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5
WILLIAMS MCWILLIAMS
LAWRENCE WAHEDUZZAMAN
Copyright Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-300
5
WILLIAMS MCWILLIAMS
LAWRENCE WAHEDUZZAMAN
MGMT5 © 2023 Cengage Learning Australia Pty Limited
5th Edition
Chuck Williams Copyright Notice
Alan McWilliams This Work is copyright. No part of this Work may be reproduced, stored in a
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For permission to use material from this text or product, please email
First published in Australia by Cengage Learning Australia in 2010. aust.permissions@cengage.com
Second edition published in 2014.
Third edition published in 2017. National Library of Australia Cataloguing-in-Publication Data
Fourth edition published in 2019. ISBN: 9780170459587
A catalogue record for this book is available from the National Library of
Acknowledgements Australia.
Adaptation of MGMT, 12th edition by Chuck Williams, Cengage Learning US
[9780357137727]. Cengage Learning Australia
Level 7, 80 Dorcas Street
Part openers: Unsplash/Karl Groendal; Adobe Stock/tilialucida; Adobe South Melbourne, Victoria Australia 3205
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For learning solutions, visit cengage.com.au
Printed in China by 1010 Printing International Limited.

1 2 3 4 5 6 7 26 25 24 23 22
BRIEF
CONTENTS
1 Management 2
PART 1 2 History of management 22

INTRODUCTION
TO MANAGEMENT 3 Organisational environments and cultures 43
4 Ethics and social responsibility 63
5 Planning and decision making 88
PART 2 6 Organisational strategy 108
PLANNING
7 Innovation and change 128
8 Global management 147
9 Designing adaptive organisations 174

PART 3
10 Managing teams 197
ORGANISING
11 Managing people: human resource management 216
12 Motivation 256
PART 4
13 Leadership 277
LEADING
14 Managing communication 296
15 Control 319
PART 5
16 Managing information 336
CONTROLLING
17 Managing service and manufacturing operations 356
Endnotes 376
Index 404
Tear-out review cards
Brief Contents iii
Operations, information, systems and
contingency management 38
Operations management 38
Information management 40
Systems management 40
CONTENTS
Contingency management 42
3 Organisational environments and cultures 43
Changing environments 44
Environmental change 44
Environmental complexity 45
Resource scarcity 45
Environmental uncertainty 46
General environment 46
Economy 47
Technological component 48
Sociocultural component 48
Political/legal component 49
PART 1
INTRODUCTION TO Specific environment 49
Customer component 49
MANAGEMENT 1 Competitor component 50
Supplier component 51
1 Management 2 Industry regulation component
Advocacy groups
52
53
Management is … 2 Making sense of changing environments 55
Environmental scanning 55
Management functions 3
Interpreting environmental factors 56
Planning 4
Acting on threats and opportunities 56
Organising 5
Leading 5 Organisational cultures: creation, success
Controlling 6 and change 58
Creation and maintenance of organisational cultures 58
Kinds of managers 6
Successful organisational cultures 59
Top managers 6
Changing organisational cultures 60
Middle managers 8
First-line managers 10
Team leaders 10 4 Ethics and social responsibility 63
Managerial roles 11
Informational roles 12 Workplace deviance 64
Decisional roles 13 Regulators and regulations 66
What companies look for in managers 15 Who, what and why? 66
Determining the punishment 66
Mistakes managers make 16
Influences on ethical decision making 68
The transition to management: the first year 17 Ethical intensity of the decision 68
Competitive advantage through people 19 Moral development 69
Principles of ethical decision making 71
2 History of management 22 Practical steps to ethical decision making 73
Selecting and hiring ethical employees 73
The origins of management 22 Codes of ethics 73
Management ideas and practice throughout history 23 Ethics training 74
Why we need managers today 23 Ethical climate 75
Scientific management 25 To whom are organisations socially responsible? 77
Father of scientific management: Frederick W. Taylor 26 For what are organisations socially responsible? 79
Motion studies: Frank and Lillian Gilbreth 28
Responses to demands for social responsibility 81
Charts: Henry Gantt 29
Social responsibility and economic performance 83
Bureaucratic and administrative management 30
Bureaucratic management: Max Weber 31
Administrative management: Henri Fayol 32
Human relations management 34
Constructive conflict: Mary Parker Follett 34
Hawthorne Studies: Elton Mayo 36
Cooperation and acceptance of authority:
Chester Barnard 37
iv Contents Copyright Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-300
Experiential approach: managing innovation
during discontinuous change 136
Compression approach: managing innovation
PART 2 during incremental change 137
Organisational decline: the risk of not changing 139
PLANNING 87 Managing change 139
Managing resistance to change 141
5 Planning and decision making 88 What not to do when leading change 142
Change tools and techniques 144
Benefits and pitfalls of planning 89
Benefits of planning 89 8 Global management 147
Planning pitfalls 89
How to make a plan that works 90 Global business, trade rules and trade
Setting goals 90 agreements 148
Developing commitment to goals 91 The impact of global business 148
Developing effective action plans 92 Trade agreements 151
Tracking progress 92 Consumers, trade barriers and trade agreements 155
Maintaining flexibility 93 Consistency or adaptation? 156
Planning from top to bottom 94 Forms of global business 157
Starting at the top 94 Exporting 158
Bending in the middle 95 Cooperative contracts 158
Finishing at the bottom 96 Strategic alliances 160
Steps and limits to rational decision making 97 Wholly owned affiliates (build or buy) 161
Define the problem 98 Global new ventures 161
Identify decision criteria 98 Finding the best business climate 161
Weight the criteria 99 Growing markets 162
Generate alternative courses of action 100 Choosing an office or manufacturing location 163
Evaluate each alternative 100 Minimising political risk 164
Compute the optimal decision 101
Becoming aware of cultural differences 166
Limits to rational decision making 102
Preparing for an international assignment 169
Using groups to improve decision making 102
Language and cross-cultural training 169
Advantages and pitfalls of group decision making 102
Spouse, family and dual-career issues 170
Structured conflict 104
Nominal group technique 105
Delphi technique 105
Electronic brainstorming 105
6 Organisational strategy 108 PART 3

What is strategy? 109
ORGANISING 173
Sustainable competitive advantage 109
Strategy-making process 111
Assessing the need for strategic change 111 9 Designing adaptive organisations 174
Situational analysis 112
Choosing strategic alternatives 114 Departmentalisation 176
Functional departmentalisation 176
Corporate-level strategies 116
Product departmentalisation 177
Portfolio strategy 116
Customer departmentalisation 179
Grand strategy 120
Geographic departmentalisation 180
Industry-level strategies 121 Matrix departmentalisation 181
Positioning strategies 121
Organisational authority 183
Adaptive strategies 122
Chain of command 183
Five industry forces 123
Line versus staff authority 183
Firm-level strategies 125 Delegation of authority 183
Direct competition 125 Degree of centralisation 185
Strategic moves of direct competition 126
Job design 186
Job specialisation 186
7 Innovation and change 128 Job rotation, enlargement and enrichment 186
Job characteristics model 187
The difference between change and innovation 129 Intra-organisational processes 190
Why innovation matters 129 Reengineering 190
Technology cycles 129 Empowerment 192
Innovation streams 131 Inter-organisational processes 193
Managing innovation 133 Modular organisations 193
Managing sources of innovation 134 Virtual organisations 195
Contents v
10 Managing teams 197
The good and bad of using teams 198 PART 4

The advantages of teams 198
The disadvantages of teams 199 LEADING 255
When to use teams 200
Kinds of teams 201
Autonomy – the key dimension 201 12 Motivation 256
Special kinds of teams 203
Basics of motivation 257
Work team characteristics 205
Effort and performance 257
Team norms 205
Need satisfaction 258
Team cohesiveness 206
Extrinsic and intrinsic rewards 260
Team size 207
Motivating with the basics 261
Team conflict 208
Stages of team development 209 Equity theory 262
Components of equity theory 263
Enhancing work team effectiveness 210
How people react to perceived inequity 264
Setting team goals and priorities 210
Motivating with equity theory 266
Selecting people for teamwork 211
Team training 213 Expectancy theory 267
Team compensation and recognition 214 Components of expectancy theory 267
Motivating with expectancy theory 268
11 Managing people: human resource management 216 Reinforcement theory 270
Components of reinforcement theory 270
Recruiting 217 Schedules for delivering reinforcement 272
Job analysis and recruiting 217 Motivating with reinforcement theory 273
Internal recruiting 218 Goal-setting theory 274
External recruiting 218 Components of goal-setting theory 274
Selection 221 Motivating with goal-setting theory 275
Application forms and résumés 221 Motivating with the integrated model 276
References and background checks 222
Selection tests 222
Interviews 225 13 Leadership 277
Training 228
Leaders versus managers 278
Determining training needs 228
Training methods 228 Who leaders are and what leaders do 279
Evaluating training 230 Leadership traits 279
Leadership behaviour 281
Performance appraisal 230
Accurately measuring job performance 231 Putting leaders in the right situation:
Sharing performance feedback 232 Fiedler’s contingency theory 283
Leadership style: least-preferred co-worker 283
Compensation and remuneration 235 Situational favourableness 284
Compensation decisions 235 Matching leadership styles to situations 284
Terminating employees 236
Downsizing 238 Adapting leader behaviour: path–goal theory 286
Retirement 238 Leadership styles 287
Employee turnover 238 Subordinate and environmental contingencies 287
Outcomes 288
Workplace diversity 240
Value of diversity 240 Adapting leader behaviour: normative decision
Surface-level diversity 240 theory 289
Deep-level diversity 240 Decision styles 289
Decision quality and acceptance 289
Managing diversity 242 Problem: change to casual wear? 290
Diversity paradigms 243
Diversity principles 244 Visionary leadership 292
Charismatic leadership 292
Employment legislation 244 Transformational leadership 294
Employment laws 245
Employment discrimination 246
Anti-discrimination legislation 246
14 Managing communication 296
Age discrimination 246
Perception and communication problems 296
Disability discrimination 247
Basic perception process 297
Racial discrimination 248
Perception problems 298
Sex discrimination 248
Perceptions of others 298
Sexual orientation discrimination 252
Self-perception 300
Workplace bullying 252
vi Contents Copyright Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-300
Kinds of communication 301 Characteristics and costs of useful information 339
The communication process 301 Accurate information 340
Formal communication channels 304 Complete information 340
Informal communication channels 305 Relevant information 340
Coaching and counselling: one-on-one communication 306 Timely information 340
Non-verbal communication 307 Acquisition costs 341
Managing one-on-one communication 308 Processing costs 341
Choosing the right communication medium 308 Storage costs 341
Listening 309 Retrieval costs 342
Giving feedback 311 Communication costs 342
Managing organisation-wide communication 312 Capturing, processing and protecting

Improving transmission: getting the message out 312
information 343
Capturing information 343
Improving reception: hearing what others
Processing information 345
feel and think 312
Protecting information 347
Accessing and sharing information and
knowledge 351
Internal access and sharing 351
External access and sharing 352
PART 5 Sharing knowledge and expertise 353
CONTROLLING 318 17 Managing service and manufacturing operations 356
Productivity 356
15 Control 319 Why productivity matters 357
Kinds of productivity 358
The control process 320
Quality 359
Standards 320
Quality-related characteristics for products and
Comparison to standards 321
services 360
Corrective action 322
ISO 9000 and 14000 361
Dynamic, cybernetic process 322
Baldrige National Quality Award and the Australian
Feedback, concurrent and feed-forward control 322
Business Excellence Framework 362
Control isn’t always worthwhile or possible 323
Total quality management 363
Control methods 324
Service operations 364
Bureaucratic control 325
The service-profit chain 365
Objective control 325
Service recovery and empowerment 366
Normative control 326
Concertive control 327 Manufacturing operations 366
Self-control 327 Amount of processing in manufacturing
operations 367
What to control 328
Flexibility of manufacturing operations 367
The balanced scorecard 328
Inventory 369
Types of inventory 369
16 Managing information 336 Measuring inventory 370
Costs of maintaining an inventory 371
Strategic importance of information 337 Managing inventory 373
First-mover advantage 338
Sustaining a competitive advantage 338
Endnotes 376
Index 404
Tear-out review cards
Contents vii
Guide to the text
As you read this text you will find a number of features in every
chapter to enhance your study of management and help you
understand how the theory is applied in the real world.
PART OPENING FEATURES
PART ONE
The Part openers outline the INTRODUCTION TO
THE ORIGINS OF
chapters contained in each MANAGEMENT
part for easy reference.
1 Management
Managment ideas and practice
throughout history
2 History of management
2 Why we need managers today
3 Organisational environments and cultures
4 Ethics and social responsibility
BK-CLA-MGMT_5E-220170-Chp01.indd 1 05/08/22 1:33 PM
CHAPTER OPENING FEATURES
1 WHAT IS MANAGEMENT?
MANAGEMENT
Management issues are fundamental to any organisation:
Identify the key concepts you how do we plan to get things done, organise the company
to be efficient and effective, lead and motivate employees
will engage with through the and put in place controls to make sure our plans are
Learning objectives at the followed and our goals are met? Good management
is basic to starting a business, growing a business and
start of each chapter maintaining a business once it has achieved some
measure of success.
The Chapter overview lists Determining what constitutes good management

