HU introduction to management

CHAPTER ONE

MANAGEMENT: AN OVERVIEW

Chapter Objectives

After completing this chapter you should be able to:

 Explain the different meanings and definitions of management.

 Describe the significance of management.
 Discuss why management is both an art and a science.
 Identify the different classifications of managers.
 List the five basic managerial functions and describe their relationships.
 Describe the roles managers play and the skills they need.
1.1 Meaning and Definition of Management

Meaning

The word management has several meanings, the most important of which are:

i. Management refers to a group of people who are responsible for guiding and controlling the
organization (managerial personnel).
ii. Management is the process of running an organization (planning, organizing, staffing, directing,
and controlling).
iii. Management is a body of knowledge, a discipline.
iv. Management is a factor of production; economic resource as land, labor, and capital.

Defining Management

There are several definitions of management given by different authorities in the field.

i. Management is the art of getting things done through and with people in a formally organized
group.
ii. Management is the art of knowing what you want to do in the best and cheapest way.
iii. Management is the process of planning, organizing, staffing, directing, and controlling the use of
a firm’s resources to effectively and economically attain its objectives.
iv. Management may be defined as the art of securing maximum results with a minimum of efforts
so as to secure maximum prosperity and happiness for both the employer and employee and give
the public the best possible service.

Providing a single, comprehensive, and universally accepted definition of management is impossible due
to the fact that:

 Management has various aspects, that all of which cannot be represented by a single definition.
 The theorists who gave the definitions had different areas of interest or training, and all defined
management from their perspective (engineering, sociology, psychology, mathematics, etc.)
 Management as a discipline is young and there is a lack of clarity of concepts and principles.

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In spite of all the above reasons for different definitions, the definitions are not contradictory.
Management is the synthesis of all the definitions given by different theorists.

Characteristics of Management
1. Goal Oriented
2. Dynamic
3. Decision Making
4. Universal
5. A Continuous Process
6. Working with and through people
7. Multi – Disciplinary
8. Not Absolute Principles
1.2 Significance of Management

Ever since people began forming groups to accomplish activities they couldn’t achieve as individuals,
management has been essential to ensure the coordination of individual efforts. As society has come to
rely increasingly on group effort, and as many organized groups have become large, the task of managers
has been rising in importance.

In an organization, it is quite possible that members might do parts of jobs that each thought important to
meet the objectives, while in reality the members might be working in opposite directions. To prevent this
from occurring and to ensure coordination of work to accomplish the objectives, management is needed.

Management is, therefore, essential whenever and wherever human efforts are to be undertaken
collectively to achieve specific goals. No group activity can succeed without management.

Modern enterprises succeed only when there is a competent leadership in the form of management. A
competent manager would turn a losing concern while an incompetent manager could only hasten its
closure.

1.3 Basic Management Functions

All managers regardless of their level share in the execution of the five management functions. A brief
description of each of the five functions is presented below.

Planning

Planning is the first function that all managers engage in because it lays the ground for all other functions.
It identifies the goals and alternatives. It maps out courses of action that will commit individuals,
departments, and the entire organization for days, months, and years to come.

Planning achieves these ends after setting in motion the following processes:

(1) Determination of what resources will be needed

(2) Identification of the number and types of personnel the organization will need
(3) Development of the foundation for the organizational environment in which work is to be
accomplished.

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(4) Determination of standard against which the progress toward the objectives can be measured so
that corrections can be made if necessary.

The length of time and the scope of planning will vary according to the level in the company. Top level
management planning may cover a period of five or ten years and can be considered long range planning.
The plans at this level may cover expansion of the business and how it will be financed. At lower levels
of management, the concern may be a plan for today’s activities or planning tomorrow’s work schedule.

Each manager’s plans are influenced by the plans of the other managers. Lower level managers’ plans are
strongly guided by the directions of the plans of top level managers. Besides the vertical influence on a
manager’s plans there is the horizontal influence of other managers, those on the same level within the
same department. Add to these the influence of government rules and regulations, and you can see that
planning is more complex than it appears. Planning does not occur in a vacuum. A manager’s plans
affect, and are affected by, the plans of others on their team and the requirements of government rulings.

Organizing

Organizing is a management function which is concerned with:

(1) Assembling the resources necessary to achieve the organization’s objectives and
(2) Establishing the activity-authority relationships of the organization. Planning has established the
goals of the company and how they are to be achieved; now, organizing develops the structure to
reach these goals.

