REGIS MARIE COLLEGE

#7108 Lire Lane, Villanueva Village, Parañaque City

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PRINCIPLES OF MANAGEMENT
AND ORGANIZATION
 REGIS MARIE COLLEGE
#7108 Lire Lane, Villanueva Village, Parañaque City

Landline# 8671-0199 | www.regismariecollege.com

PRINCIPLES OF MANAGEMENT AND ORGANIZATION

MANAGEMENT: FUNCTIONS, ROLES AND STYLES

Learning Objectives:
Upon completion of this module, students are expected to:
1. Understand the functions of management.
2. Explain the three basic leadership styles.
3. Explain the three basic levels of management.
4. Understand the management skills that are important for a successful small
business.

What is Management?
There is no universally accepted definition for management. The definitions run the
gamut from very simple to very complex. For our purposes, we define management as
“the application of planning, organizing, staffing, directing, and controlling functions in
the most efficient manner possible to accomplish meaningful organizational objectives.”
Put more simply, management is all about achieving organizational objectives through
people and other resources. (Kurtz, 2011).

Management principles apply to all organizations—large or small, for-profit or not-for-

profit. Even one-person small businesses need to be concerned about management
principles because without a fundamental understanding of how businesses are
managed, there can be no realistic expectation of success. Remember that the most
common reason attributed to small business failure is failure on the part of
management.
 REGIS MARIE COLLEGE
#7108 Lire Lane, Villanueva Village, Parañaque City

Landline# 8671-0199 | www.regismariecollege.com

Management Functions
On any given day, small business owners and managers will engage in a mix of many
different kinds of activities—for example, deal with crises as they arise, read, think,
write, talk to people, arrange for things to be done, have meetings, send e-mails,
conduct performance evaluations, and plan. Although the amount of time that is spent
on each activity will vary, all the activities can be assigned to one or more of the five
management functions: planning, organizing, staffing, directing, and controlling.

Figure 1.1 The

Management Functions

1. Planning. “It is the process of anticipating future events and conditions and
determining courses of action for achieving organizational objectives.” (Kurtz, 2011). It
is the one step in running a small business that is most commonly skipped, but it is the
one thing that can keep a business on track and keep it there. Planning helps a
business realize its vision, get things done, show when things cannot get done and why
they may not have been done right, avoid costly mistakes, and determine the resources
that will be needed to get things done. (Ivancevich and Duening, 2007)

REGIS MARIE COLLEGE

#7108 Lire Lane, Villanueva Village, Parañaque City

Landline# 8671-0199 | www.regismariecollege.com

2. Organizing. “It is consists of grouping people and assigning activities so that job
tasks and the mission can be properly carried out.”( Ivancevich and Duening, 2007).
Establishing a management hierarchy is the foundation for carrying out the organizing
function.
3. Staffing. The staffing function involves selecting, placing, training, developing,
compensating, and evaluating (the performance appraisal) employees (Ivancevich and
Duening, 2007). Small businesses need to be staffed with competent people who can
do the work that is necessary to make the business a success. It would also be
extremely helpful if these people could be retained.
4. Directing. It is the managerial function that initiates action: issuing directives,
assignments, and instructions; building an effective group of subordinates who are
motivated to do what must be done; explaining procedures; issuing orders; and making
sure that mistakes are corrected (Ivancevich and Duening, 2007). Directing is part of
the job for every small business owner or manager. Leading and motivating work
together in the directing function. Leading “is the process of influencing people to work
toward a common goal [and] motivating is the process of providing reasons for people
to work in the best interests of an organization. (Pride, Hughes and Kapoor, 2008)
5. Controlling. It is about keeping an eye on things. It is “the process of evaluating
and regulating ongoing activities to ensure that goals are achieved (Pride, Hughes and
Kapoor, 2008).Controlling provides feedback for future planning activities and aims to
modify behavior and performance when deviations from plans are discovered
(Ivancevich and Duening, 2007). Setting performance standards is the first step.
Standards let employees know what to expect in terms of time, quality, quantity, and so
forth. The second step is measuring performance, where the actual performance or
results are determined. Comparing performance is step three. This is when the actual
performance is compared to the standard. The fourth and last step, taking corrective
action, involves making whatever actions are necessary to get things back on track. The
controlling functions should be circular in motion, so all the steps will be repeated
periodically until the goal is achieved.
 REGIS MARIE COLLEGE
#7108 Lire Lane, Villanueva Village, Parañaque City

