ABM – Specialized Subject

1st Quarter – Module 1

Organization and Management

Nature and concept of Management

Introduction:

The study of organization and management is very essential in the field of business industry, where the learners
will surely improve working in the organization, regardless of the chosen career path. As an economist, or
marketers indeed in any job. The effectiveness of work depends on the understanding of the organization, the
sources of power and influence, and the nature of leadership. Through this study of this field, we will learn to
understand more about how effective in international as well as national context. It will discover also how
organization work effectively and efficiency.

Objectives:

This module will help understand the study of organizational and management. The definition and the function
of management, the evolution of management. The functions, roles and skills of a manger.

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Management defined by Management Guru’s:
Management is a multi-purpose organ that manages business and manages managers and manages
workers and work” Peter Drucker.
According to Mary Parker Follet, “Management is the art of getting things done through people” Mary Parker
Follet.
According to Harold Koontz, “Management is an art of getting things done through and with the people in
formally organized groups. It is an art of creating an environment in which people can perform and
individuals and can co-operate towards attainment of group goals”
Characteristics and Nature of Management
The salient features which highlight the nature of management are as follows:
A. Management is goal oriented: management is not an end in itself. It is a means to achieve certain
goals. Management has no justification to exist without goals. Management goals are called group goals or
organizational goals. The basic goals of management is to ensure efficiency and economy in the utilization
of human, physical and financial resources. The success of management is measured by the extent to which
the established goals are achieved. Thus, the management is purposeful.
B. Management is universal: Management is an essential element of every organized activity irrespective
of the size or the type of the activity.
C. Management is continuous process: The cycle of the management continues to operate as long as there
is organized action for the achievement of group goals. Management is 5 an ongoing process and is also a
never ending process. Management is dynamic and the cycle is continues.
D. Management is multi-disciplinary: Management techniques, principles and theories are drawn from
other disciplines such as engineering, anthropology, sociology and psychology. It depends on wide
knowledge and practice derived from various discipline.
E. Management is intangible force: Management is evidenced by the results of its efforts through others.
Management is unseen and invisible force. It can not be seen. But its presence can be felt in the form of
results in every type of organization.
F. Management is situational: There is no best way of doing things. To solve a particular problems
conditions and situations must be taken into account. vii. Management is a system of authority:
Management provides the direction of every activity of an organization. Management forms system of
authority or a hierarchy of command to control the activities and give smooth direction.
G. Management is both a science and an art: Science is a systemized body of knowledge base d on certain
principles that are generally applied. Scientific knowledge is observed through the process of the critical
and continuous observation and intelligent speculation. Accordingly, management as a science is based on
principles instead of a traditional way of doing things in trial and error method.

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 Evolution of Management Through

EVOLUTION OF MANAGEMENT THOUGHT

PRE-SCIENTIFIC CLASSICAL THEORY NEO- CLASSICAL MODERN

MANAGEMENT THEORY THEORY
PERIOD Scientific Management Hawthrone
Contributions made System
by Administrative Experiment Approach
Roman Catholic Management Theory
Church Contingency
Bureaucratic Model Approach
Military
Organization

Writers like
Charles Babbage,
James Watt etc.

Explain the Evolution of Management Thought

Evolution of management thought may be divided into four stage

1 Pre- scientific management period

2 Classical Theory
a. Scientific Management of Taylor
b. Administrative Management of Fayol
c. Bureaucratic Model of Max Weber

2. Neo-classical Theory or Behavior Approach

3. Modern Theory or System Approach
4. Modern Theory or System Approach

Pre-scientific Management Period

Employee went to their work instead or receiving it, and so. The factory system , as it is known today, become a
dominant feature of the economy. Under this the system , land and buildings, hired labor, and capital are made
available to the entrepreneur, who strives to combine these factors in the efficient achievement of a particular
goal. All these changes, in turn, brought about changes in the field of management. Traditional, conventional or
customary ideas of management were slowly given up and management came to based on scientific principles. In
the words of L. F. Urwick-“Modern management has thrown open a new branch of human knowledge, a fresh
universe of discourse”. During the period following the industrial revolution, certain pioneers tried to challenge the
traditional character of management by introducing new ideas and character of management by introducing new
ideas and approaches.
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Classical theory
During this period, stalwarts like F.W. Taylor, H.L. Gantt, Emerson, Frank and Lillian Gilberth etc., Laid the
foundation of the management, which in due course, came to be known as scientific management. This epoch in
the in the history of management will be remember as an era in which traditional ways of managing were
challenged , past managements experience was scientifically systematized, and principles of management were
distilled and propagated.
F.W Taylor and Henry Fayol are generally regarded as the founders of scientific management and administrative
management and both provided the base for science and art of management.

Features of Management in the Classical Period:

1 .It was closely associated with the r revolution and the rise of large –scale enterprise.
2. Classical organization and management theory is based on contribution from a number of sources. They
are scientific management, Administrative management theory, bureaucratic model, and micro-
economics and public administration.
3. Management thought focused on job content division of labor, standardization, simplification and
specialization and scientific approach towards organization.

Neoclassical Theory: Neo-classical Theory is built on the base of classical theory. It modified, improved and
extended the classical theory. Classical theory concentrated on job content and management of physical resources
whereas, neoclassical theory gave greater emphasis to individuals and group relationship in the workplace. The
neo-classical theory pointed out the role of psychology and sociology in the understanding of individual and group
Behavior in an organization.

