Lesson 1

MEANING, FUNCTIONS, TYPES AND

THEORIES OF MANAGEMENT

Subtopic 1: Meaning of Management

Management is a process in designing and maintaining an environment in which individuals, working
together in groups, efficiently accomplish selected aims (Weihrich and Koontz, 1993).
This basic definition needs to be expanded in the following ways:
1. As managers, people are employed to carry out the specific functions. These functions which are
commonly referred to as managerial functions are planning, organizing, staffing, leading and controlling
among others.
2. Management applies to any kind of organization. Management is not restricted to any particular
organization. Any organization, as long as human and other resources call for management.
3. Management is important to any level in an organization. Whatever position you find yourself in an
organization, you will feel the presence of management.
4. The aim of all managers whether a senior manager or junior one is the same. It is to make profit.
Making profit demands that the right decisions are made so that the resources available to an organization
are used without wastage.
5. Managing is concerned with productivity. This demands creating something that is of value to the
customers. But the higher the volume of production, the better for the organization. This is because with
increased volume, the unit cost of the product is going to be lower.
Furthermore, Sir Reynolds defined management as getting things done through the efforts of others.
This means:
1. The manager is different from other employees. The manager has a group of subordinates or the
doers or operatives reporting to him. They are the ones that perform the routine, day to day activities while
the manager performs the managerial functions.
2. Management permeates the entire organization. The definition has established criterion through
which one can determine who is a manager. The criterion is that anybody that has a group of workers
reporting to him automatically qualifies as a manager.

Subtopic 2: Functions of Management

As part of the managerial responsibility, managers must be concern with the efficiency and
effectiveness of the activities in the organization. Efficiency concerns on how things get done with the
minimum effort, expense or waste while effectiveness is about getting tasks done that help to fulfill
organizational objectives.
The pandemic brings a lot of changes in management and carrying out its functions is also a
challenging tasks for the managers.
The founder of the field of Management was Henri Fayol who was then a managing director of a larger
steel company. According to him, managers need to perform the five managerial functions: Planning,
Organizing, coordinating, commanding and controlling for the organization become successful. As time
passes, most of the management books today updated the five functions dropping the coordinating
function and replaced commanding by leading. The four managerial functions by Henri Fayol are now known
as Planning, Organizing, Leading and Controlling. Let’s take a look to the illustration below to easy
understand the four managerial functions.

Source: Elements by Canva.com

The first function of management: Planning talks about setting the organizational goals and finding way
how to achieve it in the future. A good plan is almost half done. This function need to be carried out
accordingly by the management to lessen failure in the long-run, like the old saying goes “If you fail to plan,
you plan to fail.”
After knowing the organizational goals and the means to achieve it, organizing is the next function to be
performed by the management. It is about deciding what actions will be made, and identifying the person
who will do the tasks while allocating the resources to the things needed to be done.
Leading, the third management function, works closely to the human resources of the organization, where
different leadership styles apply to the diverse personality of the workers. An inspired and motivated worker
will work well the job thus leads to the achievement of the organizational goals.
The last function of management, controlling involves monitoring all the performances if everything goes
according to plan. It is a process that involves setting the standards to achieve organizational goals and
comparing the actual performance to the set standards and make changes if not.
Organizational success is guaranteed if managers perform or carry out well all the
functions of management.

Subtopic 3: Theories of Management

The Industrial Revolution (1750-1900) had begun transforming the agrarian and rural areas to urban
society when the use of the power of steam started to manufactured products in the Britain. Assembly
line started to form, workers started to work in factories and some changes occur in the economy thus the
need of management became vital during that time.

• Scientific Management Theory. The scientific management theory is that which seeks the use of
scientific methods to find the “best way of performing a task or job. Stoner, Freeman and Gilbert
(1995:34) assert that this theory arose in part from the need to increase productivity since at the
time of the introduction of this theory, skilled labor was in short supply. Its proponents thought that
the only way to expand productive capacity was to raise the efficiency of workers. The proponents
of the theory are quite numerous. The notable ones include: Frederick Taylor (1856-1915). Taylor
used time study as his base, broke each job down into its components and designed the quickest and
best methods for performing each component. He strongly believed that if the amount of time and
effort that each worker expended in producing a unit of output should be reduced by increasing
specialization and division of labor, the production process would become more efficient. He opined
that such best ways could be devised through scientific management techniques rather than
intuition or other informal methods. His concern was with management at the shop level -
supervisory job. The application of the scientific approach led to an unprecedented production
'miracle' (faster than Taylor expected). In addition, workers feared that the dramatic increases in
productivity and higher pay would exhaust available work and cause layoffs. This made unions to
 become suspicious of the theory leading to mistrust and strained labor management relations for a
long time. Thus, scientific management theories center on studying personal task mix to increase
efficiency in organizations.

