Lesson 1

Created @August 16, 2024 8:05 PM

Date @August 20, 2024

Management Definition
Koontz and O’Donnell Weihrich Peter Drucker
(1993)
Peter Drucker views
It is the process of designing management as a discipline
and maintain an environment and a field of study that
in which individuals working denotes a social position and
together in groups efficiently authority involving people and
accomplish selected aims. their functions.

Negotiator = Contract

Purpose of Management as a field of

study
— Is to achieve certain specific
objectives which are ultimately to
improve the ability of an
organization in its effectiveness
and efficiency.

— The importance of management

as a tool of accomplishing goals is
specifically charged with making
resources productive.

— Management is considered as
the people working together and
responsible for the actions and
results in the organization.

Lesson 1 1
 Classifications of Management
Functions
OPERATIONAL (3P- MANAGERIAL (POS’DC) —by
FM) Henry Fayol

Production Planning

Purchasing Organizing

Personnel Staffing

Financing Directing

Marketing Controlling

Function Roles and Skills of a

Manager

Informational Interpersonal Decisional Roles

Roles (MDS) Roles (FLL) (Ra-N-Dh-E)

1. Monitor 1. Figurehead 1. Resource Allocator

2. Disseminator 2. Leader 2. Negotiator

3. Spokesperson 3. Liason 3. Disturbance Handler

4. Entrepreneur

Managerial Skills
1. Technical Skill 3. Conceptual Skill

;This is the knowledge of and proficiency ;This is the ability to see the overall
in activities involving methods picture, to identify important elements in
procedures and processes. a situation and to understand the
relationships among the elements.
;It involves working with tools and
specific techniques to achieve the desire
result.
4. Design Skill

;This is the ability to solve problem is

2. Human Skill or Interpersonal Skill different ways that will benefit the
;This is the ability to work with people, it organization.
is cooperative effort. ;Managers must have the skill of being
able to design a workable solution to the
;It is the creation of work environment in
problem in the light of the existing
which people feel secure and free to
express their opinions. realities they face.

Lesson 1 2
 — Major Contribution in the Field of
Management

Fredrick W. Taylor Henry I. Gantt (1861 Henry Fayol (1841 -

(1856 - 1912) - 1919) 1925)
→ Father of “Scientific → Is known for his → Referred as the real
Management” development of graphic “Father of Modern
methods of describing Management Theory”, a
→ Major concern was to
plans and making French industrialist.
increase efficiency in
production. possible better → Fayol found out that
managerial control.
→Productivity as answer activities of an industrial
→He stressed the undertaking could be
to both higher wages and
importance of time and divided into six groups as
higher profits.
cost in planning, follows: (T.C.F-SAM)
Believed that the directing and controlling
1. Technical (production)
application of tasks.
scientific methods 2. Commercial (buying
could yield He is known for the
and selling)
productivity without famous Gant Chart
which is widely used 3. Financial (search for
the expenditure of
today and the and optimum use of
human energy.
forerunner of the capital)
His principles Program Evaluation 4. Security (protection of
emphasizes using and Review property and persons)
science, creating Technique (PERT)
group harmony, and 5. Accounting ( including
cooperation achieving He emphasized the statistics)
maximum output and need for training
6. Managerial ( planning,
developing workers. workers.
organizing command,
He was a coordination and
mechanical control.)
engineer.

14 Principles of Management; (DAD-

UUSR-CSO-ESotI-E)
—by Henry Fayol

1. Division of Work — a specialization 8. Centralization — Fayol refers to the

that economists consider necessary extent to which authority is
for efficiency in the use of labor. concentrated. Individual
circumstances will determine the
— It can applies the principle of all kinds
degree that will produce the best
of work, managerial and technical.
overall yield.

Lesson 1 3
 2. Authority and Responsibility — 9. Scalar Chain — This is the chain of
Fayol finds authority and superiors from the highest to the
responsibility to be related. lowest ranks.

— He sees authority as a combination of

10. Order — Breaking this into material
official factor, deriving from manager’s
and social order, Fayol believes that
position and personal factors composed
should be an arrangement of things
of intelligence, moral worth and
and people in an organization.
experience.
11. Equity — Loyalty and commitment
3. Discipline — He sees discipline as
should be elicited from personnel by
respect for agreements which are
a combination of kindness and
directed at achieving obedience,
justice on the part of managers when
application and energy.
dealing with subordinates.
4. Unity and Command — This means
12. Stability of Tenure — Fayol pointed
that subordinates should receive
out the unnecessary turn-over to be
orders from one superior only.
both the cause and the effect of poor
5. Unity of Direction — In this principle management and stressed its
in each group if activities, the same dangers and costs.
objective must have one head and
13. Initiative — Is conceived to be the
one plan.
thinking out and execution of a plan
— As distinguished from unity of and one of the satisfaction for an
command, this relates to the organization intelligent individual to experience.
of the body corporate rather than to
personnel. He did not mean that all 14. Espirit de Corps — This is the
decisions should be made at the top. principle that in unity there is
strength.
6. Subordination of Individual to
— It is the extension of the unity of
General Interest — When the interest
command which emphasizes the need
of management and the workers
for teamwork and the importance of
differ, management must reconcile
communicating.
with them.

7. Remuneration — The renumeration

and methods of payment should be
fair. It should afford the maximum
satisfaction to employees and
employer.

