Lecture Notes on Management Concepts and Theories môn Principle of Management | Trường Đại học Quốc tế, Đại học Quốc gia Thành phố Hồ Chí Minh

Lecture 1: Takeaway 1:
Globalization: indicates worldwide interdependence of resource flows, product
markets, and business competition that characterizes our economy.
-Job migration, the shifting of jobs from one country to another.
Ethics: set of moral standards for what behavior is right and what is wrong. It
depends on the individual being responsible for conducting the right ethical business
at all levels. Leaders are supposed to conduct things right so that their followers can follow.
Diversity: a group of workers or a workforce that have differences in gender, age,
race, ethnicity, religion, sexual orientation, and able bodiedness. Since society is
diverse, the way we deal with diversity in the workplace is an issue. Some major problems are:
-Prejudice: the holding of negative, irrational opinions and attitudes regarding
members of diverse populations.
-Discrimination: minority members are unfairly treated and denied the full
benefits of organizational membership.
-Glass ceiling effect: an invisible barrier that prevents women and minorities
from rising above a certain level regarding organizational responsibility. Careers:
-Shamrock organization is a core group of permanent, full-time employees,
freelancers and part-time staff.
-Free- agent economy: you can change jobs often and work on flexible
contracts with a mix of employers over time.
-Self-management: realistically assess yourself, make constructive changes,
and manage your personal development. Takeaway 2:
An organization is a collection of people working together to achieve a common
purpose. Its members perform tasks not only for their accomplishment but also for
the final goal of the organization.
Organization as an open system that interacts with their environments: Obtaining
resource inputs—people, information, resources, and capital—and transforming
them into outputs in the form of finished goods and services for customers.
-Productivity: measures the quantity and quality of outputs relative to the cost of inputs. -Performance
effectiveness is an output measure of task or goal accomplishment.
-Performance efficiency is an input measure of the resource costs against goal accomplishment. Takeaway 3: Manager: supports,
supervises, and helps motivate the work efforts and
performance accomplishments of staff, followers, team members.
If classifying by levels, we have 4 levels of managers.
-Board of directors whose members are elected by stockholders to represent
their ownership interests. The basic responsibilities of board members is to
make sure that the organization is always being run right
-Top managers are an executive team that reports to the board and is
responsible for the performance of an organization as a whole.
-Middle managers are in charge of relatively large departments consisting of several smaller work units.
-Team leader is in charge of a small work group composed of non-managerial staff.
If classifying by levels, we have 4 types of managers.
-Line managers are responsible for work that makes a direct contribution to the organization’s outputs.
-Staff managers use technical expertise to advise and support line workers.
-Functional managers have responsibility for a single area of activity such as
finance, marketing, production, human resources, accounting, or sales.
-General managers are responsible for activities covering many functional areas.
-Administrators are used in non-profit org. Managerial Performance
-Accountability is the requirement of one person to answer to a higher
authority for performance results in his or her area of work responsibility.
-Quality of work life (QWL) indicating the quality of staff experience with their job.
Changing Nature of Managerial Work
The concept of the upside-down pyramid fits with the changing mindset of managerial today.
Takeaway 4: these are the 4 basic functions of a manager
-Planning:is the process of setting performance objectives and determining
what actions should be taken to accomplish them. Through planning, a
manager identifies desired results and ways to achieve them.
-Organizing:Once plans are set, they must be implemented. The process of
assigning tasks, allocating resources, and coordinating the activities to accomplish plans.
-Leading:is the process of arousing people’s enthusiasm and motivating their
efforts to work hard to accomplish objectives. Managers build commitments,
encourage activities and influence others to do their work.
-Controlling:is the process of measuring performance, comparing results to
objectives, and taking corrective action as needed. Managers control by
staying in contact with people as they work, gathering and interpreting
measurements and making constructive changes. Managerial Roles
Mintzberg identified a set of 10 roles commonly filled by managers:
-Interpersonal roles involve interactions with people inside and outside of org. -
A manager’s informational roles involve the giving, receiving, and analyzing of information. -
The decisional roles involve using information to make decisions to solve
problems or address opportunities.