Frederick Taylor' Principles of Management. Taylor's principles of management were aimed at

achieving harmonious and corporative group relationships, developing the full potentials of the
employees and organizations so as to work for maximum output and replacing rule of thumb with
organized body of knowledge. Jones and George (2003) summarized Taylor's principles of
management into four (4).

They are further summarized as follows:

1. Improvement in Tasks Performance. Taylor emphasized that there is every need to the way tasks
are performed by workers, through gathering of all the informal job knowledge that they possess and
to experiment with ways of improving how tasks are performed by them.

2. Codification of new methods of performance into written rules and standard operating
procedures and processes. When best procedures or methods were identified, Frederick Taylor
recommended their recording and stipulation as standard procedures be taught and applied to all
employees performing similar tasks. In other words that became the standard mode of operation for
that task. Taylor believed that could help ensure efficiency throughout the entire organization.

3. Selection and training of employees with special abilities to carry on tasks according to
established patterns. Taylor posited that to increase specialization and efficiency, there was the
pressing need for workers to understand thoroughly their tasks via training so as to perform such
tasks at required minimum levels. This meant that those who could not attend such required
minimum levels needed to be posted to other sections until such minimum acceptable levels of
performance were attained.

4. Developing a good system of remuneration for workers that excel. Taylor being a manager with
a flair for productivity recommended bonus pay system and some percentage for hard working
employees who exceeded the required minimum acceptable levels of performance. This invariably
meant that putting in place a system of reward for workers who performed above the accepted
minimum levels stipulated by management.
• Bureaucratic Management
Max Weber was the person who proposed the idea of Bureaucratic organization, according to him it is
“the exercise of control on the basis of knowledge”, it aims not to protect the authority, but to achieve
the organizational goals in the most efficient manner.
Max Weber's Principles of Management. Weber was a German academic with much interest in
developing formalized system of organization and administration with a view to enhancing
effectiveness and efficiency in operations. He placed much interest in the authority structure of
 organizations and developed the principle of bureaucracy. He emphasized that hierarch, authority and
bureaucracy were necessary ingredients for success of all social systems (Agbaeze, 2006).
In their analysis of Weber's theory of bureaucracy, Jones and George (2003) summarized the
principles of management from Weber's perspective as follows:

1. A manager's formal authority emanates from the position being held. Every manager is capable
of commanding obedience and respect as a result of the position he/she occupies and that this
permits the manager to control and direct compliance of the subordinates.

2. Occupation of position is derived from a manager's performance. This implies that job related
skills should determine the kinds of positions managers occupy.

3. Clearly specified extent of authority, responsibility and relationship to other positions in the
enterprise. This principle warrants every employee to know what is expected of him/her and what is
expected from others as well. This permits for accountability.

4. Hierarchical arrangement of positions. This permits who reports to an employee and who such
employee is to report to.

5. Effective control of organizational members' behavior. Weber opined that this can be achieved
where well defined systems of rules, standard operation norms are clearly created. These provide
behavioral guidelines and which can enhance improvements in accomplishing organizational task.

