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FUNDAMENTALS of
MANAGEMENTand Introduction to TQM
Francisco S. Cruz, MD, MPHHPAD 201, Session 5, July 14
Reference:EMER FARAON, MD, MBA
DHPA, CPH, UPM
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Learning Objectives
Definition and Concept of Management
Four Functions / Elements of Management
Overview of the Evolution of ManagementThought (Basic Timeline and Categorization)
Modern Approaches to Management
Introduction to TQM
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ManagementEnvironment
Managers
Organizations
Resources
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ManagementEnvironment
Managers
The people responsible
for supervising the use of
an organizations
resources to meet itsgoals
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ManagementEnvironment
All managers work in
organizations
Organizationscollections of people who work
together and coordinate their
actions to achieve a widevariety of goals or desired
future outcomes
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ManagementEnvironment
Resources
include people, skills,
know-how and experience,machinery, raw materials,
computers and IT, patents,
financial capital, and loyal
customers and employees
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GOALS OF BUSINESS OR
MANAGEMENT
Business/economics traditionally definedas based on a sole primary motive ofself-interest
Lead to thinking about profit-maximization as the major goal ofenterprise
Modified meaning today especially in thehealthcare industry
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Is Administration and
Management the same?
Administration refers to the
activities of the higher level of the
management group who identifiesthe major aims and policies.
Administration is a part of
management
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FOUR FUNCTIONS
First stated by Henri Fayol (1841-1925)- French CEO
Now stated plainly as:
1. Planning
2. Organizing
3. Directing/Leading
4. Controlling
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PLANNING & ORGANIZING
Planning -- Setting firms goals plus the
way to accomplish them
Organizing -- deciding structure ofdecision-making
What will be done, by whom, for
whom
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LEADING & CONTROLLING
Leading/Directing-- Motivating
employees to achieve firms objectives
Controlling --
Monitoring progress toward goals
Taking corrective action
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EVOLUTION OF
MANAGEMENT THOUGHT
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MAJOR CLASSIFICATION OF
MANAGEMENT APPROACHES
CLASSICALAPPROACH
SCIENTIFICMANAGEMENT
BUREAUCRATICMANAGEMENT
ADMINISTRATIVEMANAGEMENT
BEHAVIORAL
APPROACH
HAWTHORNE
STUDIES
MASLOWS
NEEDHIERARCHY
THEORY X AND
THEORY Y
QUANTITATIVEAPPROACH
MANAGEMENTSCIENCE
OPERATIONSMANAGEMENT
MANAGEMENTINFORMATIONSYSTEM
MODERNAPPROACH
THE SYSTEMSTHEORY
CONTINGENCYTHEORY
EMERGINGAPPROACHES
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Classical Approach to Management
There are 3 classical approaches to
management;
1. Scientific Management
2. Administrative Principles
3. Bureaucratic Organization
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Classical Approach to Management
All 3 Classical Approaches share a common assumption;
People at work act in a rational manner that is
primarily driven by economic concerns
Workers are expected to rationally consider
opportunities made available to them and do
whatever necessary to achieve the greatestpersonal and monetary gain
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Classical Approach to
Management
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Scientific Management
Emphasizes careful selection and
training of workers and supervisory
support with an emphasis onimproving efficiency
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Scientific Management
SM has 4 guiding action principals;
1. Develop rules of motion, standardized work
implements, and proper working conditions for every
job2. Carefully select workers with the right abilities for the
job
3. Carefully train workers and provide proper incentives4. Support workers by carefully planning their work and
removing obstacles
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Scientific Management
This approach called MOTION STUDY is the science of
reducing a job or task to its basic physical motions,
which eliminating wasted motions, improves
performance and productivity
In one study, Taylor reduced the number of motions
used by bricklayers and in turn tripled their
productivity
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MAJOR CLASSIFICATION OF
MANAGEMENT APPROACHES
CLASSICALAPPROACH
SCIENTIFICMANAGEMENT
BUREAUCRATICMANAGEMENT
ADMINISTRATIVEMANAGEMENT
BEHAVIORAL
APPROACH
HAWTHORNE
STUDIES
MASLOWS
NEEDHIERARCHY
THEORY X AND
THEORY Y
QUANTITATIVEAPPROACH
MANAGEMENTSCIENCE
OPERATIONSMANAGEMENT
MANAGEMENTINFORMATIONSYSTEM
MODERNAPPROACH
THE SYSTEMSTHEORY
CONTINGENCYTHEORY
EMERGINGAPPROACHES
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Administrative Principles
Fayol developed 14 guiding principles ofmanagement, that he felt should be taught to allaspiring managers;
1. DIVISION OF LABOR - specialization of work willresult in continuous improvement in skills and
methods2. AUTHORITY - managers and workers need to
understand that managers have the right to giveorders
3. DISCIPLINE - behavior needs to be grounded inobedience and derived from respect
4. UNITY OF COMMAND - each employee shouldhave one, and only one manager
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Administrative Principles
5. UNITY OF DIRECTION - the leader generates a singleplan, and all play their part in executing it
6. SUBORDINATION OF INDIVIDUAL INTERESTS - whileat work, only work issues should be undertaken orconsidered
7. REMUNERATION - all should receive fair paymentfor their work; employees are valuable and notsimply an expense
8. CENTRALIZING - decisions are primarily made from
the top9. CONTROL - organizations must have a clear, formal
chain of command running from the top to thebottom of the organization
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Administrative Principles
10.ORDER - there is a place for everything andall things should be in there place
11.EQUITY - managers should be kind and fair
12.PERSONNEL TENURE - unnecessaryturnover is to be avoided, and there shouldbe lifetime employment for good workers
13. INITIATIVE - undertake work with zeal and
energy14.ESPRIT DE CORPS - work to build harmony
and cohesion among personnel
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Administrative Principles
What can we learn from Fayol?
