Chapter One: An Overview

To The Nature Of
Management
 Chapter Content
1. Introduction
2. Definition of Management
3. Features and significance of Management
4. Managerial Functions: An Overview
5. Levels and Areas of Management
6. Types of Managers
7. Managerial Roles and Skills
8. Universality of Management
 1.1. Introduction
• Human beings have passed through different historical
periods, processes and dynamics. Hence, this made human
beings a combination of nature and nurture.
• Biological human beings are not more strong than other
creatures; however, human survival is mainly associated with
the ability of reasoning and knowledge transmitting from
generation to generation.
• The historical transition also demonstrated the transition from
individual dependency to collective action to satisfy human needs and
wants.
• As a result people found that they could magnify their own abilities by
working with others and could hereby better satisfy their own needs in
organized manner. So has involved the development organization.
• Formation of social organization facilitated the roles human
beings in engaging in different social activities .
 1.1. Introduction
• Social organization mobilize and utilize the limited or scarce
human and physical resources that requires creativity,
efficiency, and effectiveness approaches that balance different
objectives.
– People participate in social organizations, and organizations have
always existed to serve the objectives and goals of people.
– Consequently, balancing objectives and attaining goals need
coordination of human action with regulation of organizational
political power.
• The dynamics of social organizations and human actions
coupled with social, economic, and political changes fosters
the development concepts, approaches and methods of doing.
• The change in human interaction and social organization gave
birth to the concept of Management as a tool to doing things
in the right way and coordinating group activities.
 1.1. Introduction
• Among the modern social organizations, a business organization
through the passage of time developed complexities that made
managing business organizations and activities have become
difficult and complicated task. It made visible the need for
management theories and practices.
• This made “Management [as] may be the most important
innovation of the twentieth century.”
• The practice of management is ancient, but formal study of the
body of management knowledge is relatively new.
• Giving precise definition of management is not so simple because
the term management is used in a variety of ways.
• As a result, the concept of management from theoretical and
empirical perspectives, different authors defined it in variety of
ways.
 1.2. Definition of Management
• Management is the process of working with and
through others to achieve organizational objectives in
a changing environment. Central to this process is the
effective and efficient use of limited resources.
(Robert Kreitner (2009:5), Management 11th
Edition)
• Management is the attainment of organizational
goals in an effective and efficient manner through
planning, organizing, leading, and controlling
organizational resources.(Richard L. Daft (2008:7),
Management 8th Edition)
 1.2. Definition of Management
• “….Managing was a specific kind of work that could
be analyzed, studied, and improved systematically.”
– Engineering, Economics, Sociology, Psychology,
Sociology, Political Science, and Anthropology
• Management denotes the functions and the people
who discharge it.
• It also denotes a social position and authority relationship;
a discipline and a field of study.
 1.2. Definition of Management
• There are four views of management:
– is a process: as systematic method of handling
activities.
– is a discipline: refers to the field of study having
well defined concepts and principles.
– is a human activity:. referring to the people who
guide, direct and thus manage organizations.
– is a career: management is developed as a career
focused on specialization.
 1.2. Definition of Management
• Definition summarized:
– Working with and through other people
– Achieving organizational objectives
– A process that includes different functions
– Balancing efficiency and effectiveness
