FORMATION AND DEVELOPMENT OF MANAGEMENT

In the traditional world of work, management’s job was to control and limit people,
enforce rules and regulations, seek stability and efficiency, design a top-down
hierarchy, and achieve bottom-line results. To spur innovation and achieve high
performance, however, managers need different skills, particularly in today’s tough
economy, which has caused suffering for many employees. Managers have to find
ways to engage workers’ hearts and minds, as well as take advantage of their labor.
The new workplace asks that managers focus on building trust, inspiring
commitment, leading change, harnessing people’s creativity and enthusiasm,
finding shared visions and values, and sharing information and power. Teamwork,
collaboration, participation, and learning are guiding principles that help managers
and employees maneuver the difficult terrain of today’s turbulent business
environment.

Rather than controlling their employees, managers focus on training them to adapt
to new technologies and extraordinary environmental shifts, and thus achieve high
performance and total corporate effectiveness.

Organization is a group of people intentionally organized to accomplish an overall,

common goal or a set of goals. It is management that regulates man's productive
activities through coordinated use of material resources. Without the leadership
provided by management, the resources of production remain resources and never
become production. Management is the specific organ of all kinds of organizations
since they all need to utilize their limited resources most efficiently and effectively
for the achievement of their goals

All organizations exist for certain purposes or goals, and managers are responsible
for combining and using organizational resources to ensure that their organizations
achieve their purposes. Management moves an organization toward its purposes or
goals by assigning activities organization members perform. Management strives
to encourage individual activity that will lead to reaching organizational goals and
to discourage individual activity that will hinder the accomplishment of those
goals. Because the process of management emphasizes the achievement of goals,
managers must keep organizational goals in mind at all times.
Management is the process of reaching organizational goals by working with and
through people and other organizational resources.

The four basic management functions—activities that make up the management

process— are described in the following sections.

Planning involves choosing tasks that must be performed to attain organizational

goals, outlining how the tasks must be performed, and indicating when they should
be performed. Planning activity focuses on attaining goals. Through their plans,
managers outline exactly what organizations must do to be successful. Planning is
essential to getting the “right” things done. Planning is concerned with
organizational success in the near future (short term) as well as in the more distant
future.

Organizing can be thought of as assigning the tasks developed under the planning
function to various individuals or groups within the organization. Organizing, then,
creates a mechanism to put plans into action. People within the organization are
given work assignments that contribute to the company’s goals. Tasks are
organized so that the output of individuals contributes to the success of
departments, which, in turn, contributes to the success of divisions, which
ultimately contributes to the success of the organization. Organizing includes
determining tasks and groupings of work. Organizing should not be rigid, but
adaptable and flexible to meet challenges as circumstances change.

Influencing is another of the basic functions within the management process. This
function—also commonly referred to as motivating, leading, directing, or actuating
—is concerned primarily with people within organizations. Influencing can be
defined as guiding the activities of organization members in appropriate directions.
An appropriate direction is any direction that helps the organization move toward
goal attainment. The ultimate purpose of influencing is to increase productivity.
Human-oriented work situations usually generate higher levels of production over
the long term than do task-oriented work situations, because people find the latter
type less satisfying.

Controlling is the management function through which managers:

1. Gather information that measures recent performance within the organization.

2. Compare present performance to pre-established performance standards.

3. From this comparison, determine whether the organization should be modified

to meet pre-established standards.
Controlling is an ongoing process. Managers continually gather information, make
their comparisons, and then try to find new ways of improving production through
organizational modification. History shows that managers commonly make
mistakes when planning, organizing, influencing, and controlling. Figure 1.3 shows
a number of such mistakes managers make related to each function. Studying this
text carefully should help managers avoid making such mistakes.

Figure 1.3 Classic mistakes commonly made by managers in carrying out

various management functions Planning
Not establishing objectives for all important organizational areas
Making plans that are too risky
Not exploring enough viable alternatives for reaching objectives
Organizing
Not establishing departments appropriately
Not emphasizing coordination of organization members
Establishing inappropriate spans of management
Influencing
Not taking the time to communicate properly with organization members
Establishing improper communication networks
Being a manager but not a leader
Controlling
Not monitoring progress in carrying out plans
Not establishing appropriate performance standards
Not measuring performance to see where improvements might be made

Management must always be aware of the status and use of organizational

resources. These resources, composed of all assets available for activation during
the production process, are of four basic types:

