CHAPTER

2
Introduction to
Management
and Management
Decision Making

The roles of the nurse manager and nurse

executive have evolved significantly in response
to changes in the healthcare industry in the last
20 years.
—Carol S. Kleinman

24
 CHAPTER 2 ■ Introduction to Management and Management Decision Making 25

Throughout history, nursing has been required to respond to changing technological

and social forces. The new managerial responsibilities placed on organized nursing
services require nurse administrators who are knowledgeable, skilled, and competent
in all aspects of management. Now more than ever there is a greater emphasis on the
business of health care, with managers being involved in the financial and marketing
aspects of their respective departments. To confront expanding responsibilities and
demands, the manager’s role must take on new dimensions to facilitate quality out-
comes in patient care and meet other strategic institutional goals and objectives.
Although, management functions are similar in every discipline and across soci-
eties, changes in the healthcare industry in the last 20 years have been so dramatic
that nurse managers have had to bring a new cadre of skills into a dynamic and rap-
idly changing managerial role (Kleinman, 2003).
The relationship between leadership and management continues to prompt
some debate, although the literature demonstrates the need for both (Trent, 2003;
Zaleznik, 2004). Whereas management emphasizes control–control of hours, costs,
salaries, overtime, use of sick leave, inventory, and supplies–leadership increases
productivity by maximizing work force effectiveness.
Leadership is viewed by some as one of management’s many functions; others
maintain that leadership requires more complex skills than management and that
management is only one role of leadership; still others delineate between the two.
But if a manager guides, directs, and motivates others and a leader empowers oth-
ers, then it could be said that every manager is a leader.
Management and leadership are, however, first artificially separated in this
chapter so that there is a full understanding of the functions of management. The
following are some of the characteristics of managers:
• Have an assigned position within the formal organization
• Have a legitimate source of power due to the delegated authority that
accompanies their position
• Are expected to carry out specific functions, duties, and responsibilities
• Emphasize control, decision making, decision analysis, and results
• Manipulate people, the environment, money, time, and other resources to
achieve organizational goals
• Have a greater formal responsibility and accountability for rationality and
control than leaders
• Direct willing and unwilling subordinates
Historically, strong management skills were valued more than strong leadership
skills in the healthcare industry. This was true not only in nursing and health care
but throughout businesses in Western society. Only in the last 50 years has the
world shifted much of its research and interest onto leadership. Effective managers
need to be well grounded in management theory and to understand management
decision making. Leadership without management results in chaos and failure for
both the organization and the individual executive. The ultimate goal for all execu-
tives is to integrate management functions and leadership roles. This chapter will
focus on providing an historical overview of management theory development and
provide some tools for management decision making.
26 UNIT 1 ■ A New Approach to Leadership and Management

HISTORICAL DEVELOPMENT OF MANAGEMENT THEORY

Management science, like nursing, develops a theory base from many disciplines,
such as business, psychology, sociology, and anthropology. Because organizations
are complex and varied, theorists’ views of what successful management is and what
it should be have changed repeatedly in the last 100 years.

Scientific Management (1900–1930)

Frederick W. Taylor, the “father of scientific management,” was a mechanical engi-
neer in the Midvale and Bethlehem Steel plants in Pennsylvania in the late 1800s.
Frustrated with what he called “systematic soldiering,” where workers achieved
minimum standards doing the least amount of work possible, Taylor postulated
that if workers could be taught the “one best way to accomplish a task,” productivity
would increase. Borrowing a term coined by Louis Brandeis, a colleague of Taylor’s,
Taylor called these principles “scientific management.” The four overriding principles
of scientific management as identified by Taylor (1911) are:
1. Traditional “rule-of-thumb” means of organizing work must be replaced
with scientific methods. In other words, by using time and motion studies
and the expertise of experienced workers, work could be scientifically
designed to promote greatest efficiency of time and energy.
2. A scientific personnel system must be established so workers can be hired,
trained, and promoted based on their technical competence and abilities.
Taylor thought each employee’s abilities and limitations could be identified
so the worker could be best matched to the most appropriate job.
3. Workers should be able to view how they “fit” into the organization and how
they contribute to overall organizational productivity. This provides common
goals and a sharing of the organizational mission. One way in which Taylor
thought this could be accomplished was by the use of financial incentives as a
reward for work accomplished. Because Taylor viewed humans as “economic
animals” motivated solely by money, workers were reimbursed according to
their level of production, rather than by an hourly wage.
4. The relationship between managers and workers should be cooperative and
interdependent, and the work should be shared equally. Their roles, however,
were not the same. The role of managers, or “functional foremen” as they were
called, was to plan, prepare, and supervise. The worker was to do the work.
What was the result of scientific management? Productivity and profits rose
dramatically. Organizations were provided with a rational means of harnessing the
energy of the industrial revolution. Some experts have argued that Taylor was not a
humanist and that his scientific principles were not in the best interest of unions or
workers. However, it is important to remember the era in which Taylor did his
work. During the industrial revolution, laissez-faire economics prevailed, optimism
was high, and a Puritan work ethic was prevalent. Taylor maintained that he truly
believed managers and workers would be satisfied if increased productivity resulted
in adequate financial rewards.
 CHAPTER 2 ■ Introduction to Management and Management Decision Making 27

