SAINT JOSEPH COLLEGE OF SINDANGAN INCORPORATED

Poblacion, Sindangan, Zamboanga del Norte

BSBA Department

HRM ELECT I
FUNDAMENTALS OF MANAGEMENT
UNDERSTANDING THE JOB OF MANAGERS
MODULE 1
FOR PRELIM PERIOD

Learning Outcomes After studying this chapter, you should be able to:
1 Define management, describe the kinds of managers found in organizations, identify and
explain the four basic management functions, describe the fundamental management skills, and
comment on management as a science and art.
2 Justify the importance of history and theory to managers, and explain the evolution of
management thought through the classical, behavioral, and quantitative perspectives.
3 Identify and discuss key contemporary management perspectives represented by the systems
and contingency perspectives, and identify the major challenges and opportunities faced by
managers today.

Learning Experience:
INTRODUCTION TO MANAGEMENT
Organization-A group of people working together in a structured and coordinated fashion to
achieve a set of goals.
Management-A set of activities (including planning and decision making, organizing, leading,
and controlling) directed at an organization’s resources (human, financial, physical, and information),
with the aim of achieving organizational goals in an efficient and effective manner.
Manager-Someone whose primary responsibility is to carry out the management process.
Efficient -using resources wisely in a cost effective way.
Effective-Making the right decisions and successfully implementing them.

Kinds of Managers
Many different kinds of managers work in organizations today. Figure 1.1 shows how various
kinds of managers within an organization can be differentiated by level and by area.
 Top managers make up the relatively small group of executives who manage the overall
organization.

Middle management is probably the largest group of managers in most organizations.

First-line managers supervise and coordinate the activities of operating employees.

Managing in Different Areas of the Organization

Regardless of their level, managers may work in various areas within an organization. In any
given firm, for example, these areas may include marketing, financial, operations, human resources,
administrative, and others.

Marketing managers work in areas related to the marketing function—getting consumers and
clients to buy the organization’s products or services.

These areas include new product development, promotion, and distribution. Given the
importance of marketing for virtually all organizations, developing good managers in this area is critical.

Financial managers deal primarily with an organization’s financial resources. They are
responsible for activities such as accounting, cash management, and investments. In some businesses,
especially banking and insurance, financial managers are found in large numbers.
Operations managers are concerned with creating and managing the systems that create an
organization’s products and services. Typical responsibilities of operations managers include production
control, inventory control, quality control, plant layout, and site selection.
Human resources managers are responsible for hiring and developing employees. They are
typically 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 and problem employees.
Administrative, or general, managers are not associated with any particular management
specialty. Probably the best example of an administrative management position is that of a hospital or
clinic administrator. Administrative managers tend to be generalists; they have some basic familiarity
with all functional areas of management rather than specialized training in any one area.

Basic Management Functions

Planning -Setting an organization’s goals and deciding how best to achieve them.
Decision Making-Part of the planning process that involves selecting a course of action from a
set of alternatives.
Organizing-Determining how activities and resources are to be grouped.
Leading-The set of processes used to get members of the organization to work together to
further the interests of the organization.
Controlling-Monitoring organizational progress toward goal attainment.
Fundamental Management Skills
Technical skills-the skills necessary to accomplish or understand the specific kind of work done
in an organization.
interpersonal skills-the ability to communicate with, understand, and motivate both individuals and
groups
conceptual skills-the manager’s ability to think in the abstract.
diagnostic skills-the manager’s ability to visualize the most appropriate response to a situation
communication skills-the manager’s abilities both to effectively convey ideas and information to
others and to effectively receive ideas and information from others
Decision-making skills-the manager’s ability to correctly recognize and define problems and
opportunities and to then select an appropriate course of action to solve problems and capitalize on
opportunities
Time management skills-the manager’s ability to prioritize work, to work efficiently, and to
delegate appropriately.

The Science and the Art of Management

The Science of Management Many management problems and issues can be approached in
ways that are rational, logical, objective, and systematic. Managers can gather data, facts, and objective
information. They can use quantitative models and decision-making techniques to arrive at “correct”
decisions. And they need to take such a scientific approach to solving problems whenever possible,
especially when they are dealing with relatively routine and straightforward issues. When Starbucks
considers entering a new market, its managers look closely at a wide variety of objective details as they
formulate their plans. Technical, diagnostic, and decision-making skills are especially important when
approaching a management task or problem from a scientific perspective.

The Art of Management -Even though managers may try to be scientific as often as possible,
they must frequently make decisions and solve problems on the basis of intuition, experience, instinct,
and personal insights. Relying heavily on conceptual, communication, interpersonal, and time
management skills, for example, a manager may have to decide among multiple courses of action that
look equally attractive. And even “objective facts” may prove to be wrong. When Starbucks was
planning its first store in New York City, market research clearly showed that New Yorkers preferred drip
coffee to more exotic espresso-style coffees. After first installing more drip coffee makers and fewer
espresso makers than in their other stores, managers had to backtrack when New Yorkers lined up
clamoring for espresso. Starbucks now introduces a standard menu and layout in all its stores, regardless
of presumed market differences, and then makes necessary adjustments later.13 Thus, managers must
blend an element of intuition and personal insight with hard data and objective facts.

THE EVOLUTION OF MANAGEMENT

Most managers today recognize the importance of history and theory in their work. For
instance, knowing the origins of their organization and the kinds of practices that have led to success—
or failure—can be an indispensable tool in managing the contemporary organization. Thus, in our next
section, we briefly trace the history of management thought. Then we move forward to the present day
by introducing contemporary management issues and challenges.

