CHAPTER ONE

1. MANAGEMENT – AN OVERVIEW

One of the most important human activities is managing. 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. As society has
come to rely increasingly on group effort, and as many organized groups have
become large, the task of managers has been rising in importance.

Just what is management? What do managers do? Are all management jobs the
same? If there are differences, what are they? In this chapter, you will examine
the answers to these questions and get a better view of the management job.

1.1. MEANING AND DEFINITION OF MANAGEMENT

Meaning of the term

The term management can have different meanings, and it is important that you
understand these different meanings.

Management as a process: Have you ever said, "That is a well-managed

company" or "That organization has been mismanaged"? If you have, what did you
mean by such statements? They seem to imply that: (1) management is some type
of work or set of activities; and (2) sometimes the activities are performed quite
well, and sometimes not so well.

You may not be able to define management exactly, but you are saying that it is a
process involving certain functions and activities that managers must perform.
Managers also use principles in managing which are generally accepted tenets that
guide their thinking and actions. This is what managers do. They engage in the
process of management.

Management as a discipline: If you say that you are a student of management

or majoring in management, you are referring to the discipline of management.
Classifying management as a discipline implies that it is an accumulated body of
knowledge that can be learned. Thus, management is a subject with principles,
concepts, and theories. A major purpose of studying the discipline of management
is to learn and understand the principles, concepts, and theories of management
and how to apply them in the process of managing.

Management as people: Whether you say, "That company has an entirely new
management team" or "She is the best manager I've ever worked for," you are
referring to the people who guide, direct, and, thus, manage organizations. The
word management used in this manner refers to the people, managers, who

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engage in the process of management. Managers are the people primarily
responsible for seeing that work gets done in an organization.

Definition of Management

Before defining management and discussing what managers do, we need to

examine the environment in which managers conduct their activities and perform
the role that separates them from non-managers.

Managers work in an organization or company. Basically, an organization is a group

of two or more persons that exist and operates to achieve clearly stated,
commonly held objectives. In an organization, it is quite possible that each
member might do parts of jobs that each thought important to meet the
objectives, while in actuality the members might be working in opposite directions.
To prevent this from occurring and to ensure coordination of work to accomplish
the objectives, managers are needed. A manager may be the
owner/operator/founder of an organization or someone hired to give it direction –
to make decisions and commit its resources (personnel, capital, and equipment) to
achieve the organization's objectives. The manager is often a connecting link,
catalyst, "sparkplug," and driving force for change, coordination, and control in an
organization.

Management has been given different definitions by different authors. Below is a

definition that covers the important points covered in many of the definitions.

Management is defined as the process of setting and achieving goals

through the execution of five basic management functions – planning,
organizing, staffing, directing, and controlling – that utilize human, financial,
and material resources.

There are a number of points to remember in this definition.

 First, management and managers make conscious decisions to set and achieve
goals. Decision making is a critical part of all management activities.

 Second, management is getting things done through people. Once

management acquires the financial and material resources for the organization,
it works through the organizational members to reach the stated objectives.

 Third, to achieve the goals they set, managers must execute the five basic
functions: planning, organizing, staffing, directing, and controlling. Each of
these we take up later in detail.

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1.2. MANAGEMENT FUNCTIONS

We recall from our definition of management that all managers share in the
execution of the management functions – planning, organizing, staffing, directing,
and controlling. But what do these functions involve? A brief explanation of each of
these five functions follows. Separate chapters in this course deal with them in
much more detail.

Planning

Planning is the first function that all managers engage in because it lays the
groundwork for all other functions. It identifies the 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 achieves these ends after setting in motion the following processes: (1)
determination of what resources will be needed, (2) identification of the number
and types of personnel the organization will need, (3) development of the
foundation for the organizational environment in which work is to be accomplished,
and (4) determination of standard against which the progress toward the
objectives can be measured so that corrections can be made if necessary.

The length of time and the scope of planning will vary according to the level in the
company. Top-level management planning may cover a period of five or ten years
and can be considered long-range planning. The plans at this level may cover
expansion of the business and how it will be financed. At lower levels of
management, the concern may be a plan for today's activities or planning
tomorrow's work schedule.

Each manager's plans are influenced by the plans of other managers. Lower level
managers' plans are strongly guided by the directions of the plans of top-level
managers. Besides the vertical influence on a manager's plans, there is the
horizontal influence of other managers, those on the same level within the same
department. Add to these the influence of government rules and regulations, and
you can see that planning is more complex than it appears. Planning does not
occur in a vacuum. A manager's plans affect, and are affected by, the plans of
others on their team and the requirements of government rulings.

Organizing

Organizing as a management function is concerned with (1) assembling the

resources necessary to achieve the organization's objectives and (2) establishing
the activity-authority relationships of the organization. Planning has established the

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goals of the company and how they are to be achieved; now, organizing develops
the structure to reach these goals.

