CHAPTER ONE: MANAGEMENT AN OVERVIEW

The way organizations are managed is changing by necessity. Globalization is now an accepted fact
of everyday life. To remain or become competitive, managers in the developed countries have to
restructure and rethink how people are managed. In the new global economy that is slowly emerging,
human resources, information technology, speedy decision making, strategic alliances, use of the
skills of a diverse workforce, and knowledge of how to combine individualism and teamwork can
provide competitive edge opportunities for small entrepreneurs, mid-size companies, or large
conglomerate multinational firms. The application of effective management principles, programs, and
techniques in organizations must become commonplace regardless of industries product.

There are several definitions of Management, but they all are fundamentally the same. Among the
many, some are:
a. Management is the process of coordinating all resources through the five major functions of
planning, organizing, staffing, directing /leading and controlling to achieve organizational
goals/desired objectives. That is, it is the process of achieving organizational goals through
engaging in the five major functions of planning, organizing, staffing, directing/leading and
controlling.
In the above definition there are three key concepts
o Coordination of all resources: managers should coordinate the resources of an organization.
These resources may be human or non human.
o The five managerial functions: To coordinate the resources of an organization a manager
should employ/use the five managerial functions.
o Objectives: Is the reason for the establishment of organizations and management is useful
for achieving these goals. Managing/management is concerned with productivity: effectiveness and
efficiency. There are points to be meet, targets to be shot or places to be reached. All organizations
establish a variety of goals and direct their energies and resources to achieve them.
a. Profit oriented business e.g. ROI goals
b. Hospital e.g. Patient care
c. Educational institution e.g. Teaching, research and community service.
All organizations also have resources that can be used to meet these objectives. Such resources can be
classified into: human and non-human, and management is, then, the force that unifies these
resources. It is the process of bringing them together and coordinating them to help accomplish
organizational goals.
b. Management is the art of getting things done through other people by making the atmosphere
conducive for others. It is the process of getting things done through others, and their process puts
emphasis on both the objectives to be attained and the people who will be pursuing them.
o An effective manager focuses on both work and people.
o The job of every manager is to achieve organizational goals through the combined
efforts of people.
c. Management is the utilization of scientifically derived principles to examine and improve
collective efforts or production.
o Management applies to any kind of organization, to managers at all organizational
levels.
o Without management, virtually no business could survive.
o Management increases the values of our resources.
d. Management is the process of achieving organizational goals through engaging in the five major
functions of planning, organizing, leading, staffing and controlling.
This definition recognizes that
o Management is an ongoing activity
o Entails reaching important goals, and
o Involves knowing how to perform the five major functions of management.
Managers: are those persons in the position of authority who make decisions to commit (use) their
resources and the resources of others towards the achievement of organizational objectives.
 Everybody is the manager of her time, energy and talents. Organization is a group of two or
more people brought together to achieve common stated objectives. Or a collection of two or
more persons engaged in a systematic effort to produce goods and/or services.

1. Managerial Functions

Regardless of the type of firm and the organizational level, all managers perform certain basic
functions. These managerial functions are planning, organizing, staffing, directing/leading and
controlling.
PLANNING is making decisions today about future actions.
 It involves selecting missions and objectives and the actions to achieve them;
 It requires decision making. That is, choosing future courses of action from among
alternatives. No real plan exists until a decision – a commitment of human or material
resources – has been made. Before a decision is made, all we have is a planning study, an
analysis or a proposal, but not a real plan.
 Planning bridges the gap between where we are to where we want to be in a desired future.
 Planning identifies goals and alternatives. It maps out courses of action that will commit
individuals, departments and the entire organization for days, months and years to come.
 Planning is the first managerial function that all managers engaged in because it lays the
groundwork for other managerial functions.