Landline# 8671-0199 | www.regismariecollege.com

Leadership Styles
Different situations call for different leadership styles. In a very influential research
study, Kurt Lewin established three major leadership styles: autocratic, democratic, and
laissez-faire. Although good leaders will use all three styles depending on the situation,
with one style normally dominant, bad leaders tend to stick with only one style (Don
Clark, 2010).
1. Autocratic Leadership. It occurs when a leader makes decisions without
involving others; the leader tells the employees what is to be done and how it should be
accomplished. It is found that this style creates the most discontent (Don Clark, 2010).
However, this style works when all the information needed for a decision is present,
there is little time to make a decision, the decision would not change as a result of the
participation of others, the employees are well motivated, and the motivation of the
people who will carry out subsequent actions would not be affected by whether they are
involved in the decision or not. This leadership style should not be used very often.

2. Democratic Leadership. It involves other people in the decision making—for

example, subordinates, peers, superiors, and other stakeholders—but the leader makes
the final decision. Rather than being a sign of weakness, this participative form of
leadership is a sign of strength because it demonstrates respect for the opinions of
others. The extent of participation will vary depending on the leader’s strengths,
preferences, beliefs, and the decision to be made, but it can be as extreme as fully
delegating a decision to the team. This leadership style works well when the leader has
only part of the information and the employees have the other part. The participation is
a win-win situation, where the benefits are mutual. Others usually appreciate this
leadership style, but it can be problematic if there is a wide range of opinions and no
clear path for making an equitable, final decision (Lewin, 2012).

In experiments that Lewin et al. conducted with others, the democratic leadership style
was revealed as the most effective.
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#7108 Lire Lane, Villanueva Village, Parañaque City

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3. Laissez-faire leadership (or delegative or free-reign leadership). It minimizes

the leader’s involvement in decision making. Employees are allowed to make decisions,
but the leader still has responsibility for the decisions that are made. The leader’s role is
that of a contact person who provides helpful guidance to accomplish objectives
(Ivancevich and Duening, 2007). This style works best when employees are self-
motivated and competent in making their own decisions, and there is no need for
central coordination; it presumes full trust and confidence in the people below the leader
in the hierarchy (Lewin, 2012). However, this is not the style to use if the leader wants
to blame others when things go wrong. This style can be problematic because people
may tend not to be coherent in their work and not inclined to put in the energy they did
when having more visible and active leadership.
Good leadership is necessary for all small businesses. Employees need someone to
look up to, inspire and motivate them to do their best, and perhaps emulate. In the final
analysis, leadership is necessary for success. Without leadership, “the ship that is your
small business will aimlessly circle and eventually run out of power or run aground
(Ward, 2012).
Levels of Management
As a small business grows, it should be concerned about the levels or the layers of
management. Also referred to as the management hierarchy, there are typically three
levels of management: top or executive, middle, and first-line or supervisory. To meet a
company’s goals, there should be coordination of all three levels.
Figure 1.2 The Management Hierarchy
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#7108 Lire Lane, Villanueva Village, Parañaque City

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1. Top Management. It is also referred to as the executive level, guides and

controls the overall fortunes of a business (Pride, Hughes and Kappor, 2008). This level
includes such positions as the president or CEO, the chief financial officer, the chief
marketing officer, and executive vice presidents. Top managers devote most of their
time to developing the mission, long-range plans, and strategy of a business—thus
setting its direction. They are often asked to represent the business in events at
educational institutions, community activities, dealings with the government, and
seminars and sometimes as a spokesperson for the business in advertisements. It has
been estimated that top managers spend 55 percent of their time planning (Ivancevich
and Duening, 2007).
2. Middle Management. It is probably the largest group of managers. This level
includes such positions as regional manager, plant manager, division head, branch
manager, marketing manager, and project director. Middle managers, a conduit
between top management and first-line management, focus on specific operations,
products, or customer groups within a business. They have responsibility for developing
detailed plans and procedures to implement a firm’s strategic plans (Kurtz, 2011).
3. First-line or supervisory management. It is the group that works directly with
the people who produce and sell the goods and/or the services of a business; they
implement the plans of middle management (Kurtz, 2011). They coordinate and
supervise the activities of operating employees, spending most of their time working
with and motivating their employees, answering questions, and solving day-to-day
problems (Pride, Hughes and Kappor, 2008). Examples of first-line positions include
supervisor, section chief, office manager, foreman, and team leader.
In many small businesses, people often wear multiple hats. This happens with
management as well. One person may wear hats at each management level, and this
can be confusing for both the person wearing the different hats and other employees. It
is common for the small business owner to do mostly first-level management work, with
middle or top management performed only in response to a problem or a crisis, and top-
level strategic work rarely performed (Seiffer, 2006). This is not a good situation. If the
small business is large enough to have three levels of management, it is important that
there be clear distinctions among them—and among the people who are in those
positions. The small business owner should be top management only. This will
eliminate confusion about responsibilities and accountabilities.
 REGIS MARIE COLLEGE
#7108 Lire Lane, Villanueva Village, Parañaque City