1. Human

2. Monetary

3. Raw materials

4. Capital

Human resources are the people who work for an organization. The skills they
possess and their knowledge of the work system are invaluable to managers.
Monetary resources are amounts of money that managers use to purchase goods
and services for the organization. Raw materials are ingredients used directly in
the manufacturing of products. For example, rubber is a raw material that
Goodyear would purchase with its monetary resources and use directly in
manufacturing tires. Capital resources are machines used during the
manufacturing process. Modern machines, or equipment, can be a major factor in
maintaining desired production levels.Worn-out or antiquated machinery can make
it impossible for an organization to keep pace with competitors.
Organizational
Inputs outputs
Resources
People
Money Raw
materials
Capital resources

Thus far, the introduction to the study of management has focused on discussing
concepts such as the importance of management, the task of management, and the
universality of management.

This section continues the introduction to management by defining management

skill and presenting both classic and more contemporary views of management
skills thought to ensure management success. Management skill is the ability to
carry out the process of reaching organizational goals by working with and through
people and other organizational resources. Learning about management skill and
focusing on developing it are of critical importance because possessing such skill is
generally considered the prerequisite for management success. A manager with the
necessary management skills will probably perform well and be relatively
successful.

There are three types of skills are important for successful management
performance: technical, human, and conceptual skills.
Technical skills involve the ability to apply specialized knowledge and expertise
to work related techniques and procedures. Examples of these skills are
engineering, computer programming, and accounting. Technical skills are mostly
related to working with “things”—processes or physical objects.
Human skills build cooperation within the team being led. They involve working
with attitudes and communication, individual and group interests—in short,
working with people.
Conceptual skills involve the ability to see the organization as a whole. A
manager with conceptual skills is able to understand how various functions of the
organization complement one another, how the organization relates to its
environment, and how changes in one part of the organization affect the rest of the
organization. As one moves from lower-level management to upper-level
management, conceptual skills become more important and technical skills less
important.

From another literature

Every day, managers solve difficult problems, turn organizations around, and
achieve astonishing performances. To be successful, every organization needs good
managers. That is, rather than doing all the work themselves, good managers create
the systems and conditions that enable others to perform those tasks. Recognizing
the role and importance of other people is a key aspect of good management. More
recently, noted management theorist Peter Drucker stated that the job of managers
is to give direction to their organizations, provide leadership, and decide how to
use organizational resources to accomplish goals. Getting things done through
people and other resources and providing leadership and direction are what
managers do.

Management is the attainment of organizational goals in an effective and efficient

manner through planning, organizing, leading, and controlling organizational
resources. This definition holds two important ideas: (1) the four functions of
planning, organizing, leading, and controlling, and (2) the attainment of
organizational goals in an effective and efficient manner. As a new manager,
remember that management means getting things done through other people. You
can’t do it all yourself. As a manager, your job is to create the environment and
conditions that engage other people in goal accomplishment.

Human, financial,
Attain goals, products,
raw materials,
services, efficiency,
technological,
effectiveness
information
resources
 Planning
Select goals and
ways to attain
them

Monitoring Organizing
monitoring the process of Assign responsibility
activities and for task
make corrections
management
accomplishment

Leading
use influence to
motivate employees

Planning means identifying goals for future organizational performance and

deciding on the tasks and use of resources needed to attain them. In other words,
managerial planning defines where the organization wants to be in the future and
how to get there.

Organizing typically follows planning and reflects how the organization tries to
accomplish the plan. Organizing involves assigning tasks, grouping tasks into
departments, delegating authority, and allocating resources across the organization.
In recent years, companies as diverse as IBM, the Catholic Church, Motorola, and
the Federal Bureau of Investigation have undergone structural reorganizations to
accommodate their changing plans. At Avon Products, where sales have stalled
and overhead costs have run amok, CEO Andrea Jung recently trimmed seven
layers of management and reorganized the company into a structure where more
decisions and functions are handled on a global basis to achieve greater efficiency
of scale.

Leading is the use of influence to motivate employees to achieve organizational

goals. Leading means creating a shared culture and values, communicating goals to
employees throughout the organization, and infusing employees with the desire to
perform at a high level. Leading involves motivating entire departments and
divisions as well as those individuals working immediately with the manager. In an
era of uncertainty, global competition, and a growing diversity of the workforce,
the ability to shape culture, communicate goals, and motivate employees is critical
to business success. One doesn’t have to be a well-known top manager to be an
exceptional leader. Many managers working quietly in both large and small
organizations around the world also provide strong leadership within departments,
teams, non-profit organizations, and small businesses.

