CHAPTER ONE

FUNDAMENTALS OF
MANAGEMENT
 MEANING AND DEFINTION OF
MANAGEMENT
• Meaning: The word “Management” has various meanings. The most
important ones include the following:

• Management refers to a group of people who are responsible for guiding and
controlling the organization
• Management is the process of running an organization(planning, organization,
staffing, directing, and discipline).

• Management is a body of knowledge, a discipline

• Management is a factor of production, economic resource as land, labour and
capital
Definitions of Management

• Management is defined by different authorities in different ways. The following are

some of the common definitions given by different authorities in the field.
• Management is the art of getting things done through and with people in a formally
organized group
• Management is the art of knowing what you want to do in the best and cheapest way
• Management is the art of securing maximum results with a minimum of efforts so as to
secure maximum prosperity and happiness for both the employer and employee, and
give the public the best possible service
• Management is the process of planning, organizing, staffing, directing and controlling
the use of a firms resources to effectively and efficiently attain its objectives
• Management has various aspects, that cannot be represented by a single definition
Definition of Management
• Though management is defined in various ways as mentioned earlier,
the following is the commonly used precise definition of
management: “Management is the process of planning, organizing,
directing and controlling to accomplish organizational objectives
through the coordinated use of human and material resources.”
• It is the process of efficiently and effectively getting activities
completed with and through other people
• It is the process by which human and non-human resources are
coordinated to accomplish a set of objectives
Definition of Terms
• Organization – is a group of two or more people coming together to achieve common objectives (goals)
• Resources – are inputs that will be utilized in order to perform a given task.

• Planning – is determining courses of actions that will be gone for, in order to achieve objectives.
• Organizing – refers to integrating resources to their best efficiency and effectiveness.

• Directing – refers to leading, motivating, and influencing people, so that they can behave in the desired
way.

• Controlling – refers to ensuring whether objectives are efficiently and effectively achieved or not.

• Effectiveness – doing the right thing.

• Efficiency – refers to doing things right and performing something with the minimum possible input (cost).
 SIGNIFICNACE OF MANAGEMENT
• As people began forming groups to accomplish activities that they
could not achieve as individuals, management has been essential to
ensure the coordination of individual efforts
• Thus, the task of managers has been rising in importance, as society
has come to rely increasingly on group effort, and as many groups
have become large
• Basically, an organization is a group of two or more persons that exists
and operates to achieve clearly stated, and commonly held objectives
Cont..
• Each member of an organization is expected to do part of jobs that are
important to meet the organizational objectives. However, members may
be working in opposite directions. To prevent this from happening and to
ensure the coordination of work to accomplish the objectives set,
management is needed.
• Therefore, management is essential whenever and wherever human
efforts are to be undertaken collectively to achieve specific goals. Thus, the
success of group activity is determined by management. The success and
failure of a given concern or firm depends on the competence of its
manager.
• Every scientific and technological development is result of organizations;
and the achievements of organizations are, obviously, the achievements of
of organizations are, obviously, the achievements of their managers.
Managerial Functions: An Overview
• The Basic Management functions include
• Planning
• Organizing
• Staffing
• Directing, and
• Controlling
Planning Functions
• Planning: -is the first function that all managers engage in. It lays the
groundwork for all other functions.
• Planning usually:
• Identifies the goals of an organization
• It maps out courses of action
• Length of time and scope of planning:
• Will vary according to the level in the company
Cont.

• Top-level management planning may cover a period of five or ten years(Long

–range planning)
• The plans at the top management level may cover expansion of the business
and how it will be financed.
• Lower level management planning is however concerned with planning
today’s or tomorrow’s actions.
• A manager’s plans affect and are affected by, the plans of others and the
requirements of governments ruling
Organizing Functions
Organizing is concerned with Assembling the resources necessary to
achieve the organization’s objectives.
• Establishing the activity-authority relationships of the organization
• Planning has established the goals of the company and how they are
to be achieved Organizing is therefore concerned with developing the
structure to reach these goals.
 Staffing Functions

• Staffing is concerned with locating prospective employees to fill the

jobs created by the organizing process.
• Involves:
• Recruiting and selecting potential candidates for a job.
• Matching the job demands with the candidates’ abilities.
• Orienting new employees to the job environment
• Keeping employees qualified
• Appraising performance and providing feed-back
• Determining the proper pay and benefit for each job
Directing /leading Functions

• Directing is aimed at getting members of the organization to move in

the direction that will achieve its objectives.
• It involves motivating and encouraging employees, to participate in
the decision-making process.
 Controlling Functions

• Controlling deals with:

.Establishing standards of performance
. Reassuring performances against established standards, and
.Dealing with deviations from established standards.
It attempts to:
.Prevent problems
. Solve the problems that occur
• In general, controls ensure that work is performed to standards as
planned.
Levels of Management and Types of Managers

Levels of management are hierarchical arrangement of managerial

positions in an organization. The number of levels of management may
depend on the size of the organization. In general, however, there are
three managerial levels, which includes:
• Top level management,
• Middle level management, and
• Fist level (operating level management)
• These levels of management can be presented graphically as
indicated below
Cont.
1.4. Levels of Management
• Top level management
• Middle level management, and
• Fist level
Top – level Management
• Top – level management includes that of board of directors, executive
committee and chief executive, or president, or general manger, etc.
of an organization.
• Functions of top management include;
• Establishing broad objectives;
• Designing major strategies;
• Outlining Principal policies;
Cont.