The activities necessary to achieve the objectives are grouped into working
divisions, departments, or other identifiable units primarily by clustering similar and
related duties. The result is a network of interdependent units. Each unit (and each
person in the unit) should have clearly defined authority, or a clearly defined list of
duties, and one person to whom to report. Organizing is not done once and then
forgotten. As the objectives of the company change, they will influence the
structure of managerial and organizational relationships. One thing is certain in
organizing, changes that occur both within and outside the organization will require
new approaches, plans, and organizational units.

Staffing

Staffing is concerned with locating prospective employees to fill the jobs created by
the organizing process. Staffing initially involves the process of recruiting potential
candidates for a job, reviewing the applicants' credentials, and trying to match the
job demands with the candidates' abilities.

After the employment decision has been made – the position is offered and
accepted – staffing involves orienting the new employee to the company
environment, training the new person for his or her particular job, and keeping
each employee qualified. Staffing also involves the development and
implementation of a system for appraising performance and providing feedback for
performance improvement. Staffing is also concerned with determining the proper
pay and benefits for each job. Many aspects of the staffing function are the
responsibility of the personnel department – a staff department most likely to exist
in an organization large enough to support such a specialized group.

Directing/Leading

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

direction that will achieve its objectives. Directing builds a climate, provides
leadership, and arranges the opportunity for motivation. Each boss must plan and
oversee the work of each of his or her subordinates. The challenge for a manager
in directing is to create an environment in which both the employee and the
organization will achieve their objectives. To provide this environment, all
employees need to be dealt with on an individual basis – one-on-one. Expectations
need to be communicated and reinforced. Communication needs to be ongoing
and personalized. And each person should be encouraged to participate in the
decision making process.

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Controlling

Controlling deals with establishing standards for performance, measuring

performances against established standards, and dealing with deviations from
established standards. It attempts to prevent problems, to determine when
problems do exist, and to solve the problems that occur as quickly and effectively
as possible. Controlling depends on accurate, reliable, and enforceable standards
and on monitoring performances by people, machines, and processes. The best
controls ensure that work is performed to standards as planned.

1.3. SIGNIFICANCE OF MANAGEMENT

Where there is group effort, it requires coordination to be achieved via

management. Management is responsible for the success or failure of a group in
our society institutions or organization providing services and goods are dependent
on the decisions of one or more individuals designated as “managers”.
Management specifically stands as a corner stone in:

 Achieving effectiveness and efficiencies

 Coordination of resources
 Reconciling conflicts (between management and labour,
individuals, group)
 Innovativeness

1.4. MANAGING: SCIENCE OR ART?

Managing, like all other practices – whether medicine, music composition,

engineering, or accountancy – is an art. It is know-how. It is doing things in the
light of the realities of a situation. Yet managers can work better by using the
organized knowledge about management. It is this knowledge that constitutes a
science. Thus, managing as practice is an art; the organized knowledge underlying
the practice may be referred to as a science. In this context science and art are not
mutually exclusive; they are complementary.

As science improves, so should art, as has happened in the physical and biological
sciences. To be sure, the science underlying managing is fairly crude and inexact.
This is true because the many variables with which managers deal are extremely
complex. Nevertheless, such management knowledge can certainly improve
managerial practice. Physicians without the advantage of science would be little
more than witch doctors. Executives who attempt to manage without management
science must trust to luck, intuition, or what they did in the past.

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In managing, as in any other field, unless practitioners are to learn by trial and
error, there is no place they can turn to for meaningful guidance other than the
accumulated knowledge underlying their practice.

1.5. LEVELS OF MANAGEMENT AND TYPES OF MANAGERS

We have been using management in a broad sense to describe all managers. Is

management the same throughout the organization? The answer is both yes and
no. Managers all perform the same management functions but with different
emphases because of their positions in the company. In most organizations, the
management group consists of several levels of managers, such as those shown in
Figure 1.1. The specific titles managers have depend on the organizations they
work in and on the actual jobs they perform. In government organizations, such
titles as administrator, section chief, and director are quite common. In business,
titles such as supervisor, manager, vice-president, and foreman are often used.
Titles by themselves have little meaning outside the environment in which they are
granted. A district manager of one company could be the equivalent of a regional
manager in a rival firm.

For our purposes, we can divide managers into three basic categories: top
management, middle management, and first-line or supervisory management.

Top
Management
Middle
Management

First Line or
Supervisory Management

Figure 1.1: Levels of Management

Top Management

Top management usually consists of the organization's most important manager –

the chief executive officer or president – and his or her immediate subordinates,
usually called vice-presidents. Top management is responsible for the overall
management of the organization. It establishes organizational or company-wide
objectives or goals and operating policies, and it directs the company in
relationships with its external environment.

