply, managers are constantly switching roles as tasks, situations, and expectations change. Management expert and professor, Henry Mintzberg,'* recognised this, and he argued that there are ten primary roles or behaviours that can be used to categorise a manager's different functions. The ten roles are: figurehead, leader, liaison, monitor, disseminator, spokesperson, entrepreneur, disturbance handler, resource allocator, and negotiator. Mintzberg then divided the ten roles into three categories: interpersonal, informational, and decisional. Although Mintzberg did his work in 1989, his findings still apply today. Let’s look at each of the ten managerial roles in more detail: !° + Interpersonal category: Managerial roles in this category involve providing information and ideas. - Figurehead: A manager has social, ceremonial, and legal responsibilities. A manager is expected to be a source of inspiration. People look up to their manager as a person with authority and asa figurehead. ~ Leader: Managers provide leadership for their teams, their departments, or perhaps the entire organisation. Managers also manage the performance and responsibilities of everyone in the group. Liaison: Managers must communicate with internal and external contacts. Managers need asl to be able to network effectively on behalf of their organisations. Informational category: The managerial roles in this category involve processing information. ~ Monitor: In this role, managers | regularly seck out information | related to their organisations and industry, looking for relevant changes in the environment. Managers also monitor their teams, in terms of both their productivity and their well-being. - Disseminator: This is where managers communicate potentially usefull information to their colleagues and their teams. - Spokesperson: Mangers represent and speak for their organisations, In this role, they are responsible for transmitting information about their organisations and their goals to the people outside it. Decisional category: The managerial roles in this category involve using information. - Entrepreneur: Managers create and control change within their organisations. This means solving problems, generating new ideas, and implementing them. - Disturbance handler: When an organisation or team hits an unexpected roadblock, it is the manager who must take charge. Managers also need to help mediate disputes within the organisation. - Resource allocator: Managers need to determine where organisational resources are best applied. This involves allocating funding as well as assigning staff and other organisational resources. ~ Negotiator: Managers may be needed to take part in, and direct important negotiations within their teams, departments, or organisations.To enhance — your understanding of Mintaberg’s managerial roles, please watch the following video on YouTube, Mintzberg’s managerial roles, available at: [Link] [Link]/watch?v=NgkQYRqxKTs [Accessed 4 October 2021]. 1.3 Is a manager's job the same in all organisations? Up until now, we have implied that managers are managers regardless of where they manage. They are all concerned with planning; organising, leading, and controlling as well as with performing Mintzberg’s managerial roles. Is this true? The answer is ‘yes’, but only in broad or general terms. Because organisations are different in terms of characteristics, such as size, geographical location, type of industry (for example, retailing, manufacturing ot services), and type of organisation (for example, ‘for-profit’ or ‘not-for-profit’ organisations), it would be surprising if the managerial tasks were carried out in exactly the same way in all organisational situations. We need to take a closer look at this by considering the impact that the following characteristics have on the actual activities undertaken by managers: (a) the size of the organisation, (b) whether the manager is a toplevel executive or a first-line supervisor, (c) whether the organisation is a ‘for-profit’ or a ‘not-for-profit’ organisation, and (d) the geographic location of organisations. 1.3.1 Size of the organisation The question arises whether the job of managing a small business is the same as that of managing a big business. While the tasks of planning, organising, leading, and controlling have to be performed in both small and big businesses, there are differences in priority as well as in the proportions of a manager’s time that are spent on various managerial tasks and roles, Figure 14 indicates that managers in small organisations tend to spend most MANAGEMENT SIXTH EDITION | 13 of their time performing the role of spokesperson. They spend a large proportion of their time in such activities as negotiating with banks, meeting with customers, and searching for new opportunities In large organisations, however, managers’ concerns are more internally focused. Managers in large organisations tend to spend a sizeable proportion of their time performing the role of resource allocator, deciding which organisational units are going to get what resources in what proportions. Furthermore, it is clear in Figure 1.4 that the second most important role of managers in small organisations is the role of entrepreneur, searching for new business opportunities and assessing risk. Apart from perhaps, top management, the role of entrepreneur is, quite understandably, of lesser importance for managers in large organisations. Another difference between small and large organisations is the level of formality in the execution of managerial tasks. Not unexpectedly, the managerial systems in small businesses tend to be less formal than in big business. Organisational designs are less complex, planning systems are less sophisticated, and the controlling tasks are usually carried out by observation rather than by computerised monitoring systems. Importance of rotes Roles played by managers Roles