• Providing overall leadership and direction;

• Making overall control of the organization;
• Dealing with external parties such as the government,
community, business, etc. by representing the organization,
and
• Analyzing the changes in the external environment and
respond to it.
Middle – level Management
• Middle-level management includes heads of the different functional
areas and their assistant: divisional heads, department heads, section
heads, plant managers, branch management, etc. The major functions of
middle-level management are:
• Acting as intermediary between top and operating level management
• Translating long-term plans of top management into medium range plans
• Developing specific targets in their areas of reasonability
• Developed specific schedules to guide actions and facilitate control
• Coordinating inputs, productivity and outputs of operating level
management
Operating level management(First level management)

• First – line management is found at the lowest level in the hierarchy.

• The first – line managers comprise the largest managerial group in most organizations and
they are responsible for directly and managing operating employees and resources.
• They direct small team of workers and keep a check on their performance so that short-
term plans and work target are achieved.
• Plan daily and weekly activities based on the quarterly and yearly plans
• Assign operating employees to specific tasks
• Issue instructions at the workplace
• Motivate subordinates to charge or improve their performance
• Provide subordinates feedback about the ongoing performance
• Take action to resolve performance problems
• Identifying ways of improving communication among subordinates
Types of Managers

Managers are also classified based on the scope of the activity they manage
in to functional and general managers.
A. Functional Managers
• Functional managers supervise with specialized skills in a single area of
operations, such as accounting, personnel, finance, marketing and
production
B. General Managers
• General Managers are responsible for the overall operations of more
complex unit, such as accompanier division .General managers hold
functional managements accountable for their areas and usually coordinate
two or more departments.
Who are managers?

