Introduction to Management and Leadership Concepts ...

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2 CHAPTER

Introduction to Management and Leadership Concepts, Principles,

and Practices

Kurt Darr

INTRODUCTION

Everyone manages. We manage our finances, time, careers, and relationships. We tend not to think of these activities as "managing" or of ourselves as being "managers." Nevertheless, they are. These examples of managing or being managers are relatively simple and straightforward, even though we may find many of them fraught with difficulty. It is when the concepts of managing or being a manager are applied to organizations that complexity increases--almost always exponentially. At this point it becomes necessary to study and understand the theoretical bases of management.

The practice of management and the classical enunciation of management principles can be traced to the 19th century. The development of management as an academic discipline based on a body of knowledge that can be taught is a recent development and is generally attributed to the work of Peter F. Drucker in the latter half of the 20th century. That body of knowledge is taught in graduate schools of business and in programs that prepare managers of public health departments, programs, and health services organizations, such as hospitals, clinics, and long-term care facilities. This chapter provides a basic introduction to management theory and problem solving, and concludes with a brief discussion of negotiation and alternative dispute resolution.

Managers are persons who are formally appointed to positions of authority in organizations. They enable others to do their work and are accountable to a higher authority for work results. Primarily, the differences between levels of managers are the degree of authority and the scope of their accountabil-

ity for work results. Line managers manage people and things; staff managers, such as the human resources department and the fiscal office, support the work of line managers.

LEARNING OBJECTIVES

After reading the chapter, the reader will be able to:

1. Review the background on managing and management. 2. Discuss organizational culture, philosophy, and performance. 3. Describe the elements of management knowledge. 4. Describe the five functions of management and decision making. 5. Discuss the distinctions between managing and leading. 6. Outline management skills, roles, and competencies. 7. Review the steps in managerial problem solving. 8. Discuss designing formal organizations. 9. Describe the contributions of contemporary management

theorists. 10. Discuss negotiating and alternative dispute resolution.

ORGANIZATIONAL CULTURE, PHILOSOPHY, AND PERFORMANCE

Management, organization, culture, and organizational philosophy are inextricably linked; they are especially linked to organizational effectiveness. Much has been written about an organization's culture and the need for managers to not only understand the values in that culture, but to move that culture in the direction of values that further the organization's mission and vision. The value system of an organization can also be called its organizational philosophy--the ethical context in which goods and services are rendered. Ethics audits are an

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Introduction to Management and Leadership Concepts, Principles, and Practices

important tool managers can use to "biopsy" the organization's value system. These audits are comprised of staff surveys; observations of staff/patient interaction; and reviews of staff recruitment, selection, and training. Audits provide an understanding of the culture so that the culture's values can be moved in the desired direction.

Managers are judged by their organizations' performance. The way managers set standards, coordinate and integrate workgroups, make decisions, and design the organization affect performance. In addition, it is patently clear from research and anecdotal evidence that high-performing organizations have a values system that furthers the organization's goals. These values are expressed in explicit and implicit ways by managers and are expected to be present in the work of all members of the staff. Managers must model appropriate behavior. It is logical to conclude that an organization in which all staff understand the desired values and incorporate them into their work lives will achieve its goals more effectively.

MANAGEMENT THEORY

Management or managing has four main elements. It is (1) a process comprised of interrelated social and technical functions and activities (2) that accomplishes organizational objectives, (3) achieves these objectives through use of people and other resources, and (4) does so in a formal organizational setting. In concert with managers at various levels, senior management establishes organizational objectives, and all who work in the organization strive to achieve them. Management's work includes providing an organizational context in which direct and support work can be performed effectively, and preparing an organization to deal with threats and opportunities in its external environment.

Managers at all levels shape organizational values and culture by their decisions and through leading by example (modeling), even though senior managers usually have the clearest and most direct effect. The organization's overall performance is the best evidence of managers' efforts. Regardless of hierarchical level, managers throughout an organization engage in the same basic, generic functions, even though decisions made at senior levels have the most dramatic effect on the organization (Rakich, Longest, & Darr, 2000). Managers can be described by the functions they perform, the skills they use, the roles they play, and the competencies they must have to succeed. This emphasizes the process of managing.

Management Functions and Decision Making

The five management functions of planning, organizing, controlling, directing, and staffing are brought to life and connected by decision making, which is itself a subset of the essential process for managers that is known as problem solv-

ing. Little that managers at all levels in an organization do falls outside the purview of the five management functions. Management theorists and practitioners may chose one or two of the five functions as most important, but this is not borne out normatively. When one considers the full range of what managers do (or should do) as they perform their work, concentrating on a few to the exclusion or diminution of the others will invariably cause problems for the organization.