for individual businesses is not always straightforward.
the topics that are covered in Companies in Australia pay management consultants
nearly $6.5 billion1 per year for advice on basic
the chapter. Learning objectives
management issues, such as how to lead people
LO1 Describe what management is. effectively, organise the company efficiently, and manage
large-scale projects and processes.2 This textbook will
LO2 Explain the four functions of help you understand some of the basic issues that
management. management consultants help companies resolve (and it
LO3 Describe the different kinds of managers. won’t cost you billions of dollars).
After reading the next two sections, you should be
LO4 Explain the major roles and sub-roles that
able to:
managers perform in their jobs.
• describe what management is
LO5 Explain what companies look for in • explain the four functions of management.
managers.
LO6 Discuss the top mistakes that managers
make in their jobs.
LO7 Describe the transition that employees LO1 Management is …
viii Guide to the text go through
Copyright Cengage Learning. All Rights Reserved. when
May notthey
be are promoted
copied, to
scanned, Many of today’s
or duplicated, managers
in whole got their
or in part. WCN start working
02-300
management positions. on the factor y f loor, clearing dishes from tables,
LO8 Explain how and why companies can helping customers choose the r ight d ress to buy
FEATURES WITHIN CHAPTERS
Analyse practical applications of key management Gain insight into real-world examples of innovative
concept and tips with the MGMT in Practice boxes. management showcased in the Smart MGMT boxes.
Explore the current and future directions of management Take a behind-the-scenes look at real-world
through the MGMT Trend boxes. management practices and their outcomes through the
Workplace and community boxes.
Changes in any sector of the general environment working and wages are growing, and therefore
eventually affect most organisations. For example, consumers have relatively more money to spend.
when a country’s central bank (the Reserve Bank of More products are bought and sold in a growing
Australia, Reserve Bank of New Zealand, Bank Negara economy than in a static or shrinking economy.
in Malaysia or the Federal Reserve in the US) lowers Though an individual organisation’s sales will not
its prime lending rate, most businesses benefit because necessarily increase, a growing economy does provide
banks and credit card companies often pass on the an environment favourable to business growth. By
lower interest rates to their customers in the rates contrast, in a shrinking economy, consumers have
they charge for loans. Consumers can then borrow less money to spend and relatively fewer products are
money more cheaply to buy homes, cars, refrigerators bought and sold. Thus, a shrinking economy makes
and large-screen TVs. growth for individual businesses more difficult.
Each organisation also has a specific environment Because the economy influences basic business
that is unique
Examine interesting factstoabout
that contemporary
organisation’s industry
and and decisions,Key
Important suchterms
as whether to hire in
are marked more
boldemployees,
in the text and
historical management directly
with the affects Fact
MGMT the way it conducts
boxes. expandinproduction
defined the margin or when
take out
theyloans to purchase
are used for the first
specific
environment day-to-day business. The specific equ ipment, ma nagers sca n t hei r econom ic
time.
the customers, environment, which will be discussed environments for signs of significant change.
competitors,
suppliers, industry
in detail later in t h is chapter, Some managers try to predict future economic
regulations and includes customers, competitors, activity by keeping track of business confidence.
advocacy groups suppliers, industry regulation and Business confidence indices show how
that are unique to
an industry and advocacy groups. confident managers in organisations business confidence
indices
directly affect how Let’s take a closer look at the four are about future business growth. For indices that show the
a company does
business components of the general environment example, an Australian index that is level of confidence
that affect all organisations: widely cited is the National Australia managers have
about future
• the economy Bank (NA B) business confidence business growth
• technological trends index. Managers often prefer business
confidence indices to economic statistics because
• sociocultural trends
they know that managers make business decisions
• political/legal trends.
that are in line with their expectations concerning
the economy’s future. In Hong Kong, the Swedish
Economy Chamber of Commerce (Swedcham) collates a series
The current state of a country’s economy affects of business confidence surveys to present an annual
virtually every organisation doing business there. ‘summary of surveys’.16 So if the Swedchamsurvey or
In general, in a growing economy, more people are the NAB business confidence index in Australia are
Guide to the text ix
FIGURE 3.2 GENERAL AND SPECIFIC ENVIRONMENTS
REVIEW FEATURES
Review your understanding of
the key chapter topics with the
Concept summary at the end
of each Part.
PART 1, What can you take from your progress
through this part of MGMT5?
CHAPTERS
1–4 1 Management
☑ You have developed your understanding of the four functions of
management and covered the different kinds of managers – including the
major roles and sub-roles that managers perform in their jobs.
☑ You can articulate what companies look for in managers and you will be
able to describe the transition that employees go through when they are
promoted to management positions.
Overall aim of Part 1
☑ You understand that companies can create competitive advantage through
To introduce management, its people.
history and its applications in
☑ You have learned that sometimes managers make mistakes, and you can
contemporary workplaces now identify and discuss the top mistakes that managers make in their jobs.
☑ You have developed your understanding of the history of management
and you have covered conceptual, theoretical and analytical aspects of
management
☑ You are able to discuss the origins of management, comparing them with the
ideas and practices of managers today.
☑ You understand the history of scientific management, bureaucratic and

administrative management, and you have learned about the contributions
to management theory and practice by key thinkers in the field.
☑ You have covered the history of human relations management and can apply
the lessons learned from

☑ You have learned how changing environments affect organisations. You
can explain and provide examples of the four components of the general
environment and explain the five components of the specific environment.
☑ You will be able to articulate and adopt certain processes that companies
use to make sense of their changing environments, and expand upon how
Consolidate your knowledge organisational cultures are created and how they can help companies be
successful.
with the Tear-out study cards
found at the end of the book
that summarise each chapter
REVIEW 1 MANAGEMENT
4
☑
Ethics and social responsibility
You have learned how to identify common kinds of workplace deviance,
LEARNING
and understand the role of the Australian Competition OBJECTIVES
and Consumer
for class preparation and Commission (ACCC) in the Australian business environment.
LO1 Management is …
Key definitions ☑
revision. Your study of ethical decision making has allowed you to discuss how
Good
companies aremanagement
encouraged to is working
behave through
ethically others
and how to accomplish
they may betasks that
Management Team leaders punishedhelp
for fulfil organisational
unethical behaviour.objectives as efficiently as possible.
Getting work done Managers responsible
through others. for facilitating team
LO2 Management functions
activities toward goal Henri Fayol’s classic management functions are known today as
Efficiency accomplishment. planning, organising, leading and controlling. Planning is determining
Getting work done with
a minimum of effort, Figurehead role organisational goals and a means for achieving them. Organising is
expense or waste. The interpersonal deciding where decisions will be made, who will do what jobs and
role managers play tasks and who will work for whom. Leading is inspiring and motivating
Effectiveness when they perform employees to work hard to achieve organisational
CHAPTER goals.
4 Ethics and socialControlling is 85
responsibility
Accomplishing ceremonial duties.
tasks that help monitoring progress toward goal achievement and taking corrective
fulfil organisational Leader role action when needed. Studies show that performing management
objectives. The interpersonal functions well leads to better managerial performance.
BK-CLA-MGMT_5E-220170-Chp04.indd 85 role managers play 05/08/22 2:22 PM
Planning when they motivate LO3 Kinds of managers
Determining and encourage
organisational goals and workers to accomplish There are four different kinds of managers. Top managers are
a means for achieving organisational responsible for creating a context for change, developing attitudes of
them. objectives. commitment and ownership, creating a positive organisational culture
through words and actions and monitoring their company’s business
Organising Liaison role
Deciding where The interpersonal role environments. Middle managers are responsible for planning and
decisions will be made, managers play when allocating resources, coordinating and linking groups and departments,
who will do what jobs they deal with people monitoring and managing the performance of subunits and
and tasks, and who will outside their units.
implementing the changes or strategies generated by top managers.
work for whom.
Monitor role First-line managers are responsible for managing the performance of
Leading The informational non-managerial employees, teaching their workers how to do their jobs
Inspiring and role managers play and making detailed schedules and operating plans based on middle
motivating workers to when they scan their
work hard to achieve environment for management’s intermediate-range plans. Team leaders are responsible
organisational goals. information. for facilitating team performance, managing external relationships and
facilitating internal team relationships.
Controlling Disseminator role
Monitoring progress The informational LO4 Managerial roles
towards goal role managers play
achievement and when they share Managers perform interpersonal, informational and decisional roles
taking corrective action information with others in their jobs. In fulfilling the interpersonal role, managers act as
when needed. in their departments or figureheads by performing ceremonial duties, as leaders by motivating
companies. and encouraging workers and as liaisons by dealing with people
Top managers
Executives responsible Spokesperson role outside their units. In performing their informational role, managers
for the overall direction The informational role act as monitors by scanning their environment for information, as
of the organisation. managers play when disseminators by sharing information with others in the company and
they share information
as spokespeople by sharing information with people outside their
Middle managers with people outside
Managers responsible their departments or departments or companies. In fulfilling decisional roles, managers act
for setting objectives companies. as entrepreneurs by adapting their units to incremental change, as
consistent with top disturbance handlers by responding to larger problems that demand
management’s goals Entrepreneur role
The decisional role
immediate action, as resource allocators by deciding resource recipients
and for planning and
implementing subunit managers play when and amounts, and as negotiators by bargaining with others about
strategies for achieving they adapt themselves, schedules, projects, goals, outcomes and resources.
these objectives. their subordinates and
their units to change. LO5 What companies look for in managers
First-line managers
Disturbance handler
Companies do not want one-dimensional managers. They want
Managers who
x Guide to the text Copyright Cengage Learning. All Rights Reserved. May not
train and supervise
be copied, scanned, or
role
duplicated,
managers in whole
with a balance or in
of skills. part.
They wantWCN 02-300
managers who know
the performance The decisional role their stuff (technical skills), are equally comfortable working with blue-
of non-managerial managers play when collar and white-collar employees (human skills), are able to assess
employees who are they respond to severe
the complexities of today’s competitive marketplace and position
Guide to the online resources
FOR THE INSTRUCTOR
Cengage is pleased to provide you with a selection of resources that will

help you prepare your lectures and assessments. These teaching tools
are accessible via cengage.com.au/instructors for Australia
or cengage.co.nz/instructors for New Zealand.
MINDTAP
Premium online teaching and learning tools are available on the MindTap platform – the personalised eLearning
solution.
MindTap is a flexible and easy-to-use platform that helps build student confidence and gives you a clear picture of their
progress. We partner with you to ease the transition to digital – we’re with you every step of the way.
The Cengage Mobile App puts your course directly into students› hands with course materials available on their
smartphone or tablet. Students can read on the go, complete practice quizzes or participate in interactive real-time
activities.
MindTap for MGMT5 is full of innovative resources to support critical thinking, and help your students move from
memorisation to mastery! Includes:
• MGMT5 eBook
• Media quizzes
• Self assessments
• Revision quizzes
• Research activities and more!
MindTap is a premium purchasable eLearning tool. Contact your
Cengage learning consultant to find out how MindTap can transform
your course.
INSTRUCTOR’S MANUAL
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Guide to the online resources xi
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xii Copyright Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-300
Guide to the online resources
About the authors
Alan McWilliams
Alan is an Associate Professor in the College of Business at Victoria University where is he also the Deputy Head
of Community Engagement in the First Year College. In academia since 1990, Alan previously worked in various
management and HR roles in hospitality and within the Tasmanian State public service. Alan’s research interests
include team-based organisations, employee relations management and management issues within the hospitality
and events industries. Alan has published in numerous refereed journals and has presented at a variety of
discipline-related conferences. His teaching awards include Carrick Australia Award for University Teaching 2007:
Citation for Outstanding Contribution to Student Learning, Vice Chancellors citation for outstanding contribution
to student learning 2006 and a Vice Chancellors Award for programs which enhance the student experience 2006.
Alan is also a board member of the Australia and New Zealand Academy of Management (ANZAM).
Rob Lawrence
Rob Lawrence has many years of senior management experience with federal and state public services, working as
a project manager, ministerial adviser and speechwriter for Commonwealth and Victorian governments. He also
worked for three years as Manager (Learning and Development) for the Australian Public Service Commission.
Rob has a BA in economics, adult training certification and post-graduate qualifications in management. His
teaching experience includes lecturing in a range of management subjects at Monash and RMIT universities. In
recent years Rob has focused on teaching first-year Management at Victoria University. He teaches locally and
overseas, mainly in China.
Wahed Waheduzzaman
Wahed Waheduzzaman is currently a lecturer in the Faculty of Business and Law, Swinburne University of
Technology. He completed his PhD in comparative management and public service management from the
Victoria University. Wahed previously worked in different ministries as a deputy secretary to the Government
of Bangladesh. Major areas of his research interests are management, human resource management, good
governance, and public-sector management. He has published articles in several refereed journals including
Public Administration and Society, Local Government Studies, Employee Relations and Australian Journal of Public
Administration.
About the authors xiii
Acknowledgements
The authors would like to thank Rachael, Stephanie and Kylie for their valuable feedback to improve the chapters
in this book.
Cengage would like to thank Anjali Chhetri firstly for her valuable research on Chapters 14, 15 and 17, and
her writing on Chapter 5. We would also like to thank Gaby Grammeno for her writing on Chapters 14, 15 and 17.
Cengage Learning would like to thank the following reviewers for their valuable feedback in the development
of this text:
• Zoë Port – Massey University
• Dr Dhara Shah – Griffith University
• Mark Wickham – University of Tasmania
• Merran Renton – Bedford College
• Bruce Johnstone – Monash University
• Jess Co – Monash University
• Jing Ye – Deakin College
• Jason Yap – Scope Training
• Helen Parker – University of Sydney
• Nicole El Haber – La Trobe University
• Pheroza Daruwalla – Western Sydney University
• Elisa Uyen – The Pivot Institute.
xiv Acknowledgements
PART ONE
INTRODUCTION TO
THE ORIGINS OF
MANAGEMENT
1 Management
Managment ideas and practice
throughout history
2 Why we need managers today
4 Ethics and social responsibility
1 WHAT IS MANAGEMENT?
MANAGEMENT
Management issues are fundamental to any organisation:
how do we plan to get things done, organise the company
to be efficient and effective, lead and motivate employees
and put in place controls to make sure our plans are
followed and our goals are met? Good management
is basic to starting a business, growing a business and
maintaining a business once it has achieved some
measure of success.
Determining what constitutes good management
for individual businesses is not always straightforward.
Companies in Australia pay management consultants
nearly $6.5 billion1 per year for advice on basic
Learning objectives
management issues, such as how to lead people
LO1 Describe what management is. effectively, organise the company efficiently, and manage
large-scale projects and processes.2 This textbook will
LO2 Explain the four functions of help you understand some of the basic issues that
management. management consultants help companies resolve (and it
LO3 Describe the different kinds of managers. won’t cost you billions of dollars).
After reading the next two sections, you should be
LO4 Explain the major roles and sub-roles that
able to:
managers perform in their jobs.
• describe what management is
LO5 Explain what companies look for in • explain the four functions of management.
managers.
LO6 Discuss the top mistakes that managers
make in their jobs.
LO7 Describe the transition that employees LO1 Management is …
go through when they are promoted to Many of today’s managers got their start working on
management positions. the factory floor, clearing dishes from tables, helping
LO8 Explain how and why companies can customers choose the right dress to buy or working
create competitive advantage through in a supermarket. Similarly, lots of you will start at
people. the bottom and work your way up. There’s no better
way to get to know your competition, your customers
and your business. However, whether you begin
your career at the entry level or as a supervisor,
your job is not to do the work, but to help others do
theirs. Management is getting work
done through others. Vineet Nayar, management
getting work done
Founder of Sampark Foundation and through others
former CEO of IT services company
HCL Technologies, doesn’t see himself
2 Copyright Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-300
as the guy who has to do everything or have all the
answers. Instead, he sees himself as ‘the guy who is
obsessed with enabling employees to create value’.
Rather than coming up with solutions himself,
Nayar creates opportunities for collaboration, peer
review and employees to give feedback on ideas and
work processes. Says Nayar: ‘My job is to make sure
Shutterstock.com/Sunflowerey
everybody is enabled to do what they do well.’ 3
Nayar’s description of managerial responsibilities
suggests that managers also have to be concerned
with efficiency and effectiveness in the work process.
Efficiency is getting work done with
efficiency
getting work done a minimum of effort, expense or waste.
Maersk is managing the use of shipping containers more
with a minimum of For example, if you drive along efficiently by using tracking software.
effort, expense or
Footscray road in Melbourne, or pass
waste
by Port Tauranga near Auckland,
you’ll see containers from many countries, with the Management
LO2
logos of even more companies on their sides. Chances
are you will have seen a lot of containers with the
functions
name ‘Maersk’ on them. Maersk is the world’s largest Henri Fayol, who was a managing director (CEO) of a
container shipping company. The Chief Operating large steel company in the early 1900s, was one of the
Officer at Maersk, Soren Toft, says: ‘Cutting idle time founders of the field of management. You’ll learn more
at ports is a big priority and challenge. It’s like a about Fayol and management’s other key contributors
Formula One pit stop. The faster we come in and out, when you read about the history of management in
the more time and money we save.’4 So Maersk Chapter 2. Based on his 20 years of experience as a
digitally tracks each container (a 12-metre steel box CEO, Fayol argued that ‘the success of an enterprise
loaded onto a railway wagon or truck) and all the generally depends much more on the administrative
loading and unloading steps for its ‘Triple E’ ships, ability of its leaders than on their technical ability’.7
which hold nearly 21 000 containers. Maersk’s ‘pit A century later, Fayol’s arguments still hold true.
stop’ system ties into mobile phone apps so ships During a two-year study code-named Project Oxygen,
can easily share data with shore crews who position Google analysed performance reviews and feedback
1815-tonne stacking cranes, shuttle carriers and surveys to identify the traits of its best managers.
‘truck-on’ loaders to efficiently move the right According to Laszlo Bock, Google’s Vice President for
container boxes on and off at each stop. 5 For example, People Operations: ‘We’d always believed that to be
the ship Madrid Maersk unloaded and reloaded 6500 a manager, particularly on the engineering side, you
containers in just 59 hours in Antwerp, Belgium. need to be as deep or deeper a technical expert than
By itself, efficiency is not enough the people who work for you. It turns out that that’s
effectiveness
to ensure success. Managers must absolutely the least important thing.’ 8 What was
accomplishing
tasks that help also strive for effectiveness, which most important? ‘Be a good coach.’ ‘Empower; Don’t
fulfil organisational is accomplishing tasks that help fulfil micromanage.’ ‘Be product and results-oriented.’
objectives
organisational objectives, such as ‘Be a good communicator and listen to your team.’
customer service and satisfaction. The renowned ‘Be interested in [your] direct reports’ success and
writer on management, Peter Drucker, puts it like this: wellbeing.’ 9 In short, Google found what Fayol
‘efficiency is doing things right, effectiveness is doing observed: administrative ability, or management,
the right things’.6 is key to an organisation’s success.
CHAPTER 1 Management 3
According to Fayol, to be successful managers
FIGURE 1.1 T
HE FOUR FUNCTIONS OF
need to per for m f ive ma nager ia l f u nc t ion s:
MANAGEMENT
planning, organising, coordinating, commanding
and controlling.10 Today, though, most management
textbooks have dropped the coordinating function
a nd refer to Fayol’s com ma nd i ng f u nct ion as
‘ lead i ng ’. Consequent ly, Fayol’s ma nagement
functions are known today as planning, organising,
Planning Organising
leading and controlling (see Figure 1.1). Studies