Manager - someone whose primary responsibility is to carry out the

management process.
Specifically, a manager is someone who plans, makes decisions, organizes,
leads, and controls human, financial, physical, and information resources.
Managers are those who are responsible for achieving the organizational goals
in an effective and efficient manner through proper scarce resource utilization
A good manager is
The one who feel sense of responsibility, belongingness, accountability…
Who take initiative (innovator) for new things or discovery.
Who effectively & efficiently brings factors of production together
 Managerial Roles
• Managerial functions are broad areas of activities that represent the ends
for which management is practiced. They are purposes that tell little about
what managers actually perform. They simply indicate the objectives of
managers when they do their work. Thus, from the above definition, it can
be inferred that there must be the means to successfully accomplish
managerial functions and categories of actual managerial behaviors. These
are managerial roles.
• Managerial roles represent specific tasks that managers undertake to
ultimately accomplish the functions of planning, organizing, staffing,
leading and controlling. They are an organized set of activities belonging to
an identifiable job that give realism and systematize managerial functions.
Cont.
• Beside the functional approach of management the other approach to study
management is to examine the roles that managers are expected to perform.
Managerial roles are related to how managers carry out their jobs in their day to
day managerial life. Managerial functions are general administrative duties that
need to be carried out in all productive organizations.
• Managerial roles are specific categories of behavior/managerial behavior.
Managerial functions involve “desired out comes”. These outcomes are achieved
through the performance of managerial roles (actual behavior). In other words,
roles are the means and functions are the ends of the manager’s job.
• Henery Mintzeberg developed ten managerial roles, which can be classified in to
three broad categories. These are interpersonal, informational and decisional
roles.
1) Inter personal roles
These are the roles that the managers play in interacting with other
people both within the organization and outside the organization.
These roles again are classified in to three categories.
A. Figurehead role:- when managers perform duties of social or
legal obligations that represent an organization at different
occasions .
These duties include:-greeting visitors, signing legal documents,
taking important customers to lunch, attending social functional
involving their subordinates like wedding, funerals, Handing out
merit certificates to works etc or speaking at functions in schools
and churches etc.
Cont.
B. The leadership role:- This involves directing and coordinating
subordinates activities such as hiring, training, motivating and
guiding.
C. Liaison role:- Managers must maintain a net work of outside
contacts in order to assess the external environment such as
competition, social changes or changes in government rules,
regulation and laws that affect the organization interest.
2) Informational Role
A.Managers emerged as a source of information about certain issues concerning the
organization. They play the role of central point for receiving and sending important
information. In informational role managers perform the following three roles.
A. The monitor role:- in this role managers constantly monitoring and examining their
internal and external environment by collecting and studying information
B. The disseminator role:- Manager’s must transmit their information regarding
changes in policies or other matters to their subordinates, their peers and to other
members of the organization
C. Spokesperson role:- the manager represents his/her organization or unit to other
people internally or externally. A manager represents his organization in either
sending relevant information to people outside the firm or making some demand on
behalf of the firm. He transmits information to outsiders as official position of the
organization.
3) Decision making/Decisional role
• On the basis of the managers interpersonal and
information received, a manager must make decisions
and solve organization problem in that respect. These
are manager’s activities to make choices from
alternatives.
• In the decisional role the manager becomes an
entrepreneur, disturbance handler, resource allocator
and negotiator.
Cont.
A.Entrepreneurial role: - here managers are continuously involved in
improving the organization and facing dynamic technological changes and
initiating and designing of change in the organization by assuming the risk of
change. They always look out for new ideas for product improvement.
B. Disturbance handler role: - managers have to work like a fire fighter.
They must seek solutions of various unanticipated problems such as
strikes, complaints, grievances, shortage of materials etc. the manager
makes decisions or takes corrective action to response to pressure
beyond his/her control. They have to take corrective actions during
crises, disputes and sudden departure of subordinates, importance
customers or suppliers.
Cont.
C. The resource allocator role:- the manager must divide work and
delegate authority among his subordinates. He/she must make
decisions how to optimally allocate scarce resources among the
unlimited needs.
This role of managers pertains to decisions about how to allocate people, time,
equipment, budget and other resources to attain desired results. Managers
decide exactly where the organization will expend its resources according to
the priorities of organizational objectives.
D. Negotiator role:- the manager deals or negotiates with individuals or groups
about certain issues in view of reaching agreement on certain problems.
The manager also bargains with units and individuals to obtain advantages for
his/her unit or organization.
 Managerial Skills
• A skill is an acquired and learned ability to translate knowledge into
performance. It is an ability or proficiency in performing a particular task.
In order to be effective at all levels in which managers perform; they must
possess and continuously develop several essential skills.
• Managerial skills are skills of a manageability of a manager to perform his
duties and responsibilities expertly. Modern business organizations are
dynamic, complex and competition in the market place is very high.
Consequently managers must be highly skilled to succeed.
• The major managerial skills that managers need to possess
include: Technical skills, Human skills and Conceptual skills. These essential
skills briefly explained as follows.
Technical skills
• Technical skill involves the use of knowledge, methods and
techniques in performing a job effectively. It is a specialized
knowledge and expertise, which is utilized in dealing with day-to-day
problems and activities.
• This skill is acquired through education and training or formal studies
in colleges and institutions. Technical skill is more important at lower
level management and as one move to higher level management; the
relative importance of technical skill will diminish. E.g. engineers
accountants, computer programmers, program analysis etc.
Human skills
• Human skills is the ability to work with other people in a co-
operative manner i.e. the ability to influence others, to motivate, to
lead and understand others.
• It involves understanding, patience, trust and genuine practice in
interpersonal relationships. Though there are some controversies,
these skills are equally important at all levels of management
because all tasks in an organization are done with people.
• This skill includes effective communication, creation of positive
attitude towards others, development of co-operation among group
members and motivation of subordinates.
Conceptual skill
• Conceptual skill is ability of a manager “to see” the big picture of the
organization, to view the organization from a broad perspective. It is the
ability to view the organization as a whole entity and as well as a system
comprised of various parts and subsystems integrated into a single unit.
• It is especially important for top level managers how keep the whole
system under focus. They must understand the complexities of the overall
organization, to see the big picture and how each unit of the organization
contributes towards the success or achievement of organizational skills
• . Conceptual skills are more important in strategic (long range) planning;
therefore it is the top level managers/executives who require more of
these skills than middle level managres and supervisors.
 UIVERSALITY OF MANAGEMENT
• Is a manager’s job universal? Are the principles of management universally
applicable? It is already stated that managing is found in all types, functions,
levels and sizes of organizations. Management can be applied to all organized
human efforts whether they are in business, government, and educational, social,
religious or other fields.
• Universality of management suggests that the manager uses the same managerial
skills and principles in each managerial position held in various organizations. It
means that management is generic in content and is applicable to all types of
organizations. Many professionals in the field of management agree that
“management is universal”.
• This is to mean that regardless of title, position or management level, all managers
do the same job. They all execute the five management functions and work
through and with others to set and achieve organizational goals.
Cont.
• Managers perform the same functions irrespective of their level in the
organization, industry or country
• Classical writers like Fayol, believed that there are certain principles in
management which are universally applicable
• The very fact that managers regularly move from public to private sector
organizations bears ample testimony to the fact that management concepts are
• universal across organizational types. For example, D.D. Eisenhower went from a
general in the US army to President of Columbia University to President of the
United States.
• Nowadays, management has got rationalistic and quantitative approaches, which
contribute for the universality of management principles. One can say a best that
management principles are universal but their application is situational.
Is Management an art, a science or a
profession?
• Basically management is an art, a science as well as a profession.
• As science, management is a systematized body of knowledge
representing a core of principles or fundamental truth that tends to
be true in most management situations.
• Art is a system of doing a particular work in a way at a given time,
place and condition tactfully, wisely and creatively. It enables one to
make decisions when there is insufficient data and information or
when there is a limit to use secondary sources of information.
Cont.
• Management is a profession. To consider a given field is a profession,
it must fulfill the following criteria:
• Specialized knowledge
• Competent application
• Community application
• Social responsibility
• Self - control