Chapter: 02

• A group of people working together in a structured and

coordinated fashion to achieve a set of goals.

For-profit Organizations
– Large businesses
• Industrial firms, commercial banks, insurance companies, retailers,
transportation companies, utilities, communication companies, service
organizations
– Small businesses and start-up businesses
Not-for-profit Organizations
– Governmental organizations—local, state, and federal
– Educational organizations—public and private schools, colleges, and
universities
– Healthcare facilities—public hospitals and HMOs
– Nontraditional settings—community, social, spiritual groups
There are probably a huge number of definitions of management. Almost a century ago, F.W. Taylor (1856-1915)
defined management as “knowing exactly what people want to do, and then seeing that they do it in the best and the
cheapest way”. So, we can define management as follows:

 Henri Fayol (1841-1925): To manage is to forecast and plan, to organize, to command, to coordinate and control.

 P.F.Drucker (1909-): Management means whatever a manager does.

 M.P.Follet (1868-1933): Management is the act of getting things done through others.

 Stoner and Freeman: Management is the process of planning, organizing, leading, and controlling the work of
organization members and of using all available organizational resources to reach stated organizational goals.
(1995).

 Robbins and Coulter: Management is the process of coordinating work activities so that they are completed efficiently
and effectively with and through other people. (2002).

 Management is the process of designing and maintaining an environment in which individuals, working together in
groups, efficiently accomplish selected aims

.
 Management is a process, which includes a set of activities (planning, decision
making, organizing, staffing, leading, controlling) directed at an organizational
resources (human, financial, physical, information) with the aim of achieving
organizational goals in an efficient and effective manner.

 This three basic definitions needs to be expanded:

 As managers people carry out the managerial functions of Planning, Organizing,
Staffing, Leading and Controlling.
 Management applies to any kind of organization.
 It applies to manager at all organizational levels.
 The aim of all the managers is the same; to create surplus/profit.
 Managing is concerned with productivity; this implies effectiveness and efficiency.
 Planning
and Decision Organizing
Making
Inputs from the environment
• Human resources Goals attained
• Financial resources • Efficiently
• Physical resources • Effectively
• Information resources

Controlling Leading
 Human resources
◦ Managerial talent and labor
 Financial resources
◦ Capital investments to support ongoing and long-term operations
 Physical resources
◦ Raw materials; office and production facilities, and equipment
 Information resources
◦ Usable data, information linkages
 EFFICIENTLY
Using resources wisely and
in a cost-effective way
And

EFFECTIVELY
Making the right decisions and
successfully implementing them
 Someone who coordinates and oversees the work of other
people so that organizational goals can be accomplished.

 Someone whose primary responsibility is to carry out the

management process.

 Someone who plans and makes decisions, organizes, leads,

and controls human, financial, physical, and information
resources.
 Top Managers
◦ The relatively small group of executives who manage the overall
organization. They create the organization’s goals, overall strategy,
and operating policies.
 Middle Managers
◦ Largest group of managers in organizations who are primarily
responsible for implementing the policies and plans of top
managers. They also supervise and coordinate the activities of lower
level managers.
 First-Line Managers
◦ Managers who supervise and coordinate the activities of operating
employees.
 Marketing Managers
◦ Work in areas related to getting consumers and clients to buy the
organization’s products or services—new product development,
promotion, and distribution.
 Financial Managers
◦ Deal primarily with an organization’s financial resources—
accounting, cash management, and investments.
 Operations Managers
◦ Concerned with creating and managing the systems that create
organization’s products and services—production control,
inventory, quality control, plant layout, site selection.
 Human Resource Managers
◦ Involved in human resource planning, recruiting and selecting
employees, training and development, designing compensation and
benefit systems, formulating performance appraisal systems, and
discharging low-performing employees.
 Administrative Managers
◦ Generalists who are familiar with all functional areas of management
and who are not associated with any particular management
specialty.
 Other Kinds of Managers
◦ Organizations have developed specialized managerial positions
(e.g., public relations managers) directly related to the needs of the
organization.
 Levels of Management

Top managers

Middle managers

First-line managers

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Areas of Management
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Planning and Decision Making
Planning involves selecting missions and objectives and actions to achieve them; it
requires decision making that is choosing future courses of actions from among
alternatives. Simply it refers to setting an organization’s goal and deciding how best to
achieve them.

– What are the organization’s long-term objectives?

– What strategies will best achieve those objectives?
– What should the organization’s short-term objectives be?
– How difficult should individual goals be?
 Planning includes-
 Determining the present status of the organization.
 Survey the environment.
 Set objectives.
 Forecast the future situations.
 State actions and resource needs.
 Evaluate proposed actions.
 Revise and adjust the plan.
 Communicate throughout the planning process.
 Organizing: Organizing involves grouping activities, assigning activities and giving
the authority necessary to carry out the activities. It is a that part of managing that
involves establishing an intentional structure of roles for people to fill in an
organization.
 Determining how activities and resources are to be grouped.
◦ How many employees should I have report directly to me?
◦ How much centralization should there be in an organization?
◦ How should jobs be designed?
◦ When should the organization implement a different structure?
 Organizing includes-
 Identify and defined work to be performed.
 Define position requirements.
 Assign work to be performed, accountability and extent of authority.
 Revise and adjust the organizational structure.
 Communicate throughout the organizing process.
 Staffing: Staffing is a process of determining human resource need and recruiting,
selecting, training and developing human resources. It is a process of filling, and
keeping filled the positions in the organization structure.
 Staffing includes-
 Determining human resource needs.
 Recruit potential employees.
 Select from the recruits.
 Train and develop the resources.
 Revise and adjust the quantity and quality of human resources.
 Communicate throughout the staffing process.
Leading : Leading is the management function that involves motivation subordinates, influencing
individuals and groups so that they will contribute to achieve organizational objectives. Simply it
refers to directing and guiding human behavior toward the accomplishment of objectives.
The set of processes used to get members of the organization to work together to advance the
interests of the organization.
– How do I handle employees who appear to be unmotivated?
– What is the most effective leadership style in a given situation?
– How will a specific change affect worker productivity?
– When is the right time to stimulate conflict?
Leading includes-

