The function of managers
This classical approach was originally devised by a French managing director of a coal-mining firm called Fayol (Robbins et al., 2001). He separated the practice of management from the other business functions and boiled it down to the four universal set of functions:
Planning
To set a goal usually means that plans has to be worked out to find various ways of attaining the set goal. The plans has to take into account both the environment in which it operates and the internal qualities of the organization, and the two factors have to correspond with each other; no company operates in a vacuum, nor does its surroundings remain unaffected by the actions of an organization (Harvard Business Review, 1964, p. 62).
“The only thing certain about it [the future] is that it will be different from, rather than a continuation of, today” (Ibid. p.62) P. F. Drucker continues, however, by saying “it can be shaped by purposeful action”. He holds that while the great philosophical idea might have had more profound effects on our society, a very small percentage of philosophical ideas make it as far as to change the direction of society. “And while each business idea is much more limited, larger proportions of them are effective” (Ibid.).
Take the Sony Walkman for instance, when the idea first was presented within Sony, the market department tried to stop it. They did not think people would walk around with earphones on their heads, the chief executive pushed it through nonetheless. It is alleged that the cost of giving free samples to the trendiest people in Tokyo to roller-skate round the city wearing the Walkman, was $5,000, and the rest, as they say, is history (Foden, 1991).
Although good business ideas effectively have changed the face of society, the “number of events -10% to 20% at most – account for 90% of all results whereas the great majority of events account for 10% or less than the events” (Harvard Business Review, 1963, p.54). This means that most managers have to be reactive rather than proactive in terms of their environment and are forced to change the internal plans to accommodate the changing and unpredictable market. The manager becomes ”the ‘nerve center’ of his unit and only he has the full and current information to make the set of decisions that determines the units strategy” (Minkes, 1987).
Mintzberg holds that planning is an ongoing process in the mind of the manager (Harvard Business Review, 1990), and it may have to be: Drucker observes in Harvard Business Review (1963) that “the bulk of the time, work, attention and money first goes to “problems” rather than opportunities”.
The CEO of Airfreight Express (AFX), in London, Philip Bowels, had to wrestle with problems concerning the repairs and maintenance of his planes when he found that the work performed on his planes was not satisfactory. The sloppy work posed a very real threat not only to his company, but to human life as planes with faults have a tendency to crash (Time Magazine p.56, August 13, 2001). It is not very likely that his plans for the company included sloppy work by the maintenance company. His plans had to be changed to deal with the problem, post haste.
Organizing
The way a problem is handled is usually decided by the nature of the problem, but the way a company identifies and responds to trouble is often determined by the its structure. In a group of people plans should be understood fully by everyone to be fulfilled to the planners contentment (Bartol et al. 1998, p. 367). Similarly problems arising in the course of putting the plans to life, will be identified earlier when there are more people with enough information to identify them (Ibid.).
In Brazil, a company called Semco SA has taken organizing, or rather the lack of organizing, to an extreme by completely removing its structure. The traditional hierarchy is replaced with a democratic form of organizing the workers. Positions are elected upon for periods of 6 months and anyone may lose their job at any time given a consensus in the work force. Projects may be proposed by anyone and are approved by the workers by the same process as managers are hired and fired (Killian, Perez & Shiel, 1998).
The increased amount of autonomy given to each worker has given rise to a great understanding of how the organization works and therefore produced an organization of experts capable of seeing the meaning and reasons behind managerial decisions. This understanding both enables the workers to give their work meaning and to complete work in such a way that the it is aligned with the overall plans, and subsequently goals, of the company (Ibid.).
The way a business is organized can actually have as weighty effect on its environment as the groundbreaking business idea. “The rise of discount stores in the USA in the late 1940’s with the application of an idea developed by Sears, Roebuck and Co.” (Harvard Business Review, p.62, 1964) the idea was to use samples of each appliance on the store floor for demonstration reasons only and delivering the items purchased by customers directly from the warehouse. This restructuring realized savings in costs by 20% and so they were able to cut their retail price by the same percentage (Ibid.)