played by managers insmall organisations —_in targe organisations Spokesperson —f eal oL__ Resource allocator Entrepreneur Liaison Figurehead ——* Moderate “| Monitor Leader ———* | __ Disturbance handler Negotiator Disseminator — Entrepreneur Figure 1.4 Importance of managerial roles in small and large businesses Source: Paolo (1984)”14 | CHAPTER 1 An ‘overview of manage el of management in the anagerial f ors earty out the manage While a rng, organising Headings and “proportion fanning and organisi i ve up the organisation, an «their time spent on divectly rnder them decreases. controlling, nising increases spent on pl pean employees ling the emp °Y hs leading he mgr spend most of eet HME aveading’, middle managers spend Most O reir time on ‘leading’ and “organising’» and top managers spend most of their time on ‘organising’ and ‘planning’."" ‘Top managers develop goal strategies forthe entire organisation. They set the goals that are handed down through the organisational hierarchy, eventually reaching 1s, policies, and each employee. Pressures and demands on top managers can be intense. Tightly scheduled workdays, heavy travel requirements, and workweeks of 60 or more hours are common. Top managers also often represent their organisations in community affairs, such as serving on the boards of sporting, church, hospital, and charitable organisations. In addition, top managers expanding public relations duties. They must be able to respond quickly to crises that may create image or reputational problems for also face their organisations. 1.3.3 Profit versus not-for-profit organisations Does a who works for an organisation, such as the Department of Health, the South African Red Cross, or Wordworks, do the same things as a manager who works for Volkswagen South Africa or Johnson & Johnson, for example? The answer is generally, ‘yes', While manage! in any organisation, whether it be a. for Profit or a not-for-profit organisation, have © plan, organise, lead, and control, clearly manager there are some differences. ‘The most obviou, Uiforence is about the measurement of performance, or in a sense, ‘controlling’, For: a business organisation, the most obvious measure of performance is profit. While the measurement of performance in schools, maseums, and charitable organisations ismore vrffcult, it still needs to be done to determin “hether they are fulfilling their purposes o not. While not-for-profit organisations als need to worry about money, the difference is that the making of profit for distributio to the owners of the organisation is not their main focus. 1.3.4 Organisational location If the managerial tasks were completel we would expect them to by in any country in the world social, cultural, generic, applicable regardless of economic, and political differences. However, studies that have compared managerial practices between countries have not generally supported the idea that the manager’s job is exactly the same in all organisations, in every country of the world. The principles of management discussed in this book tend to be generally applicable in western democracies and/or developed economies. Whether the organisation is classified as a multinational, global corporation, oF transnational organisation, managers net to be sensitive when managing in a different national culture. Every country and region has a specific set of values, customs and economic, social, and political systems, driven by legislation, which will affect how the business should be managed. '® 1.4 Decision-making, managing change, and ensuring that organisations behave responsibly We have considered the primary managerial tasks and the various managerial roles sential for managerial success. There are,however, three additional factors that we need to consider to fully understand what managers do in practice. These are: + Managers make decisions + Managers manage change + Managers ensure that their organisations behave responsibly. Each of these additional factors will be briefly discussed in the sections that follow: 1.4.1 Making decisions In carrying out the managerial tasks of planning, organising, leading, and controlling, managers have to make decisions continuously. The best managers then are those who are able to diagnose problems, set goals, identify alternative solutions, compare solutions, choose solutions, implement solutions, and follow up and control. Decision- making is a critical support activity that ensures effective planning. When planning, various decisions have to be made: what are the goals and objectives, which strategies are most suitable, is the vision a true reflection of the organisation's dream, and does the mission statement reflect the true reason why the business exists?2° Decision-making is discussed in greater detail in Chapter 7. 1.4.2 Managing change All organisations operate in an environment where change is a given, whether it be political, social, technological, nvironmental, or global. To survive and thrive economic, Table 1.1 The evolution of the workplace RUSuc cd MANAGEMENT SIXTH EDITION | 15 in this increasingly turbulent environment, Organisations have to manage change and adapt, preferably proactively. This is the responsibility of managers in general. They are responsible for making the changes that will ensure that their organisations exploit emerging opportunities and minimise the effects of impending threats. Resistance to change among employees is a reality, and managers, therefore, have tobe able toconvince their employees of the necessity of the change in order to earn their cooperation. Managing change, and the resistance to change, is covered in more detail in Chapter 14, Fast-moving changes in the external environment are creating the need for fundamental organisational changes that, in turn, are having a huge impact on the manager’s job. These organisational changes are seen in the transition to