Communicate and explain the objective to subordinates.

Assign performance standards.

Coach and guide subordinates to meet performance standards.

Reward subordinates based on performance.

Provide a motivating environment.

Revise and adjust the method of leadership.

Communicate throughout the leadership process.

Controlling
Controlling is a management function that involves monitoring actual performance,
comparing actual to standard and taking actions if necessary.
•Monitoring the organization’s progress towards its goals.

– What activities in the organization need to be controlled?

– How should those activities be controlled?
– When is a performance deviation significant?
– What type of management information system should the organization have?
Controlling includes-

Establish standards.

Monitor result and compare to standards.

Correct deviations.

Revise and adjust control methods.

Communicate throughout the controlling process.

 Interpersonal Roles
◦ Figurehead, leader, and liaison roles involve dealing with other
people.
 Informational Roles
◦ Monitor, disseminator, and spokesperson roles involve the
processing of information.
 Decisional Roles
◦ Entrepreneur, disturbance handler, resource allocator, and
negotiator are managerial roles primarily related to making
decisions.
Category Role Sample Activities

Interpersonal Figurehead Attending ribbon-cutting ceremony for new plant

Leader Encouraging employees to improve productivity
Liaison Coordinating activities of two projects

Informational Monitor Scanning industry reports to stay abreast of

developments
Disseminator Sending memos outlining new organizational
initiatives
Spokesperson Making a speech to discuss growth plans

Decisional Entrepreneur Developing new ideas for innovation

Disturbance Resolving conflict between two subordinates
handler
Resource allocator Reviewing and revising budget requests
Negotiator Reaching agreement with a key supplier or labor
union
• Managerial Skill

• Technical Skill
– Skills necessary to accomplish or understand the specific kind of work being done in an
organization.
– Technical skills include knowledge of and proficiency in a certain specialized field like
engineering, computers, accounting, or manufacturing. Thus it involves working with tools and
specific techniques. This skill is more important at lower levels of management. Since this
managers are dealing directly with employees doing the organization’s work.
Interpersonal Skill
– The ability to communicate with, understand, and motivate both individuals and groups.
– Human skill is the ability to work with the people; it is cooperative effort; it is teamwork; it is the
creation of environment in which people feel secured and free to express their opinions
Conceptual Skill
– The manager’s ability to think in the abstract.
– The ability to recognize significant element in a situation and understand the relationships
among the elements. Using this skill, manager must be able to see the organization as a whole,
understand the relationship among various sub-units and visualize how the organization feeds
into broader environment.
Diagnostic Skill
– The manager’s ability to visualize the most appropriate response to a situation.
 Communication
◦ The manager’s abilities both to convey ideas and information
effectively to others and to receive ideas and information effectively
from others.
 Decision-Making
◦ The manager’s ability to recognize and define problems and
opportunities correctly and then to select an appropriate course of
action to solve the problems and capitalize on opportunities.
 Time-Management
◦ The manager’s ability to prioritize work, to work efficiently, and to
delegate appropriately.
• Science of Management
– Assumes that problems can be approached using rational, logical,
objective, and systematic ways.
– Requires the use of technical, diagnostic, and decision-making
skills and techniques to solve problems.
• Art of Management
– Decisions are made and problems solved using a blend of intuition,
experience, instinct, and personal insights.
– Requires the use of conceptual, communication, interpersonal, and
time-management skills to successfully accomplish the tasks
associated with managerial activities.
Sound educational
base; continued
life-long educational
experiences
Successful
acquisition and
utilization of basic
management skills
Initial job experiences;
continued experiences
through a variety of
job assignments
The Increasing Importance of Customers
◦ Customers: the reason that organizations exist
 Managing customer relationships is the responsibility of all managers and
employees.
 Consistent high quality customer service is essential for survival.
Innovation
◦ Doing things differently, exploring new territory, and taking risks
 Managers should encourage employees to be aware of and act on opportunities
for innovation.
 Decision making that’s rational, but limited (bounded) by an
individual’s ability to process information
 Decision makers are supposed to do certain things and

exhibit good decision-making behaviors as they identify

problems, consider alternatives, gather information, and act
decisively but prudently.
 A more realistic approach to describing how managers make
decisions is the concept of bounded rationality, which says
that managers make decisions rationally, but are limited
(bounded) by their ability to process information. Because
they can’t possibly analyze all information on all alternatives,
managers satisfice, rather than maximize. That is, they accept
solutions that are “good enough.” They’re being rational
within the limits (bounds) of their ability to process
information.