Controlling is the fourth function in the management process. Controlling means

monitoring employees’ activities, determining whether the organization is on target
toward its goals, and making corrections as necessary. Managers must ensure that
the organization is moving toward its goals. Trends toward empowerment and trust
of employees have led many companies to place less emphasis on top down control
and more emphasis on training employees to monitor and correct themselves.
Information technology is helping managers provide needed organizational control
without strict top-down constraints. Companies such as Cisco Systems and Oracle
use the Internet and other information technology to coordinate and monitor
virtually every aspect of operations, which enables managers to keep tabs on
performance without maintaining daily authoritarian control over employees.

Based on our definition of management, the manager’s responsibility is to

coordinate resources in an effective and efficient manner to accomplish the
organization’s goals. Organizational effectiveness is the degree to which the
organization achieves a stated goal, or succeeds in accomplishing what it tries to
do. Organizational effectiveness means providing a product or service that
customers value. Organizational efficiency refers to the amount of resources used
to achieve an organizational goal. It is based on how much raw materials, money,
and people are necessary for producing a given volume of output. Efficiency can
be calculated as the amount of resources used to produce a product or service.
Efficiency and effectiveness can both be high in the same organization.

A manager’s job is complex and multidimensional and, as we shall see throughout

this book, requires a range of skills. Although some management theorists propose
a long list of skills, the necessary skills for managing a department or an
organization can be summarized in three categories: conceptual, human, and
technical. As illustrated in Exhibit 1.2, the application of these skills changes as
managers move up in the organization. Although the degree of each skill necessary
at different levels of an organization may vary, all managers must possess skills in
each of these important areas to perform effectively.

Conceptual skill is the cognitive ability to see the organization as a whole system
and the relationships among its parts. Conceptual skill involves the manager’s
thinking, information processing, and planning abilities. It involves knowing where
one’s department fits into the total organization and how the organization fits into
the industry, the community, and the broader business and social environment. It
means the ability to think strategically—to take the broad, long-term view—and to
identify, evaluate, and solve complex problems. Conceptual skills are needed by all
managers but are especially important for managers at the top. Many of the
responsibilities of top managers, such as decision making, resource allocation, and
innovation, require a broad view. Consider how recent strategic changes at General
Electric reflect the conceptual skills of CEO Jeff Immelt. Immelt is remaking GE
by thinking on a broad, long-term scale about the types of products and services
people around the world are going to need in the future. He’s pushing for growth
by investing heavily in basic scientific and technological research, looking toward
the needs of developing countries, and making structural and cultural changes that
focus GE toward creating innovative products and services to meet shifting
customer needs.

Human skill is the manager’s ability to work with and through other people and to
work effectively as a group member. Human skill is demonstrated in the way a
manager relates to other people, including the ability to motivate, facilitate,
coordinate, lead, communicate, and resolve conflicts. A manager with human skills
allows subordinates to express themselves without fear of ridicule, encourages
participation, and shows appreciation for employees’ efforts. Heather Coin,
manager of the Sherman Oaks, California, branch of The Cheesecake Factory,
demonstrates exceptional human skills. She considers motivating and praising her
staff a top priority. “I really try to seek out moments because it’s so hard to,” she
says. “You could definitely go for days without doing it. You have to consciously
make that decision [to show appreciation]. Human skills are essential for managers
who work with employees directly on a daily basis. Organizations frequently lose
good people because of front-line bosses who fail to show respect and concern for
employees. However, human skills are becoming increasingly important for
managers at all levels. In the past, many CEOs could get by without good people
skills, but no longer. Today’s employees, boards, customers, and communities are
demanding that top executives demonstrate an ability to inspire respect, loyalty,
and even affection rather than fear. “People are expecting more from the
companies they’re working for, more from the companies they’re doing business
with, and more from the companies they’re buying from,” says Raj Sisodia, a
professor of marketing at Bentley College and co-author of a recent book called
Firms of Endearment.

Technical skill is the understanding of and proficiency in the performance of

specific tasks. Technical skill includes mastery of the methods, techniques, and
equipment involved in specific functions such as engineering, manufacturing, or
finance. Technical skill also includes specialized knowledge, analytical ability, and
the competent use of tools and techniques to solve problems in that specific
discipline. Technical skills are particularly important at lower organizational levels.
Many managers get promoted to their first management jobs by having excellent
technical skills. However, technical skills become less important than human and
conceptual skills as managers move up the hierarchy. For example, in his seven
years as a manufacturing engineer at Boeing, Bruce Moravec developed superb
technical skills in his area of operation. But when he was asked to lead the team
designing a new fuselage for the Boeing 757, Moravec found that he needed to rely
heavily on human skills in order to gain the respect and confidence of people who
worked in areas he knew little about. Managers use conceptual, human, and
technical skills to perform the four management functions of planning, organizing,
leading, and controlling in all organizations—large and small, manufacturing and
service, profit and nonprofit, traditional and Internet-based. But not all managers’
jobs are the same. Managers are responsible for different departments, work at
different levels in the hierarchy, and meet different requirements for achieving high
performance.