There are Essential Skills for a manager
-Technical Skills:the ability to use a special proficiency or expertise to
perform particular tasks. Technical skills are very important at job entry and early career levels. -
Human and Interpersonal Skills: the ability to work well in cooperation with others.
o Emotional intelligence: how well you recognize, understand, and
manage feelings while interacting and dealing with others. -
Conceptual and Analytical Skills: the capacity to break problems into parts,
see the relations between the parts, and recognize the implications of each
problem for others. Conceptual skills are important in high levels of management. Lecture 2:
1. Classical management approaches a. Scientific management b. Administrative principles c. Bureaucratic organization
2. Behavioral Management Approaches
a. Maslow’s theory of human needs
b. McGregor’s Theory X and Theory Y
CLASSICAL MANAGEMENT APPROACHES: assumes that people are rational in
taking opportunities to achieve personal and monetary gain
I.Scientific management: emphasizes careful selection and training of workers and supervisory support.
It comes with 4 guiding principles: -
A “science” that includes rules of motion, standardized work implements, and proper working conditions. -
Careful selection of workers with the right abilities. -
Carefully training workers to do the job and proper incentives to cooperate with job “science.” -
Supporting workers by planning and by smoothing the jobs.
II. Administrative Principles
Fayol identifies the five “rules” of management:
1. Foresight—to complete a plan for the future
2. Organization—to provide and allocate resources to implement the plan
3. Command—to lead and evaluate workers to get the best work
4. Coordination—to fit diverse efforts and to ensure information is shared and problems are solved
5. Control—to make sure things happen according to plan and to take necessary corrective action
The foundation for the 4 functions of management
Principles to guide managers including:
- Scalar chain principle—a clear and unbroken line of communication from the
top to the bottom in the organization. So that information can be shared and
transparency of a business is secured
- Unity of command principle—each person should receive orders from only
one boss in order to avoid confusion and power overlapping
- Unity of direction principle—one person should be in charge of all activities
that have the same performance objective
III.Bureaucratic Organization: a rational and efficient form of organization
founded on logic, order, and legitimate authority. His ideas developed after
noticing organizations performed poorly since people holding positions of
authority not because of their capabilities, but because of their “privileged” social
status. So according to Weber’s approach, people with ability will take authority
and be in charge. A whole organization will be run based on a hierarchy structure
where managers give out orders to their lower level and then it is passed on to the subordinates.
The characteristics of bureaucratic organization are:
-Clear division of labor: Jobs are well defined, and workers become highly skilled at performing them
-Clear hierarchy of authority: Authority and responsibility are well defined for
each position, and employees know who they report to
-Formal rules and procedures: established written guidelines and written files are kept for historical record
-Impersonality: Rules and procedures are impartially and uniformly applied,
with no one receiving special treatment
-Careers based on merit: Workers are selected and promoted on ability, competency, and performance
BEHAVIORAL MANAGEMENT APPROACHES: assume that people are social and
self-actualizing, responding to group pressures, and searching for personal fulfillment.
-Follett’s notion of organizations as communities -The Hawthorne studies
-Maslow’s theory of human needs -Douglas McGregor -Chris Argyris
I. Maslow’s Theory of Human Needs
Maslow’s theory is based on two underlying principles:
-Deficit principle—a satisfied need is not a motivator of behavior. It means
people act to satisfy “desired” needs, a deficit
-Progression principle—a need at any level is activated only when the
next-lower-level need is satisfied II.
McGregor’s Theory X and Theory Y
managers holding Theory X assumes that those who work for them generally dislike
work, lack ambition, are irresponsible, are resistant to change, and prefer to be led rather than to lead
Theory Y assumes that manager believes people are willing to work, capable of
self-control, willing to accept responsibility, imaginative and creative, and capable of self-direction. Lecture 5: I. GLOBAL ECONOMY
1.Global economy in which resource supplies, product markets, and business
competition are worldwide rather than local or national in scope.
2.Globalization is the growing interdependence among elements of the global economy.
Both are doing international businesses for these common reasons:
-Profits—Gain profits through expanded operations.
-Customers—Enter new markets to gain new customers.
-Suppliers—Get access to materials, products, and services.
-Labor—Get access to lower-cost talented workers.
-Capital—Tap a larger pool of financial resources.
-Risk—Spread assets among multiple countries.
3. There would be 2 approaches:
a.Market-entry strategies that involve the sale of goods or services to
foreign markets without expensive investments
b.Direct investment strategies require major capital commitments, create
rights of ownership and control over operations in the foreign country
Market entry strategies are the first steps in globalizing an organization:
-Global sourcing—the process of purchasing materials, manufacturing
components, or locating business services around the world.
-Exporting—selling locally made products in foreign markets.
-Importing—buying foreign-made products and selling them in domestic markets.
-Licensing agreement whereby foreign firms pay a fee for rights to make or
sell another company’s products in a specified region.
-Franchising is a form of licensing in which the foreign firm buys the rights to
use another’s name and operating methods in its home country.