i nd icate t hat ma nage rs who pe r for m t hese The four
management functions well are more successful. For functions of
management
example, the more time that CEOs spend planning,
the more profitable their companies are. 11 Over
a 25-year period, a large US telecommunications Leading Controlling
company, AT&T, found that employees with better

planning and decision-making skills were more
likely to be promoted into management jobs, to be
SMART MGMT
successful as managers and to be promoted into
HAMBURGER U
upper levels of management.12
As McDonald’s looked to grow in the
The evidence is clear. Managers serve their
booming market of China, it knew that a
companies well by planning, organising, leading and
key to its success there was the quality of
its managers. That’s why in 2011 it opened controlling. (That’s why this book is organised around
up a training centre, Hamburger University, the four functions of management.)
in Shanghai, with the goal of recruiting and Now let’s take a closer look at each of these
retaining top employees. McDonald’s management functions in more detail.
created a centre where it could train about
1000 people per year for junior and senior Planning planning
management positions. The centre also determining
Pla n n i ng is determining organisational goals
helps franchise owners learn how to
operate their restaurants effectively and organisational goals and a means and a means for
achieving them
efficiently. Its investment in the university for achieving them. As you’ll learn
of about $32.5 million (US$23 million) was in Chapter 5, planning is one of the best ways to
intended to serve as a foundation for the improve performance. It encourages people to work
company’s plans to expand aggressively in harder, to work hard for extended periods, to engage
China by opening 1000 more stores. in behaviour directly related to goal accomplishment
With an acceptance rate of only 1 per cent and to think of better ways to do their jobs. More
of applicants, it is not easy to get in; in fact, importantly, companies that plan have larger profits
McDonald’s Shanghai course sets a higher and faster growth than companies that don’t plan.
standard than Harvard University (which has
For example, the question ‘What business are
a 7 per cent acceptance rate).13
we in?’ is at the heart of strategic planning, which
Hamburger University gives employees an
you’ll learn about in Chapter 6. If you can answer the
opportunity to move up in the McDonald’s
hierarchy. An entry-level employee can rise question ‘What business are you in?’ in two sentences
to store manager, and then, with training or less, chances are you have a very clear plan for
from Hamburger University, rise further to your business.
middle and senior management in the Ford, Toyota and Mercedes-Benz are in the business
organisation.14 of making combustion-engine automobiles for
individual consumers. But for how much longer? The
industry is racing to catch up with Tesla, which sold
367 000 electric vehicles in 2019, with new factories
in China and Germany potentially raising production
PART ONE Introduction to management
to a million electric cars per year.15 In Australia, the of 14.4 per cent. With the shift to online purchasing
number of people aged between 20 and 24 who hold a at the outset of the COVID-19 pandemic, total online
driver’s licence has been falling in some states, but sales in Australia averaged an annual rise of 67.1 per
has risen slightly in others; overall, there seems to cent from March to October 2020. 20
be a downward trend in younger people getting their The experience in the US and elsewhere was
driver’s licence.16 Fewer people with driver’s licences similar. The first challenge, according to industry
means fewer car sales. Furthermore, some forecasts analyst Sucharita Kodali, is that unlike in warehouses,
suggest that there will be an estimated 23 million self- ‘[i]nventory is never where it’s supposed to be [in
driving cars in the US by 2035, although the uptake the store]. People [shoppers] move it around, and
of self-driving cars in Australia and elsewhere may fast-moving items are never there.’ 21 The second
be slower. Whatever the number of self-driving cars is that store workers only collect 80 items per hour
eventually turns out to be, if the trend in self-driving from grocery store aisles. 22 With online orders rising
technology continues, even fewer people will need to rapidly, Walmart couldn’t keep up. So, it turned to
own other forms of cars.17 Toyota CEO Akio Toyoda Alert Innovation.
sees the future for Toyota as being its development Alert Innovation’s Alphabot Automated Storage
from being a car maker to being a mobility provider and Retrieval System reorganises who does what.
for communities: ‘we will strive to adopt a broad, Installed in the almost 7000-square-metre storerooms
community-level and society-level perspective … at the back of Walmart Supercenters, the 7.3-metre-
which in essence is the concept of the “connected high system automatically moves items vertically
city”.’18 and horizontally in automated carts from their stored
You’ll learn more about planning in Chapter 5 locations to work stations where employees check and
on planning and decision making, Chapter 6 on bag the items for pick-up. According to Walmart Senior
organisational strategy, Chapter 7 on innovation and Manager Brian Roth: ‘Ultimately, this will lower
change and Chapter 8 on global management. dispense times, increase accuracy, and improve the
entirety of online grocery [shopping].’ 23 Indeed, the
Organising Alphabot system allows Walmart associates to handle
organising
800 items per hour – a tenfold increase from manually
deciding where Organising i s dec id i ng whe re
picking up from the aisles. 24 Roth concludes that the
decisions will be decisions will be made, who will do
made, who will do reorganisation ‘will help free associates to focus on
what jobs and tasks, and who will
what jobs and tasks,
service and selling, while the technology handles the
and who will work work for whom in the company. In
for whom more mundane, repeatable tasks’. 25
other words, organising is about
You’ll learn more about organising in Chapter 9
determining how things get done. For
on designing adaptive organisations, Chapter 10
example, supermarket click-and-collect online orders
on managing teams and Chapter 11 on human
– in which customers pick up their groceries in the
resource management.
supermarket car park without setting foot in the shop
itself – used to make up just a small percentage of total
grocery shopping, but surging customer demand is Leading
forcing supermarkets to rethink how they do things.19 Our third management function, leading
In Australia, online sales generally, including leading, i nvolves i nspi r i ng a nd inspiring and
click-and-collect, became increasingly popular motivating employees to work hard to motivating
employees to work
during 2020 and the first part of 2021, mainly due to achieve organisational goals. During hard to achieve
the COVID-19 pandemic. The range of goods available the depth of the Australian drought organisational goals
online exploded in 2020, and grew to include not just in 2019, Grace Brennan founded the
groceries, but also hardware from stores such as ‘Buy From The Bush’ campaign. She had a vision of
Bunnings and sporting/outdoors equipment from turning around the fortunes of drought-ravaged rural
stores such as Anaconda and BCF. Retailers had to and regional communities by promoting the products
adapt to this rapid increase in online sales very quickly and produce of businesses in those communities to
during the pandemic, and the Australian Bureau of the urban population. Speaking in an interview with
Statistics (ABS) stated in December 2020 that it was The Sydney Morning Herald, Brennan explained that
possible that the value of online purchases had been she believed that if consumers knew of the quality of
under-reported since April that year. The ABS further products available in the regions, they would be happy
stated that in the 12 months from March 2019 to to buy them and so invest in regional businesses. She
February 2020, total online sales averaged growth was right. Since Buy From The Bush started, it has
grown to have over 400 000 social media followers, that pose a threat to safety are automated, the human
and some rural businesses sold out of stock after being element of operations remains. They are now just in
featured in the campaign. different forms and in a different location. Rio Tinto’s
Brennan told the The Sydney Morning Herald autonomous equipment is monitored from a control
that ‘Buy From The Bush injected energy back into centre in Perth. The centre, sometimes compared to
businesses. At times it was difficult [for businesses] ‘NASA mission control’, is about 1500 km from the
to open the doors when you were reliant on cash flow mines. 27
from farmers who were not spending.’ 26 You’ll learn more about the control function in
The Buy From The Bush model has stimulated Chapter 15 on control, Chapter 16 on managing
comparable campaigns in response to the devastating information and Chapter 17 on managing service and
bushfires of 2019–2020, with #SpendWithThem and manufacturing operations.
#EmptyEsky using social media to promote small
businesses affected by the fires.
Brennan inspired people around her to work hard
to achieve organisational goals by clearly outlining
a vision for rural and regional business impacted
by drought, by being a role model, and by setting
an example of enthusiastic entrepreneurialism and
WHAT DO MANAGERS DO?
effective management.
You’ll learn more about leading in Chapter 12 on
Not all managerial jobs are the same. The demands and
motivation, Chapter 13 on leadership and Chapter 14
the requirements placed on the CEO of Facebook, for
on managing communication.
example, are significantly different from those placed on
the manager of your local fast-food restaurant.
Controlling After reading the next two sections, you should be
controlling
The last function of management, able to:
monitoring progress controlling, is monitoring progress • describe different kinds of managers
towards goal towards goal achievement and taking • explain the major roles and sub-roles that
achievement and
taking corrective
corrective action when progress isn’t managers perform in their jobs.
action when needed being made. The basic control process
involves setting standards to achieve
goals, comparing actual performance to those standards
and then making changes to return performance to the
standards you set.
LO3 Kinds of managers
Have you ever sat in your car at the traffic lights As shown in Table 1.1, there are four kinds of managers,
next to a huge truck? If the truck was close to fully each with different jobs and responsibilities:
laden, that would probably be a little over 40 tonnes • top managers
rolling along the road beside you. Now think of a • middle managers
truck weighing in at about 390 tonnes rolling along at
• first-line managers
60 km/h with no driver. This is not a ‘runaway’
• team leaders.
vehicle or a scene from a science fiction action movie;
it is an everyday occurrence in some of Australia’s
biggest mines. Australian mines lead the world in the Top managers
use of autonomous trucks and trains. Driverless trains Top managers hold positions such
carry millions of tonnes of iron ore from mines in the as chief executive officer (CEO), chief Top managers
Pilbara region of Western Australia to the coast for operations officer (COO), chief financial executives
responsible for the
international shipment. officer (CFO) or chief information overall direction of
The huge size of the mines in the Pilbara and officer (CIO), and are responsible for the the organisation
the repetitive nature of the tasks that autonomous overall direction of the organisation. Top
vehicles do has made the mine operations not only managers have responsibilities in the following areas:
safer but also more efficient. Speaking in a media change, commitment, culture and environment. 28
interview in 2019, Rio Tinto Group Executive Steve First, they are responsible for creating a context for
McIntosh said that while Rio Tinto are developing change, including forming a long-range (that is, three
advanced operations, where repetitive tasks or those to five years out) vision or mission for the company.
Table 1.1 WHAT THE FOUR KINDS OF MANAGERS DO
Job Responsibilities
Top managers Change
CEO CIO Commitment
COO Vice-president Culture
CFO Corporate heads Environment
Middle managers Resources
Shutterstock.com/michaeljung; Shutterstock.com/PETER CLOSE; Shutterstock.com/MangoNic; Shutterstock.com/stockfour

General manager Objectives
Plant manager Coordination
Regional manager Subunit performance
Divisional manager Strategy implementation
First-line managers Non-managerial worker supervision

Office manager Teaching and training
Shift supervisor Scheduling
Department manager Facilitation
Team leaders Facilitation

Team leader External relationships
Team contact Internal relationships
Group facilitator
When Satya Nadella became CEO of Microsoft in software company in the history of technology that fell
2014, the company had blown opportunities in mobile onto hard times and has recovered so well.’29
phones, search engines, web advertising and social Second, once that vision or mission is set, the
media. It was entrenched and unable to move beyond next responsibility of top managers is to develop
its dominant product, Microsoft Windows. Nadella’s employees’ commitment to and ownership of the
vision refocused Microsoft around cloud-based services. company’s performance.
A former Microsoft executive said that Nadella ‘just Amy Hood became Microsoft’s CFO at a challenging
started omitting “Windows” from sentences … Suddenly, time, just six months before Satya Nadella was
everything from Satya was “cloud, cloud, cloud!”’ Five appointed CEO in 2014. Goldman Sachs Analyst
years later, Azure, Microsoft’s cloud platform, had grown Heather Bellini says: ‘Satya has done an excellent job,
from $4.2 billion to $48 billion in annual revenues. but people think of them as a package together.’ One
Microsoft Office, formerly a ‘buy once, upgrade often’ of Hood’s regular responsibilities is speaking to new
software package, became a $99-per-year cloud-based Microsoft employees. She tells them that while she’s
service with 214 million subscribers. Netflix CEO responsible for company finances, she sees her main
Reed Hastings commented: ‘I don’t know of any other responsibility as making employees happy that they
chose to work for Microsoft – in other words, gaining challenges, … that some people were worried about
employee buy-in. Says Hood: the liability. So considering that when I’m faced with
challenges I just try to be a fixer person, and think
My kids will tell you I practice counting, but my job is
what could be done to change that and what we
really a little different than that. I may have thought
needed was to change the legislation to make it as
about it that way when I took the job almost ﬁve
simple as possible and easy for people to donate, so
years ago. But now it’s about creating an environment
that’s what I needed to do.
in which you all remember that you still want to pick
us every day. That’s my job as a CFO. 30 Kahn is an example to the people at OzHarvest and
Third, top managers are responsible for creating thereby shapes the culture of the organisation. 32
a positive organisational culture through language (You can find out a little more about Ronni Kahn
and action. Top managers have an impact on company by listening to her in the ABC program ‘Fierce Girls’:
values and strategies through what they do and say to https://www.abc.net.au/radio/programs/fierce-girls/
others, both inside and outside the company. Above ronni-kahn/9566650.)
all, no matter what they communicate, it’s critical
for CEOs to send and reinforce clear, consistent
messages. 31
For Ronni Kahn, CEO of OzHarvest, food has
always been about sharing and showing you care.
Understanding that food isn’t just about nutrition,
it’s also about love, she started a charity to help feed
those in need. When she was running a successful
Getty Images/Mark Metcalfe