As the cost of labor rose in the United States, many organizations took a new
look at scientific management. Healthcare organizations are using new technology,
such as video cameras and computers for time and motion studies, to enable indi-
viduals to find ways to “work smarter” (Russell, 2000). The implication is that Managers need to think
managers need to think of new ways to do traditional tasks so that work is more of new ways to do
efficient. Meltzer (1999) maintains that time and motion studies can be used to traditional tasks so that
improve performance, cut costs significantly, and improve the quality of care. work is more efficient.

Learning Exercise 2.1

Strategies for Efficiency

In small groups, discuss some work routines carried out in healthcare
organizations that seem to be inefficient. Could such routines or the time
and motion involved to carry out a task be altered to improve efficiency
without jeopardizing quality of care? Make a list of ways that nurses
could work more efficiently. Don’t limit your examination only to nursing
procedures and routines, but examine the impact other departments or
the arrangement of the nurse’s work area may have on preventing nurses
from working more efficiently. Share your ideas with your peers.

Bureaucracy
About the same time that Taylor was examining worker tasks, Max Weber, a
well-known German sociologist, began to study large-scale organizations to
determine what made some more efficient than others. Weber saw the need for
legalized, formal authority and consistent rules and regulations for personnel in
different positions; he thus proposed bureaucracy as an organizational design.
His essay, “Bureaucracy,” was written in 1922 in response to what he perceived
as a need to provide more rules, regulations, and structure within organizations
to increase efficiency. Much of Weber’s work and bureaucratic organizational
design are still evident today in many healthcare institutions. His work is discussed
further in Chapter 12.

Management Functions Identified (1925)

Henri Fayol (1925) first identified the management functions of planning, organiza-
tion, command, coordination, and control. Luther Gulick (1937) expanded on Fayol’s
management functions in his introduction of the seven activities of management—
planning, organizing, staffing, directing, coordinating, reporting, and budgeting—as
denoted by the mnemonic POSDCORB. Although often modified (either by includ-
ing staffing as a management function or renaming elements), these functions or
activities have changed little over time. Eventually, theorists began to refer to these
functions as the management process.
28 UNIT 1 ■ A New Approach to Leadership and Management

Figure 2.1 The management

process.

Planning

Organizing

Controlling

Staffing
Directing

The management process, shown in Figure 2.1, is this book’s organizing frame-
work. Brief descriptions of the five functions for each phase of the management
process follow:
1. Planning encompasses determining philosophy, goals, objectives, policies,
procedures, and rules; carrying out long- and short-range projections; deter-
mining a fiscal course of action; and managing planned change.
Just as nursing practice 2. Organizing includes establishing the structure to carry out plans, determining
requires that all nursing the most appropriate type of patient care delivery, and grouping activities to
care has a plan and an meet unit goals. Other functions involve working within the structure of the
evaluation, so too does organization and understanding and using power and authority appropriately.
each function of 3. Staffing functions consist of recruiting, interviewing, hiring, and orienting
management. staff. Scheduling, staff development, employee socialization, and team
building are also often included as staffing functions.
4. Directing sometimes includes several staffing functions. However, this
phase’s functions usually entail human resource management responsibili-
ties, such as motivating, managing conflict, delegating, communicating,
and facilitating collaboration.
5. Controlling functions include performance appraisals, fiscal accountability,
quality control, legal and ethical control, and professional and collegial control.
In many ways, the management process is similar to the nursing process, as
shown in Figure 2.2. Both processes are cyclic, and many different functions may
occur simultaneously. Suppose that a nurse-manager spent part of the day working
on the budget (planning), met with the staff about changing the patient care man-
agement delivery system from primary care to team nursing (organizing), altered the
staffing policy to include 12-hour shifts (staffing), held a meeting to resolve a con-
flict between nurses and physicians (directing), and gave an employee a job perform-
ance evaluation (controlling). Not only would the nurse-manager be performing all
phases of the management process, but each function has a planning, implementing,
and controlling phase.
 CHAPTER 2 ■ Introduction to Management and Management Decision Making 29

Simplified Nursing Process Management Process Functions

ASSESSING Planning

Planning

PLANNING Staffing

Organizing

Organizing

IMPLEMENTING

Directing

EVALUATING Controlling

Figure 2.2 Integrating nursing and management processes.