– Making the most of limited resources
– Coping with changing environment
• Question: Is Management an Art,
Science, or Profession?
 1.2. Definition of Management
• Management as an Art
– Art is the skill full and personal application of
existing knowledge to achieve desired results.
– The basic features of art are:
• Existence of theoretical knowledge
• Professional application
• Based on practice and creativity
– Management can be considered are when:
• A successful manager practices that art of management
in day-to-day activities
• Application of knowledge in skillful manner
 1.2. Definition of Management
• Management as a Science
– Science is a systematized body of knowledge that
explains certain general truths or the operation of general
laws.
– Basic feature:
• Systematized body of knowledge
• Principles based experimentation
• Universal validity
– Characteristics of management as a sciences:
• It is a systematized body of knowledge
• Principles evolved recurring experiment and study
• Principles of management are not exact that vary in its
application
 1.2. Definition of Management
• Management as a Profession
– Characteristics of profession
• Well-defined body of knowledge
• Restricted entry
• Professional association
• Ethical code of conduct
• Service motive
 1.3. Features and Significance of Management
• The nature of management can be described as follows:
– Multidisciplinary: draws ideas and concepts from various
disciplines.
– Dynamic Nature of Principles: flexibility and change of
principles from time to time.
– Relative Not Absolute Principles: applicability according to
organizational needs.
– Management – Science or Art: controversial and open for
discussion.
– Universality of Management: universal phenomenon that
needs modification to fit situations.
 1.3. Features and Significance of Management
• The Need for Management
• It is the most vital forces in the successful performance of
all kinds of organized social activities.
• Management is the integrating force in all organized
activity.
• It is management that regulates man's productive activities
through coordinated use of material resources to promote
excellence.
• With increasing complexities managing the business has
become a difficult task.
 1.3. Features and Significance of Management
• The Need for Management
• Management is a vital aspect of the economic life of man,
which is an organized group activity.
• Every organization and institution possesses its specific
common interest or good common to the organization.
• Importance of management for the development of
underdeveloped economies has been recognized.
 1.3. Features and Significance of Management
• Some of the characteristics of management are:
– A continuous process
– An art (skill ) as well as science(principles & laws)
– Aims at achieving predetermined objectives (goal oriented)
– A factor of production (considered as economic resource)
– Decision-making
– Universal application
– Aims at maximum profit or ensure better life
– Dynamic
– A career/ a profession
– A discipline – area knowledge or study
– Intangible
– Indispensable – can not be replaced or substituted
 1.3. Features and Significance of Management
• Significance of Management:
– Achievement of organizational of group goals
– Optimum utilization of resources
– Minimization of costs
– Change and growth
– Efficient and smooth running of organization
– High profits (returns)
– Providing and promotion of innovation
– Maximization of social benefits
– Building sound organizational structure
 1.4. Managerial Functions: An Overview
• There is no an agreement among researchers and writers
about classification of managerial functions or process.
Some of the function or process classifications given by
some authors are:
– Richard L. Daft- Planning, Organizing, Leading, and
Controlling
– Henri Fayol- Planning, Organizing, Commanding,
Coordinating, and Controlling.
– Luther Gulick- Planning, Organizing, Staffing, Directing,
Coordinating, Reporting, and Budgeting
– Koontz And O'donnell- Planning Organizing, Staffing,
Directing, and Controlling.
• For the purpose of the course, we will discussed the
classification made by Richard L. Daft.
1.4. Managerial Functions: An Overview
Adapted from Richard Daft (2008)
Planning