event management company, she had seen firsthand
the amount of food that was wasted by the hospitality
industry every day. She decided it was time to do
something and started OzHarvest to get food – that
would otherwise go to waste – to people who need it. ‘I
never set up OzHarvest intending … that this could be a Ronni Kahn, CEO of OzHarvest worked to amend legislation
allowing potential food donors to give their surplus food to
way of life or that I could support myself,’ she laughs. ‘I charities without fear of liability.
ran my business for the first seven years of OzHarvest
to support myself because I never started OzHarvest
Finally, top managers are responsible for monitoring
because I was a rich bored housewife.’
their business environments. This means that they
Kahn says that the purpose of OzHarvest is to
must closely monitor customer needs, competitors’
nourish our country through rescuing food, educating
moves, economic conditions, and long-term business
members of the public and vulnerable people to live a
and social trends.
more sustainable life, and coming up with ways to end
the human-made problem of hunger.
During the first year of OzHarvest, Kahn was
Middle managers
confronted with a huge issue – legislation that didn’t Middle managers hold positions
allow the charity to collect good-quality but unneeded such as factory manager, regional middle managers
managers
foods from food vendors and then redistribute them to manager or d iv isional manager. responsible for
those who were so desperately in need of a decent meal. They are responsible for setting setting objectives
Kahn didn’t give up. Instead she fought to change the objec t ives consistent w it h top consistent with top
management’s goals,
legislation – something she appreciates is no small management’s goals and for planning and for planning
feat. Working with a team of pro bono lawyers, she and implementing subunit strategies and implementing
subunit strategies
lobbied state governments to amend legislation to for achieving those objectives in for achieving these
allow potential food donors to give their surplus food the intermediate range (or six to 18 objectives
to charities without fear of liability. The Civil Liability months out). 33
Amendment (Food Donations) Act was passed in New As one middle manager put it, a middle manager
South Wales in 2005, and other states followed. is ‘the implementer of the company’s strategy’ who
She says: figures out ‘how’ to do the ‘what’. 34 Ryan Carson
It was one of the obstacles that I faced, well one of founded online learning company Treehouse Island
the challenges, cause I didn’t face obstacles, just without managers because he believed that his 100
employees could make decisions better and faster
by themselves. However, that decision was severely SMART MGMT
tested when rapid growth resulted in 100 000 students Culture in the googleplex
enrolling in Treehouse Island’s online courses.
in the increasingly fierce competition to hire
Employees, unsure of their responsibilities, became and retain the best and brightest employees,
increasingly frustrated as endless meetings never companies are looking to their organisational
seemed to result in meaningful action or decisions. culture to find an advantage. Research from
Tasks and projects that were necessary to keep up with consulting firm Deloitte shows that culture,
demand started to fall behind schedule. Carson fixed engagement and employee retention are
the situation by creating roles for middle managers. now the top talent challenges facing
‘That [managerless] experiment broke,’ said Carson. businesses today. A leader in building a high-
‘I just had to admit it.’ 35 performance culture that is attractive to work
One specific middle management responsibility in is Google.
is to plan and allocate resources to meet objectives. Google actively encourages employees to
put their ideas into action. The company
A second major responsibility is to coordinate and
advocates that everyone has access to
link groups, departments and divisions within a
senior decision makers, as can be seen from
company. One middle manager described his job as this online statement about Google culture:
being ‘a man who can discuss strategy with [the CEO]
We strive to maintain the open culture
at breakfast and [then] eat lunch with workers’. 36 A often associated with start ups, in which
third responsibility of middle management is to everyone is a hands-on contributor and
monitor and manage the performance of the subunits feels comfortable sharing ideas and
and individual managers who report to them. opinions. In our weekly all hands (‘TGIF’)
meetings – not to mention over email
Finally, middle managers are also responsible for
or in the cafe – Googlers ask questions
implementing the changes or strategies generated directly to Larry [Larry Page, CEO], Sergey
by top managers. Why? Because they’re closer to the [Sergey Brin, co-founder] and other execs
managers and employees who work on a daily basis about any number of company issues.
with suppliers to effectively and efficiently deliver Our offices and cafes are designed
the company’s product or service. In short, they’re to encourage interactions between
Googlers within and across teams, and
closer to the people who can best solve problems and
to spark conversation about work as well
implement solutions. as play.39
How important are middle managers to company
performance? A university study of nearly 400
video game companies found that middle managers’
effectiveness accounted for 22 per cent of the
differences in performance across companies. In
fact, middle managers were three times as important
as the video game designers who develop game
characters and storylines. Professor Ethan Mollick,
who conducted the study, said that middle managers
are the key to ‘making sure the people at the bottom
and the top [of the organisation] are getting what they
Google
need’. 37
As for Treehouse Island, revenue is up, the number Google’s Melbourne office
of online courses has increased, and response times to
student questions have been cut in half. According to
instructor Craig Dennis, things are ‘light years better’
with middle managers in place. 38
First-line managers looks seven to 10 days ahead for staffing needs and
preparing staff rosters.
First-line managers, sometimes
first-line managers
managers who
known as front-line managers, hold Team leaders
train and supervise positions such as office manager,
The fourth kind of manager is a team
the performance shift super v isor or depar tment team leaders
of non-managerial leader. This relatively new kind of
employees, who are manager. The primary responsibility managers
management job developed as many responsible for
directly responsible of first-line managers is to manage the
for producing the companies moved to self-managing facilitating team
performance of entry-level employees, activities toward goal
company’s products teams, which, by definition, have no accomplishment
or services who are directly responsible for
formal supervisor.
producing a company’s goods and
I n t r ad it ion a l m a n a ge me nt
services. Therefore, first-line managers are the only
hierarchies, first-line managers are responsible for the
managers who don’t supervise other managers.
performance of non-managerial employees, making
job assignments and controlling resources, and may
even have the authority to hire and fire employees.
Tea m leade r s h ave a d i f fe re nt se t of
responsibilities. They are primarily responsible for
facilitating team activities towards accomplishing a
Shutterstock.com/Monkey Business Images
goal. This doesn’t mean, however, that team leaders

are responsible for team performance. They aren’t.
The team is.
First, team leaders help their team members plan
and schedule work, learn to solve problems and work
effectively with each other. Management consultant
Franklin Jonath says:
The idea is for the team leader to be at the service
Like top managers and middle managers, front-line
of the group. It should be clear that the team
managers perform the four functions of management
members own the outcome. The leader is there to
bring intellectual, emotional and spiritual resources
First-line managers encourage, monitor and
to the team. Through his or her actions, the leader
reward the performance of their employees. They should be able to show the others how to think about
also make detailed schedules and operating plans the work that they’re doing in the context of their
based on middle management’s intermediate-range lives. It’s a tall order, but the best teams have such
plans. In fact, in contrast to the long-term plans leaders.41
of top managers (three to five years out) and the Relat ion sh ips a mong tea m membe rs a nd
intermediate plans of middle managers (six to 18 between different teams are crucial to good team
months out), first-line managers engage in plans performance, and must be well managed by team
and actions that typically produce results within leaders, who are responsible for fostering good
two weeks. 40 For example, a typical convenience relationships and add ressing problematic ones
store manager might start the day by driving past within their teams. Getting along with others is
competitors’ stores to inspect their specials’ prices. much more important in team structures because
Then they may check the outside of their own store for team members can’t get work done without the help
anything in need of maintenance, such as blown light of teammates.
globes or damaged signs, or that needs restocking, Tim Clem emerged as a team leader at a software
like windscreen washer fluid and paper towels. Then company that provides collaborative tools and
comes an inside check, where the manager determines online work spaces for people who code software.
what needs to be done for the day. (Are there The company also uses team structures and team
enough muffins and juices for breakfast or enough leaders to decide which software projects its 170
sandwiches for lunch?) Once the day is planned, the employees will work on. After only a few months at
manager turns to weekend orders. After accounting the company, Clem, who had not previously led a team,
for the weather (hot or cold) and the sales trends at convinced his colleagues to work on a new product he
the same time last year, the manager makes sure the had designed for Microsoft Windows.42 Without their
store will have enough bread, milk, soft drinks and approval, he would not have been able to implement
weekend newspapers on hand. Finally, the manager the change or secure the resources to hire people to
do the project. By contrast, a manager, and not the • interpersonal roles
team, would have probably made this decision in a • informational roles
traditional management structure. • decisional roles.
Second, team leaders are responsible for managing In other words, managers talk to people, gather and
external relationships. Team leaders act as the bridge give information, and make decisions. Furthermore,
or liaison between their teams and other teams, as shown in Figure 1.2, these three major roles can be
departments and divisions in a company. For example, subdivided into 10 sub-roles. We will examine these
if a member of Team A complains about the quality in the following sections.
of Team B’s work, Team A’s leader needs to initiate a More than anything else, management jobs are
meeting with Team B’s leader. Together, these team people-intensive. Estimates vary with the level of
leaders are responsible for getting members of both management, but most managers spend between
teams to work together to solve the problem. If it’s two-thirds and four-fifths of their time in face-to-face
done right, the problem is solved without involving communication with others.45 If you’re a loner or if you
company management or blaming members of the consider dealing with people to be a pain, then you
other team.43 may not be cut out for management work.
Third, team leaders are responsible for internal In fulfilling the interpersonal roles of management,
team relationships. Getting along with others is managers perform three sub-roles: figurehead, leader
much more important in team structures because and liaison.
team members can’t get work done without the help I n t he f ig u rehead role,
of their teammates. You will learn more about teams managers per for m ceremonial figurehead role
in Chapter 10. the interpersonal
duties such as greeting company role managers play
visitors, speaking at the opening of when they perform
LO4 Managerial roles a new facility or representing the ceremonial duties
company at a community luncheon
So far, we have described managerial work by to support local charities. The figurehead role is also
focusing on the functions of management and important when companies face major challenges.
by examining the four kinds of managerial jobs. Alan Joyce took to the media in November 2020 to
However, although those are valid and accurate explain that passengers on Qantas international
ways of categorising managerial work, if you flights would need proof of COVID-19 vaccination
followed managers around as they performed their before they could board the aircraft. By personally
jobs you probably would not use the terms planning, announcing bad news and difficult policy Joyce was
organising, leading and controlling to describe what fulfilling his figurehead role for Qantas.46
they do. In fact, that’s exactly the conclusion that When managers are in the
management researcher Henry Mintzberg reached leader role, they motivate and leader role
when he observed five American CEOs. Mintzberg the interpersonal
encourage employees to accomplish role managers play
spent a week ‘shadowing’ each of the CEOs and organisational objectives. Remember when they motivate
analysing their correspondence, their conversations the empty supermarket shelves and encourage
employees to
a nd t hei r act ions. M i ntzberg concluded t hat where toilet paper should have accomplish
managers fulfil three major roles while performing been? In March 2020, Woolworths organisational
their jobs:44 Group CEO Brad Banducci said
objectives
FIGURE 1.2 MINTZBERG’S MANAGERIAL ROLES

Source: Adapted from H. Mintzberg, ‘The Manager’s Job:
Folklore and Fact’, Harvard Business Review,
Interpersonal roles Informational roles Decisional roles

July–August 1975 Interpersonal roles
• Figurehead • Monitor • Entrepreneur

• Leader • Disseminator • Disturbance handler
• Liaison • Spokesperson • Resource allocator
• Negotiator
in a corporate press release: ‘The safety of our t hey have collected w it h t hei r disseminator role
customers, teams and the communities in which we subord inates and ot hers in t he the informational
operate remains our number one priority.’47 As well as company. Although there will never role managers play
making pleas to the public to stay calm and respect be a complete substitute for face-to- when they share
information with
one another as fear spread that essential grocery items face dissemination of information, the others in their
might run out, Banducci made sure that the teams of primary methods of communication departments or
companies
workers who stacked shelves and staffed checkouts in large companies are email and
were recognised. He said: voicemail.
I want to specifically thank our team who have been Front is a software company that facilitates
working tirelessly to support customers and replenish effective teamwork by providing shared emails,
stores as quickly as possible. Our team responds inboxes and assignments, all within a powerful email/
incredibly well in a crisis and I am especially proud of calendar platform. CEO and Co-founder Mathilde
how they have come together … for our customers. 48 Collin makes sure everyone is clear on Front’s goals
And finally, in the liaison role, and plans. She says:
liaison role
managers deal with people outside At the beginning of every week, I also send an email
the interpersonal
role managers play their units. Studies consistently to direct reports, I share what my goals of the week
when they deal with indicate that managers spend as are. What I’m working on is also what they’re working
people outside their on. The way that our goal-setting works is that once
units much time with ‘outsiders’ as they do
with their own subordinates and their the company OKRs [objectives and key results] are
own bosses.49 done, then every executive will work on their OKRs
and those are shared [with their teams].51
Informational roles Collin doesn’t share goals that are personal or

confidential (out of privacy concerns for others), or
Not only do managers spend more of their time in face-
that ‘would raise more questions’. She says: ‘The way
to-face contact with others, they also spend much of it
I think about transparency is: Good transparency will
obtaining and sharing information. Indeed, Mintzberg
help solve problems, and bad transparency will create
found that the managers in his study spent 40 per cent
more questions and problems.’52
of their time giving and getting information from
In contrast to the disseminator role, in which
others. 50 In this regard, management can be viewed
managers distribute information to employees inside
as gathering information by scanning the business
the company, in the spokesperson
environment and listening to others, processing spokesperson role
role managers share information with the informational
information, and then sharing information with the
people outside their departments and role managers play
people inside and outside the company.
companies. One of the most common when they share
Mintzberg described three informational sub-roles: information with
ways CEOs serve as spokespeople for people outside their
monitor, disseminator and spokesperson.
their companies is at annual meetings departments or
In the monitor role, managers companies
monitor role with company shareholders or the
ac t i ve l y c o nt ac t o t he r s f o r
the informational board of directors.
role managers play information and, because of their
The news is not always good, and managers have
when they scan their
personal contacts, receive a great deal
environment for to sometimes ‘face the music’ and admit when their
of unsolicited information. In addition
information
company has got it wrong. For example, as problems
to receiving firsthand information,
with bad behaviour in the Australian banking
they monitor their environment by reading online
industry became known during the Royal Commission
news and business sites, local newspapers and the
into Misconduct in the Banking, Superannuation and
business pages of The Age, The Sydney Morning Herald
Financial Services Industry, senior managers were
or the Financial Review to keep track of customers,
faced with the job of apologising and explaining to the
competitors and technological changes that may affect
public how these things could happen. Matt Comyn’s
their businesses. Managers can also take advantage of
first public task as CEO of the Commonwealth Bank
electronic monitoring and distribution services that
of Australia was to say ‘sorry’. In a letter written to
track news services (Associated Press, Reuters and so
51 000 bank staff in 2018, Comyn wrote:
forth) for stories related to their businesses.
We have made mistakes. That starts with me and our
Because of their numerous personal contacts and
senior executives. We have let some of our customers
their access to subordinates, managers are often
down when they have needed us most … in doing so
hubs for the distribution of critical information. we have let you down. We have been too slow to fix
In the disseminator role, they share information mistakes and we have failed to meet some important
regulatory and compliance obligations. This is
unacceptable.53
Decisional roles
M intzberg found that obtaining and sharing
In 2020, Comyn was able to look to the future of
information is not an end in itself. Obtaining and
the Australian banking sector and the economy in
sharing information with people inside and outside
general. Speaking to The Australian, he represented
the company is also useful to managers because
his bank’s view of the future by stating that digital
it helps them make good decisions. According to
transformation was changing the customers’ lives
Mintzberg, managers engage in four decisional sub-
and how they choose to interact with the bank: ‘This
roles: entrepreneur, disturbance handler, resource
change has already been profound and is ongoing,’ he
allocator and negotiator.
said. ‘Our goal is to build deep, trusted relationships
In the entrepreneur role, managers
with our customers.’54 entrepreneur role
adapt themselves, their subordinates
the decisional role
and their units to change. managers play
In the chaos that many businesses when they adapt
themselves, their
experienced around the world during subordinates and
the early days of the COVID-19 their units to change
pandemic and the sudden transition to
‘working from home’, some business barely survived
and some thrived. One that thrived was Canva.
Founded in Sydney in 2012 by Melanie Perkins, Cliff
Shutterstock.com/Jacob Lund
Obrecht and Cameron Adams, Canva produces a