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Middle Management

Middle managers are all managers below the rank of vice-president but above the
supervisory level. These middle managers may be titled regional managers or
group managers in their organizations. Regardless of the title, the main point is
that their subordinates are other managers. They are responsible for implementing
top management objectives and policies.

First-line Managers or Supervisors

First-line managers or supervisors, those at the operating level, are the lowest level
of management. They are responsible for the management of their specific work
groups and for the accomplishment of the actual work of the organization. Their
subordinates are non-management workers – the group management depends on
for the execution of its plans.

Kinds of Managers

1. Functional/special managers
 marketing managers
 financial managers
 operations managers (production)
 personnel managers

2. General Managers - are administrative managers whose activities are not

confined to a limited function unlike the special managers. General
managers perform usually administrative duties. E.g. Hospital
administration, managing enterprises etc.

1.6. MANAGERIAL ROLES

Our working definition describes the manager as a person who plans, organizes
staffs, directs, and controls. Implicit in this description is that all managers,
regardless of level in the organization or job title – vice-president of marketing,
director of accounting services, machine shop foreman, or supervisor of clerical
support – perform these functions to some degree. Now we need to know: What
does the manager do to carry out these functions? The answer is that she or he
must fill various roles.

What are the roles? And what influences which role a manager must assume? A
role is anyone of several behaviors a manager displays as he or she functions in
the organization. As a manager attempts to perform the management job, he or
she must "wear different hats" in interactions with various members of the
organization. These role requirements are influenced by a manager's formal job

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description and also arise from the values and expectations of the manager's
superiors, subordinates, and peers. Let's look at some of the roles required of a
manager.

 Figurehead role. A manager is the head of his or her work unit, be it

division, department, or section. Because of this "lead person" position, the
manager must routinely perform certain ceremonial duties. For example, the
manager may be required to entertain visitors to the organization, attend a
subordinate's wedding, or participate in a group luncheon.

 Leadership role. The manager is the environment creator. She or he plays

this role by working to improve employees' performances, reducing conflict,
providing feedback on performance, and encouraging growth.

 Liaison role. Managers interact with others besides superiors and

subordinates; they work with peer-level managers in other departments,
staff specialists, other departments' employees, and outside contacts
(suppliers, clients). In this role, the manager is building contacts through
which to gather information.

 Monitor role. The manager is constantly monitoring the environment to

determine what is going on. This information is collected directly, by asking
questions, and indirectly, through unsolicited information.

 Disseminator role. What does the manager do with the information

collected? As disseminator, the manager passes on to subordinates some of
the information that would not ordinarily be accessible to them.

 Spokesperson or representative role. The manager is the person who

speaks for his or her work unit to people outside the work unit. One part of
this role is to keep superiors well informed, and a second aspect is to
communicate outside the organization.

 Entrepreneur role. As the manager is exposed to new ideas or methods

that may improve the work unit's operations, she or he assumes the
entrepreneur role. In this role, the manager initiates activities that will allow,
and encourage, the work unit to use the ideas or methods most
advantageously.

 Disturbance handler role. Managers deal with problems like strikes by

labor, bankruptcy of major suppliers or breaking of contracts by customers.
The manager must handle these crises as they develop.

 Resource allocator role. The manager is responsible for determining who

in the work unit gets the resources and how much each person gets. These

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 resources include money, facilities, equipment, and access to the manager's
time.

 Negotiator role. Managers are required to spend a good part of their time
in the negotiator role. Negotiating may be required on contracts with
suppliers or simply on trading off resources inside the organization. The
manager must play this role because he or she is the only one in the work
unit with both the information and authority negotiators need to have.

These multiple roles are what managers actually do as they are completing their
managerial functions. In planning and organizing, the manager needs to perform
the resource allocator role successfully with money, facilities, and equipment.
Staffing requires the manager to focus on the leadership role by providing
subordinates with feedback on performance. Directing includes the successful
performance of disseminator, entrepreneur, and disturbance handler roles.
Controlling is aided through the performance of the monitor role. The ability to
perform the multiple role demands makes the difference between a successful
manager and an unsuccessful one. Any manager who has a problem wearing any
of the many hats of the job is going to have a work unit that is adversely affected
to some extent.

1.7. MANAGERIAL SKILLS AND THEIR RELATIVE IMPORTANCE

As a manager plans, organizes, staffs, directs, and controls in his or her

management job, he or she must have mastery of three basic skills. These skills
needed by all managers are technical, human, and conceptual.

Technical skill

Technical skill is the knowledge of, and ability to use, the processes, practices,
techniques, and tools of the specialty area a manager supervises. For example, if a
manager is supervising accountants, the manager would have to have knowledge
of accounting. The manager does not need to be a technical expert. Rather, the
manager needs enough technical skill to accomplish the job he or she is
responsible for.