ORGANIZING is concerned with assembling the resources necessary to achieve organizations’

objectives and establishing the activity authority relationship.
 It is the management function that focuses on allocating and arranging human and non-
human resources so that plans can be carried out successfully. Resources are allocated on the
basis of major company goals.
 Planning has established the goals of the company and how they are to be achieved;
organizing develops the structure to reach these goals.
It is through organizing function that managers
 Determine which tasks are to be done, how tasks can best be combined into specific jobs, and
how jobs can be grouped into various units that make up the structure of the organization.
 It involves creating job positions with assigned duties and responsibilities, arranging
positions into hierarchy by establishing authority–reporting relationship, determining the
number of subordinates each manger should supervise, determining the number of
hierarchical levels etc and thereby create an organization.
 Organizing is not done once and then forgotten. As the objectives of the company change,
they will influence the structure of managerial and organizational relationship.
STAFFING: As it has been pointed out, organizing involves creating job positions with assigned
duties and responsibilities.
  Staffing involves filling and keeping filled the positions in the organization structure.
 It is concerned with locating prospective employees to fill the jobs created by the organizing
process.
 It basically deals with inventorying the people available, announcing vacancies, accepting,
identifying the potential candidates for the job, recruiting, selecting, placing, orienting, training
and promoting both candidates and existing employees. Staffing is concerned with human
resource of the organization.
DIRECTING/LEADING has been termed as motivating, influencing, guiding, stimulating, actuating
or directing.
 It is aimed at getting the members of an organization move in the direction that will achieve its
objectives. Leading/leadership is the heart and soul of management.
 It involves influencing others to engage in the work behavior necessary to reach organizational
goals; i.e., it is influencing people so that they will contribute to organization and group goals;
it has to do predominantly with the human/interpersonal aspect of management.
Leading is the most complex managerial function because it deals with complex human behavior; and
because most problems in organizations arise from people, their desire and behavior. It includes
communicating with others, helping to outline a vision of what can be accomplished, providing
direction, and motivating organization members to put forth the substantial effort required.
CONTROLLING is the measuring and correcting of activities of subordinates to ensure that events
conform to plans. It deals with establishing standards, measuring performances against established
standards and dealing with deviations from established standards.

 Controlling is the process through which mangers assure that actual activities conform to
planned activities.
 It is checking current performances against predetermined standards contained in the plan.
Control activities generally relate to the measurement of achievement.

2. Significance of Management
Why do we study management?
There are different reasons to study management. These are:
o It is important for personal life.
 o Management is universal: managers work in all types of organizations, at all levels, and in all
functional areas. These managers are responsible for the success or failure of the organizations.
 Societies depend on organizations for the provision of goods and services. These
institutions are guided by the decision of few individuals designated as Managers.
o It affects the accomplishment of social, economic, political and organizational goals. Management
is the force that determines whether business organizations and social institutions will serve us or
waste our talents and resources.
o Ever since people began forming groups to accomplish aims they could not achieve as
individuals, managing has been essential to ensure the coordination of individual efforts.
o People currently not trained by management get themselves in managerial positions and earn their
livelihood, and the most common path to become successful manager involves a combination of
education and experience.
o Management is needed to coordinate and direct the efforts of individuals, groups and the entire
organization to achieve desired objectives. Management is responsible for the success or failure of
an organization. That is, when an organization fails it is because of poor management, and when
an organization succeeds it is because of good management. Whenever and wherever there is a
group work having stated objectives, management is needed to direct and coordinate their efforts.
Without management effort will be wasted.

3. Levels Of Management
Is management the same throughout an organization? Yes and No
Yes: because all managers perform the five managerial functions.
No: because despite the fact that they perform all managerial functions, they perform it with different
emphasis and scope.
Managers all perform the same management functions but with different emphases because of their
position in the organization. Although all managers may perform the same basic duties and play similar
roles, the nature and scope of their activities differ. These differences are the base for the classification
of managers.
Managers can be divided based on two criteria. These are:
a. Levels of management (vertical difference)
b. Scope of responsibilities (horizontal difference)
Types of Managers based on levels of management
An important determinant of a manager’s job is hierarchical level. Levels refer to hierarchical
arrangement of managerial positions or persons in an organization. The number of managerial levels in
an organization depends on the size of the organization. In most organizations, however, there are three
distinct levels. How these levels are distinguished? What functions are performed at each level? And the
reporting relationships are some of the issues to be addressed.
Based on levels of management or hierarchy we do have three types of managers. A manager’s assigned
duties and the authority needed to fulfill those duties are what determine management level.
a. Top Level Managers: Top-level managers are managers who are at the top of the organizational
hierarchy and are responsible for the entire organization. They are usually few in number and
include the organization’s most important managers - the CEO or the president and her immediate
subordinates usually called vice-presidents. But the actual title may vary from organization to
organization. They are few in number because of the nature of the work they perform and economic
problem. They deal with the big picture, not with the nitty-gritty. They are responsible for the overall
management of the organization. They establish companywide objectives or goals and organizational
policies. Furthermore, top management:

