Comparative Management Studies

Alan S. Gutterman

• Publisher: Business Expert Press
• Year: 2019
• ISBN:
  9781949991376
• Topic: Business
• Subtopic: Gestione
• Index: Business

All managers, regardless of where they work, must understand certain basic concepts such as the functions, roles, and skills associated with the managerial position and the styles available to managers for use in any given situation. However, context matters, and it is essential that managers understand the role that culture plays in being effective in their positions.

This book begins with a brief description of the history and evolution of "management studies", continues with an overview of the scope and practice of comparative management studies, and provides examples of the research that has been done on cross-cultural transfer of management theories. In addition, the book includes materials on the search for, and analysis of, dimensions of management styles that can be used as a basis for creating models that can be used for comparison purposes.

CHAPTER 1

Introduction to Management Studies

Introduction

This chapter provides an introduction to the central and important topic of management studies. The study of management covers a wide array of topics such as organizational theory and behavior, strategic and human resources management, managerial functions and roles, and identification and training of management skills. The tools used by practitioners of management studies to collect and analyze information and disseminate findings within the research community and to practicing managers are similarly diverse. This chapter includes a brief description of the history and evolution of management studies, a daunting topic given that it is generally recognized that economic and military activities have been focusing on issues of planning, directing, and control for thousands of years and that one can find useful illustrations of management in the building of the pyramids in ancient Egypt, the operation of the complex trade routes during the Middle Ages, and the commercial activities of the wealthy family businesses throughout the Renaissance. Over the last few decades, hundreds of journals and periodicals devoted to management studies have been launched and management has become a mainstream topic as books by authors such as Peter Drucker and Tom Peters have climbed to the top of “best-seller” lists. The field of management education, taught as a distinct discipline in both universities and through commercial private sector initiatives, has been a fertile ground for textbooks.¹

Definitions of Management

Given that “management” has been so widely studied and practiced for literally thousands of years, it is not surprising to find a wide array of possible definitions of the term. At the most basic level, the verb “manage” derives from the Italian word “maneggiare,” which is means “to handle.” A number of definitions of “management” have focused on the specific tasks and activities that all managers, regardless of whether they are overseeing a business, a family or a social group, engage in, such as planning, organizing, directing, coordinating and controlling. One of the simplest, and often quoted, definitions of management was offered by Mary Parker ­Follett, who described it as “the art of getting things done through ­people.”² The notion of “management through people” can also be found in the work of Weihrich and Koontz, who began with a basic definition of management as “the process of designing and maintaining an environment in which individuals, working together in groups, accomplish ­efficiently selected aims.”³ They then went on to expand this basic definition with the following observations:

• Managers carry out certain universally recognized basic ­managerial functions, including planning, organizing, ­staffing, leading and controlling.
• Management applies to any kind of organization.
• Management principles apply to managers at all levels of the organization, not just executives and senior managers ­positioned at the top of the organizational hierarchy.
• The goal of all managers is the same: to create a “surplus.”
• Managers are concerned with improving productivity, which implies both effectiveness and efficiency.⁴

Elements mentioned by Weihrich and Koontz the aforementioned explanations and observations have figured prominently in other definitions of management. For example, Jones et al. referred to management as “the process of using an organization’s resources to achieve specific goals through the functions of planning, organizing, leading and controlling.”⁵ The importance of managerial functions was also emphasized by Weihrich in his explanation of the “systems approach to organizational management” based on an “input–output” model in which “inputs” from an organization’s external environment (i.e., people, capital, and technology) were transformed into “outputs” demanded by various organizational stakeholders in a transformation process based on and guided by managerial functions such as planning, organizing, staffing, leading, and controlling.⁶

Others infer that merely carrying out the functions typically associated with management is not sufficient and it is necessary to add certain other concepts such as “value creation,” “wealth creation,” “efficiency,” and “productivity” to the equation. In fact, well-known management guru Peter Drucker proposed a definition of management that focused on “the process of administering and coordinating resources effectively, efficiently, and in an effort to achieve the goals of the organization.”⁷ In other words, the efforts of managers need to be “effective,” as demonstrated by the degree to which the goals of the organization are achieved, and they need to be “efficient,” which is measured by productivity (i.e., generating a given output by using the fewest inputs, including capital and human resources).⁸ In another one of his publications Drucker observed that with respect to economic and business activities “… management has failed if it fails to produce economic results. It has failed if it does not supply goods and services desired by the consumer at a price the consumer is willing to pay. It has failed if it does not improve or at least maintain the wealth producing capacity of the economic resources entrusted to it.”⁹ Therefore, in the business context, effective managers carry out a wide array of tasks and activities as they seek to combine capital, people, machines, equipment, and technology to produce goods and services that create profits and wealth for the owners of the business.

Management: Science, Art, or Both?