Human Relations Management (1930–1970)

During the 1920s, worker unrest developed. The industrial revolution had resulted
in great numbers of relatively unskilled laborers working in large factories on spe-
cialized tasks. Thus, management scientists and organizational theorists began to
look at the role of worker satisfaction in production. This human relations era
developed the concepts of participatory and humanistic management, emphasizing
people rather than machines.

Participative Management
Mary Parker Follett was one of the first theorists to suggest basic principles of what
today would be called participative decision making or participative management. In
her essay “The Giving of Orders” (1926), Follett espoused her belief that managers
should have authority with, rather than over, employees. Follett stated that to do so,
a need existed for collective decision making.
The human relations era also attempted to correct what was perceived as the
major shortcoming of the bureaucratic system—a failure to include the “human
element.” Studies done at the Hawthorne Works of the Western Electric Com-
pany near Chicago between 1927 and 1932 played a major role in this shifting
focus. The studies, conducted by Elton Mayo and his Harvard associates, began
as an attempt to look at the relationship between light illumination in the factory
and productivity.
30 UNIT 1 ■ A New Approach to Leadership and Management

Recognition of Workers
Mayo and his colleagues discovered that when management paid special attention
to workers, productivity was likely to increase, regardless of the environmental
working conditions. This Hawthorne effect indicated that people respond to being
studied, attempting to increase whatever behavior they feel will continue to warrant
the attention. Mayo (1953) also found that informal work groups and a socially
informal work environment were factors in determining productivity, and Mayo
recommended more employee participation in decision making.

Employee Satisfaction
Douglas McGregor (1960) reinforced these ideas by theorizing that managerial
attitudes about employees (and, hence, how managers treat those employees) can
be directly correlated with employee satisfaction. He labeled this Theory X and
Theory Y. Theory X managers believe that their employees are basically lazy, need
constant supervision and direction, and are indifferent to organizational needs.
Theory Y managers believe that their workers enjoy their work, are self-motivated,
and are willing to work hard to meet personal and organizational goals.

Flexibility and Employee Participation

Chris Argyris (1964) supported McGregor and Mayo by saying that managerial
domination causes workers to become discouraged and passive. He believed that if
self-esteem and independence needs are not met, employees will become discour-
aged and troublesome or may leave the organization. Argyris stressed the need for
flexibility within the organization and employee participation in decision making.
The human relations era of management science brought about a great interest
in the study of workers. Many sociologists and psychologists took up this challenge,
and their work in management theory contributed to our understanding about
worker motivation, which will be discussed in Chapter 18. Table 2.1 summarizes
the development of management theory up to 1970.
By the late 1960s, there was growing concern that the human relations approach
to management was not without its problems. Most people continued to work in
a bureaucratic environment, making it difficult to always apply a participatory

Table 2.1 Developers of Management Theory

Theorist Theory

Taylor Scientific management

Weber Bureaucratic organizations
Fayol Management functions
Gulick Activities of management
Follett Participative management
Mayo Hawthorne effect
McGregor Theory X and Theory Y
Argyris Employee participation
 CHAPTER 2 ■ Introduction to Management and Management Decision Making 31

approach to management. The human relations approach was time-consuming and

often resulted in unmet organizational goals. In addition, not every employee liked
working in a less-structured environment.
The evolution of management theory has affected how managers address workers’
concerns and needs. The early management theorists discounted workers’ needs and
focused on productivity and efficiency. Later the needs and motivation of workers
became the focal point of the work of the human relation theorist’s research into man-
agement science. It was not until the 1960s that it became apparent that management
was a complex issue that was intertwined with leadership. The following chapter will
focus on leadership and the relationship between leadership and management.

MANAGEMENT DECISION-MAKING TECHNOLOGY

As was discussed in Chapter 1, decision making is one of a manager’s primary
functions. Clancy (2003) maintains that even the most experienced manager can-
not eliminate all uncertainty when making decisions. However, to assist the man-
ager in making decisions, management analysts have developed tools that provide
order and direction in obtaining and using information or that are helpful in select-
ing who should be involved in making the decision. Because there are so many of
these decision aids, this chapter presents selected technology that would be most
helpful to a beginning manager. Some of these aids encourage analytical thinking,
others are designed to increase intuitive reasoning, and a few encourage use of both
hemispheres of the brain.