o Develop overall structure of the organization.

o Direct the organization in accordance with the environment.
o Develop policy in areas of Equal Employment Opportunity and employee development.
o Represent the organization in community affairs, business deals, and government
negotiations.
o Spent much of their time in planning and dealing with middle level managers and other
subordinates.
o Work long hours and spend much of their time in meetings and on telephone.
o Are persons who are responsible for making decisions and formulating policies that affect all
aspects of the firm’s operations.
o Provide overall leadership of the organization towards accomplishment of its objectives.
 o They are responsible for the organization because objectives are established and policies are
formulated at the top.
o Top-level managers take the credit or blame for organizational success and failures
respectively.

b. Middle Level Managers: Middle level managers occupy a position in an organization that is
above first-line management and below top management. They interpret and implement top
management directives and forward messages to and from first-line management.
o Regardless of their title, they are subordinates are managers.
o Often coordinate and supervise the activities of lower level managers.
o Receive broad/overall strategies from top managers and translate it into specific objectives and
plans for First-Line Mangers/operating managers.
o Are responsible for the proper implementation of policies and strategies defined by top level
managers. They interpret and implement top management directives and forward messages to
and from first-line management.
o Their principal responsibility is to direct the activity that implement the policies of the
organization.
E.g. Academic deans, Division Head, Plant managers, Army captain
c. First Level Supervisory Level managers
o Are those at the operating level or at the last level of management;
o Their subordinates are non managers.
o They are responsible for overseeing and coordinating the work of operating employees.
o Assign operating employees to specific tasks.
o Are managers on which management depends for the execution of its plan since their job is
to deal with employees who actually produce the organization’s goods and services to fulfill
the plan?
o Are directly responsible for the production of goods and services.
o Motivate subordinates to change or improve their performance.
o Serve as a bridge between managers and non-managers.
o Spent much of their time in leading and little in planning.
 o Are in charge of carrying out the day to day activities within the various departments to
ensure that short term goals are met.
a. E.g. Department Heads, supervisory personnel, Sales managers, Loan officers,
Foreman.
b. Are often neither fish nor fowl – neither management nor labor because they feel
great deal of empathy for their subordinates (which stems from close personal contact
and the fact that most supervisors have come up from the ranks of labor) and they are
there to reflect the company’s point of view to their subordinates. And that is why
First-Line Mangers are called “People in the Middle”.
All managers carry out managerial functions. However, the time spent for each function varies according
to their managerial hierarchy. Top-level managers spend more time on planning and organizing than
lower-level managers. Leading, on the other hand, takes a great deal of time for first-line managers. The
difference in time spent on staffing and controlling varies only slightly for managers at various levels.
Planning

Organizing

Staffing

Controlling
Directing
Top

Middle

First-line

Organizational Hierarchy Time spent on carrying out managerial functions

Fig. 1.1 The relative importance of the managerial functions at different levels

Types of Managers based on scope of responsibility

Based on the scope of responsibility/activities they manage, managers are divided into two:

 Functional Managers: Functional managers are managers who are responsible for a department
that performs a single functional task and has employees with similar training and skills. Supervise
employees (managers + workers) with specialized skills in specific areas of operations such as
accounting, payroll, finance, marketing, production, or sales etc. They are responsible for only one
organizational activity; i.e. their responsibility is limited to their specialization/specification.
  General Managers: General Managers are managers who are responsible for several departments
that perform different functions. They are responsible for the entire operations of the organization
without being specific. Oversee a complex unit, such as a company, a subsidiary, or an independent
operating division. She will be responsible for all activities of that unit, such as its production,
marketing, sales and finance. A small company may have only one general manager – its president
or executive vice president – but a large organization may have several, each at the head of a
relatively independent division.

