CHAPTER I

INTRODUCTION TO ORGANIZATION AND MANAGEMENT

LEARNING OBJECTIVES

After studying the following, students should be able to

1. Describe the four management functions and the type of management activity associated
with each.
2. Explain the difference between efficiency and effectiveness and their importance for
organizational performance.
3. Describe management types and the horizontal and vertical differences between them.
4. Describe conceptual, human and technical skills and their relevance for managers and
non-managers.
5. Define the ten roles that managers perform in organization.

I. ORGANIZATION

WHAT IS ORGANIZATION?

- A social entity that is goal directed and deliberately structured

CHARACTERISTICS OF ORGANIZATION

• Social Entity – means being made up of two or more people

• Goal Directed – means to achieve some results or outcome. Organization has distinct
purpose.
• Deliberately Structured – means that tasks are divided and responsibility for their
performance is assigned to organization members.

WHO ARE MANAGERS?

• An organizational member who integrates and coordinates the works of others.

• It may mean direct responsibility for a group of people in one department or supervising
one person.
• Involves coordinating the work activities of a team composed of people from several
departments.

TYPES OF MANAGERS

A. VERTICAL DIFFERENCES

I. TOP MANAGERS
• Top of the hierarchy and are responsible for the entire organization
• Titles: President, Chairperson, Executive Director, Chief Executive Officer (CEO), etc.
• Responsible for setting goals, defining strategies for achieving them, monitoring and
interpreting the external environment and making decisions that affect the entire
organization.
• They communicate vision for the organization, shape corporate culture and nurture
entrepreneurial spirit that help the company keep pace with rapid change.
• Creating a context for change

II. MIDDLE MANAGERS

- Work at the middle levels of the organization and are responsible for business units and
major departments.
 - Department Heads, Division Head, Manager of Quality Control and Director of Research
etc.
- Have two or more management levels beneath them.
- Responsible for implementing the overall strategies and policies defined by top
managers.
- Generally concerned with the near future and are expected to establish good relationships
with peers around the organization, encourage team work, and resolve conflicts.

III. FIRST LINE MANAGERS

- Directly Responsible for the production of goods and services.
- The first or second level of management
- Titles: Supervisor, Line Manager, Section Chief and Office Manager
- Responsible for groups of non-management employees
- Primary concern is the application of rules and procedures to achieve efficient
production, provide technical assistance and motivate subordinates.

B. HORIZONTAL DIFFERENCES

I. FUNCTIONAL MANAGERS
- Responsible for departments that perform a single functional task and have employees
with similar training and skills
- Includes Advertising, Sales, Finance, Human Resources, Manufacturing and Accounting
- Line Managers are responsible for manufacturing and marketing departments that make
or sell the product or service
- Staff Managers are in charge of departments such as Finance and Human Resources that
support Line Departments

II. GENERAL MANAGERS

- Responsible for several departments that perform different functions.
- Responsible for a self-contained division, and for all the functional departments within it.

II. WHAT IS MANAGEMENT?

MANAGEMENT
- The attainment of organizational goals in an effective and efficient manner through
planning, organizing, leading and controlling organizational resources.

2 IMPORTANT FACTORS

1. The attainment of organizational goals in an effective and efficient manner.

2. The Four Functions of Management: Planning, Organizing, Leading and Controlling

Getting Efficiency
work
done
through Effectiveness
others
 EFFICIENCY AND EFFECTIVENESS

EFFECTIVENESS
- The degree to which the organization achieves a stated goal. It means that it succeeds in
accomplishing what it tries to do and providing a product or service that customers value.
- Goal attainment
- Doing the right things

EFFICIENCY
- The use of minimal resources to produce a desired volume of output.
- It can be calculated as the amount of resources used to produce a product or service.
- The relationship between inputs and outputs, the goal is to minimize resource cost
- Doings things right—most output for least input

PERFORMANCE
- The organization’s ability to attain its goals by using resources in an efficient and
effective manner. The ultimate responsibility of managers is to achieve high
performance

KINDS / TYPES OF RESOURCES

1. Manpower
2. Money
3. Method
4. Machine
5. Materials

WHAT DO MANAGERS DO?