Leading
Most organizations do not find their optimal form as soon as they are created, they evolve and change. Semco SA spent almost two decades to reach the form they have today, and they are still changing. It was the vision of Semco’s CEO Ricardo Semler, that in the 1980’s laid the foundation for what the company’s structure is today (Killian, Perez & Shiel, 1998). Semco was at the time a rigid hierarchical organization, and in the initial process Semler met a lot of resistance due to what Cronin states, in an article in Your future in Business and Law, as fear of change (2001, p.8). The workers were skeptical due to the increased responsibility and the managers were afraid that they were giving away to much of their responsibility. Because “Management of change calls for leadership” (Ibid.) and that “It is a natural reaction for staff faced with uncertainties and insecurities about the future to resist change” (Ibid.) Ricardo Semler would have had to be a strong leader to enforce the radical changes he did.
Strong leaders have throughout history made deep impacts on society, names like Martin Luther King, Mahatma Gandhi and Joan of Arc to mention a few have effectively led the way to change people’s general opinion of right and wrong (Robbins et al. 2001, p. 593). Equally managers have the opportunity to affect the success of a company by motivating its employees. Richard Branson, (as cited in Robbins et al., 2001, p.611), holds that “almost 100 per cent of running a business is motivating your staff [..] if you can motivate them, then you can achieve anything”.
Controlling
To “achieve anything” the managers have to keep their eye on the ball. They need to make sure that the plans and actual work are helping the company reach its goals (Robbins et al., 2001 p.685). In an observation by Peter F. Drucker, of a company of engineers, he found that the majority of the engineers worked on smaller projects commissioned by small companies that created only a small part of the revenue, the larger contracts were largely ignored and little effort was directed towards them. When Drucker interviewed the engineers they told him that the smaller projects largely were more challenging and that the bigger clients had their own engineers (Harvard Business Review,1964).
The lack of control in the above mentioned case meant that the managers did not have sufficient information to make the right decisions. The goal of profit maximization did not fit the way the employees worked. The inconsistency was according to Drucker not known by the management (Ibid.), making the way they measured and compared performance faulty.
Managers can make or brake their company just by choosing the right criteria when measuring accomplishment. Taking the resent bankruptcy of the US’ power company Enron into account. The internal pressure to make profits became so big that it became the only criteria for success in the minds of its employees. The employees and managers subsequently started to hide loss and boost revenue with creative book-keeping. The discrepancies became so large that when the actual results surfaced they were enough to make one of the biggest companies in the USA go bankrupt, literally, overnight.
Conclusion
Man needs to assume certain roles to function together. Realization, within the group, that some people are more important to them than others, gives rise to positions of power, or rather, positions of power to manage. As far back as our researchers can research, man has worked in groups, therefor the position of managers must have been present.
The fact that managers have been around for a long time is, however, not enough to imply that it is the most important job of our society. What managers actually have done in all that time they have been around, is getting closer to establishing their importance. To do so the paper has taken Fayol’s universal principals and showed that even the individual components of management, has had an impact on peoples way of life and thought.
Together the notion of near-perpetual existence and that every aspect of management holds such a potent possibility of change, it seems evident that Henry Mintzberg was right when he wrote:
“No job is more vital to our society than that of a manager”
References:
Bartol, Martin, Tein & Matthews (1998) “Management – A pacific rim focus”, The MacGraw-Hill Companies, Inc.
Cronin, B. (2001), “Managers: you can’t live without them” Your future in business and law: New Hobsons Press Pty Ltd, p. 8
Donnelly, S. B. (2001, August 13), “Just plane dangerous?” Time Magazine, p.56-57
Drucker, P. F., (1963), Managing for Business – analysis, allocation, decision”, Harvard Business Review. Vol. 41. no 3
Drucker, P. F., (1964), “The big Power of little ideas”, Harvard Business Review. Vol. 42. no 3.
E-law, (2002), “E-law for Enron”. Retrieved 09.04.02. Web-site: http://www.elaw4enron.com/default.asp
Foden, J., (1991), “Paid to decide”, Business Books, Ltd.
Follett (1995), “Prophet of Management”, Harvard Business School Press
Ford, H. (1991), “Ford on Management – Harnessing The American Spirit”, Basil Blackwell Ltd.
Gibson, Ivancevich, Donnelly, Irwin, (1998) “Organisations close up – A book of readings”, BPI
Godelier, M. (1977), “Perspectives in Marxist Anthropology”, Cambridge University Press
Killian, Perez & Siehl (1998), “Ricardo Semler and Aemco S.A.”, Thunderbird, The American Graduate School of International Management.
Minkes, A. L. (1987), ”The entrepreneurial manager – Decisions, goals and business ideas”, Penguin Books
Mintzberg, H. (1990), “The manager’s Job Folklore and Fact”, Harvard Business Review.