Quantitative Decision-Making Tools

Some management authors label management decision-making aids as models;
others use the term “tools.” It is only important to remember that any decision-
making aid always results in the need for the person to make a final decision and
that all aids are subject to human error.

Decision Grids
A decision grid allows one to visually examine the alternatives and compare each
against the same criteria. Although any criteria may be selected, the same criteria
are used to analyze each alternative. An example of a decision grid is depicted in
Figure 2.3. When many alternatives have been generated or a group or committee
is collaborating on the decision, these grids are particularly helpful to the process.
This tool, for instance, would be useful when changing the method of managing
care on a unit or when selecting a candidate to hire from a large interview pool.
The unit manager or the committee of nursing staff would evaluate all the alter-
natives available using a decision grid. In this manner, every alternative is evalu-
ated using the same criteria. It is possible to weight some of the criteria more
heavily than others if some are more important. To do this, it is usually necessary
to assign a number value to each criterion. The result would be a numeric value
for each alternative considered.
32 UNIT 1 ■ A New Approach to Leadership and Management

Financial Political Departmental

Alternative effect effect effect Time Decision

#1

#2

#3

#4

Figure 2.3 A decision grid.

Payoff Tables
The decision aids that fall in this category have a cost-profit-volume relationship
and are very helpful when some quantitative information is available, such as the
item’s cost or predicted use. To use payoff tables, one must determine probabilities
and use historical data, such as a hospital census or a report on the number of oper-
ating procedures performed. To illustrate, a payoff table might be appropriately
used in determining how many participants it would take to make an in-service
program break even.
If the instructor for the class costs $400, the in-service director would need to
charge each of the 20 participants $20 for the class, but for 40 participants, the class
would cost only $10 each. The in-service director would use attendance data from
past classes and the number of nurses potentially available to attend to determine
probable class size and thus how much to charge for the class. Payoff tables do not
guarantee that a correct decision will be made, but they assist in visualizing data.

Decision Trees
Because decisions are often tied to the outcome of other events, management
analysts have developed decision trees. Used to plot a decision over time, decision
trees allow visualization of various outcomes. The decision tree in Figure 2.4
compares the cost of hiring regular staff to the cost of hiring temporary employ-
ees. Here the decision is whether to hire extra nurses at regular salary to perform
outpatient procedures on an oncology floor or to have nurses available to the unit
on an on-call basis and pay them on-call and overtime wages. The possible con-
sequences of a decreased and an increased volume of procedures must both be
considered. Initially, costs would increase in hiring a regular staff, but over a
longer period of time, this move would mean greater savings if the volume of
procedures does not dramatically decrease.

Consequence Tables
Clancy (2003) used a consequence table to demonstrate how various alternatives
create different consequences. A consequence table lists the objectives for solving a
 CHAPTER 2 ■ Introduction to Management and Management Decision Making 33

ALTERNATIVE
POSSIBLE EVENTS
ACTIONS

Increased demand
for procedures

Hire regular staff

Decreased demand
for procedures
Decision point
(Last event to occur)
Increased demand
for staff Pay overtime and
on-call wages

Decreased demand
for staff

Variable affecting the direction of the decision tree:

• Revenue from procedures • Net cash flow
• Costs • First year expected value

Figure 2.4 A decision tree.

problem down one side of a grid and rates how each alternative would meet the
desired objective. For example, consider this problem: The number of patient falls has
exceeded the benchmark rate for two consecutive quarters. After a period of analysis the
following alternatives were selected as solutions:

• Provide a new educational program to instruct staff on how to prevent falls.

• Implement a night check to ensure that patients have side rails up and beds
are in a low position.
• Implement a policy requiring soft restraints orders on all confused
patients.

The decision maker then lists each alternative opposite the objectives for solving
the problem, which for this problem might be:

• Reduces the number of falls

• Meets regulatory standards
• Is cost effective
• Fits present policy guidelines.

The decision maker(s) then ranks each desired objective and examines each of
the alternatives through a standardized key, which allows a fair comparison
between alternatives and assists in eliminating undesirable choices. It is important
34 UNIT 1 ■ A New Approach to Leadership and Management

Table 2.2 Consequence Table: An Example

Objectives for
Problem Solving Alternative 1 Alternative 2 Alternative 3

1. Reduces the number X X X

of falls

2. Meets regulatory X X X
standards

3. Is cost effective X X

4. Fits present policy X

guidelines

Decision Score

to examine long-term effects of each alternative as well as how the decision will
affect others. See Table 2.2 for an example of a consequence table.