a new kind of workplace, as reflected in Table 1.1. One of the most. significant recent changes in the external environment with which business has had to cope, is the Covid- 19 pandemic. The pandemic struck South Africa in March 2020, and the country has been through various levels of lockdown since then. During the heavy lockdown period in 2020, stores selling non-essential products and services had to close, tourism companies were not allowed to operate, and restaurants, liquor companies, and wine farms were severely hit by liquor bans. In addition, many organisations had to allow their employees to work from home, where possible. auc Cee aces Resources Big data, information Information Physical assets. Work Flexible, agile, virtual, global Flexible, virtual, Structured, localised localised Human Empowered employees, open | Empowered Loyal employees resources talent economy, gig workers employees7 | rnc ee cee OE on ad anes q 7 ital, e-commerce | Mechanical The Fourth Industral Revolution Digital, e ree Tecmolny |i artical ittigence (I , impacting on rts and the Internet isations me = re eras ttl a , ubiquitous Global - because of | Local, dor L———Trrarkets | Global and virtual, ee Ts i Homogeneous ‘Labour market: structural Diverse Workiore | ismatch between demand and aan stability, effcien ues Te ‘abundant organisation, | Change, speed stability, cy a environmental, social, and ee Calm, predictable tex, _| Turbulent, . | external Volatile, uncertain, complex, Environment _| ambiguous (VUCA) unpredictable ry | Cognitive flexibility Dispersed, Autocratic | Managerial | Leadership 9 io responses Focus Skills planning: re-skilling and | Connection to Profits up-skiling employees and customers Doing work | Virtual teams, remote working _| By teams By individuals Relationships | Transversal management Collaboration Conflict, competition Organisational | Organic form of organising, Learning Efficient, | design highly adaptive and flexible | organisation performance | | structure Source: Based on Daft (2006: 26)" In broad terms, Table 1.1 traces the transition from what could be called the ‘old workplace’ to the ‘emergent workplace’ to the ‘new workplace’. It is suggested in ‘Table 1.1 that there are three key attributes of the workplace in wh changes have occurred: (a) character ) © forces impacting the organisations, and managerial responses, Each of these three characteristics will be discussed in the sections that follow. [Link] Characteristics The first characteris in the new work data, rather that tic pertaining to resources place is the phenomenon of big n information and ideas per se. as was the case in the emergent workplace. Organisations are being bombarded by more and more information all the time. According to Troy Segal, big data refers to the highly diverse information that arrives in increasing quantities and speed. Both opportunities and threats may be hidden in big data. Thus, in the new workplace, organisations simply have to deal with this explosion of information. The second characteristic of the new workplace is the need to be even more flexible - 2g than ia the emergent workplace. rly evident in the context of the Covid-19 pandemic, © C where many organisations had to add onl line facilities,| home deliveries, and take-away services as more and more customers were forced to stay at home. Checkers, for example, was ves flexible and agile in introducing is Sixty programme. By downloading their Sixty60 app, it is possible t0 shop in 60 seconds and have the selected groceries delivered in 60 minutes.”* The third characteristic of the new workplace is the move towards a ‘mix’ of human resources, rather than a cohort of employees essentially employed on a. fulle time, permanent basis, which tends to be typical of the emergent workplace and the old workplace. This mix of human resources comprises a combination of full-time employees on the one hand, and freelance workers and gig workers, who have no formal, long-term contractual relationship with the organisation, on the other hand. Gig work consists of income-earning activities for independent individuals who engage with formal organisations in short- term, flexible work arrangements and who get paid for each gig they perform. Uber drivers are an example of this. What this all adds up to is the existence of an open talent economy.” Making use of the open talent economy will give employers the freedom to adjust their workforces according to changes in demand for various skills in a relatively short space of time. Perhaps, more importantly, it will give employers the opportunity to source the best available talent, not only domestically, but also globally in certain situations, In the workplace, empowered employees are expected to exploit opportunities and solve problems as they emerge, rather than to refer them upwards \o more senior managers as is typical of the old workplace, Organisational structures are flatter and decision-making authority is pushed down to lower levels. Work is also ual than before, and managers ust supervise people who work remotely. In addition, because of the significant advances new more MANAGEMENT SIXTH EDITION | 17 in information technolo, i By (IT), work is more slobal than before. Iti entirely possible, for ample, for @ consultant in Johannesburg f0 service clients in London via emails and Zoom sessions, Having looked at characteristics of the n now look at some of thi the new workplace, some of the key ew workplace, let us forces impacting on [Link] Forces impacting organisations The most notable force impacting Organisations is probably tecinology, ‘The Fourth Industrial Revolution (IR), involving artificial intelligence (AD, robotics, and the Internet of Things(IoT), amongmany others, has arrived. “The First Industrial Revolution used water and steam power to mechanise production. The Second used electric power as a basis for mass production. The Third used electronics and information technology to automate production. Now a Fourth Industrial Revolution is building on the Third. It is characterised by a fusion of technologies that is blurring the lines between the physical, digital and biological spheres”, see Chapter 3." Of the technologies making up the 41R, we shall focus on three: AI, robotics, and the IoT. Artificial intelligence, very simply, uses computers and machines to mimic the prob- lem-solving and decision-making capabilities of the human mind, including visual per- ception, speech recognition, and translation between languages.”