THE INSTITUTE OF FINANCE MANAGEMENT

MSD 06202: FUNDAMENTALS OF MANAGEMENT

TOPIC 1: THE NATURE OF MANAGEMENT

By Mr. Lema, F
Office No: 608- Block A
Mobile: 0783 229 535
Email: [email protected]

A. General meaning of management

Below are some definitions of Management
 Is the process of designing and maintaining an environment in which individuals working
together in groups efficiently accomplish selected aims (koontz et al, 2010)
 In an expanded mode of the above definition,
o As managers, people carry out the managerial function of planning, organizing,
staffing, leading and controlling
o Management applies to all king of organization
o It applies to all managers’ at all organizational levels
o The aim of all managers is to create surplus (profit/satisfaction of needs)
o Managing is concerning with productivity, which implies effectiveness and
efficiency.
 Is the art of getting things done by group of people with the effective utilization of
available resources (Hellriegel, D & Slocum, J., 1989)
 "Henry Fayol" say to manage is forecast, and plan, to organize, to compound, to co-
ordinate and to control
 Is a problem solving process of effectively achieving organization goals through effective
use of scarce resources in a changing environment (Chandan, J.,1987)

B. Features of management
Management is;-
1. A Goal-Oriented process - it gives a lot of importance to "Results"
2. Getting things done through people - it integrates Human, Physical and Financial Resources
3. A Continuous, never ending or an ongoing process of handling problem and issues
4. all Pervasive function - Management is required in all types of organizations whether it is
political, social, cultural or business
5. A Group Activity that is to say, it is very much less concerned with individual’s efforts
6. Multidisciplinary in nature - Management has to get the work done through people. It has to
manage people. This is a very difficult job because different people have different emotions,
feelings, aspirations, etc. So, management is a very complex job
7. Follows established principles or rules such as division of work, discipline, unity of command,
etc
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 8. Aided but not replaced by computers - all managers use computers. Computers help the managers
to take accurate decisions
9. Situational in nature- Management makes plans, policies and decisions according to the situation.
It changes its style according to the situation
10. Need not be an ownership- In small organisations; management and ownership are one and the
same. However, in large organisations, management is separate from ownership. The managers
are highly qualified professionals who are hired from outside
11. Both an art and science- Management is result-oriented. Therefore, it is an Art. Management
conducts continuous research. Thus, it is also a Science.
12. Management is intangible- it cannot be seen and touched, but it can be felt and realised by its
results. The success or failure of management can be judged only by its results.
13. Uses a professional approach in work- Managers use a professional approach for getting the work
done from their subordinates. They delegate (i.e. give) authority to their subordinates. They ask
their subordinates to give suggestions for improving their work
14. Dynamic in nature- That is, management is creative and innovative. An organization will survive
and succeed only if it is dynamic. It must continuously bring in new and creative ideas, new
products, new product features, new ads, new marketing techniques, etc.

C. Management as an art, science and profession

Mgt as an Art
 It is an art in a sense of possessing managing skills by a person
 Art implies application of knowledge & skill to trying about desired results.
 An art may be defined as personalized application of general theoretical principles for
achieving best possible results
 Art is a practical way of doing specific things
 It represents a human behaviour or know –how to do things in the light of the realities of
a situation
THUS: - The main elements includes personal skills, practical know how, result
orientation, creativity, constant practice aimed at perfection

Mgt as a science
 It is a science because of developing certain principles or laws which are applicable in a
place where a group of activities are co-ordinated.
 Science is a systematic body of knowledge pertaining to a specific field of study that
contains general facts which explains a phenomenon.
 It establishes cause and effect relationship between two or more variables and underlines
the principles governing their relationship

Mgt as a profession
 Is a profession because it possesses the qualities of profession. eg a fund knowledge is
important and transferred in the profession and the same is followed by management.
 A profession may be defined as an occupation that requires specialized knowledge and
intensive academic preparations to which entry is regulated by a representative body.

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NB: Management is a judicious blend of science as well as an art because it proves the principles
and the way these principles are applied is a matter of art. Science teaches to ’know’ and art
teaches to ’do’. E.g. a person cannot become a good singer unless he has knowledge about
various ragas & he also applies his personal skill in the art of singing.

Same way it is not sufficient for manager to first know the principles but he must also apply
them in solving various managerial problems that is why, science and art are not mutually
exclusive but they are complementary to each other (like tea and biscuit, bread and butter etc.)

What do managers do?