Program Evaluation and Review Technique

Program evaluation and review technique (PERT) is a popular tool to determine
the timing of decisions. Developed by the Booz-Allen-Hamilton organization
and the United States Navy in connection with the Polaris missile program,
PERT is essentially a flowchart that predicts when events and activities must
take place if a final event is to occur. Figure 2.5 shows a PERT chart for devel-
oping a new outpatient treatment room for oncology procedures. The number of
weeks to complete tasks is listed in optimistic time, most likely time, and pes-
simistic time. The critical path shows something that must occur in the sequence
before one may proceed. PERT is especially helpful when a group of people are
working on a project. The flowchart keeps everyone up-to-date, and problems are
easily identified when they first occur. Flowcharts are popular, and many people
use them in their personal lives.
 CHAPTER 2 ■ Introduction to Management and Management Decision Making 35

2-3-4 4-5-6
Staff Staff Staff
recruited hired trained

1-2-3

Decision
to develop 5-7-9 2-3-4 2-3-4
a staffed Planning Room Renovation
outpatient complete gutted complete
treatment
room 2-3-4

Equipment
installed
1-2-3

3-4-5
10-12-14 Equipment
Equipment Equipment and staff
ordered received ready

Critical path

Number of weeks to complete task ranked from most optimistic,

to most likely, to most pessimistic finish times

Figure 2.5 An example of a PERT flow diagram.

Learning Exercise 2.2

Charting Workflow
Think of some project you’re working on; it could be a dance, a
picnic, remodeling your bathroom, or a semester schedule of activities
in a class.
Assignment: Draw a flowchart, inserting at the bottom the date activities
for the event are to be completed. Working backward, insert critical tasks
and their completion dates. Refer to your flowchart throughout the project
to see if you stay on target.
36 UNIT 1 ■ A New Approach to Leadership and Management

PITFALLS IN USING DECISION-MAKING TOOLS

Clancy (2003) maintains that there is a strong tendency for managers to favor first
impressions when making a decision and a second tendency called confirmation
biases often follows. A confirmation bias has a tendency to affirm one’s initial
impression and preferences as other alternatives are evaluated. So even using conse-
quence tables, decision trees and other quantitative decision tools will not guaran-
tee a successful decision.
It is also human nature to focus on an event that leaves a strong impression so
individuals may have preconceived notions or biases that influence decisions. Too
often managers allow the past to influence current decisions. Lastly, managers often
become too confident about their decision making ability and remember their good
decisions and forget the negative outcomes that resulted from some of their other
decisions (Clancy, 2003).

Minimizing Pitfalls
Many of these pitfalls can be reduced by choosing the correct decision making style
and involving others when appropriate. It is not always necessary to involve others
in decision making and frequently a manager does not have time to involve a large
group, but it is important to separate out decisions needing others from those a
manager can make alone.
In addition to quantitative decision technology, management analysts have
developed models that assist managers in choosing the correct decision-making
style. A manager can be autocratic in making decisions and have little or no input
from others or can be democratic and involve others in the process. Some managers
develop patterns and use the same methods, rather than looking at the particular
situation and then concluding which type of decision making is needed. Vroom and
Yetton (1973) developed a useful approach in selecting an appropriate decision-
making style. They have identified five decision-making methods (Table 2.3).

Variables to Determine Decision-Making Style

Seven situation variables were identified by Vroom (1973). These situation vari-
ables determine which of the five decision-making styles is appropriate in a situa-
tion (Table 2.4).
1. The information rule. If the quality of the decision is important and the
leader does not possess enough information or expertise to solve the prob-
lem by himself or herself, AI is eliminated from the feasible set. (Its use
risks a low-quality decision.)
2. The goal congruence rule. If the quality of the decision is important and the
subordinates do not share the organizational goals to be obtained in solving
the problem, GII is eliminated from the feasible set. (Alternatives that elim-
inate the leader’s final control over the decision reached may jeopardize the
quality of the decision.)
 CHAPTER 2 ■ Introduction to Management and Management Decision Making 37

Table 2.3 Types of Management Decision Styles

A1 You solve the problem or make the decision yourself, using information available
to you at that time.
A11 You obtain the necessary information from your subordinate(s), then decide
on the solution to the problem yourself. You may or may not tell your
subordinates what the problem is when getting the information from them.
The role played by your subordinates in making the decision is clearly one
of providing the necessary information to you, rather than generating or
evaluating alternative solutions.
C1 You share the problem with relevant subordinates individually, getting their ideas
and suggestions without bringing them together as a group. Then you make
the decision that may or may not reflect your subordinates’ influence.
C11 You share the problem with your subordinates as a group, collectively obtaining
their ideas and suggestions. Then you make the decision that may or may not
reflect your subordinates’ influence.
G11 You share a problem with your subordinates as a group. Together you generate
and evaluate alternatives and attempt to reach agreement (consensus) on a
solution. Your role is much like that of chairman. You do not try to influence
the group to adopt “your” solution, and you are willing to accept and
implement any solution that has the support of the entire group.
Reprinted by permission of publisher from Organizational Dynamics. Spring 1973. p. 74. New York: American Man-
agement Association. All rights reserved.