The activities necessary to achieve the objectives are grouped into working divisions, departments, or
other identifiable units primarily by clustering similar and related duties. The result is a network of
interdependent units. Each unit (and each person in the unit) should have clearly defined authority, or a
clearly defined list of duties, and one person to whom to report. Organizing is not done once and then
forgotten. As the objectives of the company change, they will influence the structure of managerial and
organizational relationships. One thing is certain in organizing, changes that occur both within and
outside the organization will require new approaches, plans, and organizational units.

Staffing

Staffing is concerned with locating prospective employees to fill the jobs created by the organizing
process. Staffing initially involves the process of recruiting potential candidates for a job, reviewing the
applicants’ credentials, and trying to match the job demands with the candidates’ abilities.

After the employment decision has been made – the position is offered and accepted – staffing involves
orienting the new employee to the company environment, training the new person for his or her particular
job, and keeping each employee qualified. Staffing also involves the development and implementation of
a system for appraising performance and providing feedback for performance improvement. Staffing is
also concerned with determining the proper pay and benefits for each job. Many aspects of the staffing
function are the responsibility of the personnel department.

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Directing/Leading

Directing is aimed at getting the members of the organization to move in the direction that will achieve its
objectives. Directing builds a climate, provides leadership, and arranges the opportunity for motivation.
Each boss must plan and oversee the work of each of his or her subordinates. The challenge for a manager
in directing is to create an environment in which both the employee and the organization will achieve
their objectives. To provide this environment, all employees need to be dealt with on an individual basis –
one – to – one. Expectations need to be communicated and reinforced. Communication needs to be
ongoing and personalized. And each person should be encouraged to participate in the decision making
process.

Controlling

Controlling deals with establishing standards for performance, measuring performances against
established standards, and dealing with deviations from established standards. It attempts to prevent
problems, to determine when problems do exist, and to solve the problems that occur as quickly and
effectively as possible. Controlling depends on accurate, reliable, and enforceable standards and on
monitoring performances by people, machines, and process. The best controls ensure that work is
performed to standards as planned.

1.4 Levels of Management and Types of Managers

Levels of Management

Levels are hierarchical arrangement of managerial positions in an organization. The number of levels of
management, among other things, depends on the size of the organization. Generally, there are three
managerial levels:

1. Top level management

2. Middle level management
3. First level(operating level) management

Top level Mgt

Middle level Mgt

Operational level Mgt

Figure 1.1 Levels of Management

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Top level Management

Top level management includes the board of directors, executive committee, and chief executive, or
president, or general manager, etc., of an organization. Functions of top level management include:

o Establishing broad objectives

o Designing major strategis
o Outlining principal policies
o Providing effective organizational structure that insures integration
o Providing overall leadership and direction
o Making overall control of the organization
o Dealing with external parties such as the government, community, business etc. by representing
the organization
o Analyzing the changes in the external environment and respond to it.

Middle level Management

Middle level management includes heads of the different areas and their assistants, divisional heads,
department managers, section heads, plant managers, branch managers, etc. Managers in this level are
specialists and their activities are limited to a particular area of operation or to a section or department.
The major functions of middle level management are:

o Acting as intermediary between top and operating level management

o Translating long-term plans of top management into medium range plans
o Developing specific targets in their areas of responsibility
o Develop specific schedules to guide actions and facilitate control
o Coordinating inputs, productivity and outputs of operating level managements.

First level (Operating level) Management

This is the last step of the ladder in the hierarchy of management. The subordinates of operating level
managers are non-management workers. Operating level managers direct a small team of workers and
keep a check on their performance so that short-term production and work targets are achieved. The
typical titles in this level are section chief, office manager, foreman, supervisor, etc. The major functions
of operating level management are:

o Planning daily and weekly activities and accomplishments based on the monthly, quarterly, and
yearly plans.
o Assigning operating employees to specific tasks
o Issuing instructions at the workplace, following-up, motivating, and evaluating, workers and
reporting to their superiors.

Types of Managers

Based on the scope of the activities they manage, managers are classified into functional and general
managers.

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Functional Managers

Functional managers supervise with specialized skills in a single area of operation, such as accounting,
personnel, finance, marketing, and production. All these functions are necessary for the success of the
organization.

General Managers

General Managers are responsible for the overall operations of a more complex unit, such as a company,
or a division. General Managers hold functional managements accountable for their specialized areas and
usually coordinate two or more departments.

