INTRODUCTION TO MANAGEMENT

LEARNING OBJECTIVES
After studying this section, the student should be able to:
1. Define Management.
2. Describe the four management functions.
3. Explain the difference between efficiency and effectiveness and their importance for
organizational performance.
4. Describe the different kinds of managers.
5. Describe the different types of management skills.
6. Define the ten roles that managers perform in organizations.

WHAT IS ORGANIZATION?
An organization is a collection of people working together to achieve a common purpose.

From society’s viewpoint, the purpose of any organization is to provide useful goods and/or
services that return value to society and satisfy customer needs in order to justify continued
existence.

ORGANIZATIONS AS SYSTEMS
Organizations are systems composed of interrelated parts that function together to achieve a
common purpose.

Organizations are open systems that interact with their environments in the continual process
of transforming resource inputs into product outputs in the form of finished goods and/or
services.

The external environment is a critical element of the open systems view of organizations
because it is both a supplier of resources and the source of customers, and has a significant
impact on the organization’s operations and outcomes. Feedback from the environment tells an
organization how well it is doing in meeting the needs of customers and society.

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ORGANIZATIONAL PERFORMANCE
For an organization to perform well its resources must be well utilized and its customers must
be well served. This is a process of value creation. If operations add value to the original cost of
resource inputs, then:
1. a business organization can earn a profit—that is, sell a product for more than the
cost of making it
2. a nonprofit organization can add wealth to society—that is, provide a public service
that is worth more than its cost (e.g., fire protection in a community)

A common way to describe how well an organization is performing overall is productivity.

Productivity is a summary measure of the quantity and quality of work performance with
resource utilization taken into account.

Performance effectiveness is an output measure of task or goal accomplishment.

Performance efficiency is an input measure of the resource costs associated with goal
accomplishment.

CHANGING NATURE OF ORGANIZATIONS

Among recent trends in changes in organizations, the following organizational transitions are
especially relevant to your study of management:
 Renewed belief in human capital
 Demise of “command-and-control”
 Emphasis on teamwork
 Pre-eminence of technology
 Embrace of networking
 New workforce expectations
 Concern for work-life balance
 Focus on speed

WHAT IS MANAGEMENT?
Management has been called ‘the art of getting things done through people’. This definition by
Mary Parker Follett calls attention to the fact that managers achieve organizational goals by
arranging for others to perform whatever tasks may be necessary – not performing the tasks
themselves.

Management is that, and more – so much more, in fact, that no one simple definition has been
universally accepted. Moreover, definitions change as the environments of organizations

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change. Our discussion will start with a fairly complex definition and in the process highlighting
the important aspects of managing.

Management is a process of planning, organizing, leading, and controlling the work of

employees and using all available organizational resources – information, human, financial, and
raw materials to reach stated organizational goals and objectives effectively and efficiently.

There are two important ideas of the definition of management:

 The four functions of management – planning, organizing, leading, and controlling
 The attainment of stated organizational goals in an effective and efficient manner.

THE FOUR FUNCTIONS OF MANAGEMENT

Management is a process - a systematic way of doing things because all managers regardless of
their particular aptitudes or skills engage in certain interrelated activities in order to achieve
their desired goals. The interrelated management activities are planning, organizing, leading,
and controlling.

Planning is a process concerned with defining goals for future organizational performance, and
deciding on the tasks and resources needed to attain them. This management function implies
where the organization wants to be in the future and how it will get there. Managers through
their plans outline what the organization must do to be successful. In addition, plans are the
guides by which the organizations obtains and commits the resources required to reach its
objectives; members of the organization carry on activities consistent with the chosen goals,
and progress toward the goals is monitored and measured so that corrective actions can be
taken if progress is unsatisfactory.

Organizing typically follows planning and it reflects how the organization tries to accomplish the
plan. It is a process concerned with arranging and allocating work, authority and resources
among an organization’s members so that they can achieve the goals of the organization in an
effective and efficient manner.

Leading involves directing, influencing, and motivating employees to perform essential tasks.
While planning and organizing deal with the more abstract aspects of the management process,
the activity of leading is more concrete. It involves working with people. By establishing the
proper atmosphere, managers help their employees do their best.