* Robotics is the intersec- tion of science, engineering, and technology that produces machines, called robots, that substitute for (or replicate) human actions. They can work more efficiently, consistently, repetitively, and accurately than humans can.” The JoT “describes the network of phys- ical objects — ‘things’ — that are embedded with sensors, software and other technologies for the purpose of connecting and exchang- ing data with other devices and systems over the Internet, These devices range from ordi- nary household objects to sophisticated18 | CHAPTER! An overview of management industri 28 To enhance your under industrial 008” : oe trip ahe Fourth Industrial Revo" sae lng Nc ae What is the mn? CN f yetps:/ /[Link]- plains, available at: HUDS./ : ep atch v=v9°Z083CUCS [Accessed er 2021]. : aed i sifcant force impacting onganisations is the globalisation of markets This has been driven by TT, which has rRotatonised both markets and the way Fe ashich business is done. For example, in Jrmerce and online shopping are othe and social media have demanded that organisations pay closer attention to what lo. The Internet has also consumers think and de ers are able to compare ensured that consume creat one organisation is offering with what tery competitive organisation is offerings thas intensifying competition. In addition, the Internet and other new technologies tnake globalisation a reality. Amazon, for ‘as shown how an organisation can lI to customers around the world. TT enables an organisation in activities example, hi very easily sel In addition, one country to outsource certain te low-cost providers in other countries. In the face of technological advancements, organisations need to take note of the notion of ubiquity. “In business, something that is ubiquitous is widely adopted and can be found nearly everywhere. Many types of technology and best practices are ubiquitous in business, meaning that all companies use them and that they therefore may not be a source of competitive advantage.” A third significant force impacting on onganisations is the labour market ~ in ter ms of skill levels, levels of education, and levels of tsemplyment This no truer than in South Ain, South Aiea’. unemployment rate hed a new record high of 34,9 per in Q5:2021 from 4h per cent in Q3:2021. ae cae 2021. ne nded definition, which ‘ouraged jobseekers, the C 122 pewenet ers, the rate rose per cent.” The high number shocking 46,6 ber of unemployed indi _ -vmptomatic of the imbalances inde symPiine demand for and the + area of concern in fF skills. Anothe : (a is that the Jabour force remaing Jowskilled; 44 per cont rth tertiary qualifications while organisations are increasingly looking for high-level skills, there is a surplus of low. skilled workers- The challe js how to overc sec Chapters 2 and 3 fo : impact of the 41R on skills and competencies that are required. ca “| fourth significant force impacting o ‘enew workplace, is values organisations and th oreofe value that employers need to addres + that employees are increasingly lookin for meaning an ‘According to David Ulrich, organisation enables its employees find meaning and purpose in their wor experience. This meaning gives employee personal hope for the future and creates valu for customers and investors. Organisatio need to take this trend really seriously t ensure a committed workforce. It is not only the values of employees th organisations need to take into account, b also the values of investors. The three broat areas of interest and concern for what termed ‘socially responsible investors’, environmental, social, and (corporat governance (ESG). Increasingly, socially responsible investors do not only consider th potential profitability and/or risk present einen ane ea oa to which organisatio! social, sua oe ea accepted environment and ice ‘ate governance principl i es. Environmental, — soci and (corporate) governa res becom eghamte) governance investing fecha popular and is ™ estment_ approachby Millennials, “Environmental, social and (corporate) governance investors tend to be more activist investors, Participating at shareholder meetings and actively working to influence company policies and practices" Organisations ignore this trend at th ‘The external environment obvious force impacting on organisations and to which organisations must proactively react, The acronym VUGA describes. the volatility, uncertainty, complexity, and anbiguity of conditions in the external environment.! It essentially reflects the unpredictable nature of the world, such as the Covid-19 pandemic that struck us so unexpectedly. It is essential that organisations currently take whatever steps are necessary to accommodate the VUCA conditions in the external environment, ‘The external environment and its impact on organisations is further discussed in Chapter 5, Having described some of the current forces impacting on organisations, we now discuss some of the required responses to these forces in the sections that follow. cir peril, is another [Link] Managerial responses In the face of the transition from the emergent workplace to the new workplace, managers might well need to rethink the way in which they carry out their managerial tasks of planning, organising, leading, and controlling The mindset has become obsolete, and managers need to embrace the VUCA environment and establish organisations that are fast, exible, and adaptable. ‘To cope with the VUCA environment, managers must develop cognitive fleribility, which allows them to analyse a situation ernative plans to meet the organisation's goals. Cognitive flexibility is the ability to adjust one’s thinking from old situations to new situations; it is the ability to ‘hange what one is thinking about, how one is thinking about it, and even what one thinks.