• Administrative Management
Henri Fayol, a Frenchman who had a significant contribution to the field of management. He is best
known for developing the five functions of management and the fourteen principles of management.
As for him, managers need to perform well the five managerial functions if they want to become
successful. According to him, effective management is based on the fourteen principles as follows:
1. Division of Labor. This involves the separation of skill areas into functional are based on specialization.
According to him, this will eliminate any uncertainty in the organization, Division of labor also involves the
specialization.
2. Authority and Responsibility. Henri Fayol postulated that authority and responsibility are important, both
as a result of manager's position as well as other forms of informal authority that emanates from personal
expertise, technical knowledge, leadership abilities, etc.
3. Unity of Command. The principle of unity of command emphasizes that each organizational member
should have only a single superior whom he/she reports to. Proponents of this concept believe that it
lessens conflict, confusion, chaos within the organizational hierarchy and creates greater feelings of
personal responsibility for results or accomplished tasks.
4. Line of Authority. By line of authority, we are referring to the chain of command from the top level down
to the bottom of an organizational structure. The efficiency of communication in organizations is greatly
influenced by the length of the chain of command.
5. Centralization. This refers to concentrating power and authority at the top hierarchy of an organization.
Fayol opines that authority should not be so much concentrated at the top managerial hierarchy.
6. Unity of Direction. This refers to having a single guiding plan. By this principle it means that tasks that
have the same aim need to come under a single head and a common Plan as guide. The rationale behind this
principle is to be focused and avoid controversies that will arise with organization members working at cross
purposes.
7. Discipline. This refers to respect for organizational members so as to ensure reliability and hard work
which are needed to achieve organizational goals. In specific terms, discipline entails obedience, proper
conduct in relation to others and respect of authority Discipline is virtually essential for the smooth
functioning of all organizations.
8. Equity. Where subordinates are loyal and committed to their duties, it is quite normal for top
management to treat them with respect, fairness, impartiality, etc. When this occurs, the workforce is
encouraged and motivated to attain higher levels of performance.
9. Order. Here, the emphasis is on the arrangement of organizational resources-human and material. Fayol's
concern was with orderliness that could result into efficiency and resourcefulness in organizations.
10. Subordination of Individual Interests to the Common Interest. The concern here is due to the fact that
there is diversity in interests of organization members. The principle is emphasizing the superiority of the
interest of the organization over and above those of individuals and groups if the organization is to survive.
11. Initiative. Initiative simply means the possibility of subordinates to exercise creativity without direction
or control from superiors. Initiative is a key ingredient in the ability to survive in any keenly competitive
environment.
12. Remuneration. Fayol posited that the remuneration system which has important implication must be
fair enough to encourage efficiency and productivity. He proposed bonus and profit sharing plans as a
system of rewarding employees.
13. Stability of Tenure. Fayol argued that high labor turnover in organizations results from poor or bad
management. He therefore recommended for long term employment He believed this to be a factor that
can bring about the development of skills that can improve organizational sense for proper utilization of
resources.
14. Esprit De Corps. This is a French word meaning "in unity there is strength.” It emphasizes the feelings
of commitment or devotion with interest to a com among members of an organization or group or team.
• Human Relations Management
This approach of management doesn’t see human as extension of machine but a valuable organization
resource. Treating workers well like giving importance to the peoples need, effort, motivation and
performances will lead to organizational success. Workers performance was affected by their relationship
to their bosses, coworkers, and work groups. The three proponent of this theory are Mary Parker Follett,
Elton Mayo and Chester Barnard.
Mary Parker Follett is known for developing constructive conflict and coordination, she believed that
conflict could be beneficial, where in managers could deal conflicts in three ways: domination, compromise,
integration. Here are the lists of four fundamental principles of organizations according to her:
1. Coordination as reciprocal relating all the factors in a situation
2. Coordination by direct contact of the responsible people concerned
3. Coordination in the early stage
4. Coordination as a continuing process
Elton Mayo Hawthorne Studies found that human factors related to work are more important than the
physical condition or the design of work, thus workers’ feelings and attitude affected their work
performance.
Cooperation and Acceptance of Authority by Chester Barnard pointed that organizations need to be both
effective and efficient. The satisfaction of workers need will lead to the achievement of organizational goals
and acceptance to the authority.
• Operations, Information, System and Contingency Management
The operation management uses quantitative or mathematical approaches to find ways to increase the
productivity improve quality and manage or reduce costly inventories. It involves managing the daily
production of goods and services.
Whereas, information management, where organizations continuously adopted the use of information
technologies because it can help to reduce cost and increase the speed of acquiring, storing, retrieving and
communicating information. Due to complexity of today’s companies, the management need to employ
larger group of people that will work together in the company. The managers should address that
complexity thru the system approach wherein it encourages the managers to complicate their thinking by
looking for connections between the different parts of the organization.
Lastly, the contingency management articulates that there are no universal management theories, the
most effective management theory and idea depends on the situations and problem that the managers and
organizations are facing at a particular time. The theories act as a guide to the managers and organizations
today. At the end of the day, these theories will help the managers and organization to move forward and
achieve the goals.