Finally, controlling is concerned with monitoring employees’ activities, determining whether

the organization is on target toward it goals, and making corrections as necessary. Managers

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must ensure that the organization is moving toward its stated goals. It involves three main
elements: establishing standards of performance; measuring current performance, comparing
this performance to the established standards, and if deviations are detected, taking corrective
actions.

THE MANAGEMENT PROCESS

ORGANIZATIONAL PERFORMANCE
A manager’s responsibility is to coordinate resources in order to accomplish stated goals
effectively and efficiently. Organizational effectiveness is the degree to which the organization
achieves a stated goal. It means that the organization succeeds in accomplishing what it tries to
do. It also means providing a product or service that customers value. Organizational efficiency
refers to the amount of resources used to achieve an organizational goal. It is based on how
much raw materials, money, and people are necessary for producing a given volume of output.
It can be calculated as the amount of resources used to produce a product or service.

The ultimate responsibility of managers is to achieve high performance, which is the attainment
of organizational goals by using resources in an effective and efficient manner. A legendary
manager once said:
I think it is an immutable law in business that words are words, explanations are
explanations, promises are promises – but only performance is reality. Performance alone is the
best measure of your confidence, competence, and courage. Only performance gives you the
freedom to grow as yourself.

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 Just remember that: performance is your reality. Forget everything else. That is why my
definition of a manager is what it is: one who turns in the performance.

WHAT IS A MANAGER?
A manager is a person in an organization who directly supports and helps activate the work
efforts and performance accomplishments of others.

The people who are supported and helped by managers are usually called direct reports, team
members, work associates or subordinates. These people are the essential human resources
whose tasks represent the real work of the organization.

MANAGEMENT TYPES
The four management functions must be performed in all organizations. But not all managers’
jobs are the same. Managers are responsible for different department, work at different levels
in the organization, and meet different requirements for achieving high performance.

A manager’s job can be described according to the vertical perspective or horizontal

perspective. The vertical perspective describes the job of a manager based on the hierarchical
levels. The horizontal perspective describes the job of a manager based on the function or area
of management.

MANAGEMENT LEVELS
There are three levels in the hierarchy. These include top managers, middle managers, and first
line managers.

Top managers are responsible for the overall management of the organization. It establishes
operating policies and guides the organization’s interactions with its environment. Typically
titles of top managers are ‘chief executive officer,’ ‘president,’ ‘senior vice president’ just to
name a few. Actual titles vary from one organization to another and are not always a reliable
guide to membership in the highest management classification.

Middle managers are responsible for business units and major department. They direct the
activities of lower level managers. Examples of middle managers are ‘division head,’ ‘manager
of quality control,’ ‘director of the research lab,’ just to name a few.

First line managers are directly responsible for the production of goods and services. They are
the first or second level of management and have such tiles as ‘supervisor,’ ‘line manager,’
‘section chief,’ ‘office manager,’ just to name a few. They are responsible for groups of non

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management employees. Their primary concern is the application of rules and procedures to
achieve efficient production, provide technical assistance, and motivate employees.

AREAS OF MANAGEMENT
The other major difference in management jobs occurs horizontally across the organization.
Functional managers are responsible for departments that perform a single functional task and
have employees with similar training and skills. Functional department include advertising,
sales, finance, personnel, manufacturing, and accounting. Line managers are managers who are
empowered or authorized to make decisions and to direct the work of employees and
responsible for accomplishing the goals of the organization. They are responsible for the
manufacturing, and marketing departments that make or sell the product or service. Staff
managers are in charge of departments such as finance and personnel that support line
departments.

General Managers are responsible for several departments that perform different functions. A
general manager is responsible for self contained division and for all of the functional
departments within it. Project managers also have general management responsibility, because
they coordinate people across several departments to accomplish a specific project. General
and project managers require significant human skills because they coordinate a variety of
people to attain project or division goals.

KINDS OF MANAGERS BY LEVEL AND AREA

Levels of Management

Top managers

Middle managers

First-line managers

Marketing Finance Operations Personnel Administration Other

Areas of Management

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CHANGING NATURE OF MANAGERIAL WORK
Many trends in organizations require new thinking from those who serve as managers. We are
in a time when the best managers are known more for “helping” and “supporting” than for
“directing” and “order giving.” There is less and less tolerance for managers who simply sit back
and tell others what to do.