The Importance of Theory and History

Theory- a conceptual framework for organizing knowledge and providing a blueprint for action.
Why History Awareness and understanding of important historical developments are also
important to contemporary managers.17 Understanding the historical context of management provides
a sense of heritage and can help managers avoid the mistakes of others. Most courses in U.S. history
devote time to business and economic developments in this country, including the Industrial Revolution,
the early labor movement, and the Great Depression, and to captains of U.S. industry such as Cornelius
Vanderbilt (railroads), John D. Rockefeller (oil), and Andrew Carnegie (steel). The contributions of those
and other industrialists left a profound imprint on contemporary culture

The Historical Context of Management

Two of its pioneers were Robert Owen and Charles Babbage. Owen (1771–1858), a British
industrialist and reformer, was one of the first managers to recognize the importance of an
organization’s human resources and to express concern for the personal welfare of his workers.
Babbage (1792–1871), an English mathematician, focused his attention on efficiencies of production. He
placed great faith in the division of labor and advocated the application of mathematics to such
problems as the efficient use of facilities and materials.

classical management perspective-consists of two distinct branches— scientific management and

administrative management.
Scientific management-concerned with improving the performance of individual workers
Soldiering -employees deliberately working at a slow pace.

Administrative management-focuses on managing the total organization.

The Classical Management Perspective Today- he classical perspective focused on stable,

simple organizations; many organizations today, in contrast, are changing and complex. They also
proposed universal guidelines that we now recognize do not fit every organization.
behavioral management perspective-emphasizes individual attitudes and behaviors and group
processes.
The Human Relations Movement The human relations movement, which grew from the
Hawthorne studies and was a popular approach to management for many years, proposed that workers
respond primarily to the social context of the workplace, including social conditioning, group norms, and
interpersonal dynamics.
 Theory X A pessimistic and negative view of workers consistent with the views of scientific
management
Theory Y A positive view of workers; it represents the assumptions that human relations
advocates make.
Douglas McGregor developed Theory X and Theory Y. He argued that Theory X best
represented the views of scientific management and Theory Y represented the human relations
approach. McGregor believed that Theory Y was the best philosophy for all managers.

Theory X Assumptions
1. People do not like work and try to avoid it.
2. People do not like work, so managers have to control, direct, coerce, and threaten employees to get
them to work toward organizational goals.
3. People prefer to be directed, to avoid responsibility, and to want security; they have little ambition.

Theory Y Assumptions
1. People do not naturally dislike work; work is a natural part of their lives.
2. People are internally motivated to reach objectives to which they are committed.
3. People are committed to goals to the degree that they receive personal rewards when they reach
their objectives.
4. People will both seek and accept responsibility under favorable conditions.
5. People have the capacity to be innovative in solving organizational problems.
6. People are bright, but under most organizational conditions, their potential is underutilized.

Organizational behavior Contemporary field focusing on behavioral perspectives on

management.
quantitative management perspective Applies quantitative techniques to management
management science -focuses specifically on the development of mathematical models.
operations management -concerned with helping the organization more efficiently produce its
products or services.

CONTEMPORARY MANAGEMENT PERSPECTIVES

System An interrelated set of elements functioning as a whole.
Open systems -A system that interacts with its environment
Closed systems- A system that does not interact with its environment
Subsystems A system within another system
Synergy Two or more subsystems working together to produce more than the total of what they
might produce working alone
Entropy A normal process leading to system decline
Universal perspectives An attempt to identify the one best way to do something
Contingency perspective Suggests that appropriate managerial behavior in a given situation
depends on, or is contingent on, unique elements in a given situation.

Contemporary Management Issues and Challenges

 Interest in management theory and practice has heightened in recent years as new issues and
challenges have emerged. No new paradigm has been formulated that replaces the traditional views,
but managers continue to strive toward a better understanding of how they can better compete and
lead their organizations toward improved effectiveness.

Contemporary Applied Perspectives

Several applied authors have significant influence on modern management theory and practice.
Among the most popular applied authors today are Peter Senge, Stephen Covey, Tom Peters, Jim Collins,
Michael Porter, John Kotter, and Gary Hamel.46 Their books highlight the management practices of
successful firms such as Shell Oil, Ford, and IBM, or they outline conceptual or theoretical models or
frameworks to guide managers as they formulate strategies or motivate their employees. Malcolm
Gladwell’s books The Tipping Point, Blink, and Outliers have all caught the attention of many
contemporary managers. Scott Adams, creator of the popular comic strip Dilbert, also remains popular
today. Adams is a former communications industry worker who developed his strip to illustrate some of
the absurdities that occasionally afflict contemporary organizational life. The daily strip is routinely e-
mailed and posted outside office doors, above copy machines, and beside water coolers in hundreds of
offices.

Contemporary Management Challenges

Managers today also face an imposing set of challenges as they guide and direct the fortunes of
their companies. Coverage of each of these challenges is thoroughly integrated throughout this book. In
addition, many of them are highlighted or given focused coverage in one or more special ways. One
significant challenge (and opportunity) is globalization. Managing in a global economy poses many
different challenges and opportunities. For example, at a macro level, property ownership arrangements
vary widely. So does the availability of natural resources and infrastructure components, as well as
government’s role in business. Moreover, behavioral processes vary widely across cultural and national
boundaries. For example, values, symbols, and beliefs differ sharply among cultures. Different work
norms and the role that work plays in a person’s life, for example, influence patterns of both work-
related behavior and attitudes toward work. They also affect the nature of supervisory relationships,
decision-making styles and processes, and organizational configurations. Group and intergroup
processes, responses to stress, and the nature of political behaviors also differ from culture to culture.