The levels of Management and Their Functions are Discussed Below:

Top Level Management

The Top-Level Management is also referred to as the administrative level. They

coordinate services and are keen on planning. The top-level management is made
up of the Board of Directors, the Chief Executive Officer (CEO), the Chief
Financial Officer (CFO) and the Chief Operating Officer (COO) or the President
and the Vice President. The top level management controls the management of
goals and policies and the ultimate source of authority of the organization. They
apply control and coordination of all the activities of the firm as they organize the
several departments of the enterprise which would include their budget, techniques,
and agendas.
The Top-level management is accountable to the shareholders for the performance
of the organization. There are several functions performed by the top-level
management, but three of them are the most important, and they are:

• To lay down the policies and objective of the organization

• Strategizing the plans of the enterprise and aligning competent managers to
the departments or middle level to carry them out.
• Keeping the communication between the enterprise and the outside world.

Middle Level of Management

The Middle level Management is also referred to as the executory level, they are
subordinates of the top-level management and are responsible for the organization
and direction of the low-level management. They account for the top-level
management for the activities of their departments. The middle-level managers are
semi- executives and are made up of the departmental managers and branch
manager. They could be divided into senior and junior middle-level management if
the organization is big. They coordinate the responsibilities of the sub-unit of the
firm and access the efficiency of lower-level managers.

The middle-level managers are in charge of the employment and training of the
lower levels. They are also the communicators between the top level and the lower
level as they transfer information, reports, and other data of the enterprise to the
top-level. Apart from these, there are three primary functions of the middle-level
management in the organization briefed below:

• To carry out the plans of the organization according to policies and

directives laid down by the top level management.
• To organize the division or departmental activities.
• To be an inspiration or create motivation for junior managers to improve
their efficiency.

Lower Level of Management

The lower level Management is also referred to as the supervisory or the operative
level of managers. They oversee and direct the operative employees. They spend
most of their time addressing the functions of the firm, as instructed by the
managers above them. The lower level managers are the first line of managers as
they feature at the base of operations, so they are essential personnel that
communicates the fundamental problems of the firm to the higher levels. This
management level is made up of the foreman, the line boss, the shift boss, the
section chief, the head nurse, superintendents, and sergeants. They are the
intermediary, they solve issues amidst the workers and are responsible for the
maintenance of appropriate relationship within the organization. They are also
responsible for training, supervising and directing the operative employees.

The lower level managers represent the management to the operative workers as
they ensure discipline and efficiency in the organization. The duty of inspiration
and encouragement falls to them, as they strengthened the workforce. They also
organize the essential machines, tools and other materials required by the
employees to get their job done.

Briefed below are the primary functions of the lower-level management:

• To allocate tasks and responsibilities to the operative employees.

• To ensure quality and be responsible for the production quantity.
• To communicate the goals and objective of the firm laid down by the higher
level managers to the employees and also the suggestions, recommendations,
appeals and information concerning employee problems to the higher level
managers.
• To give instruction and guided direction to workers on their day to day jobs.
• To give periodic reports of the workers to the higher level managers.

A management style is the particular way managers go about accomplishing these

objectives. It encompasses the way they make decisions, how they plan and
organize work, and how they exercise authority.

Management styles vary by company, level of management, and even from person
to person. A good manager is one that can adjust their management style to suit
different environments and employees. An individual’s management style is
shaped by many different factors including internal and external business
environments.

Autocratic management is the most controlling of the management styles.

Variations of this style are authoritative, persuasive, and paternalistic. Autocratic
managers make all of the decisions in the workplace. Communication with this
type of management is one way, top-down to the employees. Employee ideas and
contributions are not encouraged or considered necessary. Roles and tasks are
clearly defined, and workers are expected to follow these directions without
question while being consistently checked and supervised. Autocratic management
is the most top-down approach to management -- employees at the top of the
hierarchy hold all the power, making decisions without collaborating or informing
their subordinates. And after they tell them what to do, they expect immediate
acceptance and execution, with no questions asked.