1.5 Managerial Roles and Skills

Managerial Roles

Managers perform the basic managerial functions by playing a variety of managerial roles. A role is an
organized set of behaviors. Henry Mintzberg studied a variety of managerial jobs and arrived at the ten
most common roles of top managers. The ten roles are classified into three categories: interpersonal
roles, informational roles, and decisional roles. However:

i. Every manager’s job consists of some combination of roles.

ii. These roles often influence the characteristic of managerial work.
iii. Although we describe them separately for simplicity, these roles actually are highly interrelated.
iv. The relative importance of each role varies considerably by managerial level of function.

Interpersonal Roles

Interpersonal roles, which arise directly from a manager’s formal authority, involve interpersonal
relationships. Managers play the following three interpersonal roles.

Figurehead role: in the figurehead role, the manager represents the organizations at ceremonial and
symbolic functions. It’s the most basic and the simplest of all managerial roles. The president who greets
a touring dignitary, the mayor who presents a key to the city to a local hero, the supervisor who attends
the wedding of the machine operator, the sales manager who takes an important customer to lunch – all
are performing ceremonial duties important to the organization’s image and success. While these duties
may not seem important, they are expected of managers. They symbolize management’s concern for
employees, customers, and the community.

Leadership role: the leadership role involves responsibility for directing and coordinating the activities
of subordinates in order to accomplish organizational objectives. Some aspects of the leadership role have
to do with staffing: hiring, promoting. Other aspects involve motivating subordinates to meet the
organization’s needs. Still other aspects relate to creating a vision that company employees can identify
with.

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Liaison role: the liaison role refers to dealing with people outside the organization, such as clients,
government officials, customers, and suppliers. It also refers to dealing with managers in other
departments, staff specialists, and other departments’ employees. In the liaison role, the manager seeks
support from people who can affect the department’s and the organization’s success.

Informational Roles

Effective managers build networks of contacts for sharing information. Because of these contacts,
managers emerge as the nerve system centers of their organizations. Many contacts made while
performing figurehead and liaison roles give mangers access to a great deal of important information. The
following three roles describe the informational aspects of managerial work.

Monitor role: the monitor role involves seeking out, receiving, and screening information. Just as a radar
unit scans the environment, managers scan their environments for information that may affect their
organization. Since much of the information received is oral (from gossip and hearsay, as well as formal
meetings), managers must evaluate and decide whether to use this information.

Disseminator role: in the disseminator role, the manager shares information with subordinates and other
members of the organization. Sometimes the manager passes along special or “privileged” information to
certain subordinates who would not originally have access to it and who can be trusted not to let it go
further. In practice passing information along to subordinates is often difficult and time consuming.
Therefore, the manger must decide which and how much information will be useful.

Spokesperson role: in the spokesperson role, managers transmit information to others, especially those
outside the organization, as the official position of the company. The manager is the person who speaks
for his or her work unit or organization to people outside the work unit or organization.

Decisional Roles

Managers use information to make decisions about when and how to commit their organization to new
objectives and actions. Decisional roles are perhaps the most important of the three categories of roles.
Managers are the core of the organization’s decision making system since they play the following four
decisional roles.

Entrepreneurial role: this role involves designing and initiating planned change in order to improve the
organization’s position. Managers play this role when they initiate new projects, launch a survey, test a
new market, or enter a new business.

Disturbance handler role: managers play the disturbance handler role when dealing with problems and
changes beyond their immediate control. Typical problems include strikes by labor, bankruptcy of major
suppliers, or breaking of contracts by customers. Sometimes disturbances may arise because a poor
manager ignores the situation until it becomes a crisis. However, even good managers can’t possibly
anticipate all the consequences of their decisions or control the action of others.

Resource allocator role: this role involves choosing among competing demands for money, equipment,
personnel, and other’s demands on manager’s time. What portion for improving an existing product line?

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Should she/he add a second shift or pay overtime to handle new orders? For example, one may choose
among allocating resources to automate certain plants, choose others down, etc.

Negotiator role: closely linked to the resource allocator role is the negotiator role. In this role managers
meet and discuss their differences with individuals or groups for the purpose of reaching an agreement.
Negotiations are an integral part of a manager’s job. They are especially tough when a manager must deal
with others (such as unions or political action groups) who don’t share the manger’s objectives.

