Ministry of high education and scientific research

University of Mustapha Benboulaid, Batna 2, Algeria

Faculty of Mathematic and Computer Science
Computer Science Department

Speciality: Digital Transformation and Innovation

Module: Innovation Management 1st year Master

Chapter 1 :
Management Terminology and
Concepts

Table of Contents

1. Definition of Management............................................................................................................2

2. Common Roles in Management....................................................................................................2

3. Organizational Structure...............................................................................................................3

4. Key Elements of Management......................................................................................................4

5. Motivation and Human Needs......................................................................................................5

5.1 Maslow's Hierarchy of Needs................................................................................................5

5.2 Theories of Motivation..........................................................................................................6

5.3 Employee Motivation............................................................................................................6

6. The application of management principles...................................................................................6

7. Ethical Considerations in Management........................................................................................6

8. The Organizational Environment..................................................................................................7

9. Conclusion....................................................................................................................................8
 Chapter 1: Management Terminology and Concepts

1. Definition of Management

Management can be defined as the process of planning, organizing, leading and controlling
resources within an organization. It involves working with people, resources and processes to
ensure that an organization is able to achieve its objectives and goals. This includes setting goals,
developing strategies, allocating resources and monitoring performance. Management also
requires the ability to make decisions, solve problems and adapt to changing conditions. It is
essential for any successful organization to have effective management to ensure that it is able to
operate efficiently and effectively.

2. Common Roles in Management

In the realm of management, different roles and positions exist to ensure the effective functioning
of an organization. Understanding these roles is crucial for effective coordination and decision-
making. There are some common management roles including:

 Board of Directors (Governance) plays a vital role in governing an organization,

typically a corporation. They are responsible for setting strategic direction, establishing
policies and objectives, and evaluating the chief executive officer. While the focus of the
board is on governance, it influences the overall purpose and priorities of the
organization. The chief executive officer reports to the board and implements its strategic
policies.

 Executives hold top-level positions in an organization, such as chief executive officers,

chief operating officers, or vice presidents. They are responsible for overseeing the entire
organization, setting strategic direction, and ensuring organizational performance.
Executives often focus on long-term planning and decision-making.

 Managers are responsible for working towards an organization's goals using its resources
effectively and efficiently. They may occupy various levels in the organizational
hierarchy, including top managers, middle managers, and first-line managers. Top
managers oversee the entire organization, middle managers manage major functions or
departments, and first-line managers supervise the day-to-day activities of workers.
Different types of managers, such as project managers or product managers, may also
exist depending on the organization's needs.

 Leaders play a crucial role in setting the direction of an organization and influencing
people to follow that direction. They establish a vision and goals, communicate them
effectively, and guide others towards achieving them. Leadership styles can vary,
including autocratic, democratic, participatory, or laissez-faire approaches. Leadership
can occur at all levels of an organization, not just at the top.

 Supervisors are individuals who oversee the progress and productivity of their direct
reports within the organization. They are responsible for tasks such as decision-making,
problem-solving, organizing teams, training employees, and ensuring compliance with

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 Chapter 1: Management Terminology and Concepts

policies and regulations. Supervisors can be found at various levels in the organization's
hierarchy, overseeing different groups or departments.

 Work Directors directly oversee the work of their subordinates, assigning tasks and
closely monitoring their completion. They often start at lower levels in the organization
and work their way up, developing delegation skills along the way. Work directors can be
found at different levels of the organization, depending on their responsibilities and the
size of the organization.

3. Organizational Structure

The organizational structure refers to the formal arrangement of jobs within an organization. It
determines how tasks are divided, who reports to whom, and how decisions are made.
Understanding organizational structure is essential for effective coordination and communication
within an organization.

 Formalization: refers to the degree to which jobs within an organization are

standardized, and employee behavior is guided by rules and procedures. Highly
formalized jobs leave little room for discretion, while low formalization allows
employees more freedom in how they carry out their work.

 Work Specialization: refers to the degree to which tasks in an organization are

divided into separate jobs, with each step completed by a different person. This division
of labor enables employees to develop specialized skills, increasing efficiency and
productivity.