A manager always aims at increasing PRODUCTIVITY through successful productive

operations. There is No single definition of Productivity but we can simply..;-
Productivity refers to Output-Input Ratio within a time period with due consideration of
quality. This mean that, productivity can be increased by;-
 Increasing output with the same output
 Decreasing inputs but maintaining the same level of output
Productivity implies effectiveness and efficiency in individuals and organizational performance

Efficiency refers to “doing things right”

 It refers to the relationship between inputs and outputs. So if you can get more outputs
from less or given input, you have increased efficiency.
 Since managers deals input resources (people, money, equipment) they are concerned
with efficient use of these resources

Effectiveness refers to “doing the right things”

 Is concerned with getting activities completed whereby, when managers achieve
organizational objectives, then managers are said to be effective

NB: EFFICIENCY IS CONCERNED WITH MEANS WHILE EFFECTIVE IS CONCERNED

WITH ENDS

D. Management levels, roles, functions, and skills.

I. Management Levels (types)

There are three kinds of Managers, each with different jobs and responsibilities; those are top
managers, middle managers, first line managers

Consider the table below

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S/N Jobs Responsibilities
1 TOP MANAGERS  Creating a context for Change
 CEO/CIO/CFO  Develop employees Commitment to and ownership
 Presidents & Vice of the company's performance
P  Creating a positive organizational Culture through
 Corporate heads language and action
 Monitoring business Environment eg. customers
needs, competitors moves etc.
2 MIDDLE MANAGERS  To plan and allocate Resources to meet objectives
 General Manager  Setting Objectives consistent with the top
 plant Manager management's goal and for planning and
 Regional Manager implementing sub-unit strategies for achieving those
 Divisional objectives
Manager  Coordination of activities
 Monitoring Sub-unit performance
 Strategy implementation
3 FIRST LINE  Perform Non managerial work supervision, teaching
MANAGERS and training
 office Manager  Prepare detailed Schedule and operating plan based
 shift supervisor on middle managers' intermediate-range plans
 department  Encourage, monitor and reward the performance of
Manager their workers
 Facilitation
4 TEAM LEADERS  Facilitate team activities towards goal
 Team leader accomplishment
 Team contact  Manage External relationships- act as a bridge
 Group facilitator between their teams and other teams, department and
division in a company.
 Manage Internal team relationships- teammates

Top Level - is the level of an administrative hierarchy. Managers at this level coordinate the
work of other managers but do not report to a manager.

Middle Management - it's a middle level in an administrative hierarchy. Managers at this level
coordinate the work of other managers but also report to a manager.

First Line management - it's the lowest level in an administrative hierarchy. A manager at this
level coordinates the work of non-managers but also report to a manager. Those involved in
front-line management are called supervisors, office Managers and or foreman.

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II. Managerial Functions
Are those activities that a manager must perform as a result of the position held in an
organization? There are several functions of management based on different authors but below
are some of those functions.
i. Planning - is deciding in advance what objectives to pursue during a future period and
what to do to achieve those objectives.
ii. Organizing - is the grouping & assigning of activities and providing the authority
necessary to carry out the activities
iii. Staffing - process of determining human resource needs (how many, what kind) and
recruiting, selecting, training, and developing HR
iv. Leading - providing guidance to employee to perform their duties through directing and
channelling human behaviour towards goal accomplishment
v. Controlling - A manager measures how the business perform against objectives,
determining the causes of deviation (if any) and taking corrective action where necessary

Managerial functions at different organizational level

All managers carry out managerial functions, but the time spent for each function may differ as
shown in figure below

Top level Mgt

Organizing

Controlling
Planning

Leading

Middle level
Mgrs

First level Mgt

Other functions includes;-

vi. Directing - guiding, supervising and motivation employees to achieve organizational
goals
vii. Co-ordinating
viii. Motivating or Actuating - is the process of indoctrinating personnel with unity of purpose
and the need to maintain a continuous, harmonious relationship
ix. Innovation - developing new product, material, techniques etc.
x. Representation - a manager to act as representative of the people or company inside or
outside the company.

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 xi. Decision making
xii. Communication xiv. Reporting and
xiii. Forecasting xv. Budgeting

III. Managerial Roles

One of the most frequently cited studies of managerial roles was conducted by Henry Mintzberg.
He observed and interviewed CEO's for different industries. He came up with 10 roles which are
then grouped into three major groups

a. Interpersonal role - Includes; being a figurehead, providing leadership and being a

liaison both within the company and to stakeholders outside the company
b. Informational role - A manager's duties involved in being the central point for receiving
and sending non-routine information. it includes monitoring role, disseminator role and
spokesperson role.
c. Decisional role - A manager's most important duties as a entrepreneur, disturbance
handler role, resource allocator and negotiator is to make major decision.