graphic design platform of the same name. Offering
a free version as well as a business-focused paid
version of its app, Canva has grown rapidly since it
was founded, soaring from a valuation of $1 billion by
CEOs often adopt the spokesperson role to communicate
important information to those outside the company 2018 and $4.7 billion by October 2019. The company
has attracted major investment and in June 2020 hit
a valuation of $8.7 billion. According to a company
statement in June 2020, use of the design platform had
MGMT FACT increased by 50 per cent since the start of the COVID-19
Connect to your business pandemic. ‘Canva’s accelerated growth is indicative
of the “new normal”,’ co-founder Obrecht said in a
Making good decisions depends on having
good information. Business leaders need to statement. ‘Now more than ever, organisations of all
assess a broad range of information, from sizes are doubling down on building a reliable remote
both inside and outside their organisation. workplace.’ Rick Baker, co-founder of venture capital
Among the range of available information, fund Blackbird, a long-time Canva investor, said that
many managers turn to online sources that ‘Canva continues to power ahead. In a post-COVID
deal specifically with business matters. world of remote working, we are seeing Canva’s
Some of these services, such as the ones original vision – a collaborative platform to provide
listed below, deliver customised electronic all the elements to create great design – become even
newspapers that include only stories on topics more powerful.’55
the reader specifies:
In the disturbance handler role,
• Crikey (http://www.crikey.com.au) – disturbance handler
managers respond to pressures and role
business commentary and analysis.
problems so severe that they demand the decisional role
• Boss Financial Review (http://www.afr.com/
boss) – regular background information and immediate attention and action. managers play when
they respond to
reporting of current business issues. Managers often play the role of severe problems that
• The Business Times (Singapore) (http:// disturbance handler when events that demand immediate
action
www.businesstimes.com.sg) – business impact negatively on the company
news and stock market information. have to be addressed.
As the COV ID-19 pandemic forced airlines
around the world to cancel flights and lay off staff, WORKPLACE AND COMMUNITY
Qantas CEO Alan Joyce went on television and social
Resource allocation: the ABC responds to
media to explain to the public how his airline would
budget cuts
respond. In June 2020 he announced a plan to keep
the Qantas business viable – a plan that included in 2018 the federal government announced
that the amount of money allocated to the
deep staff cuts, bringing for ward the planned
Australian Broadcasting Corporation (ABC)
retirement of iconic Boeing 747s and putting the
would be ‘frozen’ from July 2019 for three
airline’s f leet of 19 giant Airbus A380s in storage. years, effectively costing the organisation $84
By taking decisive action to resolve the dramatic million. Faced with rapidly changing
problems faced by Qantas, and thereby to keep the circumstances, 2020 saw the ABC having to
business viable, Joyce was acting in his disturbance make tough decisions about where it allocates
handler role as CEO. 56 its scarce financial resources. The company set
In the resource allocator role, about the task of looking for operational
resource allocator
managers decide who will get what efficiencies and braced itself for the seemingly
role
the decisional role resources and how much of each inevitable deeper reductions in staff numbers.
managers play when resource they will get. In June 2020, the ABC announced a process to
they decide who gets
Alphabet (parent company of make 250 staff redundant as a result of the
what resources federal government’s decision.
Google) is the second most profitable
company in the world (after Apple).
For years, it grew so fast, with revenues greatly
Twenty of the US’ largest companies, including
exceeding costs, that budgets – much less budget
American Express, IBM, Marriott, Shell Oil and
discipline – didn’t matter. In 2015, founders Larry
Verizon Communications, have formed the Health
Page and Sergey Brin hired CFO Ruth Porat to get
Transformation Alliance (HTA) to negotiate lower
Alphabet’s businesses to make budgets and stick to
drug and medical costs. Kevin Cox, former Chief
them. 57
Human Resources Officer at American Express, said
While Google is a corporate giant, its roots are in
in 2016: ‘Even the most successful companies won’t
small business. So when the COVID-19 pandemic hit,
be able to afford the rising costs of health care in the
Porat led Google’s efforts to help get small businesses
not too distant future.’60 At a time when health care
and the economy back on track. The pandemic has
spending is increasing 6 to 8 per cent per year, the
taken a tremendous toll on the world economy. In its
HTA expects to lower drug costs by 15 per cent for its
early months, over 100 000 businesses permanently
6 million employees. Kyu Rhee, IBM’s Chief Health
closed in the US alone, according to a study published
Officer, says: ‘This is the group that’s paying the bill.
by the National Bureau of Economic Research. 58 ‘It’s
We’re not waiting for the public sector to come up with
so clear that small businesses are the lifeblood of
the solution − we have the skills and expertise to do
the … economy,’ says Porat. ‘They provide about two
this ourselves.’61
thirds of net new jobs, and 67 cents of every dollar
spent at a small business stays in the local economy.’
At the start of the pandemic, Google CEO Sundar
Pichai announced an $1.13 billion (US$800 million)
commitment to aid small businesses and provide
overall crisis relief. The main objective of the aid
was to support the short-term recovery and long- WHAT DOES IT TAKE TO BE A
term financing needs of small businesses hardest
MANAGER?
hit by COVID-19. The greater part of the funds were
allocated to business loans at 3 per cent interest, and
Google Ads credits were also made
negotiator role
available to all small businesses with I didn’t have the slightest idea what my job was.
the decisional role
active accounts during 2019–2020. 59 I walked in giggling and laughing because I had
managers play
been promoted and had no idea what principles
when they negotiate In the negotiator role, managers
schedules, projects, or style to be guided by. After the first day, I felt
goals, outcomes, negot i ate sc he du les , pr oje c t s ,
like I had run into a brick wall.
resources and goa ls, outcomes, resou rces a nd
employee raises
employee raises. Sales representative #1
Suddenly, I found myself saying, ‘Boy, I can’t be What companies
LO5
responsible for getting all the revenue. I don’t
have the time.’ Suddenly you’ve got to go from look for in managers
[taking care of] yourself and say ‘Now I’m the
When companies look for employees who would be
manager and what does a manager do?’ It takes
good managers, they look for individuals who have
a while thinking about it for it to really hit you … a
technical skills, human skills, conceptual skills and
manager gets things done through other people.
the motivation to manage. 63 Figure 1.3 shows the
That’s a very, very hard transition to make.
relative importance of these four skills to the jobs of
Sales representative #262 team leaders, first-line managers, middle managers
The statements above come from two star sales and top managers.
representatives, who, on the basis of their superior Technical skills are the ability
performance, were promoted to the position of sales to apply the specialised procedures, technical skills
the ability to apply
manager. As their communications indicate, at first they techniques and knowledge required to the specialised
did not feel confident about their ability to do their jobs get the job done. For sales managers, procedures,
as managers. Like most new managers, they realised technical skills are the ability to find techniques and
that the knowledge, skills and abilities that led to success knowledge required
new sales prospects, develop accurate to get the job done
early in their careers (and were probably responsible for
sales pitches based on customer needs,
their promotion into the ranks of management) would
and close the sale. For a nurse manager, technical
not necessarily help them succeed as managers. As sales
skills might include being able to give an injection
representatives, they were responsible only for managing
or know what to do if a patient goes into cardiac
their own performance. But as sales managers, they
arrest.
were now directly responsible for supervising all of the
Technical skills are most important for team
sales representatives in their territories. Furthermore,
they were directly accountable for whether those sales leaders and lower-level managers because they
representatives achieved their sales goals or not. supervise the employees who make products or serve
If performance in non-managerial jobs doesn’t customers. Team leaders and first-line managers
necessarily prepare you for a managerial job, then what need technical knowledge and skills to train new
does it take to be a manager? employees and help employees solve problems.
After reading the next three sections, you should be Technical knowledge and skills are also needed to
able to: troubleshoot problems that employees can’t handle.
• explain what companies look for in managers Technical skills become less important as managers
• discuss the top mistakes that managers make in rise through the managerial ranks, but they are
their jobs still important.
• describe the transition that employees go through Human skills can be summarised human skills
when they are promoted to management. as the ability to work well with the ability to work
others. Managers with people skills well with others
FIGURE 1.3 MANAGEMENT SKILLS
Team leaders
Importance
High
First-line managers
Middle managers
Top managers
Importance
Low
Technical Human Conceptual Motivation

skills skills skills to manage
genius lacks technical skills, human skills or one other
factor known as the ‘motivation to manage’.
Motivation to manage is an
a ssessme nt of how mot ivated motivation manage
to
employees a re to interact w it h an assessment of

superiors, participate in competitive how enthusiastic
situations, behave assertively towards employees are about
managing the work
others, tell others what to do, reward of others
Shutterstock.com/Daisy Daisy
good behaviour and punish poor

behaviour, perform actions that are highly visible
to others, and handle and organise administrative
tasks. Managers typically have a stronger motivation
to manage than their subordinates, and managers at
Technical skills are valuable to managers who need to train
staff and help them overcome problems higher levels usually have a stronger motivation to
manage than managers at lower levels. Furthermore,
work effectively within groups, encourage others managers with a stronger motivation to manage are
to express their thoughts and feelings, are sensitive promoted faster, are rated as better managers by their
to others’ needs and viewpoints, and are good employees, and earn more money than managers with
listeners and communicators. Human skills are a weak motivation to manage.66
equally important at all levels of management, from
team leaders to CEOs. However, because lower-level
managers spend much of their time solving technical Mistakes managers
LO6
problems, upper-level managers may actually spend
more time dealing directly with people. On average,
make
first-line managers spend 57 per cent of their time Another way to understand what it takes to be a
working with people, but that percentage increases manager is to look at the mistakes managers make.
to 63 per cent for middle managers and 78 per cent In other words, we can learn just as much from
for top managers.64 what managers shouldn’t do as from what they
Conceptual skills are the ability should do.
conceptual skills to see the organisation as a whole, to Several studies of American and British managers
the ability to see the understand how the different parts have compared arrivers, or managers
arrivers
organisation as a
of the company affect each other, who made it all the way to the top of
whole, understand managers who have
how the different and to recognise how the company their companies, with derailers, or made it to the top of
parts affect each fits into or is affected by its external managers who were successful early a company
other, and recognise
how the company env ironment, such as the local in their careers but were knocked derailers
fits into or is affected community, social and economic off the fast track by the time they managers who were
by its environment
forces, customers and the competition. reached the middle to upper levels successful early
in their careers,
Good managers have to be able to of management.67 but stagnated in
recognise, understand and reconcile multiple complex The researchers found that there middle or upper
problems and perspectives. In other words, managers were only a few differences between management
have to be smart! In fact, intelligence makes so much arrivers and derailers. For the most
difference to managerial performance that managers part, both groups were talented and both groups
with above-average intelligence typically outperform had weaknesses. But what distinguished derailers
managers with average intelligence by approximately from arrivers was that derailers possessed two or
48 per cent.65 Clearly, companies need to be careful more ‘fatal flaws’ with respect to the way that they
to promote smart employees into management. managed people. Although arrivers were by no means
Conceptual skills increase in importance as managers perfect, they usually had no more than one fatal flaw
rise through the management hierarchy. or had found ways to minimise the effects of their
Good management involves much more than flaws on the people with whom they worked.
intelligence, however. For example, making the The number one mistake made by derailers is
department genius a manager can be disastrous if that that they are insensitive to others by virtue of their
abrasive, intimidating and bullying management
style. The authors of one study described a manager fatal mistake of treating people as though they don’t
who walked into his subordinate’s office and matter. One employee described an overly ambitious
interrupted a meeting by saying: ‘I need to see you.’ boss in this way:
When the subordinate tried to explain that he was not He treats employees coldly, even cruelly. He assigns
available because he was in the middle of a meeting, blame without regard to responsibility, and takes all
the manager barked: ‘I don’t give a damn. I said I the credit for himself. I once had such a boss, and he
wanted to see you now.’68 Not surprisingly, only 25 per gave me a new definition of shared risk: if something
cent of derailers were rated by others as being good I did was successful, he took the credit. If it wasn’t, I
with people, compared with 75 per cent of arrivers. got the blame.70
The second mistake is that derailers are often The fifth and final mistake made by derailer
cold, aloof or arrogant. Although to others this may managers is being unable to delegate or build a team
sound like insensitivity, it has more to do with derailer and staff effectively. Many derailer managers were
managers being so smart and so expert in their areas unable to make the most basic transition to managerial
of knowledge that they treat others with contempt work: to quit being hands-on doers and start getting
because they aren’t experts too. For example, an work done through others. In fact, according to an
American telecommunications company called in an article in Harvard Business Review, up to 50 per cent
industrial psychologist to counsel its head of human of new managers fail because they cannot make the
resources because she had been blamed for ruffling transition from producing to managing.71
too many feathers at the company. Interviews with When managers meddle in decisions that their
her co-workers and subordinates revealed that they subordinates should be making – that is, when they
thought she was brilliant, was ‘smarter and faster can’t stop being ‘doers’ – they alienate people who
than other people’, ‘generates a lot of ideas’ and ‘loves work for them. According to Richard Kilburg of Johns
to deal with complex issues’. Unfortunately, these Hopkins University, when managers interfere with
good points were accompanied by a cold, aloof and employees’ decisions, ‘[y]ou … have a tendency to lose
arrogant management style. The people she worked your most creative people. They’re able to say, “Screw
with complained that she does ‘too much too fast’, this. I’m not staying here”’.72 Further, in trying to do
treats co-workers with ‘disdain’, ‘impairs teamwork’, their subordinates’ jobs as well as their own, managers
‘doesn’t always show her warm side’ and has ‘burned who fail to delegate will not have enough time to do
too many bridges’.69 anything well.
The third and fourth mistakes made by the
derailers are betraying trust and being overly political
and ambitious, both reflecting a lack of concern for
LO7The transition
co-workers and subordinates. Betraying trust doesn’t to management: the
mean being dishonest. Instead, it means making
others look bad by not doing what you said you would first year
do, when you said you would do it. The mistake,
In her book Becoming a Manager: Mastery of a new
in itself, is not fatal because managers and their
identity,73 Harvard Business School professor Linda
employees aren’t machines. Tasks go undone in every
Hill followed the development of 19 people in their
company, every single business day. There’s always
first year as managers. Her study found that becoming
too much to do and not enough time, people, money or
a manager produced a profound psychological
resources to do it. The fatal betrayal of trust is failing
transition that changed the way these managers
to inform others when things will not be done on time.
viewed themselves and others. As shown in Figure 1.4,
The failure to admit mistakes, quickly inform others of
the evolution of the managers’ thoughts, expectations
the mistakes, take responsibility for the mistakes and
and realities over the course of their first year in
then fix them without blaming others distinguishes
management reveals the magnitude of the changes
the behaviour of derailers from arrivers.
they experienced.
Managers who make the fourth mistake – being
Initially, the managers in Hill’s study believed
overly political and ambitious – always have their
that their job was to exercise formal authority and to
eye on their next job and so rarely establish more than
manage tasks – basically being the boss, telling others
superficial relationships with peers and co-workers.
what to do, making decisions and getting things done.
In their haste to gain credit for successes that would
One of the managers Hill interviewed said: ‘Being
be noticed by upper management, they make the
the manager means running my own office, using my
FIGURE 1.4 STAGES IN THE TRANSITION TO MANAGEMENT
L.A Hill, Becoming a Manager: Mastery of a New Identity
(Boston: Harvard Business School Press, 1992).
Managers’ initial expectations After six months as a manager After a year as a manager
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
• Be the boss • Initial expectations were wrong • No longer ‘doer’