Weihrich has discussed the interesting question of whether management is best seen as a science or as art and has suggested that “[m]anaging, like so many other disciplines—medicine, music composition, engineering, accountancy, or even baseball—is in large measure an art but founded on a wealth of science.”¹⁰ He went on to caution that “[e]xecutives who attempt to manage without …………………… management science must trust to luck, intuition, or to past experience” and that managers seeking to avoid the tedious and dangerous path of learning through “trial and error” must be able to access the knowledge that has been accumulated regarding the practice of management.¹¹ Weihrich wrote that application of scientific methods to management, including determination of facts through observation followed by identification of causal relationships that can have value in predicting what might happen in similar circumstances, allows us to classify significant and pertinent management knowledge and derive certain principles that can be used as guidelines for managerial decisions and instructions. For example, a manager in a growing organization will eventually be confronted with the need to begin delegating authority and Weihrich suggests that the manager can turn to various principles of management that are relevant such as “the principle of delegating by results expected, the principle of equality of authority and responsibility, and the principle of unity of command.” Principles are merely predictive; they do not guarantee a particular result. However, they do provide a tested starting point for the manager. Also important in the management field are “techniques,” which Weihrich defined as “ways of doing things, methods for accomplishing a given result.”¹² Like principles, techniques are originally based in theory and are tested to validate their effectiveness. Examples of management techniques listed by Weihrich include budgeting, cost accounting, networking planning and control techniques, ­managing-by-objectives, and total quality management.

Management and Performance

As time has passed, management has come to be recognized as one of the core factors of production along with machines, materials, money, technology, and people. It is well-known that productivity has become a leading indicator of organizational performance and Drucker has argued that “[t]he greatest opportunity for increasing productivity is surely to be found in knowledge, work itself, and especially in management.”¹³ Bloom et al. coordinated a survey and analysis of more than 4,000 medium-sized manufacturing operations in Europe, the United States, and Asia and their findings released in 2007 confirmed that “firms across the globe that apply accepted management practices well perform significantly better than those that do not.”¹⁴ Surveyed management practices included activities relating to shop floor operations, performance management and talent management, and performance metrics included labor productivity, sales growth, and return on capital employed. The United States led the way with respect to the quality of management among firms included in the survey; however, companies from other countries were gaining ground quickly and, in fact, at that time over 15% of the Indian and ­Chinese firms included in the survey were characterized as “better managed” than the average US firm.

Strong support for the importance of management practices in generating better firm performance was also found in an extensive survey by Bloom and Van Reenen involving firms in 17 countries.¹⁵ Specifically, Bloom and Van Reenen confirmed that firms with “better” management practices tended to larger, more productive, grew faster, and had higher survival rates. Bloom and Ven Reenen also identified interesting ­differences between the surveyed countries with respect to management practices and they described their key findings as follows¹⁶:

• Management practices vary tremendously across firms and countries. Most of the difference in the average management score of a country was due to the size of the “long tail” of very badly managed firms. For example, relatively few US firms were very badly managed, while Brazil and India had many firms in that category.
• Countries and firms specialized in different styles of management. For example, firms in the United States scored much higher than firms in Sweden with respect to incentives; however, Swedish firms were stronger than US firms when it came to monitoring.
• Strong product market competition appeared to boost average management practices through a combination of eliminating the tail of badly managed firms and pushing incumbents to continuously improve their management practices.
• In general, multinationals were better ­managed regardless of the location of their headquarters office and were prone to transplanting their preferred management styles into their foreign subsidiaries. For ­example, ­
  subsidiaries of US ­multinationals operating in the
  UK were better at incentives and worse than ­monitoring
  than subsidiaries of Swedish ­multinationals also operating in the UK.
• Firms that exported into foreign markets but did not ­manufacture in foreign markets were better managed than those firms who stayed home and neither exported into or manufactured in foreign markets; however, firms that only exported were not as well managed as the multinationals who also manufactured in foreign markets.
• Family-owned firms that appointed a family member, such as the oldest son, to serve as the chief executive officer tended, on average, to be very badly managed.
• Government-owned firms tended to be extremely badly managed while publicly owned firms and firms owned by private equity investors were usually well managed.
• Firms that were more reliant on human capital, as measured by the percentage of educated workers, tended to have much better management practices.
• At the country level, easing up on regulation of labor ­market practices tended to result in a better use of incentives by management.

Research results of this type have placed even more pressure on firms to take steps to improve their management practices in order to remain competitive with peers operating from other countries throughout the ...

Table of contents

• Cover
• halftitle
• title
• copyright
• abstract
• content
• 01_Chapter 1
• 02_Chapter 2
• 03_Chapter 3
• 04_Chapter 4
• 05_Chapter 5
• 06_Bios
• 07_Index
• 08_Adpage
• backcover