3. The unstructured problem rule. When the quality of the decision is important,
if the leader lacks the necessary information or expertise to solve the prob-
lem alone, and if the problem is unstructured (i.e., he or she does not know
exactly what information is needed and where it is located), the method
used must provide a means not only to collect the information, but also to
do so in an efficient and effective manner. Methods that involve interaction
among all subordinates with full knowledge of the problem are likely to be
both more efficient and more likely to generate a high-quality solution to
the problem. Under these conditions, AI, AII, and CI are eliminated from the
feasible set. (AI does not provide for collection of the necessary information;
AII and CI represent more cumbersome, less-effective, and less-efficient
means of bringing the necessary information to bear on the solution of the
problem than methods that do permit those with the necessary information
to interact.)
4. The acceptance rule. If the acceptance of the decision by subordinates is critical
to effective implementation and it is not certain that an autocratic decision
made by the leader would receive that acceptance, AI and AII are eliminated
from the feasible set. (Neither provides an opportunity for subordinates to
participate in the decision, and both risk the necessary acceptance.)
5. The conflict rule. If the acceptance of the decision is critical, an autocratic
decision is not certain to be accepted, and/or subordinates are likely to be in
38 UNIT 1 ■ A New Approach to Leadership and Management

Table 2.4 Problem Attributes Used in the Vroom

Decision-Making Model
Problem Attributes Diagnostic Questions

A. The importance of the quality of the Is there a quality requirement such that
decision one solution is likely to be more rational
than another?
B. The extent to which the leader possesses Do you have sufficient information
sufficient information/expertise to make to make a high-quality decision?
a high-quality decision by himself or
herself
C. The extent to which the problem is Is the problem structured?
structured
D. The extent to which acceptance or Is acceptance of the decision by
commitment on the part of subordinates subordinates critical to effective
is critical to the effective implementation implementation?
of the decision
E. The prior probability that the leader’s If you were to make the decision by
autocratic decision will receive acceptance yourself, is it reasonably certain that
by subordinates your subordinates would accept it?
F. The extent to which subordinates are Do subordinates share the organizational
motivated to attain the organizational goals to be obtained in solving
goals as represented in the objectives this problem?
explicit in the statement of the problem
G. The extent to which subordinates are Is conflict among subordinates likely
likely to be in conflict over preferred in preferred solutions?
solution
Reprinted by permission of publisher from Organizational Dynamics. Spring 1973. p. 74. New York: American Manage-
ment Association. All rights reserved.

conflict or disagreement over the appropriate solution, AI, AII, and CI are
eliminated from the feasible set. (The method used in solving the problem
should enable those who disagree to resolve their differences with full
knowledge of the problem. AI, AII, and CI involve no interaction or only
“one-on-one” relationships and therefore provide no opportunity for those
in conflict to resolve their differences. Their use runs the risk of leaving
some of the subordinates with less than the necessary commitment to the
final decision.)
6. The fairness rule. If the quality of the decision is unimportant and accept-
ance is critical and not certain to result from an autocratic decision, AI, AII,
CI, and CII are eliminated from the feasible set. (The method used should
maximize the probability of acceptance because this is the only relevant
consideration in determining the effectiveness of the decision. In these cir-
cumstances, AI, AII, CI, and CII create less acceptance or commitment
than GII. To use them is to run the risk of getting less than the needed
acceptance of the decision.)
 CHAPTER 2 ■ Introduction to Management and Management Decision Making 39

A. DOES THE PROBLEM POSSESS A QUALITY REQUIREMENT?

B. DO YOU HAVE SUFFICIENT INFORMATION TO MAKE A HIGH-QUALITY DECISION?
C. IS THE PROBLEM STRUCTURED?
D. IS ACCEPTANCE OF DECISION BY SUBORDINATES IMPORTANT FOR EFFECTIVE IMPLEMENTATION?
E. IF YOU WERE TO MAKE THE DECISION BY YOURSELF, IS IT REASONABLY CERTAIN
THAT IT WOULD BE ACCEPTED BY YOUR SUBORDINATES?
F. DO SUBORDINATES SHARE THE ORGANIZATIONAL GOALS TO BE ATTAINED IN SOLVING THIS PROBLEM?
G. IS CONFLICT AMONG SUBORDINATES OVER PREFERRED SOLUTIONS LIKELY?