Managerial Skills

Skill is ability to do something expertly and well. It is meant ability related to performance that is not
necessarily in born but which can be developed/ acquired. For the purpose of discussion, managerial skills
are classified into four distinct categories: technical, interpersonal, conceptual, and communication skills.
However, in practice these skills are closely related and it may be difficult to tell where one begins and
the other ends.

Technical Skills

Technical skills involve the ability to apply specific methods, procedures, and techniques in a specialized
field. It is easy to visualize the technical skills of design engineers, market researchers, accountants,
musicians, and computer programmers. Technical skills are often given emphasis in schools and
universities and in on-the-job training programs.

Interpersonal Skills

Interpersonal skills include the ability to lead, motivate, manage conflicts, and work with others whereas;
technical skills emphasize working with things (techniques or physical objects) Interpersonal skills focus
on working with people. In the long run organizations have only one true resource, people. Thus,
interpersonal skills are a vital part of every manager’s job regardless of level or function.

Conceptual Skills

Conceptual skills involve the ability to view the organization as a whole and recognize its relationships to
the larger environment (business world). In other words, conceptual skill involves visualizing the
different parts of an organization as one big whole and to understand the wholes interaction with its
relevant environment. More specifically:

o How the organization’s various parts and functions depend on each other and thus, how changes
in one area can affect other areas.
o How each part contributes to the achievement of the overall organizational goal?

The manager uses conceptual skills to diagnose and assess different types of management problems.
Because they depend on an understanding of the relationships of various factors, conceptual skills are
among the most difficult to develop. The conceptual skills are especially important to managers in
making decisions.

Communication Skills

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Communication skills reflect a managerial ability to send and receive information, thoughts, feelings, and
attitudes. Middle and operating level mangers spend a large portion of their time communicating. The
basic communication skills are classified into writing, oral and non-verbal (facial expressions, body
posture, etc.). Communication skills are very crucial to all managers. No matter what wise ideas a
manager has it is meaningless unless he is able to communicate it in a wise way. Communication skills
are necessary for effectively displaying interpersonal, technical, and conceptual skills.

Conceptual & Communication

Interpersonal Skill Skill

Top

Level Mgt Technical Skill

Middle Level
Mgt
First Level Mgt

Figure 1.2 Relative Importances of Managerial Skills at Different Levels of Management.

1.6 Universality of Management

Although the problems, other organizational constraints, and nature of different organizations vary
widely, the functions performed by each manager are nearly the same. To be more specific, management
is regarded as a universal activity because of the following factors:

i. In all kinds of organization the basic managerial functions are used to make individuals
contribute to group objectives. Management thus applies to any type of organization.
a. From small to large and complex.
b. In profit making and nonprofit making.
c. In manufacturing and service giving.
d. In all political systems socialist, capitalist, etc.
ii. Managers in all levels of organizational hierarchy perform the same basic managerial functions.
What varies from level to level is that the various management levels require different amounts of
time for each function, and the points of emphasis in each function are different. Except for this
all managers perform the same functions.

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iii. The principles of management are universal. They are applicable to any kind of organization
wherever there is the coordinated effort of human beings. The type of enterprise is not significant.
The managerial principles are also transferable from department and from level to level.

Therefore, since at higher levels of management the operating non-managerial component of the job
is fewer and the job is more purely managerial there is great possibility of transferability of
management from organization to organization and from department to department.

1.7 Is Management Science or Art?

Science may be defined as a systematized knowledge derived from observation, study, and
experimentation carried on in order determining the nature and principles of the subject under study.
Since management has a structured body of knowledge with its own distinct concepts and principles that
are developed with reference to the general truths underlying the management practice, management is a
science.

Although we recognized management as a science, it is not as comprehensive or as exact as the other

sciences such as physical sciences. This is because the variables with which managers deal are complex
and management mostly deals with the human elements. Human beings are not standardized and their
behavior is unpredictable. As a result, experiments cannot be repeated under standardized conditions.
They cannot be subject to controlled laboratory experiment.

Art is the application of knowledge that constitutes the science and the function of the arts is to
accomplish concrete ends, effect results, produce situations that would not come about without the
deliberate effort to secure them.

Like all other practices management is an art. It is knowhow, it is the application of knowledge, and it is
doing things in light of the realities of the situation. Therefore, management is both a science and an art.
This is not a contradiction in terms, for art and science complement each other – go hand in hand, and are
not mutually exclusive.

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