MODULE 1

PRINCIPLES OF
MANAGEMENT
[Year] School Year
MODULE 1
• PRINCIPLES OF MANAGEMENT
• Management - the art of getting things done through the efforts
of other people.
• A manager’s primary challenge is to solve problems creatively
• The Principles of management are the activities that “plan,
organize, and control the operations of the basic elements of
[people], materials, machines, methods, money and markets,
providing direction and coordination, and giving leadership to
human efforts, so as to achieve the sought objectives of the
enterprise.”
• Principles of management are often discussed or learned using a
framework called P-O-L-C, which stands for planning, organizing,
leading, and controlling.
Figure 1.1. The P-O-L-C Framework
 1.1. Who Are Managers?
Managers are responsible for the processes of getting
activities completed efficiently with and through other
people and setting and achieving the firm’s goals
through the execution of four basic management
functions: planning, organizing, leading, and
controlling. Both sets of processes utilize human,
financial, and material resources.
In both the traditional and contemporary views of
management there remains the need for different
types of managers.
Top managers are responsible for developing the
organization’s strategy and being a steward for its vision
and mission.
A line manager leads a function that contributes
directly to the products or services the organization
creates.
 1.1. Who Are Managers? (cont'd)
A second set of managers includes functional, team,
and general managers.
Functional managers are responsible for the efficiency
and effectiveness of an area, such as accounting or
marketing.
Supervisory or team managers are responsible for
coordinating a subgroup of a particular function or a
team composed of members from different parts of the
organization.
Sometimes you will hear distinctions made between line
and staff managers.
A line manager leads a function that contributes
directly to the products or services the organization
creates.
A staff manager, in contrast, leads a function that creates indirect
inputs (they serve a supporting role).
 1.1. Who Are Managers? (cont'd)
A project manager has the responsibility for the planning, execution,
and closing of any project. Project managers are often found in
construction, architecture, consulting, computer networking,
telecommunications, or software development.
A general manager (GM) is someone who is responsible for
managing a clearly identifiable revenue-producing unit, such as a
store, business unit, or product line. GMs typically must make
decisions across different functions and have rewards tied to the
performance of the entire unit (i.e., store, business unit, product line,
etc.). GMs take direction from their top executives. They must first
understand the executives’ overall plan for the company. Then they
set specific goals for their own departments to fit in with the plan.
GMs must describe their goals clearly to their support staff. The
supervisory managers see that the goals are met.
Figure 1.2. The Changing Roles of Management
and Managers
 Mintzberg’s 10 managerial roles
Professor Henry Mintzberg - the nature of managerial work has
changed very little, aside from the shift to an empowered
relationship between top managers and other managers and
employees, and obvious changes in technology, and the
exponential increase in information overload.
Managers assume multiple roles, divided into three groups:
interpersonal, informational, and decisional.
The informational roles link all managerial work together. The
interpersonal roles ensure that information is provided. The
decisional roles make significant use of the information.
Mintzberg’s conclusions about the nature of managerial work - on
the one hand, managerial work is the lifeblood of most
organizations because it serves to choreograph and motivate
individuals to do amazing things. On the other hand, managerial
work is necessarily fast-paced and fragmented, where managers
at all levels express the opinion that they must process much more
information and make more decisions than they could have ever
possibly imagined.
 Mintzberg’s 10 managerial roles
The direct relationships with people in the
interpersonal roles place the manager in a
unique position to get information. Thus,
the three informational roles are primarily
concerned with the information aspects of
managerial work. In the monitor role, the
manager receives and collects
information. In the role of disseminator, the
manager transmits special information into
the organization. The top-level manager
receives and transmits more information
from people outside the organization than
the supervisor. In the role of spokesperson,
the manager disseminates the
organization’s information into its
environment. Thus, the top-level manager
is seen as an industry expert, while the
supervisor is seen as a unit or departmental
expert.
 Mintzberg’s 10 managerial roles (cont'd)
The unique access to information places
the manager at the center of
organizational decision making. There are
four decisional roles managers play. In the
entrepreneur role, the manager initiates
change. In the disturbance handler role,
the manager deals with threats to the
organization. In the resource allocator role,
the manager chooses where the
organization will expend its efforts. In the
negotiator role, the manager negotiates on
behalf of the organization. The top-level
manager makes the decisions about the
organization as a whole, while the
supervisor makes decisions about his or her
particular work unit.
The supervisor performs these managerial
roles but with different emphasis than higher
managers. Supervisory management is
more focused and short-term in outlook.
Thus, the figurehead role becomes less
significant and the disturbance handler and
negotiator roles increase in importance for
the supervisor. Since leadership permeates
all activities, the leader role is among the
most important of all roles at all levels of
management.
1.2. Leadership, Entrepreneurship, Strategy.
The principles of management are
drawn from three specific areas —
leadership, entrepreneurship, and
strategic management.
Leadership helps you understand
who helps lead the organization
forward and what the critical
characteristics of good leadership
might be.
Entrepreneurs are fanatical about
identifying opportunities and
solving problems — for any
organization, entrepreneurship
answers big questions about
“what” an organization’s purpose
might be.
Strategic management aims to
make sure that the right choices
are made —specifically, that a
good strategy is in place—to
exploit those big opportunities.
 1.3 Planning, Organizing, Leading, and Controlling