III. THE FOUR MANAGEMENT FUNCTIONS AND PROCESSES

PLANNING
- The management function concerned with defining goals for future organizational
performance and deciding on the tasks and resources needed to attain them.
- Defining goals, establishing strategy and developing sub plans to coordinate activities

ORGANIZING
- The management function concerned with assigning tasks, grouping tasks into
departments, and allocating resources to departments.
- Determining what needs to be done, how will it be done, and who is to do it.

LEADING
- The management function that involves the use of influence to motivate employees to
achieve the organization’s goals.
- Directing and motivating all involved partners and resolving conflicts

CONTROLLING
- The management function concerned with monitoring employees’ activities, keeping the
organization on track toward its goals and making corrections as needed.
- Monitoring activities to ensure that they are accomplished as planned.

Note: Some management theorist identify additional management functions such as staffing,
communicating, or decision making. These additional functions will be discussed as subsets of
the four primary functions.
LEVELS OF MANAGEMENT
All managers perform the same basic functions, but their responsibilities differ according to their
management level.

TOP MANAGEMENT
- Those who make the planning decisions that affect the whole company. Their decisions
have the broadest effect on the company.

MIDDLE MANAGEMENT
- It’s the job of the middle management to implement the decisions of top management.
They plan ways that departments under them can work to reach top management’s goal.
They communicate with and support supervisory level managers.

SUPERVISORY LEVEL
- These frontline managers supervise the activities of employees who carry out the tasks
determined by the plans of middle and top management. They assign duties and evaluate
the work of production or service employees.

IV. ROLES OF MANAGERS

ROLE – is a set of expectations for a manager’s behavior.

I. INTERPERSONAL ROLES
• Managing through people
• Pertain to relationships with others and are related to the human skills

Figurehead Managers perform ceremonial duties

Leader Managers motivate and encourage workers to accomplish objectives

Liaison Managers deal with people outside their units

II. INFORMATIONAL ROLES

• Managing by information
• Describe the activities used to maintain and develop an information network.

Monitor Managers scan their environment for information

Disseminator Managers share information with others in their company

Spokesperson Managers share information with others outside their departments or

companies

III. DECISIONAL ROLES

• Managing through action
• Pertain to those events about which the manager must make a choice and take action.
• These roles often require conceptual as well as human skills
Entrepreneur Managers adapt to incremental change

Disturbance Handler Managers respond to problems that demand immediate action

Resource Allocator Managers decide who gets what resources

Negotiator Managers negotiate schedules, projects, goals, outcomes, resources,

and raises
 MANAGEMENT SKILLS

Managers use a multitude of skills to perform the management functions to achieve

organizational goals. As illustrated in figure 1, the application of these skills changes as
managers move up in the organization.

 Skills Approach
 Technical skills
• Knowledge and proficiency in a specific field
• Includes mastery of the methods, techniques, and equipment involved in
specific functions such as engineering, manufacturing, or finance.
• It includes specialized knowledge, analytical ability, and the competent
use of tools and techniques to solve problems in that specific discipline.
• This is particularly important at lower organizational levels.

 Human skills
• The ability to work well with other people and to work effectively as a
group member
• This is demonstrated in the way a manager relates to other people,
including the ability to motivate, facilitate, coordinate, lead, communicate
and resolve conflict.
• A manager with human skills allows subordinates to express themselves
without fear of ridicule and encourage participation.
• A manager with human skills likes other people and is liked by them.
• Human skills are becoming increasingly important for managers at all
levels, and particularly for those who work with employees directly on a
daily basis.

 Conceptual skills
• The ability to think and conceptualize about abstract and complex
situations concerning the organization
• It involves the manager’s thinking, information processing and planning
abilities.
• It involves knowing where one’s department fits into total organization
and how the organization fits into the industry, the community, and the
broader business and social environment.
• It is needed by all managers but are especially important for the top
managers.

Figure 1
Conceptual Skills Human Skills Technical Skills
Top Manager

Middle Manager

First-Line Manager
 Management Levels in the Organizational Hierarchy

CEO

Top Management President Top Managers

Vice Presidents

Business Unit Heads

Middle Management General Managers Middle Managers
Administrators
Dept. Managers

Functional Heads
First Line Management First Line Managers
(Production, Sales, acctng., HRM)

Non-managerial employees
Line jobs, staff jobs

The Control Process

Set standards to
achieve goals

Make changes Compare actual

to return performance to
performance to standards
standards

standards