 Departmentalization: involves grouping jobs based on various criteria. Some

common types of departmentalization include:

➔ Functional: Grouping jobs by the functions they perform, such as marketing,

finance, or human resources.

➔ Product: Grouping jobs based on specific product lines or services.

➔ Geographical: Grouping jobs according to territories or geographic locations.

➔ Process: Grouping jobs based on the flow of products or customers.

➔ Customer: Grouping jobs according to the type of customer and their specific
needs.

 Chain of Command: refers to the continuous line of authority that extends from
upper levels of an organization to the lowest levels. It clarifies who reports to whom and
establishes a hierarchy of decision-making and accountability.

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 Span of Control: refers to the number of employees that a manager can effectively
and efficiently supervise. It varies depending on factors such as the complexity of the
work, the level of employee competence, and the manager's skills and abilities.

 Centralization and Decentralization: Centralization refers to the concentration of

decision-making authority at a single point in the organization. In centralized
organizations, top managers make most of the decisions, while lower-level employees
carry out those orders. Decentralization, on the other hand, involves pushing decision-
making down to managers who are closest to the action. It empowers employees and
allows for faster responsiveness to changes and challenges.

 Employee Empowerment: involves increasing the decision-making authority of

employees. It gives them the power to make decisions and take actions within their roles,
fostering a sense of ownership and accountability. Employee empowerment can lead to
higher employee satisfaction, productivity, and innovation.

 Mechanistic and Organic Organizations: Organizations can exhibit different

structures and characteristics. Mechanistic organizations are rigid and tightly controlled,
with a focus on efficiency and stability. On the other hand, organic organizations are
highly flexible and adaptable, allowing for creativity, innovation, and responsiveness to
change.

4. Key Elements of Management

Management involves various key elements that contribute to achieving organizational goals in
an effective and efficient manner. These elements include planning, organizing, leading, and
controlling.

 Planning is the process of determining goals, objectives, and the methods and resources
needed to achieve them. It involves identifying responsibilities, setting deadlines, and
developing strategies to guide the organization towards success. Planning can take
various forms, such as strategic planning, business planning, project planning, and
staffing planning.

 Organizing is the process of arranging resources and activities to achieve organizational

goals in an optimal fashion. It includes establishing departments, designing office
systems, and reorganizing businesses to improve efficiency and effectiveness. Effective
organizing ensures that resources are allocated appropriately and that individuals and
teams are aligned to accomplish their tasks.

 Leading involves setting direction for the organization, groups, and individuals, and
influencing people to follow that direction. It encompasses establishing a strategic vision,
values, and goals, as well as championing organizational performance management
methods. Effective leaders inspire and motivate others to achieve excellence and
contribute to the organization's success.

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 Controlling, or coordinating, focuses on monitoring and adjusting the organization's

systems, processes, and structures to effectively and efficiently reach goals and
objectives. It involves collecting feedback, measuring performance, and making
necessary adjustments to ensure progress towards desired outcomes. Control mechanisms
can include financial controls, policies, procedures, and risk management measures.

5. Motivation and Human Needs

Motivation plays a central role in management, as it energizes, directs, and sustains a person's
efforts towards achieving a goal. Understanding human needs and the factors that drive
motivation is essential for effective management.

5.1 Maslow's Hierarchy of Needs

Maslow's Hierarchy of Needs, proposed by Abraham Maslow, suggests that individuals have a
hierarchy of needs that they seek to fulfill. The hierarchy consists of five levels:

➔ Physiological Needs: These include basic needs for survival, such as food, water,
and shelter.

➔ Safety and Security Needs: These pertain to the need for stability, protection, and a
safe environment.

➔ Love and Acceptance Needs: These involve the desire for social relationships, love,
and a sense of belonging.

➔ Esteem Needs: Esteem needs encompass the need for recognition, respect, and a
positive self-image.

➔ Self-Actualization: Self-actualization represents the need for personal growth,

fulfillment, and reaching one's full potential.

5.2 Theories of Motivation

Various theories of motivation provide insights into what drives individuals to perform at a high
level. Some key theories include:

 Goal-Setting Theory: This theory suggests that setting challenging yet achievable goals
leads to higher performance.