Decision making is an inherent activity of managers, and they make decisions within and among the five management functions. Decision making is part of the process of problem solving, which also includes problem analysis. Performance of the management functions and the decision making of problem solving should be evaluated using explicit and measurable criteria. In addition to engaging in the five management functions, managers must utilize specific skills, play various roles, and evidence a number of competencies.

Managing and Leading

Some theorists and academicians distinguish managers and leaders, based on the view that managing is more caretaking and maintaining status quo (transactional) whereas leading is more visionary and dynamic (transformational). That distinction may be more important pedagogically than in practical application, however, especially at the organization's operating level. Senior managers must ensure effective current organizational activities and that an organization's future is envisioned. Using this vision, the organization can be transformed as needed.

As they work to achieve organizational objectives, managers use technical, conceptual, and interpersonal skills. These skills are applied in various proportions, depending on the manager's task and level in the organizational hierarchy. Usually, senior managers make greater use of conceptual skills, whereas middle- and entry-level managers use a more even mix of the three.

The research of Henry Mintzberg found that managers have different roles, the general categories of which include interpersonal, informational, and decisional. Each may be segmented. For example, the interpersonal role includes figurehead and influencer, informational includes monitor and spokesperson, and the decisional role includes entrepreneur and negotiator. Successful managers integrate these various roles and are likely to engage in them without making a clear distinction.

Another way to understand managers' work is to identify their competencies, some of which are found in the categorizations discussed earlier. Conceptual, technical managerial/ clinical, interpersonal/collaborative, political, commercial, and governance competencies are used in different proportions by managers at various levels of the organization.

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Management Theory

9

Management Skills and Roles

Figure 2-1 suggests the relationships of technical, conceptual, and human relations skills and shows their typical weighting at various levels. Specific situations require greater or lesser use of the skills at all levels of the organization.

Skills ? Technical skills are the abilities of managers to use the methods, processes, and techniques of managing (such as preparing a budget or a pro forma, planning a new process, or reorganizing a workgroup). Technical skills tend to decrease in importance as managers become more senior. ? Conceptual skills are the mental ability to see how various factors in a given situation fit together and interact. Seeing second- and third-order consequences of decisions and nondecisions is especially important. The need to use conceptual skills increases significantly as managers become more senior. ? Human/interpersonal skills include cooperating with others, understanding them, and motivating and leading them in the workplace. Human relations skills tend to become less important as managers become more senior.

Roles Managers engage in a wide variety of roles as they do their work.

? The interpersonal roles of figurehead, leader, and liaison derive from the formal authority of the manager.

? The informational roles include monitor, disseminator, and spokesperson. The informational roles have special significance in organizations in the health field, which are more complex and require effective communication. Access to information is a measure of power. Less secure and capable managers tend to hoard information or provide it only reluctantly, thus reinforcing their importance.

? As noted, decision making is integral to the management functions. There are various types of decisional roles, including entrepreneur, resource allocator, and negotiator. In this group, negotiation may be the most important and is an almost daily activity of managers.

? The designer role is similar to that of the management function of organizing. Managers at different levels will design various components of the organization.

? The strategist role is not unlike the manager's planning function. It suggests a specific focus on how to adapt their organizational domains to external challenges and opportunities.

FIGURE 2-1 Skills used by different types of public health managers

Level of position in the

organization hierarchy

TYPE OF MANAGER

Degree of authority and scope of

responsibility and activities

HIGH

SENIOR MANAGER

LARGE

MIDDLE

MIDDLE MANAGER

MEDIUM

LOW

FIRST-LEVEL MANAGER

SMALL

Technical Conceptual Human Relations

skills

skills

skills

Source: Adapted from Rakich, Jonathon S., Beaufort B. Longest, Jr., and Kurt Darr. Managing Health Services Organizations and Systems, 4th ed. (Baltimore: Health Professions Press: 2000). p. 11. Used by permission.

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Introduction to Management and Leadership Concepts, Principles, and Practices

? The leader role is affected by how well the roles of designer and strategist are performed. The leader role is more difficult because of the dynamism of the health services field, the multiple constituencies of its organizations, and the potential need for extensive sharing of the leader role.

Competencies In addition to the classical management functions and managerial roles, managers must develop a number of competencies.

? Conceptual competence is like that of the conceptual role. Middle and entry-level managers use conceptual competence to understand how their work fits into the larger organization, as well as the interrelationships in their areas of responsibility. As suggested earlier, senior managers use their ability to conceptualize to predict consequences of decisions and nondecisions.

? Technical managerial/clinical competency enables managers to perform the work of management, as well as understand and more effectively direct the work in the unit(s) for which they are responsible. Managers without a clinical or technical background must make a determined and persistent effort to understand the basics of specialized activities in their areas of responsibility, as well as in the organization generally.

? Interpersonal/collaborative competency requires that managers have good interpersonal and collaborative skills so as to effectively lead or direct others. These skills enable the manager to instill a common vision, stimulate a determination to pursue the vision, and meet the objectives that are part of the vision.