FIGURE below illustrates the concept of the “upside-down pyramid.” The operating workers are
at the top of the upside-down pyramid, just below the customers and clients they serve. They
are supported in their work efforts by managers below them. These managers clearly are not
just order-givers; they are there to mobilize and deliver the support others need to do their
jobs best and serve customer needs.

MANAGEMENT SKILLS
A manager’s job is diverse and complex. As a result, an effective manager requires a range of
skills and most use these skills in a number of managerial roles. The successful acquisition and
utilization of the basic skills come from different sources, namely, through a sound educational
base and continued long life educational experiences, and through initial job experiences, and
continued experiences thorough a variety of job assignments.

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SOURCES OF SKILLS

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

Although some management theorist propose a long list of skills, the necessary skills for
planning, organizing, leading and controlling can be summarized in three categories that
especially important: conceptual, human, and technical.

CONCEPTUAL SKILLS
It refers to the cognitive ability to see the organization as a whole and the relationships among
its parts. Conceptual skill involves the manager’s thinking and planning abilities. It involves
knowing where one’s department fits into the total organization and how the organization fits
into the industry and community. It means the ability to think “strategically” – to take the
broad, long term view.

Conceptual skills are needed by all managers, but are especially important for managers at the
top because they must perceive significant elements in a situation and broad, conceptual
patterns. As managers move up the hierarchy, they must develop conceptual skills or their
promotability will be limited.

HUMAN SKILLS
It refers to the ability to work with and through other people and to work effectively as a group
member. This skill is demonstrated in the way a manager relates to other people, including the
ability to motivate, facilitate, coordinate, lead, communicate, and resolve conflicts. A manager
with human skills allows employees to express themselves without fear of ridicule and
encourages participation. A manager likes other people and is likes by them. Managers who
lack human skills often are abrupt, critical, and unsympathetic toward others. For example, an
executive who tries to talk to an employee but when the employee tried to explain that he or

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she was occupied, the executive said, “I don’t give a damn. I said I wanted to see you now.”
Managers without human skills are insensitive and arrogant. They often make other people feel
stupid and resentful.

TECHNICAL SKILLS
It refers to the understanding of and proficiency in the performance or specific tasks. Technical
skill includes mastery of the methods, techniques, and equipment involved in specific functions
such as engineering, manufacturing, or finance and accounting. Technical skills also include
specialized knowledge, analytical ability, and competent use of tools and techniques to solve
problems in specific disciplines. These skills are most important at lower levels of the
organization. Many managers get promoted into their first management jobs by having
excellent technical skills. However, technical skills are less important than human skills and
conceptual skills as managers’ move up the hierarchy.

MAKING THE TRANSITION

A major difference between non managers and managers is the shift from reliance to focus on
human skills. This is a difficult transition because high achievement in the technical area may
have been the basis for promotion to a supervisory position. New managers often mistakenly
continue to rely on technical skills rather than concentrate on working with others, motivating
employees, and building a team. Indeed, some people fail to become managers at all because
they let technical skills take precedence over human skills.

DEVELOPING MANAGERIAL COMPETENCIES

A managerial competency is a skill-based capability that contributes to high performance in a
management job.

Competencies are implicit in:

 The planning, organizing, leading, and controlling functions of management.
 The demands of the informational, interpersonal, and decisional managerial roles
 Agenda setting and networking.

The key personal characteristics for managerial success are:

 Communication –– ability to share ideas and findings clearly in written and oral
expression.
 Teamwork –– ability to work effectively as a team member and team leader.
 Self-management –– ability to evaluate oneself, modify behavior, and meet
performance obligations.

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  Leadership –– ability to influence and support others to perform complex and
sometimes ambiguous tasks.
 Critical thinking –– ability to gather and analyze information for creative problem
solving.
 Professionalism –– ability to sustain a positive impression, instill confidence, and
maintain career advancement.

MANAGERIAL ROLES
Every manager takes on a much wider range of roles to move the organization toward its stated
goals. In a broad sense, a role consists of the behavior patterns expected of an individual within
a social unit. For the purpose of managerial thinking, a role is the behavioral pattern expected
of someone within a functional unit. Roles are inherent in functions.

Henry Mintzberg made an extensive survey of existing research on the subject of managerial
roles and integrated his findings with the results of a study of five chief executive officers. In an
effort to catalog and analyze the various roles of managers, the combined review covered all
kinds and levels of managers.