4. Managerial Roles
o Role is an organized set of behaviors that is associated with a particular office or position.
o It is a pattern of behavior expected by others from a person occupying a certain position in an
organizational hierarchy.
o A role is any one of several behaviors a manager displays as she functions in the organization

When a manager tries to carry out the management functions, she must behave in a certain way – to fill
certain role. Managerial roles represent specific tasks that managers undertake to ultimately accomplish
the five managerial functions. Factors which affect managerial roles are: manager’s formal job
description, and the values and expectations of other managers, subordinates and peers.

Henry Mintzberg identified 10 managerial roles which are in turn grouped into three categories:
Interpersonal, Informational and Decisional Roles.
1. Interpersonal Roles: involve developing and maintaining positive relationships with significant others
in the organization. It is communication oriented. It includes:
a. Figurehead Role: managers perform symbolic duties of a legal or social nature. The manager
is the head of her work unit, be it division, section or department. Because of the “lead person”
position the manager represents her work unit at ceremonial or symbolic functions.
The top level managers represent the company legally and socially to those outside of the
organization. The superior represents the work group to higher management and higher
management to the work group.
 E.g. Signing documents, presiding at a ceremonial event, greeting visitors, attending a
subordinate’s weeding, taking a customer to lunch, university president hands out a diploma for
graduates – in all these cases the manager is representing her organization.
b. Leadership Role: The manager is the environment creator – she makes the environment
conducive for work by improving working conditions, reducing conflicts, providing feedback for
performance and encouraging growth. (Virtually all managerial operations involving
subordinates are examples for a leadership role). The leader builds relationship and
communicates with employees, motivates and coaches them. As a leader, the manager is
responsible for hiring, training, motivating and encouraging employees/subordinates. The
leadership role is evident in the interpersonal relationship between manager and her
subordinates.
c. Liaison Role: The liaison maintains a network of contacts outside the work unit to obtain
information. The manager serves as a link between the organization and the informants who
provide favors and information. She fulfills her role through community service, conferences,
social events, etc; participation is meetings with representatives of other divisions. Refers to
dealing with the member of the organization superiors, subordinates, peer level managers in
other departments, staff specialists and outside contacts such as clients. The top management
uses their role to gain favors and information, while the superiors use it to maintain the routine
flow of work.
2. Informational Roles; focuses on the transmission of important information to and from internal and
external sources. It involves the following activities
a. Monitor role: is also called information gathering role. This role refers to seeking, receiving,
screening and getting information. The manager is constantly monitoring the environment to
determine what is going on. The monitor seeks internal and external information about issues
that can affect the organization. She seeks and receives wide variety of special information to
develop through understanding of the organization and the environment. Information is gathered
from news reports, trade publications, magazines, clients, associates, and a host of similar
sources, attending seminars and exhibitions.
b. Disseminator Role: what does the manager do with the information collected? As the
disseminator, the manager passes on to subordinates some of the information that would not
ordinarily be accessible to them. After the information has been gathered (by monitor role), it has
 to be disseminated to superiors, subordinates, peers and other concerned clients. The types of
information to be forwarded to members could be facts, opinions, interpretations, and influences.
c. Spokesperson/representative Role: the spokesperson transmits information about the
organization to outsiders. The manager is the person who speaks for her work unit to people
outside the work unit. One aspect of their role is to keep superiors well informed and a second
aspect is to communicate outside the organization like press, government agencies, customers
and labor unions. Although the roles of spokesperson and figurehead are similar, there is one
basic difference between them. When a manager acts as a figurehead, the manager’s presence is
as a symbol of the organization, whereas, in the spokesman role, the manager carries information
and communicates it to others in a formal sense.
Thus, the manager seeks information in the monitor role, communicates it internally in the
disseminator role and transmits it externally in the spokesperson role. The three informational
roles, then, combine to provide important information required in the decisional roles.