He believed that
Management can be taught
Management can be seen as
a variety of activities oractions that can be worked
on in order to improve ones
managerial skill set
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Another contributor to Administrative Principles was MARY
PARKER FOLLETT
She displayed a deep understanding of groups and
commitment to human cooperation. She believed that
Groups are mechanisms through whichindividuals can combine their talents for a
greater good
Organizations are cooperating communities
of managers and workers
It is the managers job is to help people in the
organization cooperate and achieve an
integration of interests
Administrative Principles
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Folletts perspectives lead to many modern dayapplications of her management insights. Follett believedthat
Making every employee an owner in the business creates
a sense of collective responsibility --Today we talk aboutprofit sharing, gain-sharing, etc.
Business problems involve a variety of interrelatedfactors --- Today we talk about an organization as anopen system
Company profits relative to public good Today we talkabout managerial ethics and social responsibility
Administrative Principles
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MAJOR CLASSIFICATION OF
MANAGEMENT APPROACHES
CLASSICALAPPROACH
SCIENTIFICMANAGEMENT
BUREAUCRATICMANAGEMENT
ADMINISTRATIVEMANAGEMENT
BEHAVIORAL
APPROACH
HAWTHORNE
STUDIES
MASLOWS
NEEDHIERARCHY
THEORY X AND
THEORY Y
QUANTITATIVEAPPROACH
MANAGEMENTSCIENCE
OPERATIONSMANAGEMENT
MANAGEMENTINFORMATIONSYSTEM
MODERNAPPROACH
THE SYSTEMSTHEORY
CONTINGENCYTHEORY
EMERGINGAPPROACHES
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Bureaucratic Organization
Max Weber developed the idea of the Bureaucracy
because he felt that many organizations largely
failed to reach their performance potential
A BUREAUCRACY is an ideal, intentionally rational,
and very efficient form of organization, based on
principles of logic, order, and legitimate authority.
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Bureaucratic Organization
Characteristics of Bureaucratic Organizations
CLEAR DIVISION OF LABOR - jobs are well defined, and workersbecome highly skilled at their job
CLEAR HIERARCHY OF AUTHORITY authority and responsibilityare well defined for each position, and each position reports to ahigher level
FORMAL RULES written guidelines direct behavior and decisionsin jobs, and written files are kept for historical record
IMPERSONALITY rules and procedures are impartially and
uniformly applied, with no special treatment
CAREERS BASED ON MERIT workers are selected and promotedon ability and performance
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Bureaucratic Organization
The term bureaucracy is now often used
with negative connotations
Some possible disadvantages of bureaucracy
include:
Excessive paperwork or red tape
Slowness in handling problems
Rigidity in the face of shifting needs
Resistance to change
Employee apathy (a state of indifference)
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Behavioral Approaches to
Management
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Behavioral (Human Resource)
Approaches to Management
There are 3 behavioral approaches to management;
1. The Hawthorne Studies
2. Maslows Theory of Human Needs
3. McGregors Theory X and Theory Y
All 3 Behavioral Approaches share a common assumption;
People at work are assumed to seek satisfying social
relationships, respond to group pressures and search for
personal fulfillment
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The Hawthorne Studies
In 1942, the Western Electric Company had a research
program conducted to study individual productivity at one
of their plants
Initial study examined how economic incentives and
physical conditions of the workplace affected worker output
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The Hawthorne StudiesRelay Assembly Test-Room Studies
Examined the effect of worker fatigue on output
Six assembly workers were isolated for intensive study in a specialroom
They were given various rest pauses, workday and workweek lengths,all while measuring productivity
However, regardless of the changes made, productivity increased
Researchers believe this increased productivity is due to
GROUP ATMOSPHERE workers shared pleasant social relations andwanted to do a good job
PARTICIPATIVE SUPERVISION workers were made to feel important,given lots of information and asked their opinion
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The Hawthorne Studies
Lessons Learned
Peoples feelings, attitudes and relations with co-workersaffected their work
Group influence plays an important role in the decisions
made by individuals The HAWTHORNE EFFECT is the tendency of people who
are singled out for special attention to perform as expectedmerely because of the expectations created by the situation
Helped contribute to the emergence of the HUMAN
RELATIONS movement, which suggests that managers usinggood human relations will achieve productivity
Set the stage for what has now developed into the field ofORGANIZATIONAL BEHAVIOR; the study of individuals andgroups in organizations
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Abraham Maslow
His theory rested on these assumptions.