A manager’s primary challenge is to solve problems

creatively. While drawing from a variety of academic
disciplines, and to help managers respond to the
challenge of creative problem solving, principles of
management have long been categorized into the four
major functions of planning, organizing, leading, and
controlling (the P-O-L-C framework). The four functions,
summarized in the P-O-L-C figure, are actually highly
integrated when carried out in the day-to-day realities of
running an organization.
Planning -
involves setting
objectives and
determining a
course
of action for
achieving those
objectives.
Planning requires
that managers be
aware of
environmental
conditions facing
their
organization and
forecast future
conditions.
It also requires that
managers
be good
decision makers.
Planning Planners must:
•establish objectives, which
are statements of what
needs to be achieved and
when;
•identify alternative courses
of action for achieving
objectives.;
•after evaluating the various
alternatives, planners must
make decisions about the
best courses of action for
achieving objectives;
•formulate necessary steps
and ensure effective
implementation of plans.
constantly evaluate the
success of their plans and
take corrective action
when necessary.
Types of plans and planning.
Strategic planning - analyzing
Planning
competitive opportunities and Operational planning generally
threats, as well as the strengths assumes the existence of
and weaknesses of the organization-wide or subunit goals
organization, and then and objectives and specifies ways
determining how to position the to achieve them. Operational
organization to compete planning is short-range (less than
effectively in their environment. SP a year) planning that is designed
has a long time frame, often three to develop specific action steps
years or more. SP generally that support the strategic and
includes the entire organization tactical plans.
and includes formulation of
objectives. SP is often based on
the organization’s mission, which
is its fundamental reason for
existence.
Tactical planning is intermediate-
range (one to three years)
planning that is designed to
develop relatively concrete and
specific means to implement the
strategic plan. Middle-level
managers often engage in
tactical planning.
 Organizing - involves developing an organizational
structure
The and
structure of theallocating
organization human
is resources to ensure
the
the accomplishment
framework of objectives
within which effort is
coordinated. It is usually
represented by an organization Organizing at the level of the
chart, which provides a graphic organization involves deciding how
representation of the chain of best to departmentalize, or cluster,
command within an organization. jobs into departments to
Decisions made about the coordinate effort effectively.
structure of an organization are
generally referred to as
organizational design decisions.
Organizing also involves the design
of individual jobs within the
organization. Decisions must be
made about the duties and
responsibilities of individual jobs, as
well as the manner in which the
duties should be carried out.
Decisions made about the nature
of jobs within the organization are
generally called “job design”
decisions.
Organizing - involves developing an organizational
structure and allocating human resources to ensure
the accomplishment
Organizing at the level of a of objectives
particular
job involves how best to design
individual jobs to most effectively use
human resources.
Traditionally, job design was based on
principles of division of labor and
specialization, which assumed that
the more narrow the job content, the
more proficient the individual
performing the job could become.
However, experience has shown that
it is possible for jobs to become too
narrow and specialized.
Recently, many organizations have
attempted to strike a balance
between the need for worker
specialization and the need for
workers to have jobs that entail
variety and autonomy.
 Leading - involves the social and informal sources of
influence that you use to inspire action taken by
If managers are effective leaders, their
others
subordinates will be enthusiastic about
exerting effort to attain organizational
objectives.
Personality research and studies of job
attitudes provide important information
as to how managers can most
effectively lead subordinates. To
become effective at leading,
managers must first understand their
subordinates’ personalities, values,
attitudes, and emotions.
Studies of motivation and motivation
theory provide important information
about the ways in which workers can
be energized to put forth productive
effort. Studies of communication
provide direction as to how managers
can effectively and persuasively
communicate.
Controlling - involves ensuring that performance does not deviate
from standards

Performance standards are often stated in monetary terms such

as revenue, costs, or profits but may also be stated in other terms,
such as units produced, number of defective products, or levels
of quality or customer service.
The measurement of performance can be done in several ways,
depending on the performance standards, including financial
statements, sales reports, production results, customer
satisfaction, and formal performance appraisals. Managers at all
levels engage in the managerial function of controlling to some
degree.
Controlling - involves ensuring that performance does
not deviate from standards

The managerial function of controlling should

not be confused with control in the behavioral
or manipulative sense. This function does not
imply that managers should attempt to control
or to manipulate the personalities, values,
attitudes, or emotions of their subordinates.
Instead, this function of management concerns
the manager’s role in taking necessary actions
to ensure that the work-related activities of
subordinates are consistent with and
contributing toward the accomplishment of
organizational and departmental objectives.
Controlling - involves ensuring that
performance does not deviate from
standards
Effective controlling requires the
existence of plans, since planning
provides the necessary performance
standards or objectives.
Controlling also requires a clear
understanding of where responsibility for
deviations from standards lies.
Controlling - involves ensuring that
performance does not deviate from
Two traditional control techniques are
standards
budget and performance audits.
An audit involves an examination and
verification of records and supporting
documents.
A budget audit provides information
about where the organization is with
respect to what was planned or
budgeted for, whereas a performance
audit might try to determine whether the
figures reported are a reflection of actual
performance.
Economic, Social, and Environmental
Performance
Economic Performance is a function of its
success in producing benefits for its
owners in particular, through product
innovation and the efficient use of
resources.
For most organizations economic
performance is associated with profits,
and profits depend a great deal on how
much customers are willing to pay for a
good or service.
Economic, Social, and Environmental
Performance
With regard to social and environmental
performance, it is similarly useful to think
of them as forms of profit — social and
environmental profit to be exact.
Increasingly, the topics of social and
environmental performance have
garnered their own courses in school
curricula; in the business world, they are
collectively referred to as corporate
social responsibility (CSR)
Economic, Social, and Environmental
Performance
CSR is a concept whereby organizations
consider the interests of society by taking
responsibility for the impact of their activities on
customers, suppliers, employees, shareholders,
communities, and the environment in all
aspects of their operations.
This obligation is seen to extend beyond the
statutory obligation to comply with legislation
and sees organizations voluntarily taking further
steps to improve the quality of life for
employees and their families, as well as for the
local community and society at large.