3. Decisional Roles: involve making significant decisions that affect the organization.
a. Entrepreneur Role: (initiator of change) the manager acting as an entrepreneur recognizes
problems and opportunities and initiates actions that will move the organization in the desired
direction. In the role of entrepreneur, the manager tries to improve the unit. Often she creates new
projects, change organizational structure, and institutes other important programs for improving
the company’s performance. The entrepreneur acts as an initiator, designer, and encourager of
change and innovation.
b. Disturbance Handler Role: solution seeking role. In the role of disturbance handler, the manager
responds to situations over which she has little control, i.e. that are beyond her control and
expectation such as conflict between people or among groups, strikes, breach of contract or
unexpected events outside the organization that may affect the firm’s performance. The
disturbance handler is responsible for taking corrective action when the organization faces
important, unexpected difficulties.
c. Resource Allocator Role: deciding on the allocation of the organization’s physical, financial and
human resources. As a resource allocator, the manager is responsible for deciding how and to
whom the resources of the organization and the manager’s own time will be allocated. This
involves assigning work to subordinates, scheduling meetings, approving budgets, deciding on
 pay increases, making purchasing decisions and other matters related to the firm’s human,
financial, and material resources. The resource allocator distributes resources of all types,
including time, funding (finance), equipment and human resources.
d. The Negotiator Role: representing the organization in all important/major negotiations.
Managers spend a great deal of their time as negotiators, because only they have the information
and authority that negotiators require. Examples include negotiations to buy firms, to get credit,
with government, with suppliers, etc.

Summary of the ten managerial roles

Category Role Activity
Interpersonal Figurehead Perform ceremonial and symbolic duties such as
greeting visitors, signing legal documents
Leader Direct and motivate subordinates; training,
counseling, and communicating with subordinates.
Liaison Maintain information links both inside and outside
organization; use mail, phone calls, meetings.
Informational Monitor Seek and receive information, scan periodicals
and reports, maintain personal contacts.
Disseminator Forward information to other organization
members; send memos and reports, make phone
calls.
Spokesperson Transmit information to outsiders through
speeches, reports, memos.
Decisional Entrepreneur Initiate improvement projects; identify new ideas,
delegate ideas, delegate responsibility to others.
Disturbance Take corrective action during disputes or crises;
handler resolve conflicts among subordinates; adapt to
environmental crises.
Resource Decide who gets resources; scheduling, budgeting,
allocator setting priorities
Negotiator Represent department during negotiation of union
contracts, sales, purchases, budgets; represent
departmental interests.

Managerial Skills and Their Relative Importance

A manager’s job is diverse and complex and it requires a range of skills. Skills are specific abilities that
result from knowledge, information, practice, and aptitude.
 o Effective managers are essential to the performance of all organizations, whether they have the
ability to plan, organize, staff, lead and control business operations effectively can determine a
firm’s ultimate success or failure.
o Management success depends both on: a fundamental understanding of the principles of
management and the application of technical, human and conceptual skills.
o Modern businesses are dynamic and complex, and competition in the market place is fierce.
Consequently, managers must be highly skilled to succeed. The skills managers need can be
classified as technical skill, human Relations skill, and conceptual skill

I. Technical Skills – involve process or technique, knowledge and proficiency. It is the ability to
use the tools, procedures, or techniques of a specialized field. It includes mastery of the methods,
techniques, and equipment involved in specific functions, such as engineering, manufacturing, or
finance. Technical skill also includes specialized knowledge, analytical ability, and the competent use of
tools and techniques to solve problems in that specific discipline.
o Is specialized knowledge and ability that can be applied to specific tasks.
o Is a skill that reflects both an understanding of and a proficiency in a specialized field.
o Technical skills are most important at the lower levels of management. It becomes less important
as we move up the chain of command because when they supervise the others (workers), they
have to show how to do the work.
E.g. A surgeon, an engineer, a musician, a quality controller or an accountant all have
technical skill in their respective areas.
II. Human Relations or Interpersonal Skill – the ability to interact effectively with people. It is
the ability to work with, understand and motivate other people, either as individuals or as groups.
Managers need enough of human relationships skill to be able to participate effectively and lead groups.
These skills are demonstrated in the way a manager relates to other people, including the way she
motivates, facilitates, coordinates, leads, communicates, and resolves conflicts. A manager with human
skills allows subordinates to express themselves without fear of ridicule and encourages participation. A
manager with human skills likes other people and is liked by them. This skill is a reflection of the
manager’s leadership ability.
Managers who lack human skills often are abrupt, critical, and unsympathetic toward others. The results
are often abrupt, critical, and unsympathetic response from workers to management. Because all work is
 done when people work together, human relation skills are equally important at all levels of
management.