• Formal authority • Fast pace • Communication, listening and positive reinforcement
• Manage tasks • Heavy workload • Learning to adapt to and control stress
• Job is not managing people • Job is to be problem solver and • Job is people development
troubleshooter for subordinates
ideas and thoughts.’ Another said: ‘[The office is] my

baby. It’s my job to make sure it works.’ 74
In fact, most of the new managers were attracted
to management positions because they wanted to be
‘in charge’. Surprisingly, the new managers did not
believe that their job was to manage people. The only
aspects of people management mentioned by the new
Shutterstock.com/Rawpixel.com
managers were hiring and firing.
After six months, most of the new managers
had concluded that their initial expectations about
managerial work were wrong. Management wasn’t
being ‘the boss’. It wasn’t just about making decisions
and telling others what to do. Top managers spend an average of nine minutes on a given
The first surprise was the fast pace and heavy task before having to switch to another
workload involved in being a manager. Said one

manager: ‘This job is much harder than you think. I am not doing the job I’m supposed to be doing, which
It is 40 to 50 per cent more work than being a is being with the people.’ 76
producer! Who would have ever guessed?’ The pace The other major surprise after six months on the job
of managerial work was startling, too. Another was that the managers’ expectations about what they
manager said: ‘You have eight or nine people looking should do as managers were very different from their
for your time … coming into and out of your office all subordinates’ expectations. Initially, the managers
day long.’ A somewhat frustrated manager declared defined their jobs as helping their subordinates to
that management was ‘a job that never ended … a job perform their jobs well. For the managers, who still
you couldn’t get your hands around.’ 75 defined themselves as ‘doers’ rather than ‘managers’,
Informal descriptions like this are consistent with assisting their subordinates meant going out on sales
studies indicating that the average first-line manager calls or handling customer complaints. But when
spends no more than two minutes on a task before managers ‘assisted’ in this way, their subordinates
being interrupted by a request from a subordinate, were resentful and viewed their ‘help’ as interference.
a phone call or an email. The pace is somewhat less The subordinates wanted their managers to help
hurried for top managers, who spend an average of them by solving problems that they couldn’t solve.
approximately nine minutes on a task before having Once the managers realised this distinction, they
to switch to another. In practice, this means that embraced their role as problem solvers and trouble
supervisors may perform 30 different tasks per hour, shooters. Therefore, they could help without
while top managers may perform seven different tasks interfering with their subordinates’ jobs.
per hour, with each task typically different from the After a year on the job, most of the managers
other that preceded it. A manager described this thought of themselves as managers and no longer as
frenetic level of activity by saying: ‘The only time you doers. In making the transition, they finally realised
are in control is when you shut your door and then I feel that people management was the most important
pa r t of t hei r jobs. One ma nager su m ma r ised
the lesson that had taken him a year to learn by I always think the most important one of those is
saying: ‘As many demands as managers have on people. If you don’t get that one right, it doesn’t
matter what kind of energy you have in the other
their time, I think their primary responsibility is
two – it’s not enough.79
people development. Not production, but people
development.’ Another indication of how much their After reading this section, you should be able to
views had changed was that most of the managers explain how and why companies can create competitive
now regretted the rather heavy-handed approach advantage through people.
they had used in their early attempts to manage
their subordinates. ‘I wasn’t good at managing … so
I was bossy like a first-grade teacher.’ ‘Now I see
that I started out as a drill sergeant. I was inflexible,
Competitive
LO8
just a lot of how-to’s.’ 77 By the end of the year, most advantage through
of the managers had abandoned their authoritarian
approach for one based on communication, listening people
and positive reinforcement. In his books Competitive Advantage Through People
Finally, after beginning their year as managers in and The Human Equation: Building profits by putting
frustration, the managers came to feel comfortable people first, Stanford University business professor
with their subordinates, with the demands of their Jeffrey Pfeffer contends that what separates top-
jobs and with their emerging managerial styles. performing companies from their competitors is the
W hile being managers had made them acutely way they treat their workforces – in other words,
aware of their limitations and their need to develop their management. 80
as people, it also provided them with an unexpected Pfeffer found that managers in top-performing
regard for coaching and developing the people who compa n ies u sed idea s suc h a s e mploy me nt
worked for them. One manager said: ‘I realise security, selective hiring, self-managed teams and
now that when I accepted the position of branch decentralisation, high pay contingent on company
manager that it is truly an exciting vocation. It is performance, extensive training, reduced status
truly awesome, even at this level; it can be terribly distinctions (between managers and employees)
challenging and terribly exciting.’ 78 and extensive sharing of financial information to
achieve financial performance that, on average,
was 40 per cent higher than that of other companies.
These ideas, which are explained in detail in Table
1.2, help organisations to develop workforces that
are smarter, better trained, more motivated and
WHY MANAGEMENT MATTERS more committed than their competitors’ workforces.
Also, as indicated by the phenomenal growth and
return on investment earned by these companies,
If you look on the shelves of the business section in sma r ter, bet ter-t ra i ned a nd more com m it ted
your campus bookshop, you’ll find hundreds of books workforces provide superior products and service
that explain precisely what companies need to do to to customers, who keep buying and – by telling
be successful. Unfortunately, the best-selling business others about their positive experiences – bring in
books tend to be faddish, changing dramatically every new customers.
year or two, with new solutions (or old ones re-told) P fe f fe r a l so a rg ues t h at compa n ies t h at
and new buzz words. One thing that has not changed, i nvest i n t hei r people w i l l create long-last i ng
though, is the importance of good people and good compet it ive adva ntages t hat a re d i f f ic u lt for
management – companies can’t succeed for long other companies to duplicate. Indeed, other studies
without them. c lea rly demon st rate t hat sou nd ma nagement
Apple CEO Tim Cook agrees, saying: practices can produce substantial advantages in
I think about my day and weeks and months four critical areas of organisational performance:
and years – I put them in three buckets: people, sales revenues, profits, stock market returns and
strategy and execution. I sort of move between customer satisfaction.
those on a daily basis as to where I put my time. A study of nearly 1000 organisations found that
those that use just some of the ideas shown in Table 1.2
Table 1.2 COMPETITIVE ADVANTAGE THROUGH PEOPLE: MANAGEMENT PRACTICES
1 Employment security Employment security is the ultimate form of commitment that companies can make to their employees.
Employees can innovate and increase company productivity without fearing the loss of their jobs.
2 Selective hiring If employees are the basis for a company’s competitive advantage, and those employees have employment security,
then the company needs to aggressively recruit and selectively screen applicants in order to hire the most
talented employees available.
3 S elf-managed teams Self-managed teams are responsible for their own hiring, purchasing, job assignments and production.
and decentralisation Self-managed teams can often produce enormous increases in productivity through increased employee
commitment and creativity. Decentralisation allows employees who are closest to (and most knowledgeable
about) problems, production and customers to make timely decisions. Decentralisation increases employee
satisfaction and commitment.
4 H
igh wages High wages are needed to attract and retain talented employees and to indicate that the organisation values its
contingent on employees. Employees, like company founders, shareholders and managers, need to share in the financial
organisational rewards when the company is successful. Why? Because employees who have a financial stake in their companies
performance are more likely to take a long-run view of the business and think like business owners.
5 T raining and skill Like a high-tech company that spends millions of dollars to upgrade computers or research and development labs,
development a company whose competitive advantage is based on its people must invest in the training and skill development
of its people.
6 R eduction of status These are fancy words that indicate that the company treats everyone, no matter what the job, as equal. There are
differences no reserved parking spaces. Everyone eats in the same cafeteria and has similar benefits. The result:
much-improved communication as employees focus on problems and solutions rather than on how they
are less valued than managers.
7 Sharing information If employees are to make decisions that are good for the long-run health and success of the company, they need
to be given information about costs, finances, productivity, development times and strategies that was previously
known only by company managers.
Source: J. Pfeffer, The Human Equation: Building Profits by Putting People First (Boston: Harvard Business School Press, 1996). Reprinted with permission of Harvard Business Publishing. All rights
reserved.
had over $27 000 more in sales per employee and over per cent. 84 That fits with another study of 2000 firms
$3800 more in product per employee than companies showing that an average improvement in management
that didn’t. 81 For a company with 100 people, these practices can produce a 10 to 20 per cent increase in
differences amount to $2.7 million more in sales and the total value of a company. 85
nearly $400 000 more in annual profit! So, in addition to significantly improving the
A nother study investigating the effect on profitability of healthy companies, sound management
company sales of investing in people found that practices can turn around failing companies.
poorly performing companies that adopted simple To determine the effect of investing in people
management techniques were able to improve their on stock market performance, researchers matched
average return on investment from 5.1 per cent to companies on Fortune magazine’s list of ‘100 Best
19.7 per cent, and increase sales by approximately Companies to Work for in America’ with companies
$130 000 per employee!82 The management techniques that were similar in industry, size and – this is the
they adopted were as simple as setting performance key– operating performance. In other words, both sets
expectations (establishing goals, results and of companies were equally good performers; the key
schedules), coaching (informal ongoing discussions difference was how well they treated their employees.
between managers and subordinates about what For both sets of companies, the researchers found that
is being done well and what could be done better), employee attitudes such as job satisfaction changed
reviewing employee performance (annual formal little from year to year. The people who worked for
discussions about results) and rewarding employee the ‘100 best’ companies were consistently more
performance (adjusting salaries and bonuses based satisfied with their jobs and employers year after year
on employee performance and results). 83 Two decades than were employees in the matched companies. More
of research across 92 companies indicates that the importantly, those stable differences in employee
average increase in company performance from using attitudes were strongly related to differences in
these management practices is typically around 20 stock market performance. Over a three-year period,
an investment in the ‘100 Best Companies to Work work for, t hey prov ide much better ser v ice to
for in America’ would have resulted in an 82 per cent customers. 87
cumulative stock return, compared to just 37 per You will learn more about the service–profit
cent for the matched companies. 86 This difference chain in Chapter 17 on managing service and
is remarkable given that both sets of companies manufacturing operations.
were equally good performers at the beginning of
the period.
Finally, research also indicated that managers
have an important effect on customer satisfaction.
Ma ny people f i nd t h is su r pr isi ng. T hey don’t
u nde rsta nd how ma nage rs, who a re la rgely
responsible for what goes on inside the company,
can affect what goes on outside the company. They
wonder how managers – who often interact with
Shutterstock.com/Gutesa
customers in negative situations (when customers
are angry or dissatisfied) – can actually improve
customer satisfaction. It turns out that managers
inf luence customer satisfaction through employee
satisfaction. When employees are satisfied with People provide companies with significant competitive
their jobs, their bosses and the companies they advantages
2 IN THE BEGINNING
HISTORY
OF MANAGEMENT Each day, managers are asked to solve challenging
problems with limited time, people and resources. Yet it’s
still their responsibility to get things done on schedule
and within budget. Tell today’s managers to ‘reward
workers for improved production or performance’, ‘set
specific goals to increase motivation’ or ‘innovate to
create and sustain a competitive advantage’ and they’ll
respond, ‘Duh! Who doesn’t know that?’ Only 130 years
ago, however, business ideas and practices were so
different that today’s widely accepted management
ideas would have been as self-evident as space travel,
smartphones, the Internet and flying drones.
Learning objectives
In fact, management jobs and careers didn’t exist 150
LO1 Explain the origins of management. years ago, so management was not yet a field of study.
Now, of course, managers and management are such
LO2 Explain the history of scientific an important part of the business world that it’s hard to
management. imagine organisations without them.
LO3 Discuss the history of bureaucratic and
administrative management.
LO4 Explain the history of human relations
management.
LO5 Discuss the history of operations,
information, systems and contingency
management.
Shutterstock.com/Marcus Mainka
So, if there were no managers 130 years ago, but you
can’t walk down the hall today without bumping into one,
where did management come from?
After reading the next section you should be able to
explain the origins of management
The origins of
LO1
management
Although we can find the seeds of many of today’s
management ideas throughout history, not until the
past few centuries did systematic changes in the
nature of work and organisations create a compelling
need for managers.
Let’s begin our discussion of the origins of perfectly into place. It took 20 000 workers 23 years
management by learning about: to complete this pyramid; more than 8000 were
• management ideas and practice throughout needed just to quarry and transport the stones. A
history typical quarry expedition might include 100 army
officers, 50 government and religious officials and
• why we need managers today.
200 members of the k ing’s cour t to lead; 130
stonemasons to cut the stones; and 5000 soldiers,
Management ideas and 800 barbarians and 2000 bond servants to load and
practice throughout history unload the stones from the ships. 5
Examples of management thought and practice can be
found throughout history.1 For example, the earliest
recorded instance of information management dates
to ancient Sumer (modern Iraq), circa 8000–3000
BCE (before common era). Sumerian businesses used
small clay tokens to calculate quantities of grain
and livestock and later, value-added goods such as
Shutterstock.com/Nikolay Vinokurov
perfume or pottery that they owned and traded in
temples and at city gates. Different shapes and sizes
represented different types and quantities of goods.
The tokens were also used to store data. They were
kept in small clay envelopes, and the token shapes
were impressed on the outside of the envelope to
indicate what was inside. Eventually, someone It took 20 000 workers 23 years to complete the pyramid of
King Khufu; more than 8000 were needed just to quarry the
figured out that it was easier to just write these stones and transport them
symbols with a stylus on a tablet instead of using
the tokens. Table 2.1 shows how ot her ma nagement
Here’s what was written on one clay tablet from ideas and practices throughout history relate to
this era: ‘From Durhumit until Kaneš I incurred management functions.
expenses of 5 minas of refined (copper), I spent 3
minas of copper until Wahšušana, I acquired and Why we need managers
spent small wares for a value of 4 shekels of silver.’ 2
In the end, the new technology of writing led to more
today
efficient management of the business of Sumerian Working from 8:00 a.m. to 5:00 p.m., coffee breaks,
temples. 3 Indeed, archaeologists have determined lunch hours, crushing rush hour traffic, endless
that most clay tablets of this time were ‘business emails and non-stop meet ings a re t h ings we
letters, shipment documents, accounting records, associate with today’s working world. Work hasn’t
seals and contracts’.4 always been this way, however. In fact, the design
A task as enor mous as build ing t he g reat of jobs and organisations has changed dramatically
pyramids in Egypt was bound to present practical over the past 500 years. For most of humankind’s
problems that would lead to the development of histor y, for example, people didn’t commute to
management ideas. work. 6 Work usually occurred in homes or on farms.
Egyptians recognised the need for planning, In 1720, almost 80 per cent of the 5.5 million people
organising and controlling; for submitting written in England lived and worked in the country. As
requests; and for consulting staff for advice before recently as the 1900s, the majority of Australians
making decisions. The enormity of the task they earned their living from agriculture. Even most of
faced is evident in the pyramid of King Khufu, which those who didn’t earn their living from agriculture
contains 2.3 million blocks of stone. Each block had didn’t commute to work. Blacksmiths, furniture
to be quarried, cut to precise size and shape, cured makers, leather goods makers and other skilled
(hardened in the sun), transported by boat for two tradespeople or craftspeople who formed trade
to three days, moved to the constr uction site, guilds (the historical predecessors of labour unions)
numbered to identify where it would be placed, and in England as early as 1093 typically worked out of
then shaped and smoothed so that it would fit shops in or next to their homes.7 Likewise, cottage
CHAPTER 2 History of management 23
Table 2.1 MANAGEMENT IDEAS AND PRACTICE THROUGHOUT HISTORY
Individual or group
Contributions to management
Controlling
Organising
thought and practice
Planning
Leading
Time
5000 BCE Sumerians ✓ Record keeping.
4000 BCE to Egyptians Recognised the need for planning, organising and controlling when building the
✓ ✓ ✓
2000 BCE pyramids; submitted requests in writing; made decisions after consulting staff for advice.
1800 BCE Hammurabi Established controls by using witnesses (to vouch for what was said or done)
✓
and writing to document transactions.
600 BCE Nebuchadnezzar ✓ ✓ Wage incentives and production control.
500 BCE Sun Tzu ✓ ✓ Strategy; identifying and attacking opponent’s weaknesses.
400 BCE Xenophon ✓ ✓ ✓ ✓ Recognised management as a separate art.
400 BCE Cyrus ✓ ✓ ✓ Human relations and motion study.
175 Cato ✓ Job descriptions.
284 Diocletian ✓ Delegation of authority.
900 Alfarabi Listed leadership traits.
1100 Ghazali Listed managerial traits.
1418 Barbarigo ✓ Different organisational forms/structures.
1436 Venetians ✓ Numbering, standardisation and interchangeability of parts.
1500 Sir Thomas More ✓ Critical of poor management and leadership.
1525 Machiavelli ✓ ✓ Cohesiveness, power and leadership in organisations.
Source: C. S. George, Jr, The History of Management Thought. © 1972. Reprinted by permission of Pearson Education, Inc., Upper Saddle River, NJ.
workers worked with each other out of small homes goods by themselves by hand, this new production
that were often built in a semicircle. A family in system was based on a division of labour: each worker,
each cottage would complete a different production interacting with machines, performed separate,
step, and work passed from one cottage to the next highly specialised tasks that were but a small part of
until production was complete. With small self- all the steps required to make manufactured goods.
organised work groups, no commute, no bosses and Mass production was born as rope and chain driven
no common building, there wasn’t a strong need assembly lines moved work to stationary workers who
for management. concentrated on performing one small task over and
Du r i ng t he I ndust r ia l Revolut ion (1750 – over again. While workers focused on their singular
1900), however, jobs and organisations changed tasks, managers were needed to coordinate the
dramatically. 8 First, unskilled labourers running different parts of the production system and optimise
machines began to replace high-paid, skilled artisans. its overall performance. Productivity skyrocketed
This change was made possible by the availability of at companies that understood this. At Ford Motor
power (steam engines and, later, electricity) as well Company, where the assembly line was developed,
as numerous related inventions, including Darby’s the time required to assemble a car dropped from
coke smelting process and Cort’s puddling and rolling 12.5 work hours to just 93 minutes after switching to
process (both for making iron), as well as Hargreaves’s mass production. 9
spinning jenny and Arkwright’s water frame (both Second, instead of being performed in fields,
for spinning cotton). Although artisans made entire homes or small shops, jobs occurred in large, formal
organisations where hundreds, if not thousands, of Academy of Management Perspectives) and thousands
people worked under one roof.10 In 1884, Australian of other books and articles. In the following sections,
industrialist H.V. McKay, who first started out working you will learn about some important contributors to
at a blacksmiths in Ballarat, established the Sunshine the field of management and how their ideas shaped
Harvester Works in what are now the western suburbs our current understanding of management theory and
of Melbourne. Sunshine Harvester Works was at one practice.
time the largest manufacturer in Australia with over After reading the following sections, which review the
3000 employees around 1906.11 Yet by 1913, Henry different schools of management thought, you should be
Ford employed 12 000 employees in his Highland able to:
Park, Michigan, factory alone. Because the number • explain the history of scientific management
of people working in manufacturing quintupled from • discuss the history of bureaucratic and administrative
1860 to 1890, and individual factories employed so management
many workers under one roof, companies now had a • explain the history of human relations management
strong need for disciplinary rules to impose order and • discuss the history of operations, information,
structure. For the first time, they needed managers systems and contingency management.
who knew how to organise large groups, work with
employees and make good decisions.
MGMT FACT Scientific