Direct investment strategies:
-Foreign direct investment, or FDI, involves setting up and buying all or part
of a business in another country. And the ability to attract foreign business
investors has been a key to succeeding in the global economy -> insourcing
is job creation through DI.
-When foreign firms invest in a new country, a common way to start is with a
joint venture. This is a co-ownership arrangement in which the foreign and
local partners agree to pool resources, share risks, and jointly operate the
new business. It can be a part ownership of the local organization or both can
join together to have a new operation.
-International joint ventures are types of global strategic alliances in which
foreign and domestic firms work together for mutual benefit. Both gain their own benefits.
-Aforeign subsidiary is a local operation completely owned and controlled by
a foreign firm. Or a company operating overseas that is part of a larger
corporation with headquarters in another country, often known as a parent company or a holding company. o
The difference between a foreign subsidiary and a joint venture is that
the subsidiary is operated as a completely foreign-owned enterprise
while a joint-venture company is owned by both foreign investors and
at least one domestic investor. II.
CULTURE AND GLOBAL DIVERSITY
-Culture is the shared set of beliefs, values, and patterns of behavior common to a group of people.
-Culture shock is the confusion and discomfort a person experiences when in an unfamiliar culture.
-Ethnocentrism, a tendency to view one’s culture as superior to that of others.
-Cultural intelligence, the ability to adapt and adjust to new cultures.
1. The silent language of culture:
a.Context:cultures differ in their use of language in communication.
Most communication in low-context cultures takes place via the written or spoken
word: say or write what they mean and mean what they say.
In high-context cultures what is said or written may convey only part of the real
message. The rest must be interpreted from the situation, body language, physical
setting, and even past relationships. b. Time
People in monochronic cultures often do one thing at a time. It is common in the
United States, for example, to schedule meetings with specific people and focus on a specific agenda
Members of polychronic cultures are more flexible toward time. They often try to
work on many different things at once, perhaps not in any particular order, and give
in to distractions and interruptions c. Space
Proxemics, the study of how people use space to communicate.
2. Values and National Cultures 4 cultural dimensions:
power distance, uncertainty avoidance,
individualism–collectivism, and masculinity
-Power distance is the degree to which a society accepts unequal distribution of power.
-Individualism–collectivism is the degree to which a society emphasizes
individuals and their self-interests.
-Uncertainty avoidance is the degree to which a society tolerates risk and uncertainty.
-Masculinity–femininity is the degree to which a society values assertiveness and materialism.
-Time orientation is the degree to which a society emphasizes short-term or long-term goals.
-Intercultural competencies are skills and personal characteristics that help
us be successful in cross-cultural situations. Lecture 8: I. Why do managers plan?
1. It creates a solid foundation for the other management functions. You
know where to put your staff and how to distribute your resources (organizing), you
know what activities need to be done and how to lead (leading) and you will be able
to identify whether there is a need for corrective actions (controlling)
Planning: The process of setting objectives and determining how to accomplish them
Objectives and goals: Identify the specific results or desired outcomes that one intends to achieve
Plan: A statement of action steps to be taken in order to accomplish the objectives 2. Steps of planning process: 1.
Define your objectives—Identify desired goals or results in very specific ways. 2.
Determine where you stand along with objectives—Evaluate your
current accomplishments relation with the desired results. 3.
Develop premises regarding future conditions—Forecast future events. 4.
Analyze alternatives and make a plan—Then list and evaluate possible activities. 5.
Implement the plan and evaluate results—Take the plan into real
practice, execute it and measure your progress toward your goals.
The main focus in the planning phase is objectives and goals. 3. Benefits of Planning a.
Planning Improves Focus and Flexibility
An organization with focus knows what it does best, its strengths and it
knows the needs of customers, and how to serve those needs well. A person
with focus knows where he or she wants to go in life and what his or her competencies are
An organization with flexibility is willing and able to change and adapt to
shifting circumstances without losing focus, and it operates with an orientation
toward the future rather than the past. An individual with flexibility adjusts career
plans to fit new competencies, developing opportunities as well as shifting market demands b.
Planning Improves Action Orientation
During planning phase, you are able to set your objectives and it helps
focusing our attention on priorities and avoiding the complacency trap— being
being carried along by the flow of events and lose track of the actual target c.
Planning Improves Coordination and Control
The individuals, groups, and subsystems’ efforts must be combined into
meaningful contributions to the organization.