III. Conceptual skills – involve the formulation of ideas. It refers to the ability to see the big picture
– to view the organization from a broad perspective and to see the interrelations among its components.
It includes recognizing how the various jobs in an organization depend on one another and how a change
in any one part affects all the others. It also involves the manager’s ability to understand how a change
in any given part can affect the whole organization, ability to understand abstract relationships, solve
problems creatively, and develop ideas.

Conceptual skills are more important in strategic (long range) planning; therefore, they are more
important to top-executives than middle managers and supervisors.
Although all three of these skills are essential to effective management, their relative importance to
specific manager depends on her rank in the organization. Technical skill is of greatest importance at
supervisory level; it becomes less important as we move up the chain of command. Even though human
skill is equally important at every level of the organization, it is probably most important at the lower
level, where the greatest number of management–subordinate interactions is likely to take place.
On the Other hand, the importance of conceptual skill increases as we rise in the rank of management.
The higher the manager is in the hierarchy, the more she will be involved in the broad, long term
decisions that affect large parts of the organization. For top management, which is responsible for the
entire organization, conceptual skill is probably the most important skill of all.
Important: Technical skill deals with things, human skill concerns people and conceptual skill has to do
with ideas.
Technical Skills

Conceptual Skills

Top
Human Skills

Middle

First-line

Managerial Levels Managerial Skills

 Fig. 1.2 Variation of skills necessary at different management levels

5. Management: Science or Art?

Science is characterized by making conclusions based on actual facts and verifies knowledge through
cause-effect relationship. It can be generally learnt, thought, and researched to know the universal
truth. Managers can work better by using the organized knowledge about management, and it is this
knowledge that constitutes a science.
Art is characterized by using common sense, personal feeling, beliefs, impulses, etc.
Management/Managing, like all other practices-music composition, engineering, accountancy or
baseball- is an art. It is know-how, skill or how to accomplish the desired objectives with insufficient
data and information or when there is limited use of secondary sources of information. It is doing
things in the light of realities of a situation. Thus, management as a practice is an art; the organized
knowledge underlying the practice may be referred to as a science. In this sense/context science and
art are not mutually exclusive but are complementary.
Therefore, management in actual sense is neither an art nor science, but it requires both to be
successful, i.e., it is not pure art because it uses scientific methods e.g. computer and it is not pure
science because it uses intuition, judgment, and creativity. Management is one of the most creative arts
as it requires a vast knowledge and the innovative skills to apply. Managers should develop new ideas,
techniques and strategies and be able to communicate them effectively in the work environment. They
should be able to make decisions even when there is shortage of data. This leads us to the conclusion
that ‘the art of management begins where the science of management stops’. This underlines the
importance of making managerial decisions in the absence of sufficient data and information by using
the decision maker’s common sense.

6. Universality Of Management
Regardless of title, position, or management level, all managers do the same job. They execute the five
managerial functions and work through and with others to set and achieve organizational goals.
Managers are the same whether the organization is private or public, profit making or non-profit
 making, manufacturing or service giving, and industrial or small firms. Hence, management is
universal for the following reasons.

o All managers perform the five managerial functions even if with different emphasis.
o It is applicable for all human efforts; be it business, non-business, governmental, private. It is
useful from individual to institutional efforts.
o Management utilizes scientifically derived operational principles.
o All managers operate in organizations with specific objectives.
o Management, in all organizations, helps to achieve organizational objectives.
In sum, management theories and principles have universal application in all kinds of organized and
purposeful activity and at all levels of management.