 Figurehead role - A manager plays a symbolic or ceremonial role when he/she have
to do with managers' position in the company than who he/she is in person. eg cuts
the ribbon to open a new office etc.
 Leadership role - A manager's duties that involves directing and coordinating
subordinates' activities making sure that everything goes according to plan. eg.
staffing (hiring, promoting, training) & motivating staff
 Liaison role- A manager's duties that involves interpersonal relationship outside the
manager's area of command/authority. eg. Good relation with managers who
send/receive work to/from the unit.
 Monitoring role - the aspect of which managers do examine the environment to gather
information or to direct changes , opportunities and problems that may affect the unit
 Disseminator role - this involves providing important or privilege information to
subordinates for the sake of company existence.
 Spokesperson role - representing the unit to the people, both internal and external eg.
to speak on behalf of employees in a meeting or to represent company outside..etc.
 Entrepreneur role- to change the unit for better achievements eg. looking for new
ideas/methods to improve performance of the unit (esp for first line managers)
 Disturbance handler role- A managers' role in to make decisions or take corrective
actions in response to pressure from circumstances beyond the manager's control eg.
to reacts on strike, breakdown
 Resource allocator role- Allocating of available resources to meet organizational
goals Eg money, time, people, equipments and information
 Negotiator role- involves bargaining with other units and individuals in obtaining
advantages for the unit/company

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IV. Managerial Skills
These are the skills required by a manager to be able to perform a particular job. there are three
basic managerial skills

i. Conceptual skills - is the ability to coordinate and integrate ideas, concepts and practices.
OR is the ability to see the organization as the whole, understands how different parts
affect each other and recognizes how the company fits into it. it is most important for Top
level managers
ii. Human Relation skills - it involves understanding people and being able to work well with
them. it includes ability to motivate, counsel and guiding others. it's important for Middle
level MGT
iii. Technical skills - involves being able to perform mechanics of a particular job (ability to
apply specialized procedures, techniques and knowledge to get the job done) it's most
important for first-line managers.

Relationship between Managerial skills and organizational levels

Top Managers Conceptual

Middle
Skills Human Technical
managers
Skills Skills
First-line
managers

Other skills includes but not limited to;

iv. Analytical skills - the ability to identify key factors, to understand how they interrelate and
to understand the role they play in a situation as well as to diagnose and evaluate.
v. Decision making skills all managers must make decisions and the quality of those
decisions determine the degree of effectiveness
vi. Digital skills - comprises the conceptual understanding of and ability to use computers,
telecommunication and digital technology. It is also important for top Level Managers
vii. Communication skills - both written and oral, is the ability to communicate in ways that
other people understand and to seek & use feedback from employees

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 E. MANAGEMENT RESPONSIBILITIES

The concept of management responsibilities (often know as social responsibility) is based on the
fact that many groups hold a stake or interest in the affairs and activities of the organization.

The objectives and interest of these stakeholders often differ and conflict each other but it is a
responsibilities of the management of any organization to respond in a manners that satisfies
these stake holders.

These groups includes Stakeholders /Stockholders, Employees, Suppliers/ other business,

Customers, Government, and the Local community (see the table below)

STAKEHOLDERS MANAGEMENT RESPONSIBILITY

Shareholders /Stockholders  Ensuring long term profitability
 Reasonable/ fair ROI
 Quality of service
 Stability of the firm
 Growth and image of the organization
 Timely information on the firm’s financial position
Employees  Provision of information on employment matters (i.e
job description, rights & obligations)
 Fair treatment ( no discrimination)
 Provision of good working conditions
 Fair reward for effort and equal for equal effort
 Provision of proper and adequate working tools
 Opportunities for career development & training
 Provision of incentives & fringe benefits
 Assurance of economic security
Suppliers/ other business  Open and fair negotiations
 Fair trade practices – payment methods, delivery
 Paying liabilities in time
 Information about proposals and plans likely to affect
them
Customers  Customer satisfaction
 Quality of service and or customer care
 Value for money
 Information on which to base their decision to buy
Government  Payment of Tax on time
 Respect of the law of the land
 Truthful in advertising
 Being a good citizen


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 Local community  Respect of environmental matters
 Provision of jobs
 Setting an example as good employer i.e equal
opportunity for all
 Supporting community activities e.g. charity works,
building schools/hospitals
 Supporting minority groups

F. Importance of Management
According to Peter Drucker,

"Management is what the modern world is all about." This statement means that all the
development that has taken place in the world is due to efficient management. The points below
bring out the significance or importance of management.

 Management encourages initiatives

 Management also encourages innovation in the organisation.

 Management facilitates growth and expansion by making optimum utilisation of available

resources.

 Improves life of workers

 It improves/enhance corporate image

 Motivates employees

 Provide optimum/effective utilization of resources

 Management reduces the wastage of human, material and financial resources.

 Increases efficiency

 Improves relations

 Encourages Team Work

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Revision Questions (Topic 1)
1. What is Management?
2. Describe the Levels of Management
3. Name and describe the basic functions of Management.
4. Describe the basic features of management
5. Define the basic skills required to perform the work of management
6. Explain the roles of a manager
7. "Management can be stated as an art, science or a profession" discuss
8. How will you classify the levels of management? Briefly describe the functions of
different levels of management.
9. Explain with examples the roles of a manager as described by Mintzberg
10. Give an example of a managerial activity for each of the following managerial roles:
figurehead, Liaison, spokesperson, resource Allocator.
11. Name the Various functions which constitute the process of management and discuss
each of them briefly.
12. A manager plans, organizes, staffs, directs and controls. Discuss

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