Good plans will help coordinate the activities of individuals, groups, and
subsystems to achieve the common goals. d. Planning and Time Management
Planning helps in terms of time management. Some tips for time management: –
DO say “no” to requests that distract from what you should be doing –
DO screen telephone calls, emails, and meeting requests –
DO prioritize your important and urgent work –
DO follow priorities; do most important and urgent work first –
DON’T let drop-in visitors instant messaging use up your time –
DON’T get bogged down in details that can be addressed later –
DON’T become calendar bound by letting others control your schedule
II. Types of Plans Used by Managers
By classifying plan in terms of period that plan is applied:
-Long-term plans looked three or more years into the future
-Short-term plans covered one year or less. 
Long-term plan sets the context for staff to work on useful short-term plan
By classifying based on the scope that plan covers:
-Vision is what you want to be in the future, where you wanna to stand.
-Strategic plans focused on the performance of the organization as a
whole. They set broad action directions and allocate resources for maximum performance impact.
-Tactical plans are developed and used to implement strategic plans.
They specify how the organization’s resources can be used to put strategies into action.
-Functional plans indicate how different components of the enterprise
will contribute to the overall strategy. It is a kind of tactical plan, but it focuses on
each department or sub-system of an organization.
-Operational plans are plans that identify behavior and describe what
needs to be done in the short term to support strategic and tactical plans. They
include both standing plans like policies and procedures that are used over and over
again, and single-use plans like budgets that apply to one specific task or time period. III.
Planning Tools and Techniques 1. Forecasting
Forecasting is the process of predicting what will happen in the future.
It relies on human judgement; hence, it is not recommended to base all your planning on forecasting. 2. Contingency Planning
Contingency planning is identifying alternative courses of action that can be
implemented if circumstances change. 3. Scenario Planning
Scenario planning is a long-term version of contingency planning.
It involves identifying several possible future scenarios and making plans to
deal with each scenario. In this sense, scenario planning forces us to think far ahead
and be open to lots of possibilities that can impact our plans, impact our operation or even the objectives. 4. Benchmarking
Benchmarking is the use of external and internal comparisons to better
evaluate current performance and identify possible ways to improve for the future
The purpose of benchmarking is to find out best practices then plan how to
incorporate these ideas into your own operations. 5. Staff Planning
The use of staff planners to help coordinate and energize all dept and other
employees to participate in planning. They can help to improve focus and expertise
to a wide variety of planning tasks. The risk is communication. People / staff need to
work closely in planning and commit to implementing the plan. Lecture 9: I. Why and how to control?
Controlling purpose is to measure performance in order to take corrective action.
The target of it is to assure the right things happen, with the right process at the right time II. Types of control
● Feedforward controls input: solve problem before it occurs: make sure the objective
is cleared, direction is set and resource is available
● Concurrent controls throughput: solve problem during it occurs: keep things go as planned
● Feedback controls output: solve problem after it occurs: perform improvement or learning
● Internal – self-control: self-discipline influences the behavior.
● External: external factors influence behavior -
Bureaucratic control: influences behavior by authority, policies, budget, regulations -
Clan control: influence behavior by the organizational culture, norms -
Market control: market influences organization behavior with product adjustment, process improvement III. Steps of controlling process: IV. Tools and techniques:
1. Gantt chart: graphic display of scheduled tasks required to complete a project
2. CPM/PERT chart: combination of the critical path method and program evaluation and review technique.
3. Inventory control: ensures that inventory is only big enough to meet immediate needs
i. Economic order quantity: places new orders when inventory levels fall to predetermined points
ii. Just-in-time scheduling: routes materials to workstations just in time for use
4. Break-Even analysis: performs what-if calculations under different revenue and cost conditions
i. Break-Even point: occurs where revenues just equal costs
5. Financial control: basic Financial Ratios o
Liquidity measures ability to meet short-term obligations: the higher the better ▪
Current Ratio = Current Assets/Current Liabilities ▪
Quick Ratio = Current Assets - Inventories/Current Liabilities o
Leverage measures use of debt: the lower the better ▪
Debt Ratio = Total Debts/Total Assets o
Asset Management measures asset and inventory efficiency: the higher the better ▪
Asset Turnover = Sales/Total Assets ▪
Inventory Turnover = Sales/Average Inventory o
Profitability measures ability to earn revenues greater than costs: the higher the better ▪ Net Margin = Net Income/Sales ▪
Return on Assets (ROA) = Net Income/Total Assets ▪
Return on Equity (ROE) = Net Income/Owner’s Equity
6. Balanced Scorecard: tallies organizational performance in financial, customer
service, internal process, and innovation o
Factors used to develop scorecard goals and measures: – Financial performance – Customer Satisfaction – Internal process improvement – Innovation and learning