Human skill

Human skill is the ability to interact with other persons successfully. A manager
must be able to understand, work with, and relate to both individuals and groups
in order to build a teamwork environment. The proper execution of one's human
skills is often called human relations.

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Conceptual skill

Conceptual skill deals with ideas and abstract relationships. It is the mental ability
to view the organization as a whole and to see how the parts of the organization
relate to and depend on one another. Conceptual skill is also the ability to imagine
the integration and coordination of the parts of an organization – all its processes
and systems. A manager needs conceptual skills to see how factors are
interrelated, to understand the impact of any action on the other aspects of the
organization, and to be able to plan long range.

Top Conceptual Human Technical

Management

Middle Conceptual Human Technical

Management

Conceptual Human
First-line Technical
Management

Figure 1.2: Proportion of Managerial Skills Needed at Different Levels of

Management

The importance of having these three skills depends on a manager's level of

management in the organization. Technical skill is critical for a manager at the
first-line management level and becomes less important as the manager moves up
in the organization structure. For example, the supervisor of a word processing
department will have to know more technical information about the systems,
equipment, and methods of training than the company president, who does not
deal in the "how to's" of the department. Figure 1.2 illustrates the relative amounts
of each kind of skill needed by the three levels of management.

Human skill is important at every level in the organization. The need to be able to
understand and work with people is important at all levels, but the first-line
manager's position places a premium on human skill requirements because of the
many employee interactions required.

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Conceptual skill becomes increasingly important as a manager moves up the levels
of management. The first-level manager focuses basically on her or his work
group; therefore, the need for conceptual skills is at a minimum. Top-level
management is concerned with broad-based, long-range decisions that affect the
entire organization; therefore, conceptual skill is most important at that level.

1.8. UNIVERSALITY OF MANAGEMENT

The management process has universal application. This is significant; it means

that the fundamental functions of planning, organizing directing and controlling are
basic and are performed by the manager, regardless of the type of enterprise, the
major activity, or the level at which the manager works. The management process
represents the common fabric of manages and expedites the study of
management. It is universally found wherever people work together to achieve
common objectives.

Erroneously, and all too frequently, management is thought of as existing only in

the top level and not in al levels down to supervisory management. The fact is,
however, that, when acting in their respective managerial capacities, not only the
company president but also the office supervisor performs the fundamental
functions of management. The difference lies in such things as the breadth of
objectives, the actions that constitute the plans, the magnitude o the decisions
made, the organization relationships affected and the amount of leadership
required.

Regardless of title, position, or management level, all managers do the same job.
They execute the five management functions and work through and with others to
set and achieve organizational goals. Although all managers perform the same
functions, the various management levels require different amounts of time for
each function, and the points of emphasis in each function will differ.

Top management

Top-level management's job is concerned with the "big picture," not the "nitty-
gritty." The planning function for top-level management consists of developing the
major purpose of the organization, the global objectives for organizational
accomplishment, and the major policy statements for implementation by middle
and first-line managers. Organizing at this level is viewed as developing the overall
structure of the organization to support the accomplishment of the plans and then
acquiring the resources for the company. The staffing function at the top level of
management is concerned with policy development in the areas of equal
opportunity in employment and with employee development. Top management is
also concerned with acquiring talent to fill upper-management positions. The
emphasis in directing is on company wide management philosophy and on

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cultivating an organizational climate for optimal employee performance. The
controlling function at this level emphasizes overall company performance relative
to company objectives.

Middle management

Middle-level management's primary job is to develop implementation strategies for

the broad concepts determined by top management. For example, if the top-level
managers decide on a 10 percent profit objective, the job of middle managers is to
translate that goal into concrete goals of their own so that the desired profit can be
obtained. Middle managers decide on how to do it, with new products or new
customers or new territories. Organizing at the middle level means making specific
adjustments in the organization structure and allocating the resources acquired by
top management. Staffing focuses on the policy implementation in the areas of
equal employment opportunity and employee development programs. Directing is
viewed as providing leadership and support for lower level management.
Controlling is concerned with monitoring the results of plans for the specific
products, regions, and subunits and making the indicated adjustment to achieve
organizational objectives.

First-line or Supervisory Management

Whereas top-level management is concerned with the big picture and middle-level
management with its company-wide implementation, first-line management is
concerned with only its immediate responsibilities. For the first-line manager,
planning involves scheduling employees, deciding what work will be done first, and
developing procedures to achieve the goals. Organizing may consist of delegating
authority or deciding that work done by one group of people should be done by
another work group. Staffing at this level consists of requesting a new employee,
hiring that employee, and then training the person to perform the job. Directing
includes communicating and providing leadership both to the work group and to all
employees individually. Controlling at this level focuses on having the manager's
work group meet its production, sales, or quality objectives.

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