This type of style is particularly useful in organizations with hierarchical structures

where management makes all of the decisions based on positioning in the
hierarchy. Employees that benefit from this style of management include those
who are new, unskilled, or unmotivated, as they need the supervision and clear
direction. Managers can benefit greatly from using this style in times of crises or
serious time constraints.

The advantages of the autocratic management style are little uncertainty, clearly
defined roles and expectations for employees, and the speed of decisionmaking.All
decisions are made by the manager and employees are expected to be compliant
leaving little room for variation or confusion. Decision-making speed is ideal and
is not slowed by conflicting thought or agendas. Disadvantages include lack of
staff input with ideas are not encouraged or shared. This can lead to job
dissatisfaction, absenteeism, and employee turnover. Because managers make all
of the decisions, the employees is not inclined to act autonomously and may
become too dependent on the manager. Not all employees want or need
supervision, and as a result can become resentful and unhappy.[5] Too many
dissatisfied employees and the separation of power with an autocratic management
style can lead to an ‘us vs them’ mentality.

The democratic management style involves managers reaching decisions

with the input of the employees but being responsible for making the final
decision. There are many variations of this style of management including
consultative, participative, and collaborative styles. Employee ideas and
contributions are encouraged, but not necessary. Communication is both top-down
and bottom-up and makes for a cohesive team.

As employees are being taken into account before the manager makes decisions,
the employees feel valued which increases motivation and productivity.
Disadvantages of the democratic management style are the time it takes to make a
decision due to the gathering of ideas and opinions. There is also the potential
conflict of different viewpoints playing a role in the decision making and as a
result, employees can feel less valued if their input is not taken, leading to
decreased morale and productivity.
Consultative style

With this management style trust and confidence is place in the employees and
management actively seeks out their opinions.

Participative style

Similar to consultative, management trusts the employees, but trusts them

completely and not only seeks out their opinions and ideas, but they act on them.
They work together to make decisions as a group and the staff is highly involved.
As a result the employees feel valued, and show increased motivation and
productivity. However a drawback to this style is that some employees do not want
to be involved in decision making and can come to resent a manager with this style

Collaborative style

Managers with the collaborative style communicated extensively with employees

and make decisions by the majority. The manager believes that involving everyone
and making the team take ownership will result in the best decisions made. The
main disadvantage of this style is that it is time-consuming, and sometimes the
majority decision is not the best decision for the business entity, in which case, the
manager should take control of the final choice

The laissez-faire management style involves little or no interference from

management. The staff do not need supervision and are highly skilled which allows
management to take the hand’s off approach and leave the problem solving, and
decision making to the staff.[1] Variations of this style include the delegative style
and what is referred to as bossless environments or self-managed teams.

This type of style works best in organizations with flatter decentralized

management. Typically, the staff is highly skilled, more so than the management,
and is trusted with setting the bar for innovation and setting the objectives.

The advantages of the Laissez faire are increased innovation and creativity through
the autonomy of expert staff. Some examples of this type of employee are be
teachers, creatives, and designers. Disadvantages include the risk of low
productivity by unsupervised staff, loss of direction due to the hands-off style of
management.
Delegative style

A delegative management style allows employees to take full responsibility of their

work areas. The manager assigns tasks with little or no direction and expects the
staff to achieve results of their own accord. The manager retains responsibility for
meeting objectives. The major drawbacks of this style are lack of uniformity
among team members and uncoordinated efforts toward productivity. Also because
little direction and guidance is given the team can lack direction and focus.[5]

Bossless or self-managed teams

Although self managed teams (SMT) and bossless environments are not
management styles, they are a style of management chosen by an organization.
Like the Laissez-Faire management style, employees in these environments are
highly skilled and motivated, but take it a step further as they are also highly
educated, self directed, and know a great deal more about the work than
management. SMT’s can report directly to directors or can have managers who
follow the delegative, or participative style,[7] but these teams require more
leadership than management to remain productive.

Management by walking around is not an actual management style, it is

more of a practice, but still it is labeled as such. Managers who practice MBWA
place importance on rich levels of interpersonal communication. They believe that
managers have a tendency to become separated from staff and should focus efforts
on understanding employees’ work and being visible and accessible. Managers
walk around the premises checking with employees and on the status of ongoing
projects.[8] This practice can be helpful in maintaining contact with employees and
offering guidance as well as mitigating problems, however MBWA may also lower
productivity levels by distracting employees