Landline# 8671-0199 | www.regismariecollege.com

Management Skills
It “is the ability to carry out the process of reaching organizational goals by working with
and through people and other organizational resources (Certo and Certo, 2012).
Possessing management skill is generally considered a requirement for success
(Cooper, 2001). An effective manager is the manager who is able to master four basic
types of skills: technical, conceptual, interpersonal, and decision making.

1. Technical skills. Is the manager’s ability to understand and use the techniques,
knowledge, and tools and equipment of a specific discipline or department (Kurtz,
2011). These skills are mostly related to working with processes or physical objects.
Engineering, accounting, and computer programming are examples of technical skills.
Technical skills are particularly important for first-line managers and are much less
important at the top management level. The need for technical skills by the small
business owner will depend on the nature and the size of the business.
2. Conceptual skills. Is the manager’s ability to see the organization as a unified
whole and to understand how each part of the overall organization interacts with other
parts (Kurtz, 2011). These skills are of greatest importance to top management
because it is this level that must develop long-range plans for the future direction of a
business. Conceptual skills are not of much relevance to the first-line manager but are
of great importance to the middle manager. All small business owners need such skills.
3. Interpersonal skills. Is the ability to communicate with, motivate, and lead
employees to complete assigned activities (Kurtz, 2011). Hopefully building cooperation
within the manager’s team. Managers without these skills will have a tough time
succeeding. Interpersonal skills are of greatest importance to middle managers and are
somewhat less important for first-line managers. They are of least importance to top
management, but they are still very important. They are critical for all small business
owners.
4. Decision making. Is the ability to identify a problem or an opportunity, creatively
develop alternative solutions, select an alternative, delegate authority to implement a
solution, and evaluate the solution (Ivancevich and Duening, 2007).
 REGIS MARIE COLLEGE
#7108 Lire Lane, Villanueva Village, Parañaque City

Landline# 8671-0199 | www.regismariecollege.com

Principles of Management:
1. What are the key functions of management, and how do they contribute
to organizational success?
2. Explain the difference between efficiency and effectiveness in
management.
3. How do managers differentiate between planning, organizing, leading,
and controlling activities in an organization?
4. Discuss the significance of setting clear organizational goals and
objectives.

5. Describe the different types of organizational structures and their advantages

and disadvantages.
6. What is the role of culture in shaping an organization's identity and
performance?
7. How can organizations effectively manage change and adapt to evolving
environments?
8. Discuss the concept of organizational leadership and the traits of effective
leaders.
9. Explain the importance of employee motivation and various motivational
theories.
10. Discuss the principles of organizational communication and their role in
effective management

References:
John M. Ivancevich and Thomas N. Duening, Business: Principles, Guidelines, and Practices (Mason,
OH: Atomic Dog Publishing, 2007)
David L. Kurtz, Contemporary Business (Hoboken, NJ: John Wiley & Sons, 2011)
William M. Pride, Robert J. Hughes, and Jack R. Kapoor, Business (Boston: Houghton Mifflin, 2008)
Kurt Lewin, Ronald Lippitt, and Ralph K. White, “Patterns of Aggressive Behavior in Experimentally
Created ‘Social Climates,’” Journal of Social Psychology 10, no. 2 (1939)
Samuel C. Certo and S. Trevis Certo, Modern Management: Concepts and Skills (Upper Saddle River,
NJ: Prentice Hall, 2012)