? Political competency means senior-level managers must understand and be able to work with the political processes of local, state, and even federal government. Effective application of this competency is key to meeting the health needs of the community. The position and technical knowledge held by senior managers enables them to influence the legislative and rule-making (regulatory) processes.

? Commercial competency and economic success require that organizations create economic exchanges that offer value to those involved. Managers must establish and maintain an environment that facilitates these economic exchanges. This necessitates a businesslike orientation for basic operation, but with a humanitarian and Samaritan overlay. Many not-for-profit and government organizations fall prey to an overemphasis on doing good and neglect the need to manage in a businesslike fashion.

? Governance competence means working with the governing body1 to establish a vision, assemble resources, lead the organization, and ensure accountability to stakeholders. These efforts require that senior managers interact effectively with members of the governing body. The governing body determines the right thing (direction) for the organization; management determines the right way to achieve it. Many chief executive officers (CEOs) are voting members of their governing bodies, or, if not, they attend governing body meetings and sit on its committees. Regardless, they interact with governing body members in various settings and in a variety of ways.

Leadership Behavior

Managers as leaders influence followers to achieve objectives because they have authority or power. Various sources of power have been identified: legitimate (formal), reward, coercive, expert, and referent. These sources of power are more likely to be complementary than mutually exclusive. Effective leaders understand the risks and benefits of using each type of power and try to use them appropriately. Some researchers have sought to explain leader success by identifying leader traits such as assertive, cooperative, decisive, and dependable, and leader skills such as intelligent, conceptually skilled, creative, and persuasive. Other researchers focused on leader styles, such as Rensis Likert (1903?1981), whose continuum of leadership effectiveness spans autocratic, benevolent, consultative, and participative/democratic.

An approach asserting that traits, behaviors, and styles are inadequate to explain the success of leaders is called situational or contingency theory. Its hypothesis is that certain actions or responses (behavior/styles) in some situations lead to success, while their use in other situations causes failure. Incorporating situational factors or contingencies into the analyses of leader styles made them more sophisticated and enhanced their usability. Many of the efforts to analyze leaders and the reasons for their success overlap, but they all contribute to understanding managers qua leaders (Rakich et al., 2000, ch 15).

Management Functions

Figure 2-2 shows the management functions and their intimate connection with decision making. None is necessarily more important than another. They are complementary and tend to have a sequence of use and connection. The dynamic

1Governing body is a generic term used to describe the body to whom the public health manager is accountable, whether it is a city council, county council, commissioners elected by a special tax district, commissioners appointed through an interstate compact, or the like.

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Management Theory

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FIGURE 2-2 Interrelationships of decision making and the five management

functions

Management and Managers

PLANNING Deciding in advance what is to be done

CONTROLLING Regulating activities in accordance with plans

ORGANIZING Developing intentional patterns of relationships among people and other resources

DECISION MAKING Choosing between or among alternatives

DIRECTING Initiating work in the organization

STAFFING Acquiring, maintaining, and retaining human resources

Source: Adapted from Rakich, Jonathon S., Beaufort B. Longest, Jr., and Kurt Darr. Managing Health Services Organizations and Systems, 4th ed. (Baltimore: Health Professions Press: 2000). p. 11. Used by permission.

that connects them is complex, and it may not be clear at any one time which function the manager is applying.

? Planning. Planning is usually identified as the first step of managing. It may occur de novo such as the planning for a new program, service, or facility. In addition, planning may be necessary after the outcomes of previous initiatives are found inadequate. Managers at all levels plan-- although the focus, context, and terms are different.

? Organizing. Planning establishes objectives. Organizing develops intentional patterns of relationships among staff and other resources in the health services organization (HSO) to achieve these objectives. The result is an organizational design. There is a hierarchy in this design, beginning with individual positions and moving through work groups into larger units and, perhaps, eventually into an entire organization. The design of this hierarchy includes assigning authority and responsibility. Departmentation results from organizational design. Processes and integration are key to successful design.

? Staffing. Managers may give little thought to human resources until there is a problem with staffing, which includes acquiring, maintaining, and retaining human capital in the organization. Staffing is both technical (such as planning, job analysis, performance evaluation, and compensation and benefits) and social (such as training, promotion, and counseling). Given that the majority of costs in a typical organization are staff pay and benefits, it is difficult to overstate the importance of the staffing function.

? Directing. Directing occurs when managers initiate action. Effectively directing depends on being able to lead, motivate, and communicate with the staff for whom one is accountable. The various demands of effectively leading others necessitates a variety of leadership styles, some of which will be discussed later. The ability to motivate others is linked to having a shared vision.

? Controlling. The word suggests its function. At root, managers control by comparing actual with desired output and making adjustments. Controlling is directly

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