Select goals and

ways to attain
them
Performance
Resources
•Human •Attain goals

•Financial Controlling Organizing •Products

•Raw Materials •Services

Monitor activities
Assign responsibility •Efficiency
•Technological and make
corrections for task
•Information accomplishment •Effectiveness

Leading

Use influence to
motivate employees
 1.4. Managerial Functions: An Overview
1. Planning: Planning defines where the organization wants to
be in the future and how to get there.
• Setting long and short term objective
• Crafting polices, strategies and course of actions
• Formulation of rules and regulations
2. Organizing: Organizing involves assigning tasks, grouping
tasks into departments, delegating authority, and allocating
resources across the organization.
• Organizational Structure: Line and staff relationship
• Vertical and horizontal relationship
• Activity identification and employee assignment
• Establishing cooperation and coordination networks
• Integrating and combining human, physical and financial resources
 1.4. Managerial Functions: An Overview
3. Leading: is the use of influence to motivate
employees to achieve organizational goals.
• Refers to quality of behavior
• Providing directions and guidance to individuals or
groups toward organized effort
• Inducing subordinates to work with confidence and zeal
• Motivating subordinates to achieve high level of
performance
• Directing and commanding
 1.4. Managerial Functions: An Overview
4. Controlling: Controlling means monitoring
employees’ activities, determining whether the
organization is on target toward its goals, and
making corrections as necessary.
• Establishing performance standards
• Measuring current performance
• Comparing performance with established standards
• Taking corrective actions, if deviations observed
– Process of ensuring performance goes as per goals
and objective
 1.4. Managerial Functions: An Overview
• Staffing, Motivating, Coordinating, Directing Communicating,
and Decision-Making are considered as sub-sets of the four
basic primary functions.
– Staffing: procurement and placement of appropriate and suitable
workforce
– Motivating: rewarding and encouraging for better performance
– Coordinating: working to achieve harmony in an organization
– Directing : leading (providing guidance in job) employees to perform
efficiently and effectively
– Communicating: facilitating flow of information
– Decision-Making: choosing among different alternative courses of
action.
 1.5. Levels and Areas of Management
• Managers are responsible for different
departments [functions], work at different
levels in the hierarchy, and meet different
requirements for achieving high performance.
• Large organizations, in particular, may break
down management into different levels
because so many more people [jobs] need to
be managed.
 1.5. Levels and Areas of Management
• Types of Management: Vertical and Horizontal
Vertical Differences

Top Managers General Managers Corporate or Strategic

Middle Managers Functional Managers Tactical

First Line Managers Front Lines Managers Functional

Operational

(Decision-Making or Line Relationship among the

Management Bodies or Layers )
 1.5. Levels and Areas of Management
• Types of Management: Vertical and Horizontal
• Horizontal Differences
– Cross-functional Teams are made up of experts in
various specialties (or functions) working together
on various organizational tasks.
– Team members come from such departments as
research and development, design, engineering,
marketing, and distribution. These teams are often
empowered to make decisions without the
approval of management.
1.6. Types of Managers
1.7. Management Skills and Managerial Roles
• The Three Basic Managerial Skills (Skill is ability to
convert knowledge into action that results in desired
performance) necessary to manage an organization are:
– Conceptual Skills: Cognitive ability to see the
organization as a whole and the relationships among its
parts (Examples: diagnostic and analytical skill)
– Human Skills: ability to work with and through other
people and to work effectively as a group member
– Technical Skills: understanding of and proficiency in
the performance of specific tasks.
– Design Skills: the ability to produce workable solutions
• Source of Skills: Education and Experiences
 1.7. Management Skills and Managerial Roles
Managerial Roles
Interpersonal Figure Head Provide Information
(interacting with others)
Leader
Liaison
Informational Monitor Process Information Feedback
(processing and exchanging
Disseminator information )

Spokesperson
Decisional Entrepreneur Use Information (using
information in decision-
Disturbance Handler making)
Resource Allocator
Negotiator
1.7. Management Skills and Managerial Roles
• Interpersonal
– Figurehead: hosting and attending official ceremonies
– Leader: Creating enthusiasm and serving people’s needs
– Liaison: maintaining contacts with important people and groups
• Informational
– Monitor: seeking relevant information
– Disseminator: sharing it with insiders
– Spokesperson: Sharing it with outsiders
• Decisional
– Entrepreneur: exploring opportunity and solving problems
– Disturbance Handler: helping to resolve conflicts
– Resource Allocator: allocating resources to various uses
– Negotiator: negotiating with other parties
 Organizational Performance
• Organization: social entity that is goal directed and
deliberately structured
• Effectiveness: degree to which organization achieves
a stated goal
• Efficiency: use of minimal resources (raw materials,
money, and people) to produce the desired volume of
output.
• Productivity: measure of input-output relationship
• Surplus: working for profit or social benefits
• Performance: organization’s ability to attain its goals
by using resources in an efficient and effective
manner
Critical Challenges to Management
• Globalization
• Product Quality
• Environmentalism
• ICT-Change
• Ethics and Social Responsibilities
• Workforce Diversity
• Learning Organizations