Published on December 11, 2007
52156 Professional Certificate in Business Management Mini-MBA 12th intake (2007-09) : 52156 Professional Certificate in Business Management Mini-MBA 12th intake (2007-09) Heidi Hong Session 3 Principles of Management 管理學原理 Agenda: Agenda Principles of management The historical context Scientific management vs. the humanistic approach Three types of management gurus Introduction to change management Definition Change theorist Dealing with resistance Case : The KCRC Revolt The Historical Context of Management: The Historical Context of Management The Impact of Industrial Revolution (工業革命) 3 types of management gurus (三類管理學大師) Engineers & factory managers (工程師/工廠經理) Academics & social scientists (學者/社會科學家) Management consultants (管理顧問) Milestones Wharton Business School founded in 1881 Harvard Business School founded in 1908 The Principles of Scientific Management (1911) McKinsey established in 1926 Scientific Management Vs. The Humanistic Approach(科學管理 / 人文學派): Scientific Management Vs. The Humanistic Approach (科學管理 / 人文學派) Scientific Management Developed by engineers and factory managers F.W. Taylor, Henri Fayol Efficiency, workers as resources Structuring of work Quantitative & measurement Guidelines, checklists, tips Mainstream A strong US-bias Capitalistic Work pressure, inhuman, stifling creativity The Humanistic Approach Developed by academics and social scientists Elton Mayo, Charles Handy The human factor at work Motivation, leadership, etc. Qualitative & hypothesis testing Theoretical A secondary/supplementary role Strong European influence Humanistic More consideration for workers Implications: Implications Scientific Management The Economic Man: man are selfish and calculating Managers do the thinking while workers expected to follow instructions Theory X* Employee as being inherently lazy, requiring coercion and control Avoiding responsibility and only seeking security The Humanistic Approach Man is a social animal: at work as well as outside it Try to understand human behavior and identify basic drives Theory Y* Employees as liking work, do not have to be controlled and coerced Under proper conditions they will not only accept but also seek responsibility *By Douglas McGregor, a MIT social psychologist Case Study : Call Centre: Case Study : Call Centre 隨著英國多家藍籌公司把客戶服務外判，英國的大型電話中心正如雨後春筍般蓬勃發展。但英國一個聯合工會 (TUC) 最近卻揭發有多家電話中心 (Call Centre) 剝削客戶服務員的休息及如廁時間，令電話中心成為現代的勞役工場。 蘋果日報 22/02/2001 Frederick Taylor (1856-1915): Frederick Taylor (1856-1915) Background Born in Boston, Massachusetts Started out as apprentice in engineering An inventor of machine tool Ideas Turning factory into efficient machines The single best method of organizing work Division of labor & the assembly line Stop-watch based “scientific management” Published works The Principles of Scientific Management (1911) Frederick Taylor (1856-1915): Frederick Taylor (1856-1915) The workers in Taylor’s team started to produce more, but his attitude was causing serious problems and his friends started worrying. “I don’t think it’s safe for you to walk home at night alone,” said one of his colleagues. “People are saying that some of the workers are planning to shoot you.” Frederick Taylor laughed. “Let them try,” he said. Management Gurus David Evans Penguin Readers, first published 2000 Charles Handy (1932-): Charles Handy (1932-) Background Born 1932, son of an Irish pastor Business career started at Shell Founder of the London Business School Research areas Organization structure / behavior Corporate social responsibilities Published works Understanding Organization (1993) <組織寓言> The Age of Unreason (1989) <非理性的時代> Empty Raincoat (1994) <覺醒的年代> The Elephant & the Flea (2001) <大象與跳蚤> Charles Handy (1932-): Charles Handy (1932-) Quotes Management is a soft area. It is not precise. I have a great dislike for people who are looking for a hard law for management. The idea of maximizing medium-earning per share was very remote, very long-term, very intellectual and very unreal. Capitalism is the best system for making more out of less. The question is what kind of capitalism and for whose benefit is it working. Peter Drucker (1909-2005): Peter Drucker (1909-2005) Background Born in Vienna, Jewish PhD in international law Moved to US in 1937 Ideas Criticize the “assembly-line mentality” Knowledge workers (知識員工) Management by Objectives (MBO) (目標為本管理) Published works The Future of Industrial Man (1942) The Concept of Corporation (1946) <企業的概念> The Practice of Management (1954) Peter Drucker (1909-2005): Peter Drucker (1909-2005) Quotes Efficiency is doing things right; effectiveness is doing the right things. Management is doing things right; leadership