LO2
Ancient managers management
Sumerian priests developed a formal system of
writing (scripts) that allowed them to record Bosses, who were hired by the company owner or
and keep track of the goods, flocks and herds founder, used to make decisions by the seat of their
of animals, coins, land and buildings that were pants – haphazardly, without any systematic study,
contributed to their temples. Furthermore, to thought or collection of information. If the bosses
encourage honesty in such dealings, the decided that workers should work twice as fast,
Sumerians instituted managerial controls that little or no thought was given to worker motivation.
required all priests to submit written accounts If workers resisted, the bosses often resorted to
of the transactions, donations and payments physical beatings to get workers to work faster,
they handled to the chief priest. Just like clay or harder or longer. With no incentives for bosses and
stone tablets and animal-skin documents, workers to cooperate with one another, both groups
these scripts were first used to manage the
played the system by trying to take advantage of
business of Sumerian temples.12
each other. Moreover, each worker did the same job
in his or her own way with different methods and
different tools. In short, there were no procedures
to standardise operations, no standards by which
to judge whether performance was good or bad and
THE EVOLUTION OF no follow-up to determine whether productivity
MANAGEMENT or qua l it y ac t ua l ly i mproved when cha nges
were made.14
This all changed, however, with the advent of
scientific management, which involved the thorough
Before 1880, business educators taught only basic
bookkeeping and secretarial skills, and no one published study and testing of different work methods to
books or articles about management.13 Today, if you identify the best, most efficient ways to complete
have a question about management, you can turn to a job.
dozens of academic journals (such as the Australia Let’s find out more about scientific management
and New Zealand Academy of Management’s Journal by learning about:
of Management & Organization, the British Academy of • Frederick W. Taylor, the father of scientific
Management’s Journal of Management, Administrative management
Science Quarterly, the Strategic Management Journal and • Frank and Lillian Gilbreth and motion studies
the Journal of Applied Psychology), hundreds of business • Henry Gantt and his Gantt charts.
school and practitioner journals (such as Harvard
Business Review, MIT Sloan Management Review and the
CHAPTER 2 History of management 25
Another Random Document on
Scribd Without Any Related Topics
pamphlets on the subject, 424, 425.
Reims, visit of Pitt to, 137–9.
Renunciation Act, Irish (1783), 245, 246.
Revolution of 1688, 539;
compared with the French Revolution, 554, 555.
Richmond, Duke of, advocates reform, 71, 72, 109;
Master-General of the Ordnance, 111, 112, 114, 116, 157,
546 n.;
opposes Shelburne, 119;
his proposals for fortifying Portsmouth and Plymouth, 211,
212 n.;
Memorandum on alliance with Austria, 319;
on the Dutch crisis, 359;
on the Slave Trade, 461, 477;
on Russian policy, 611, 616.
Rigby, Richard, Master of the Rolls in Ireland, anecdote of, 24.
Robespierre, 322, 348.
Robinson, Morris (afterwards Lord Rokeby), 90.
Robinson, “Perdita,” 393.
Rockingham, Marquis of, official chief of the Whigs, 80;
refuses to unite with Shelburne, 101;
his terms for accepting office, 103;
becomes Prime Minister, 104;
protests against Pitt’s inclusion in the Cabinet, 105;
his death, 110.
Rodney, Lord, his victory over De Grasse, 106.
Rohilla War, the, 225, 232, 238.
Rokeby, Lord. See Robinson, Morris.
Rolle, Lord, 401, 568.
“Rolliad,” the, 263, 276, 280, 289, 401.
Romilly, Sir Samuel, quoted, 101, 107, 433.
Roode, Count de, his mission to London, 413, 514.
Rose, George, his friendship with Pitt, 139, 286;
Secretary to the Treasury, 157, 194, 259, 285, 286, 406, 407,
578 n., 579.
Rossbach, Battle of, 382.
Rousseau, Jean Jacques, his “Contrat Social,” 2, 7, 26, 61, 322,
323, 537, 539, 540;
on British elections, 27;
story of the peasant and, 538, 539.
Royal Marriage Act (1772), 395.
Russell, Lord John, 466.
Russia, alliance with Austria, 299;
proposals for a British alliance, 315;
war with Turkey, 375, 487, 488, 490, 502, 505, 506, 590, 591;
joined by Austria, 384, 385, 491;
alliance with Poland, 485, 486;
failure of the harvest (1787), 486;
British policy towards her, 489, 605;
war with Sweden, 491, 493, 494, 502;
aided by Denmark, 501, 502;
financial corruption in, 505;
makes peace with Sweden, 532;
state of, in 1790, 591;
British ultimatum to, 609, 610;
successes against the Turks, 625;
peace with Turkey, 626;
alliance with Sweden, 628, 629.
See Catharine II.
Rutland, Duke of, his friendship with Pitt, 56–8, 74;
Lord Privy Seal, 156;
Lord Lieutenant of Ireland, 156, 207, 208, 246, 247, 249–52,
337;
letters of Pitt to, 168, 201, 209, 257, 260, 265, 318.
Ryder, Dudley (afterwards Earl of Harrowby), 267, 269, 270,
586.
Sackville, Viscount (Lord G. Germain), 79, 100;

letter of Pitt to, 155;
declines office, 156.
St. Albans Tavern, negotiations at the, 164, 165.
St. Domingo, risings of slaves in, 467–9.
St. John, Lord, 58, 90.
St. Kitts, ceded to Great Britain, 116, 121.
St. Lucia, ceded to France, 115, 121.
St. Pierre, ceded to France, 116.
St. Priest, Comte de, French agent in Egypt, 327, 355.
St. Vincent, ceded to Great Britain, 116.
Salisbury, Countess of, at Westminster Election, 172.
Salm, Rhinegrave of, 356, 376.
Sandwich, Earl of, 79, 101, 428.
Sawbridge, Alderman, his motions in favour of Reform, 109,
178, 197;
opposes abolition of the Slave Trade, 463.
Saxe, Maréchal de, 307.
Sayer, James, caricature by, 146.
Scheldt, opening of the, 298, 311, 316.
Schliessen, General, 512.
Schönborn, Danish envoy in London, 496.
Scott, Major, agent of Hastings in Parliament, 228, 235, 544.
Scott, John. See Eldon, Lord.
Schulenberg, Count, 609, 621 n.
Seditious writings, royal proclamation against (1792), 472.
Ségur, Comte de, French War Minister, 373 n., 379;
French Ambassador at St. Petersburg, 484, 485.
Selim III, Sultan of Turkey, 502, 506;
fails to secure a compact with Poland, 595, 596.
Selwyn, George, on Pitt and Fox, 26;
on Pitt’s early speeches, 87, 89;
on “Goostree’s,” 91;
prophecies the ruin of Lord North’s Ministry, 101.
Senegal, ceded to France, 116.
Senegambia, ceded to Great Britain, 121.
Sevastopol, construction of a dockyard and navy at, 304, 481.
Sharp, Granville, 455, 473, 478;
founds the Abolitionist Society, 456, 458;
conference with Pitt, 460.
Sheffield, Lord, 257.
Shelburne, Earl of (afterwards Marquis of Lansdowne), on
Economic Reform, 69;
his character, 82, 83;
attack on the Government (1781), 83;
on the King’s skill in intrigue, 99;
proposes to Rockingham to unite their parties, 101;
position of his party, 103;
made intermediary between the King and Rockingham, 104;
Secretary of State, 105;
Prime Minister, 111;
attacked by Fox, 111, 112;
in favour of exchanging Gibraltar, 114;
difficulties of his Ministry, 115;
defeated in the Commons and resigns, 123;
advises the King to make Pitt Prime Minister, 125;
not included in Pitt’s Ministry, 155;
made Marquis of Lansdowne, 155 n.;
his influence on Pitt, 184;
supports Hastings, 228;
in favour of a commercial treaty with France, 325.
Sheridan, Richard Brinsley, supports Pitt’s reform proposals,
108;
resigns, 111;
denounces the peace, 120;
made Secretary to the Treasury, 129;
opposes Pitt’s proposal for a Sinking Fund, 192;
his speeches against Hastings, 225, 231, 240;
speech on the Irish Resolutions, 262–4;
espouses the cause of the Prince of Wales, 398, 401;
his conduct on the King’s illness, 408, 409, 417, 418;
assists in drawing up the Prince’s reply to Pitt’s letter, 421;
on the aims of the Prince of Wales, 428, 429;
opposes the Russian War, 613, 624.
Sheridan, Mrs., 421.
Shooting, licences for, 186.
Sierra Leone, settlement of liberated slaves in, 473.
Sinclair, Sir John, 191.
Sinking Fund, Pitt’s proposals for a, 188–95.
Sistova, Congress of, 591, 592, 600, 606, 620, 625.
Slaughter, Colonel, 396.
Slave Trade, the. See Chap. XX;
English participation in, 9, 21;
the Abolitionist Society founded, 22, 458;
statistics, 456, 463, 474;
Privy Council inquiry, 459, 461, 462, 464, 465;
attitude of France and Spain, 460, 462;
disastrous results of liberating slaves in French colonies, 467,
468;
motions in Parliament (1788), 460–2,
(1789), 462–4,
(1790), 465,
(1791), 466, 467,
(1792), 469–71,
(1793), 472,
(1794), 474,
(1795–7), 475.
Smith, Major-General, M.P., 91, 403, 586.
Smith, Adam, his “Wealth of Nations,” 60, 182, 322, 323, 325;
his influence on Pitt exaggerated, 183, 184;
anecdote of Pitt and, 241;
advocates the Irish Union, 242.
Smith, Robert (“Bob”). See Carrington, Lord.
Smuggling, prevalence of, 181–3.
South Africa, question of a convict settlement in, 435.
Spain, peace concluded with, 115, 116, 136;
the Nootka Sound dispute, see Chap. XXV;
claims absolute sovereignty on the north-west coast of
America, 565, 573;
her position in 1790, 568;
discontent in Spanish America against, 568, 569;
her claims denied by Great Britain, 569, 570, 572–5;
agrees to give satisfaction, 575;
British ultimatum, 582;
refuses French offer of help, 583;
outrage in the Gulf of Florida, 583;
treaty with Great Britain, 584, 585, 587, 588;
favours the Allies against Russia, 599, 600.
Sparry, Mrs., nurses Pitt at Cambridge, 51.
Spencer, Lord, 428.
Spielmann, Baron, Austrian envoy in Berlin, 528, 529.
Squires, privileges and powers of the, 14–16.
Staël, Mme. de, on Wilberforce’s conversation, 92;
project for her marriage with Pitt, 140, 141.
Stafford, Marquis of, 360, 616.
Stanhope, Earl (Lord Mahon), 109, 148, 154, 155;
his influence on Pitt, 184, 185;
his scheme for a Sinking Fund, 193, 194;
his Reform Bill rejected by the Lords, 206.
Stanhope, 5th Earl, his writings quoted, 85 n., 102, 110, 135 n.,
152 n., 279 n., 389 n., 421 n., 587, 613.
Stanhope, Lady Hester, anecdote of, 272.
Stanislaus, King of Poland, 485, 486, 505, 627, 630.
Steele, Thomas, his friendship with Pitt, 91, 285, 286;
Secretary of the Treasury, 157, 267, 268, 612.
Stein, Colonel, 388.
Stephen, James, 473.
Stephenson, George, his steam-engine, 3.
Storer, Anthony Morris, M.P., 85, 585, 611 n., 614.
Stormont, Lord, President of the Council, 129, 132, 427, 428,
611.
Suffrage, universal, opposed by Pitt, 130, 131.
Suvóroff, Count, Russian General, 490, 506, 591.
Sveaborg, Swedish Navy at, 493, 494.
Sweden, compact with France, 301–4;
desires alliance with England, 385, 493;
war with Russia, 491, 493, 502, 530;
alliance with Turkey, 493;
mutiny of officers, 493, 494;
threatened by Denmark, 496, 497;
peace with Russia, 532.
See Gustavus III.
Sydney, Lord (Thomas Townshend), Home Secretary, 111, 114,
156, 250, 428;
suggests a convict settlement at Botany Bay, 437–41;
his share in the Canada Bill, 449, 452;
resigns, 449, 464, 477, 478;
opposes bill for regulating transport of slaves, 461.
Sydney, foundation of the settlement at, 440, 443.
Talleyrand, Périgord Charles Maurice de, his meeting with Pitt,