What is Business
Organization?
— The term Business organization
describes;

Lesson 1 4
 - How businesses are structured and how
their structure helps them meet their goals.
—→ Forms of Business
In general, businesses are designed to
Organization
focus on either generating profit or
improving society. Sole Proprietorship

Partnership

Corporations
—- For-profit —- Non-profit
organization —- organization—-

When a business ;or not-for-profit

focuses on When an
generating organization
profits focuses on
improving the
social good
through the; arts,
education, health
care, or some
other area.

It is not typically
referred to as a
business

———— ————
Sole Advantages Disadvantages
Proprietorship ———— ————
Easiest and least Sole proprietors have
Majority of small
expensive form of unlimited liability and
businesses start out
ownership to are legally responsible
as sole
organize. for all debts against
proprietorships.
the business.
Sole proprietors are
These firms are
in complete control, Their business and
owned by one
and within the personal assets
person, usually the
parameters of the are at risk.
individual who has
law, may make
day-to-day May be at
decisions as they
responsibility for disadvantage in
see fit.
running the raising funds and are
business Profits from the often limited to using
business flow- funds from personal
through directly to savings or consumer
— Sole proprietorships the owner’s personal loans.
own all assets of the tax return.
May have a hard time
business and the profits
The business is easy attracting high-caliber
generated by it.
to dissolve, if employees, or those
desired. that are motivated by

Lesson 1 5
 They also assume the opportunity to own
complete a part of the business.
responsibility for any
Some employee
of its liabilities or
benefits such as;
debts.
owner’s medical
insurance premiums
are not directly
deductible from
business income (only
partially as an
adjustment to income).

———— ————
Partnerships Advantages Disadvantages
— In a Partnership, two or ———— ————
more people share Partnerships are Partners are jointly
ownership of a single relatively easy to and individually liable
business. establish; for the actions of the
The partner should other partners.
however time
have legal agreement should be Profits must be shared
that sets forth how invested in with others.
these decisions will be developing the
Since decisions are
made: partnership
shared, disagreements
profits will be agreement.
can occur.
shared, With more than one
Some employees
disputes will be owner, the ability to
benefits are not
resolved, raise funds may be
deductible from
increased.
how future business income on
partners can be The profits from tax returns.
bought out, business flow
The partnership may
directly through to
or what steps will have a limited life; it
the partners’
be taken to may end upon the
personal tax return.
dissolve the withdrawal or death of
partnership when Prospective a partner.
needed. employees may be
attracted to the
business if given the
incentive to become
a partner.

The business
usually will benefit
from partners who
have
complementary
skills.

Lesson 1 6
 Yes, it’s hard to think
about a “break-up”
when the business is
just getting started,
but many partnerships
split up at crisis times
and unless there is a
defined process, there
will be even greater
problems.

They also must

decide up front
how much time
and capital each
will contribute,
etc.

Types of
Partnerships
1) General 2) Limited 3) Joint Venture
Partnership Partnership — Acts like a general
Partners divide “Limited” means that partnership, but is clearly
responsibility for most of the partners for a limited period of time
management and have limited liability or a single project.
liability, as well as the as well as limited If the partners in a
shares of profit or loss input regarding joint venture repeat
according to their management the activity, they will
internal agreement. decisions. be recognized as an
Equal shares are → Which generally ongoing partnership
assumed unless encourages and will have to file as
there is a written investors for short such, — and distribute
agreement that term projects, or for accumulated
states differently. investing in capital partnership assets
assets. upon dissolution of the
entity.

— This form of
ownership is not often
used for operating retail
or service business.

→ Forming a limited
partnership is more
complex and formal that
that of a general
partnership.

Lesson 1 7
 ———— ————
Corporations Advantages Disadvantages
— A Corporation, ———— ————
charactered by the state in Shareholders have The process of
which it is limited liability for incorporation requires
headquartered, is the corporation’s more time and money
considered by law to be a debts or judgements than other forms of
unique entity, — separate against the organization.
and apart from those who corporation.
Corporations are
own it.
Generally, monitored by federal,
→ A corporation can be shareholders can state and some local
taxed only be held agencies, and as a
→ It can be sued accountable for their result may have more
investment in stock paperwork to comply
→ It can enter into
of the company. with regulations
contractual agreements.
(Note however, Incorporating may
The owners of a
that officers can result in higher overall
corporation are its
be held taxes. Dividends paid
shareholders.
personally liable to shareholders are
The Shareholders for their actions, not deductible from
elect a board of such as the business income; thus
Directors to oversee failure to this income can be
the major policies and withhold and pay taxed twice.
decision. employment
The corporation has taxes)
life on its own and Corporations can
does not dissolve raise additional
when ownership funds through the
changes. sale of stock.

A Corporation may
deduct the cost of
benefits it provides
to officer and
employees.

Can elect S
Corporation status if
certain requirements
are met. This
election enables
company to be
taxed similar to a
partnership.

——— Management Schools———

Lesson 1 8
 Management
Schools
Emphasis —→ Organizational Culture
→ Managing workers
←—
1. Classical School and organizations — A system of shared values, beliefs and
more effectively assumptions that employees have.
→ Understanding
2. Behavioral → They govern how we behave in
human behavior in the
School organizations.
organization.

Increasing quality of → Also called “Corporate Culture”

managerial decision-
3. Quantitative making through; the
School application of Organizational Culture
mathematical and
statistical methods Aggressive Outcome
oriented
Understanding the Stable
organization as a Team Oriented
Innovative
system that
4. Systems School transforms inputs into
People
outputs while in Oriented
constant interaction
Detail
with its’ environment.
Oriented
Applying management
principles and
5. Contingency processes as dictated
School by the unique
characteristics of
each situation.

Lesson 1 9