Physiological needs;
Safety or security needs
Belongingness or social needs;
Esteem or status needs
Self actualization or self-fulfillment needs.
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Maslows Need Hierarchy
Self actualization needs
Esteem needs
Social needs
Safety needs
Physiological needs
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Maslows Theory of Human Needs
Maslows theory implies that
managers who help people satisfytheir important needs at work will
achieve productivity
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Douglas Mcgregor
Theory X Theory Y
Most People dislikework
Work is a natural activitylike play.
Most People must becoerced and threatenedbefore they work.
People are capable of selfdirection and self control
Most people prefer tobe directed. They avoidresponsibility and havelittle ambition.
People become committedto organizationalobjectives if they arerewarded in doing so.
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McGregors Theory X
and Theory Y
McGregor believed that managers should
give more attention to the social and
self-actualization needs of people atwork
Called upon managers to shift their view
of human nature away from a set ofassumptions he called Theory X and
toward what he called Theory Y
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Chris Argyris
Maturity Immaturity theory
People progress from a stage of
immaturity and dependence to a state ofmaturity and independence.
Model I and Model II organization
analysis.1. Model I organization are manipulative
2. Model II organization are open to learning
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Quantitative Approach
It includes the application of statistics,
optimization models, information models and
computer simulations. More specifically, this
approach focuses on achieving organizational
effectiveness. Three main branches:
Management Science
Operations Management and Management Information Systems.
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Management Science
It stresses the use of mathematical
models and statistical methods for
decision-making.
Another name is the Operations
Research.
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Operations Management
It deals with the effective
management of the production
process and the timely delivery of
an organizations products and
services.
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Management
Information Systems
Management information
systems focuses on designingand implementing computer-
based information systemsfor business organizations.
M d A h
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Modern Approaches
to Management
Systems Theory
Contingency Theory
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Systems Theory
Resources
Labor Materials Capital Machinery Information
Managerial andTechnological
Abilities Planning Organizing Staffing
Leading Controlling Technology
Goods
Services Profits and
losses Employee
satisfaction
Inputs Transformation process Outputs
Feedback
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Contingency Theory
Systems ViewpointHow the parts fittogetherIndividual
GroupOrganizationenvironment
Behavioral ViewpointHow managers influence
othersInterpersonal RolesInformational RolesDecisional Roles
TraditionalviewpointWhat managersdoPlan
OrganizeLead Control
ContingencyViewpoint
Managers
use of otherview points tosolveproblems
Externalenvironment
Technology
Individuals
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Contingency Theory
There is no best way to organize a
corporation, to lead a company,
or to make decisions. Instead, theoptimal course of action is
contingent (dependent) upon theinternal and external situation.
E i A h I
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Emerging Approaches In
Management Thought
William Ouchi, outlined new theorycalled Theory Z.
It is the blend of positive aspects ofboth American and Japanesemanagement styles.
i h
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Emerging Approaches In
Management Thought
Quality Management is a managementapproach that directs the efforts ofmanagement towards bringing about
continuous improvement in product andservice quality to achieve higher levelsof customer satisfaction and build
customer loyalty.
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Total Quality Management:
An Introduction
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DefinitionTotal Quality Management (TQM)is a management strategy aimed at
embedding awareness of quality inall organizational processes.
http://en.wikipedia.org/wiki/Managementhttp://en.wikipedia.org/wiki/Awarenesshttp://en.wikipedia.org/wiki/Qualityhttp://en.wikipedia.org/wiki/Qualityhttp://en.wikipedia.org/wiki/Awarenesshttp://en.wikipedia.org/wiki/Management7/31/2019 Hpad 201 Session 5, July 14 Fundamentals of Management - 201 v.2.0-Fsc
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TQM requires that the company
maintain this quality standard inall aspects of its business.
This requires ensuring thatthings are done right the first
time and that defects and waste
are eliminated from operations.
Evolution of quality Means & Focus
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Evolution of quality Means & Focus1975
1980 1985 1990 19952000
Operation Customers Innovations
QualityofWork life
QualityCircle
Productivity
EmployeeInvolvement
Quality
EmployeesEmpowerment
TotalQuality
Self
DirectedTeams
TQC/TQM
Self
Directed/Managd
Teams
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Basic Approach
A committed and involved management to
provide long-term top - to - bottom
organizational support.
An unwavering focus on the customer, bothinternally and externally.
Effective involvement and utilization of the
entire work force.
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Basic Approach
Continuous improvement of the business and
production process.
Treating supplier as partners.
Establish performance measures for the
processes.
TQM FRAMEWORK
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TQM FRAMEWORK
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Principle of Health AdministrationPreparing for the Next (6th) Session
Reading Materials for July 21, 2012
Principles and Practices in Health Administration
Any reading materials on: ZOPP, Logical Framework
Approach/Analysis DOH Department Order 2011-0188 Kalusugan Pangkalahatan
DOH LGU Scorecard
Any Provincial Investment Plan on Health