NO
D 1: AI
NO 2: GII
YES YES
NO E YES 3: AI
STATE D
NO
F
THE A YES 4: AI
YES YES
E YES NO

PROBLEM NO
B NO F 5: GII
NO NO YES
S 6A: CII
YES YES YE
C E YES
NO
D NO G NO
NO 7: AII 6B: CI
F
NO
D NO
9: CII YES
F 8: AII
YES YES
E YES
10: CII
NO
F YES

NO 11: GII

12: CII

Figure 2.6 Decision tree governing group problems—Model A: Time efficient

(Vroom, Yetton, & Jago, 1976. Reprinted by permission of publisher from Organizational Dynamics.
Spring 1973. p. 74. New York: American Management Association. All rights reserved.)

7. The acceptance priority rule. If acceptance is critical and not ensured by an

autocratic decision, and subordinates can be trusted, AI, AII, CI, and CII
are eliminated from the feasible set. (Methods that provide equal partner-
ship in the decision-making process can provide greater acceptance without
risking decision quality. Use of any method other than GII results in an
unnecessary risk that the decision will not be fully accepted or receive the
necessary commitment on the part of subordinates.
In later work, Vroom and associates (1976) demonstrated how a decision tree
could assist managers in deciding which decision-making style to use (Figure 2.6).
Vroom and Jago (1988) maintain that this model is able to deal with complexities
in situational demands more effectively than either McGregor’s Theory Y or Blake
and Mouton’s managerial grid, and they demonstrated its mathematical attributes
when the model was revised in the 1980s. Later work also demonstrated the effec-
tive use of a modified model for solving individual rather than group decisions.
However, the earlier model is less complex to use and for novice managers provides
a good basis for determining decision-making style appropriate for a manager
working with a group.

MANAGEMENT FUNCTIONS
No clear-cut lists of management functions are found in the current literature.
Kleinman (2003) lists the basic components of management functions to include
planning, organizing, delegating, problem solving, evaluating, and enforcing policies
40 UNIT 1 ■ A New Approach to Leadership and Management

Display 2.1 Functions of Management

Planning Empower staff Satisfy customers
Directing Maintain quality Organizing
Problem-solving Staffing Delegating
Enforcing policies Controlling
and procedures Evaluating
Manage day-to-day Build productive
operations work teams

and procedures. Nurse managers are expected to also manage day-to-day opera-
tions, empower staff, build productive work teams, maintain quality, and satisfy
customers. However, others describe empowerment as a role for nurse leaders
(Tourangeau, 2003; Trent, 2003 ) See Display 2.1 for a list of some of the functions
of management.
What soon becomes evident in reviewing the literature is that there is some
overlap in management functions with leadership roles. It does seem to become
increasing clear, however, that management functions are more concerned with the
day-to-day activity of the organization and with maintaining the status quo, and
therefore stability, for the organization while the role of leadership is more focused
on moving the organization forward toward the future and thereby changing the
status quo (Trent, 2003).
Throughout this text, leadership and management—the two very necessary
elements—are combined. Leadership is not merely one function of management,
nor management only one role of leadership. The two are forever symbiotic. How-
ever, by artificially separating the two components, leadership roles and manage-
ment functions, readers can see the differences in the two but also see the need for
an integrated leader manager. Zakeznik (2004) maintains that businesses must
find ways to train good managers and develop leaders at the same time. Adoption
of the integrated leader manager is critical for the healthcare industry.

A
Learning Exercise 2.3

Questions on Management
Examine Display 2.1 and then recall your own experiences as a manager
or the experiences you have had working for a manager.
Assignment: Write a one-page essay, or discuss in a group, the following
questions.
What functions of management do you feel are the most critical?
What additional functions of management should be added to this list?
Do you feel empowering staff is a function of management or a
leadership role?
 CHAPTER 2 ■ Introduction to Management and Management Decision Making 41

SUMMARY
Management has a unique purpose and outcome that is needed to maintain a
healthy organization. The history of management science provides managers with
a background into what came before so they are well grounded in the past. Man-
agers continue to use some past theories in coping with management problems
today. Since the earliest management studies, theorists have learned much about
human behavior; additionally society has changed remarkably, providing current
management theorists with new insights and challenges.
However, even today one of the most important functions for the manager
remains that of being a successful decision maker. Decision making takes place
throughout the management process and is one of the most critical functions
of management
The use of management tools and models to guide decision making will assist
the manager in making more effective decisions. Although there are many such
tools available, the successful manger knows that they are not foolproof and often
do not allow for the human element in management. Lastly, the manager is cog-
nizant that selecting the appropriate decision making style will influence the suc-
cess of the decision making.