is doing the right things. A manager is responsible for the application and performance of knowledge. Tom Peters (1942-): Tom Peters (1942-) Background Graduate of engineering Vietnam war veteran MBA & PhD at Stanford ex-McKinsey consultant Ideas Management by Walking Around Internal market of an organization Delegation / employees as entrepreneur Published works In Search of Excellence (1982) <追求卓越> Crazy Times Calls for Crazy Organizations (1994) <亂中求勝> Tom Peters (1942-): Tom Peters (1942-) Quotes Does your company have a clean-desk policy? If so, the company’s nuts and you’re nuts to stay there. Excellent firms don't believe in excellence - only in constant improvement and constant change. The magic formula that successful businesses have discovered is to treat customers like guests and employees like people. Agenda: Agenda Principles of management The historical context Scientific management vs. the humanistic approach Three types of management gurus Introduction to change management Definition Change theorists Dealing with resistance Case : The KCRC Revolt What is Strategic Change ?: What is Strategic Change ? Definition Strategic change is the implementation of new strategies that involve substantive changes to the normal routines of the organization. Strategic change involves a proactive search for new ways of working which everyone will be required to adopt. It involves the introduction of new patterns of action, belief and attitudes among members of the organization. Strategic change is concerned with people and their tasks. It is undertaken through the formal and informal structures of the organization. The Risks: The Risks The risks It involves a degree of risk and uncertainty. It causes major disruption and people may resist its consequences. It may spark objection (e.g. the KCRC revolt). Even where change is readily accepted, the changes will take time and require careful consideration. Strategic change carries important hidden costs. Even successful change has an implementation cost for the organization to set against the direct benefits resulted from the new strategies. The results will depend on (1) the existing organization culture; (2) the way in which change is introduced; and (3) the nature of the change proposed. Change Management / Managing Change: Change Management / Managing Change The classical model Change management works in the same way a medical doctor deal with a disease: Step 1: Diagnoses a system. Something is wrong. The doctor (i.e. the management and/or the consultant) examines the patient (i.e. the company), perform tests and collects data to identify the root of the problem. Step 2: Intervenes to change it. Doctor gives prescription (i.e. medicine) to the patient or operates on the patient, hoping that this will remove the root of the problem and restore the patient’s health. Step 3: Monitors the system. Identify gaps between expected and actual results, modify actions if necessary. Change Management / Managing Change (cont.): Change Management / Managing Change (cont.) Definition Objectives: to improve performance and profitability, increase customer satisfaction, enhance competitiveness and increase chances of survival. Change management implies proactive efforts to identify organizational weaknesses and fix them before they become serious enough to endanger the organization’s survival. Situations where change management is required: Moving from an old to a new strategy A major shift in technology or government policy Changing the organizational structure or culture Factory closure or shutting down a business division Re-engineering exercise (i.e. re-design of workflow) Merging two companies Kurt Lewin (1890-1947): Kurt Lewin (1890-1947) Background Born in Germany, Jewish PhD in psychology Emigrated to US in 1932 Research areas Social psychology Group dynamics (群體動態) Published works Frontiers in Group Dynamics (1946) Resolving Social Conflict (1948) Lewin’s Change Model: Lewin’s Change Model Stage 1: Unfreezing Old behavior seen as unsatisfactory and therefore stopped. Members of the organization must felt the need for change (instead of being imposed). Stage 2: Moving to a new level A period of searching for new solutions. It involves exploring alternatives, new values, changing organization structures and so on. Stage 3: Refreezing attitudes at the new level After a satisfactory situation has been found, new positive reinforcement were installed to consolidate the new way or the new strategy. Lewin’s Change Model (cont.): Lewin’s Change Model (cont.) Step1: Unfreezing - Increase dissatisfaction - Increase vision (願景) Step 2: Change Step 3: Refreezing - New systems - New controls - New rewards