What is Management

Kiechel follows back to the origination of current administration to Chicago in 1886 with the location of Henry Towne (1). Scientific and mathematical models and occurring data characterizes the modern management or scientific management to update the decision-making process. During the 1920s, the comprehension of management moved from the exacting scientific way to deal with incorporating a human-centered methodology established in the social science and psychology of the labor force (Kiechel 5). The humanistic and logical methodology both had a similar objective; raising employee profitability and are hence viewed as admirable. Vital reasoning and preparation were along these lines and was added to the supervisor's portfolio to empower him to accomplish the unusual through a bunch of well laid plans. The oil crisis of 1970s that spurred a global financial crisis shook the foundations of modern management (Kiechel 8) with managers being unable to control the reduction in profitability, wages and employments. The crisis of 1970 informed the goals of managers in the last two decades of the 20th century; to maximize stockholders’ wealth.
In the current economic and political climate, people’s understanding of the role of management is changing to one of social consciousness (Rosenzweig 1). This is hardly new since many well known managers for example McNamara have been driven by the need to better the lives of people at the bottom of the ladder. The role of management from the business organization’s point of view of enriching the shareholder still remains prominent. Rosenzweig says that this is a viewpoint popular in the 1980s and 1990s and is no longer mainstream (1). I would however argue on the validity of this statement given the common man’s understanding of management and the nature of a course in management. There is no denying that the role of management is slowly shifting towards issues of social justice and environmental protection it is, however, still predominantly concerned with questions of increasing profitability of businesses.
Good management practices are associated with high operation costs stemming from bonuses, attractive salaries and other incentives. Managers and directors of many businesses in the private sector incorrectly assume that implementing the essential practices of incentives and monitoring will significantly reduce company profits. The evidence gathered by Bloom et al. in their research into the effectiveness of proper management practices in manufacturing plants in India prove the contrary (4). The control group paid its workers menial wages, provided no medical cover and did not practice any of the three elements of good management while the intervention group was taught and implemented proper management practices (Bloom et al 4). Plants in the intervention group reduced defects in products by 50%, raised output by 10% and cut inventory by 20% (Bloom et al 4). Furthermore, the plants’ profitability increased by approximately 30% while their counterparts remained in the rut of defaulting on loans and going out of business (Bloom et al. 4). While it is true that proper management practices increase the expenses associated with remuneration, the returns associated with management practices more than cover these expenses.
Good management is not only expected of businesses in the private sector but also of public institutions especially schools and hospitals. Bloom et al.’s research indicated that better management of schools and hospital emergency rooms was associated with statistically significant improvements in student test scores and reduced mortality from heart attacks (5). Public institutions are however much more difficult to manage given the non-profit nature of the institutions and the “lack of ownership” of these institutions. Public hospitals and schools are run by departments within the state and in some cases the national government. These departments are restricted to a certain budget and can hardly afford to increase salaries to a reasonable amount let only provide nurses and doctors with incentives. These institutions are also not optimally staffed due to the budget concerns making monitoring an unaffordable luxury. Hospital and school managers are therefore more likely to resort to the tactics of negative reinforcement, which in the absence of rewards for exemplary performance ensures that the staff works to an amount they can just afford to get away with.
There remain some significant setbacks to practicing management for managers well versed in the principals of management. Some countries do not provide a suitable environment for provision of incentives to boost employees’ morale. France for example has a strong labor union that prevents the firing of underperforming employees saddling managers with unproductive people. Bloom et al. also cite the policies of quotas and tariffs used in controlling foreign trade mostly used in developing countries as encouraging mismanagement since many companies operate as monopolies.

Works Cited

Bloom, Nicholas., Sadun, Raffaella., Van Reenen, John. How three essential practices
can address even the most complex global problems. Harvard Business Review, November 2012, pp. 77:82
Kiechel, Walter. The Management Century. Harvard Business Review, November
2012, pp. 63-75
Rosenzweig, Phil. Robert S. McNamara and the Evolution of Modern Management
Harvard Business Review, November 2012, pp. 89-93.