❊ Key Concepts
• Management functions include planning, organizing, staffing, directing, and
controlling. These are incorporated into what is known as the management
process.
• Each management function has a planning and controlling phase.
• Classical, or traditional, management science focused on production in the
workplace and on delineating organizational barriers to productivity. Work-
ers were assumed to be motivated solely by economic rewards, and little
attention was given to worker job satisfaction.
• The human relations era of management science grew out of the Hawthorne
studies, which emphasized the needs of the worker for recognition. Concepts
of participatory and humanistic management emerged during this era.
• Management science has produced many tools to assist in management
decision making but all are subject to human error.
• Selecting an appropriate decision making style is critical in decision making.
• Management functions are not clear cut and are sometimes merged with
leadership roles.
42 UNIT 1 ■ A New Approach to Leadership and Management

More Learning Exercises and Applications

These exercises may be discussed individually or in groups, or used as written
assignments.

Learning Exercise 2.4

What’s Your Management Style?

Recall times when you have been a manager. This does not only mean a
nursing manager. Perhaps you were a head lifeguard or an evening shift
manager at a fast-food restaurant. During those times, do you think you
were a good manager? Did you involve others in your management deci-
sion making appropriately? How would you evaluate your decision-making
ability? What style of decision-making (from the Vroom and Yetton
model) did you use?
Assignment: Make a list of your management strengths and make a list of
management skills that you felt you were lacking.

Using the decision-making guidelines developed by Vroom and Yetton, decide

what type of decision-making style should be selected for Learning Exercises 2.5,
2.6, and 2.7.

Learning Exercise 2.5

What’s Your Decision Making Style?

You are the manager of a 30-bed medical unit. After consultation, you
recently implemented a system for incorporating nursing diagnoses on the
patient care plans. Although the system was expected to reduce report
time between shifts and improve the quality of patient care, to everyone’s
surprise, including your own, you find that the system is not working. You
do not think there is anything wrong with your idea. Many other hospitals
in the areas are using nursing diagnoses with success. You had a consultant
come from another hospital and give an update to your nurses on use of
the system. The consultant reported that your staff seemed knowledge-
able and appeared to understand their responsibilities in implementing
the system. You suspect that a few nurses might be sabotaging your
efforts for planned change, but your charge nurses do not agree; they
believe the failure may be lack of proper incentives or poor staff morale.
Your nursing administrator is anxious to implement the system in other
patient care units but wants it to be working well in your unit first. You
have just come from a manager’s meeting where your administrator told
you to solve the problem and report back to her within one week regard-
ing the steps you had taken to solve your problem. You share your admin-
istrator’s concern, but how should you solve this problem? Select the
most appropriate decision style.
 CHAPTER 2 ■ Introduction to Management and Management Decision Making 43

Learning Exercise 2.6

Who Should Go?

You are the evening shift charge nurse of the intensive care unit. Your
supervisor is sending two nurses from each shift to an upcoming critical
care conference in a nearby city. The supervisor wants each charge nurse
to submit names of the selected nurses in two weeks. All 12 of the full-
time evening shift nurses would like to go. From a staffing standpoint,
any of them could go. All are active in the local critical care organization.
Financial resources, however, limit your choice to two. How do you
resolve this situation? Select the most appropriate decision style.

Learning Exercise 2.7

Gathering the Facts—Stat!

You are the day shift charge nurse on a surgical unit. Because of your
related expertise, your supervisor has asked you to select a new type of
blood-warming unit. You want to be sure that you select the right one.
Several companies have provided your staff with trial units. You have not
received much feedback from the staff regarding their preferences.
Today, your supervisor tells you that your selection and its price must be
ready to accompany her budget, which is due in two days. What do you
do? Select the most appropriate decision style.

Learning Exercise 2.8

Teamwork in Hiring
Six nurses have just applied for a position in the open heart unit. Working
with a group, develop an appropriate decision grid for selecting which
nurse to hire. Identify six criteria for hiring. You may give each criterion
weighted points so that the decision is a quantitative solution. For exam-
ple, level of education could be weighted 5 to 10 points and experience,
10 to 30 points.
44 UNIT 1 ■ A New Approach to Leadership and Management

Web Links
Guide to project management research sites:
http://www.amanet.org/index.htm
A Web site of the American Management Associates. They offer many free learning
resources.
Management Skills and Development: Interview with Warren Bennis.
http://www.managementskills.co.uk/articles.htm (under Leadership)
An interview with Leadership theorist Warren Bennis.

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