and sanctions - New measures Case Study : The Modernization of China: Case Study : The Modernization of China Rosabeth Moss Kanter (1943-): Rosabeth Moss Kanter (1943-) Background PhD in sociology in 1967 Ex-editor of the Harvard Business Review Research areas Change management Leadership Published works The Change Masters (1983) <變革大師> When Giants Learn to Dance (1989) The Contribution of Rosabeth Moss Kanter (cont.): The Contribution of Rosabeth Moss Kanter (cont.) Three categories of people involved in the change Change strategists. Those responsible for leading strategic change in the organization. Change implementers. Those who have direct responsibility for change management. Change recipients. Those who receive the change program and often perceive themselves as powerless in the face of the decision made higher up the organization. Dealing with Resistance to Change: Dealing with Resistance to Change Why people resist change Anxiety Pessimism Irritation Lack of interest Opposition to strategy proposals Different personal ambition Overcoming resistance Involving those who resist in the change process itself Build support networks Communication and discussion Offering assistance Extra incentives Encouraging and supporting those involved Use of symbols to signal the new era Dealing with Resistance to Change (cont.): Dealing with Resistance to Change (cont.) Resistance will be less if Change is not imposed from outside but developed by those involved in the change procedures. Change is seen to reduce, rather than increase, the task of those involved and to be consistent with the value that they hold. Change offers an interesting challenge and a change from existing routine. The outcome is genuinely valued by senior management, who have wholeheartedly supported the process as it developed. Case Study : The KCRC Revolt: Case Study : The KCRC Revolt KCRC - Railway off tracks By Christine Loh http://www.civic-express.com/christine/?p=47 Case Study : The KCRC Revolt : Case Study : The KCRC Revolt Big revolt - Top executive (Samuel Lai Man Hay) submitted letter to the Board on 9/3/2006 complaining about Tien’s leadership style and said he couldn’t work with Tien anymore. The next day (10/3/2006), top KCRC staff wrote to the Board pledging support for Lai, and in another letter 3,000 staff members wrote to support Lai. Tien’s resignation – Michael Tien went to see chief executive Donald Tsang to resign on 11/3/2006 leaving the date open on when he would step down. Tien gives press conference about his resignation on 12/3/2006. Tsang’s intervention - On 13/3/2006, Tsang summoned Tien and Lai separately and demanded the KCRC Board to resolve “the problem” in 3 days. Tsang warned there were personnel and disciplinary issues involved too in view of the staff revolt. Case Study : The KCRC Revolt: Case Study : The KCRC Revolt Staff showdown - Senior KCRC staff, led by Michael Lai, held press conference on 14/3/2006 to support Lai as Board holds emergency meeting. Everything’s OK - On 15/3/2006, Sarah Liao announced both Michael Tien and Lai Man Hay would stay; Tien would be a less hands-on chairman. Liao smiles for the cameras. Tsang said crisis was over. Life goes on – Samuel Lai resigned on 16/03/2006 as Michael Lai was fired for breach of duty and others received warning letters. Lai said he did not expect things to turn out this way. The government brought back former head of Works and thereafter management head of KCRC James Blake to take charge and announced the merger with MTRC should be expedited. Comment : The KCRC Revolt: Comment : The KCRC Revolt 田先生要改革的不是一些芝麻綠豆的小事，而是公司文化，實是一項浩大工程。 何謂文化？文化有兩大特色。第一是深，文化是深層的，是內化已久的，是融匯到一個地步是不可挑戰的。例如，你見到日本人九十度躬身，你認為是多餘的，但他們卻認為如不這樣做，是不可思議的事。第二是廣，如果是一個人的思想或行為，不會成為文化。文化是大部份人共同接受的，共同維繫的。 文化既深且廣，要改變它，實在是難之又難的事。歷史上能成功由一人開始改變文化的，真是少之又少。一般來說，要改變文化，需要信念、時間和溝通。田先生想為九鐵引入透明和問責文化，這是他的個人信念，如何將之轉化成眾人之信念？難就是難在這裡。主席要將個人信念帶到公司，除了以身作則外，他要不斷及頻密地與各階層溝通，以介紹自己的理念，並根據反嚮來作出調整。 Source: http://mrjimtong.mysinablog.com/ Crisis Management: Crisis Management Definition Actions taken by a company to maintain its credibility and good reputation after a situation has occurred that may affect the company in a negative manner. A crisis (1) disrupts the way an organization conducts business and (2) attracts significant media coverage and/or public scrutiny. Typically, these crises have the capacity to inflict negative financial, legal, political, or governmental repercussions on the company, especially if they are not dealt with in a prompt and effective manner. Situations where crisis management is required: (1) natural disaster (2) terrorist attack (3) product defect/recall (3) business fraud (4) industrial accidents or labor disputes.