Mintzberg concluded that the jobs of many managers are quite similar. All managers have
formal authority over their own organizational units and derive status from that authority. This
status causes all managers to be involved interpersonal relationships with employees, peers,
and superiors who in turn provide managers with the information they need to make decisions.
All managers thus play a series of interpersonal, informational and decision making roles that
Mintzberg defined as “organized sets of behaviors.”

INTERPERSONAL ROLES
These pertain to the relationships with others and are related to human skills. There are three
routine interpersonal roles – figurehead, leader, and liaison which help managers keep their
organization running smoothly.

FIGUREHEAD
The manager performs ceremonial duties as head of the unit – organization, division or
department. He greets visitors, attends weddings, signs legal documents, or takes customers to
lunch. Moreover, managers are symbols and personify an organization’s successes and failures.
They are often held responsible for outcomes over which they have little or no control.
LEADER

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Since managers work with and through other people, they are responsible and accountable for
their employees action’s as well as their own. The manager direct and motivates employees,
trains, counsels, and communicates with employees.

LIAISON
Like politicians, managers must learn to work with everyone inside or outside the organization
who can help them achieve their organization goals. All managers play politics in the sense that
they develop networks of mutual obligations with other managers in the organization. They
may also build or join alliances and coalitions. Managers draw upon these relationships to win
support for their proposal or decisions, and to gain cooperation in carrying out various
activities.

INFORMATIONAL ROLES
These roles describe the activities used to maintain and develop an information network.
Mintzberg suggests that receiving and communicating information are the most important
aspects of a manager’s job. Managers need information to make intelligent decisions, and other
people in the organization depend on information received from or transmitted through
managers. He identified three informational roles – monitor, disseminator, and spokesperson.

MONITOR
Managers are constantly looking for useful information both within and outside the
organization. They question employees and collect unsolicited information, usually through
networks of contacts. The role of monitor often makes managers the best-informed member of
their groups.

DISSEMINATOR
The managers distribute important information to subordinates. Some of this is factual
information conveyed in staff meeting and memos, but some is based on the manager’s
analysis and interpretation of events. In either case, it is the manager’s responsibility to be sure
employees have the information they need to carry out their activities.

SPOKESPERSON
Managers also transmit information to people outside their own work units. Keeping superiors
well-informed is one aspect of this role. Like diplomats, managers may also speak for their work
unit within the organization or represent the entire organization in dealing with customers,
contractors, or government officials.

DECISION MAKING ROLES

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According to Mintzberg, information is the “basic input to decision making for managers”, who
play four decision making roles – entrepreneur, disturbance handler, resource allocator, and
negotiator.

ENTREPRENEUR
Managers try to improve their units. When, for example, managers get hold of a good idea,
they might launch a development project to make it a reality. In this role, they initiate change
of their own free will.

DISTURBANCE HANDLER
No organization runs smoothly all the time. There is almost no limit to the number and types of
problems that may occur, from financial difficulties to strikes. Mangers are expected to come
up with solutions to difficult problems and follow through – even unpopular decisions. To make
these decisions, managers must be able to think analytically and conceptually. Analytical
thinking involves breaking a problem into its components, analyzing these components, and
then coming up with it a feasible solution. Even more important is the ability to think
conceptually, which means viewing the entire task in the abstract and relating it to other tasks.
The ability to think about a decision’s implications is essential if the manager is to meet the
goals of both the work unit and the larger organization.

RESOURCE ALLOCATOR
Every manager faces a number of organizational goals, problems, and needs – all of which
compete for his or her time resources. Because such resources are limited, each manager, for
example, arrange each day’s tasks in order of priority, so the most important things are done
immediately and less important tasks are put off until later.

NEGOTIATOR
Managers spend a lot of their time negotiating because only they have the knowledge and
authority this role demands. Some of these negotiations involve outside organizations. A
company president, for example, may deal with a consulting firm, a production head may
negotiate a contract with a supplier. Managers also handle negotiations within the
organization. People working for the same organization often disagree about goals or the most
effective way of attaining them. Unresolved disputes can lower morale and productivity and
may even drive away competent employees. For these reasons, managers must take on the role
of mediator and negotiate compromises as disputes occur. Settling quarrels requires skill and
tact; clumsy negotiators may be dismayed to find they have made matters worse.

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