 Herzberg's Motivation-Hygiene Theory: According to this theory, job satisfaction and

dissatisfaction are influenced by different factors. Hygiene factors, such as working
conditions, influence job dissatisfaction, while motivators, such as recognition and personal
growth, drive job satisfaction.

 Three-Needs Theory (McClelland): This theory proposes that individuals have three major
acquired needs: the need for achievement, the need for power, and the need for affiliation.
These needs influence their behavior and motivation at work.

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5.3 Employee Motivation

Motivating employees is a critical aspect of effective management. By understanding what
motivates employees, managers can create a work environment that fosters engagement,
productivity, and job satisfaction. Some key motivators for professionals include job challenges
and organizational support of their work.

6. The application of management principles

Once the theories of motivation have been understood, it is important to apply them in a practical
way. Management principles such as goal-setting, recognition, and feedback can be used to create
an environment that encourages employee motivation. Additionally, managers should provide
employees with the resources they need to succeed and make sure their contributions are valued
and appreciated. By doing so, employees will feel empowered to reach their goals and achieve
their full potential. Finally, providing employees with meaningful feedback on their performance
can help them stay on track and stay motivated.

7. Ethical Considerations in Management

Ethics plays a vital role in management, guiding decision-making and behavior within
organizations. Understanding ethical principles and practices is essential for effective
management.

a) Ethics and Business Ethics

Ethics refers to the study of moral obligations and the distinction between right and
wrong. In the context of business, ethics focuses on the principles and practices that
determine what is considered good or bad within an organization. Business ethics
encompasses behaviors and practices that align with ethical standards and promote
integrity and responsibility.

b) Behavioral Management

Behavioral management explores how managers should behave to motivate employees

and encourage high performance. It emphasizes the importance of positive relationships,
effective communication, and supportive leadership styles. Behavioral management
recognizes the impact of managers' attitudes on employee performance, known as the
Hawthorne effect.

c) Management Science Theory

Management science theory is a contemporary approach that emphasizes the use of

quantitative techniques to maximize organizational resources. It encompasses various
fields, such as operations management, total quality management (TQM), and
management information systems (MIS).

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➔ Operations Management: Operations management involves analyzing and

improving the organization's production system to increase efficiency and
product quality.

➔ Total Quality Management (TQM): TQM focuses on analyzing input,

conversion, and output activities to ensure high product quality.

➔ Management Information Systems (MIS): MIS provides vital information for

effective decision-making within the organization.

8. The Organizational Environment

The organizational environment refers to the external forces and conditions that affect an
organization's ability to acquire and utilize resources. Understanding the organizational
environment is crucial for strategic planning and decision-making.

• Open System is one that takes resources from its external environment, transforms them
into goods or services, and delivers them back to the environment. It interacts with and is
influenced by its external surroundings, such as customers, suppliers, competitors, and
societal factors.

• Closed System closed system is self-contained and not significantly impacted by changes
in its external environment. It operates independently, without extensive interactions with
external factors. Closed systems are relatively rare in modern organizations, as most
organizations rely on external resources and interactions to thrive.

• Synergy refers to the performance gains that result from the combined actions of
individuals and departments within an organization. When individuals and teams work
collaboratively, their efforts can create outcomes that exceed what could be achieved
individually. Synergy is essential for fostering innovation, creativity, and overall
organizational success.

• Contingency Theory suggests that there is no one-size-fits-all approach to organizing

and managing an organization. The optimal structure and management practices depend
on various factors, such as the organization's size, industry, culture, and strategic
priorities. Managers must adapt their approaches to fit the specific circumstances and
needs of their organization.

9. Conclusion

This chapter guide has provided you with a solid understanding of key management terminology
and concepts. From organizational structure to motivation and ethical considerations, each section
has explored essential aspects of management. By applying this knowledge in your management
role, you can enhance your decision-making, foster employee engagement, and contribute to the

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 Chapter 1: Management Terminology and Concepts

overall success of your organization. Remember, effective management is a continuous learning

journey that requires adaptability, creativity, innovation, and a commitment to ongoing
improvement.

As a manager, it is important to remain informed and up-to-date on the latest developments in

management theory and practice. Keeping abreast of new ideas to achieve an innovation can help
you stay ahead of the competition and increase your organization's effectiveness.

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