139.
Tarleton, Colonel, 469.
Taxes, Board for, instituted by Pitt, 188.
Tea, huge duty on, 182;
increased use of, due to smuggling, 182;
duty on, reduced by Pitt, 184, 185.
Telegul, Lake, 619.
Temesvar, Banat of, 481, 491.
Temple, George Grenville, Earl (afterwards Marquis of
Buckingham), Lord Lieutenant of Ireland, 111;
suggested as Prime Minister, 126;
resigns, 129;
sounded by the King, 134;
commends Pitt for declining Thurlow’s overtures, 135;
aids the King to secure rejection of the India Bill, 147, 148;
made Privy Seal, 148;
resigns office, 152;
rupture with Pitt, 153;
made Marquis of Buckingham, 154, 188, 253, 265, 341, 404,
411;
Lord Lieutenant of Ireland, 424, 428, 429.
Temple, Richard Grenville, Earl, letter from Pitt to, 47;
letter to Pitt, 66.
Test Act, the, proposed repeal of, 212, 214;
the proposal rejected, 215;
repealed in Ireland, 244, 245.
Thatched House Tavern, 109.
Thellusson, Peter, the banker, 138.
Thorn, Polish district and fortress, question of its cession to
Prussia, 387, 507, 511 n., 521 n., 522, 526, 529, 594,
596, 597, 599, 601, 606, 607, 613, 614.
Thornton, Henry, 473.
Thulemeyer, Prussian envoy at The Hague, 354, 364, 365;
recalled, 375.
Thurlow, Lord, Lord Chancellor, 79;
negotiates with Rockingham, 103;
retained as Chancellor, 104;
opposes Reform, 110;
his advice to the King on retirement to Hanover, 127;
his overtures to Pitt on the question of Reform, 134;
advice to the King on the India Bill, 147;
Lord Chancellor in Pitt’s Ministry, 156, 359, 611, 616;
his character, 156, 157;
supports Hastings, 228, 235;
anecdote of, 289;
his treachery on the King’s illness, 408–10;
retraces his steps, 420;
interview with the King, 426;
attitude on the Slavery question, 461, 462, 464, 471, 472,
474;
the King’s partiality to him, 464, 465;
relations with Pitt, 464–6, 472;
dismissed, 472, 478.
Thynne, Henry, made Lord Carteret, 159.
Tierney, George, duel with Pitt, 269.
Tippoo Sahib, 221, 230, 383, 610.
Tobago, ceded to France, 115, 121.
Tomline, Bishop. See Pretyman, Dr.
Tordesillas, treaty of (1494), 563.
Tott, M., 482.
Toussaint l’Ouverture, 479.
Townshend, John, Lord, letter from Pitt to, 65;
Master of the Ordnance, 79;
defeated at Cambridge, 171.
Townshend, Thomas. See Sydney, Lord.
Trade, Board of, abolished, 257.
Transportation, offences punished by, 433, 434.
Travancore, Rajah of, 610.
Trincomalee, ceded to Holland, 116, 136;
offered to France, 356, 370.
Triple Alliance, the (1788), 384–9;
defects of, 517;
reality of, 582, 589;
collapse of, 627, 629.
Turgot, Anne Robert Jacques, 322, 324.
Turkey, schemes of Catharine II with regard to, 304, 353, 481–
3;
war with Russia, 375, 384, 385, 487, 490, 502, 505, 590, 591,
620, 621, 625;
Austria declares war on, 491;
alliance with Sweden, 493;
Prussian schemes at her expense, 505–10;
treaty with Prussia, 521, 529;
deserted by Sweden, 532;
peace with Austria, 625;
peace with Russia, 626.
Turner, Dr., at Cambridge, 52.
Tuscany, Grand Duke of, 319 n.
See Leopold II.
United Empire Loyalists. See Loyalists.

United Provinces, the, peace concluded with, 115, 116, 136,
306;
feuds between the Patriots and the Stadholder, 305, 306,
349–51, 355, 359–61, 372;
constitution of, 307, 308;
alliance with France, 316, 317, 332;
joint action with the French in East Indies, 317 and n., 356;
excesses of the Free Corps, 351, 355, 361, 362, 369, 371,
372, 374, 376, 380, 382;
invaded by the Prussians, 376;
surrender of Amsterdam, 379;
destruction of French influence in, 379–82;
treaty with England (1788), 383;
joins the Triple Alliance, 389;
subsidized by Pitt, 572;
reluctant to coerce Russia, 602, 606, 610.
United States, the, Shelburne Ministry offer to recognize their
independence, 113;
peace concluded, 114;
prohibit the importation of convicts, 434;
treatment of the Loyalists after the war, 444, 446.
Utrecht, Province and City of, 350, 355, 361, 376.
Utrecht, Treaty of (1713), 21, 326, 329, 455, 573.
Vancouver Island, 562, 571, 588.

Van der Noot, proposes a Belgian Republic, 512, 519 n.
Van der Spiegel, Grand Pensionary of the United Provinces, 383.
Varennes incident, its effect in Eastern Europe, 625, 626, 628.
Venezuela, 569.
Vérac, Marquis de, French envoy at The Hague, 354, 370;
recalled, 371, 372, 373 n., 376, 379.
Vergennes, Comte de, French Foreign Minister, his American
policy, 113, 116;
his hostility to England, 310;
his success in the Treaty of Fontainebleau, 316, 317;
his character and policy, 324;
negotiates the commercial treaty with England, 325, 326,
328–30, 332, 333, 338, 341, 343–5, 347;
deeper schemes, 344, 356, 482;
his death, 345.
Verney, Earl, defeated at the polls, 171.
Versailles, Treaty of (1783), 116, 136, 139, 296, 325, 339, 340,
443.
Vienna, Treaties of, 305.
Voltaire, 322, 323, 539.
Volunteer Movement, 106.
Volunteers, Irish, 244–7.
Vonck, Francis, 512.
Vorontzoff, Count, Russian Ambassador in London, 304 n., 312,
315, 489, 504, 560, 623, 624.
Wales, George, Prince of (afterwards George IV), anecdote of,

24;
his drunken orgies, 25;
his gambling, 26;
question of his allowance settled, 132, 133;
supports Fox in the election of 1784, 173, 393;
his early career, 392, 393;
friendship with Fox, 393, 395;
quarrel with the King, 393–402;
his debts and extravagance, 394, 395, 398, 400, 402, 403 n.;
secret marriage with Mrs. Fitzherbert, 394–401;
reconciliation with the King, 402;
renewed excesses with the Duke of York, 402, 403;
political activity against Pitt, 402–4;
his behaviour on the King’s illness, 407–10, 412;
negotiations with Pitt, 412, 418–20;
answer to Pitt’s letter, 421, 504;
consents to act as Regent, 422;
accessions to his party, 424;
interview with the King on his recovery, 426, 427;
aims of his followers, 428, 429;
his explanations to the King, 430.
Walfisch Bay, 435.
Wallachia, 385, 387, 481, 505, 507, 511, 525, 625.
Walpole, Sir Edward, death of, 159.
Walpole, Horace, on the condition of England, 6, 19, 21, 25, 27;
praises Pitt’s early speeches, 87, 88, 101;
on Lord Montagu, 104;
on Pitt’s proposal for Reform, 130 and n.;
on the English character, 142;
on Pitt’s character, 147, 275;
on the elections of 1784, 171;
quoted, 133, 141, 169.
Walpole, Sir Robert, his plan for a Sinking Fund, 188, 189.
Warren, Dr., physician to the King, 410, 415, 420, 421, 426.
Warsaw, Treaty of (1790), 521.
Watson, Alderman, 586.
Watson, Bishop, his “Reminiscences,” 215.
Watt, James, his inventions, 2, 3, 28, 30, 31.
Wedderburn, Alexander. See Loughborough, Lord.
Wedgwood, Josiah, head of the “Great Chamber of
Manufacturers,” 257, 259, 333.
Welzie’s Club, 403.
Werela, Peace of (1790), 532.
Wesley, John, 455;
his “Thoughts upon Slavery,” 456.
Wesleyan Revival, the, 322.
Westcote, Lord, 88.
West India merchants, oppose Pitt’s Irish Resolutions, 255, 260.
West Indies, the, gains and losses in, at the Peace of Versailles,
115, 116, 121;
slavery in, 454, 457, 459, 465–7, 477;
risings of slaves in, 467–9;
losses of troops in the war in, 479.
Westminster Election of 1784, 172, 173;
the scrutiny, 254, 257 n., 259, 271, 272.
Westmorland, Earl of, 58;
Lord Lieutenant of Ireland, 265.
Whigs, the, two groups in 1780, 80–2.
Whitbread, Samuel, 474, 613, 614.
Whitworth, Charles, Earl, British Ambassador at St. Petersburg,
598, 599, 606, 609, 623, 624.
Widdin, the Pacha of, 506.
Wilberforce, William, 22;
on Lady Chatham, 38;
his friendship with Pitt, 58;
praises his oratory, 87;
his character, 91–3;
goes with Pitt to France, 137;
elected member for York, 170;
speaks in favour of Reform, 201, 206;
Pitt’s letters to, quoted, 188, 201, 286, 287, 291, 292;
supports Pitt’s attitude in the Hastings affair, 230, 231, 237;
Pitt with him at Wimbledon, 267–9, 279;
letter to Pitt on the Irish Propositions, 282, 283;
his religious convictions and temporary retirement, 291, 292;
devotes himself to the cause of the slaves, 455, 457, 458;
joins the Abolitionist Society, 458;
his illness, 460;
campaign against the Slave Trade, 462, 465–8, 471–8;
disagreement with Pitt, 457, 477;
his Diary quoted, 130, 138, 139, 154, 267, 269, 274, 559;
mentioned, 208, 322, 544.
Wilbraham, R., his speech in defence of Hastings, 232.
Wilkes affair, the, 10, 26, 167.
Wilkes, John, welcomes Pitt to the City, 167.
William, Prince, his return from the West Indies, 549.
William V, Prince of Orange, Stadholder of the United Provinces,
306, 308, 309, 350, 351, 355, 359–61, 371, 382, 383.
Willis, Rev. Dr. Francis, his reports on the King’s illness, 414,
415, 420, 421, 426.
Wilson, Rev. Edward, Pitt’s tutor, 41, 42, 49, 51, 53.
Wimbledon, Lauriston House, 267–70.
Windham, William, 86, 91;
favours the settlement of French royalists in Canada, 447;
opposes abolition of slavery, 477;
on the Nootka Sound dispute, 586.
Window tax, the (1784), 184, 185.
Woodfall, Henry, 264.
Wordsworth, William, his lines on Cambridge quoted, 56;
his tour in France, 555.
Woronzow, Count. See Vorontzoff.
Wraxall, Sir Nathaniel, quoted, 82, 100, 145, 156, 163, 171,
201, 211, 214, 232, 234, 236, 262, 271, 272, 273, 276,
333, 404, 462, 624.
Wray, Sir Cecil, 109, 121 n.;
defeated at Westminster, 172, 173.
Wyvill, Rev. Christopher, 169, 199, 201, 205, 429;
Pitt’s letter to him on Reform, 197, 198.
Yonge, Sir George, Secretary at War, 157, 158.

York, the election at (1784), 169, 170.
York, Frederick, Duke of, 312, 396;
his home-coming, 402;
excesses with the Prince of Wales, 402, 403, 406, 407, 427;
speech on the Regency question, 419, 420;
interview with the King, 426, 427;
negotiations for his marriage, 629, 630.
Yorke, Charles, 290.
Yorktown, surrender of Cornwallis at, 100, 101.
Young, Arthur, his praise of English landowners, 32;
on the use of tea, 182;
his “Travels in France,” quoted, 346, 538, 541.
Young, Admiral Sir George, his scheme for colonizing Botany
Bay, 436–9, 441.
Young, Sir William, epigram on Burke, 416.
Zealand, Province of, 350, 368.

CHISWICK PRESS: CHARLES WHITTINGHAM AND CO.
TOOKS COURT, CHANCERY LANE, LONDON.
Transcriber’s Notes
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PART 1 2 History of management 22

4 Ethics and social responsibility 63

5 Planning and decision making 88

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8 Global management 147

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leading and controlling (see Figure 1.1). Studies

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First-line managers Non-managerial worker supervision

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good behaviour and punish poor

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ideas and thoughts.’ Another said: ‘[The office is] my

workload involved in being a manager. Said one

5000 BCE Sumerians ✓ Record keeping.

600 BCE Nebuchadnezzar ✓ ✓ Wage incentives and production control.

400 BCE Xenophon ✓ ✓ ✓ ✓ Recognised management as a separate art.

400 BCE Cyrus ✓ ✓ ✓ Human relations and motion study.