® In the face of rapid developments in nd to help cope with the VUCA command-and-control and_propose technology MANAGEMENT SIXTH EDITION | 19 environment, on skills plan Skills plan managers also need to focus ning, reskilling, and upskilling Participate in the basis. Reskilling and upskiling are (0 the existing workforce, on a full-time, permanent basis. “Reskilling 38 training employees in new capabilities ‘0 equip them for a different position with the organisation. Upskilling is preparing employees for major changes in their current Position. Organisations often employ both reskilling and upskilling strategies to enable internal mobility and to prepare their existing workforces for the future.” Making use of virtual teams and remote working is another response that managers may have to take in the face of the changing world of work. This has been particularly true in South Africa where, during the Covid-19 lockdown periods, employees were required to stay at home. Virtual ams are work groups that (a) have some core members who interact primarily through clectronic means, and (b) are engaged in interdependent tasks, that is, they are truly teams and not just groups of independent workers.” “Remote wor, also known as work-from-home, is a type of flexible working arrangement that allows an employee to work from remote locations outside of corporate offices, For employees who can complete work offite, this arrangement can help ensure work/life balance, access to career opportunities, or reduced commuter costs. Benefits to the company include increased employee satisfaction and retention, increased productivity, and cost savings on physical Remote work requires policies ning equipment use, network security al ete expectations." As Sharon Florentine states, “Remote work, however, offers unique challenges that companies must address tomake the most of their remote work strategies, Maintaining a sense of connection with remote employees, ensuring technology helps rather hinders collaboration and innovation, and overcoming the potential for employees to feel relevant usually employed resoure20 | CHAPTER 1 An overview of management isolated and excluded, are areas where most companies struggle”. Departmentalisation is probably the most common form of organisational structure. See Chapter 8 for an explanation of departmentalisation. While this type of structure has the advantage of developing expertise and promoting specialisation in certain areas, it also has the disadvantage of managers wanting to jealously hoard knowledge and expertise within. their own departments. Managers tend to want to minimise staff mobility and avoid the pooling of resources between departments or business units. In a VUCA environment, however, many issues, challenges, and projects emerge that cannot effectively be handled by only one department. They frequently require the combined expertise from several different departments. For example, a purchase request could cut across the departments of procurement, finance, logistics, and IT. What is needed, therefore, is the establishment of integrat between the different their overall cohesion. This is where transversal management comes in. As Bertrand Moingeon pointed out," “Setting up transversal project teams can help to break down the barriers between different departments. These project groups should be composed of employees from different departments, focusing on topics of general interest, such as ‘how to strengthen innovation’, ‘how to boost responsiveness’ or ‘how to be more customer-centric”, nm mechanisms units to ensure Table 1.2 Total corporate responsibility Lea eso Be profitable. ar SST | Contribute to the welfare ofthe ‘organisation, do i community and wider | nothing to harm ee aa society, contribute to the ecological et the quality oftife of | environment, employees Source: ‘Adapted from Daft (2005; 172)" ene | responsibitity In running the In response to the various forces impactin, on organisations, as reflected in Table 1], the organic form of organising is becoming increasingly necessary. The key characteristics of the organic form of organising are | described in Chapter 8. 1.4.3 Behaving responsibly Not only do managers have to make decisions and manage change, but they also have to behave responsibly. Individually and collectively, managers are required to ensure that their organisations behave responsibly and are good corporate citizens. Total corporate responsibility is the sum of various types of responsibility, as outlined in Table 1.2. In Table 1.2, the combination of economic responsibility, social responsibility, and environmental responsibility is also referred to as the ‘triple bottom line’, This is in line with ESG management, outlined in Section [Link]. The implication of the triple bottom line is that profit maximisation at any cost is no longer an acceptable organisational objective. In the making of profit, organisations are required, at the same time, to exercise their social and environmental responsibilities. This may well mean that they do not maximise profits in the short term. While they are discharging their economic, social, and environmental: responsibilities, organisations are also requir to obey the law and behave ethically. Ethics and social responsibility are covered in mo detail in Chapter 4. en | responsibility Obey the taw. | Ethical sy Be ethical