Hawthorne Theory: In 1927, a group of researchers led by Elton Mayo and Fritz Roethlisberger of the Harvard
Business School were invited to join in the studies at the Hawthorne Works of Western Electric Company, Chicago.
The experiment lasted up to 1932. The Hawthorne Experiments brought out that the productivity of the employees
is not the function of only physical conditions of work and money wages paid to them. Productivity of employees
depends heavily upon the satisfaction of the employees in the work situation. Mayo’s idea was that logical factors
were far less important than emotional factors in determining productivity efficiency.

Modern Theory (System Approach): The systems approach to management indicates the fourth major
theory of management thought called modern theory. Modern theory considers an organization as an adaptive
system which has to adjust to changes in its environment. An organization is now defined as a structured process
in which individuals interact for attaining objectives.

Meaning of “System Approach): The word system is derived from the Greek word meaning to bring
together or to combine. A system is a set of interconnected and inter-related elements or component parts to
achieve certain goals. A system has three significant parts:
1. Every system is goal-oriented and it must have a purpose or objective to be attained.
2. In designing the system we must establish the necessary arrangement of components.
3. Inputs of information, material and energy are allocated for processing as per plan so that the output
can achieve the objective of the system.

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System Approach Applied to an Organization: When systems approach is applied to organization, we
have the following features of an organization as an open adaptive system;
1. It is a sub-system of its broader environment.
2. It is a goal-oriented-people with a purpose.
3. It is a technical subsystem-using knowledge, techniques, equipment and facilities.
4. It is a structural subsystem-people working together on interrelated activities.
5. It is a psychology system-people in social relationships.
6. It is co-ordinate by a managerial sub system, creating, planning, organizing, motivating, communicating
and controlling the overall efforts directed towards set goals.

Characteristics of Modern Management Thought:

1. The System Approach: An organization as a system has five basic parts
1. Input
2. Process
3. Output
4. Feedback and
5. Environment.

Contingency Theory: System Approach emphasizes that all sub-system of an organization along with the super
system of environment are interconnected and interrelated. Contingency approach analysis and understands these
inter relationship so that managerial actions can be adjusted to demands of specific situations or circumstances.

Lesson 2: Functions, Roles and Skills of a Manager

Management is a vital aspect of the economic life of man, which is an organized group activity. A central directing
and controlling agency are indispensable for a business concern. The productive resources- material, labor, capital
etc. are entrusted to the organizing skill, administrative ability and enterprising initiative of the management.

What is a Manager? A manager achieves objectives through efficient and effective use of resources. Efficient- doing
things right. Efficient- doing things right. Effective- doing the right thing 3

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 Functions, Roles, and Skills

Functions Roles Skills

Planning Interpersonal Interpersonal

Organizing Informational Technical

Leading Decisional Decision – making

Controlling

5 Function of Management:
1. Planning is future- oriented and determines an organization’s direction. It is a rational and systematic way of
making decisions today that will affect the future of the company. It is a kind of organized foresight as well as
corrective hindsight. It involves predicting of the future as well as attempting to control the events. It involves the
ability to foresee the effects of the current actions in the long run in the future.
2. Organizing requires a formal structure of authority and the direction and flow of such authority through which
work subdivisions are defined, arranged and coordinated so that each part relates to the other part in a united and
coherent manner to attain the prescribe objectives. According to Henry Fayol, “To organize a business is to provide
it with everything useful or its functioning i.e. raw material, tool, capital, and personnel’s”.
3. Staffing is the function of hiring and retaining a suitable workface for the enter price both at managerial as well
as non-managerial levels. It involves the process of recruiting, training, developing, compensating and evaluating
employees and maintaining this workface with proper incentives and motivations. Since the human element is the
most vital factor in the process of management, it is important to recruit the right personnel.
4. The directing function is a concerned with leadership, communication, motivation, and supervision so that the
employees perform their activities in the most efficient manner possible, in order to achieve the desired goals.

The leadership element involves issuing of instructions and guiding the subordinates about procedures and,
methods. Communication must be open both ways so that the information can be passed on the subordinates and
the feedback received from them. Motivation is every important since highly motivated people show excellent
performance with less direction from superiors. Supervising subordinates would lead to continuous progress
reports as well as assure the superiors that the directions being properly carried out.

5. Controlling – The function of the control consist of those activities that are undertaken to ensure that the events
do not deviate from the pre-arranged plans. The activities consist of establishment standards for work
performance, measuring performance and comparing it these set standards and taking corrective actions as and
when needed, to correct any deviations.

Role of Manager:

Category Roles

Interpersonal Figurehead Leader Liaison

Information Monitor Disseminator Spokesperson

Decisional Entrepreneur Disturbance Handler

Resources Allocator Negotiator

Interpersonal Category
The managerial roles in this category involve providing information and ideas.
1. Figurehead - As a manager, you have social, ceremonial and legal responsibilities. You’re expected to
be a source of inspiration. People look up to you as a person with authority, and as a figurehead.
2. Leader –This is where you provide leadership for your team, your department or perhaps your entire
organization; and it’s where you manage the performance and responsibilities of everyone in the group.
3. Liaison- Managers must communicate with internal and external contacts. You need to be able to
network effectively on behalf of your organization.

Informational Category
The managerial roles in this category involve processing information.
4. Monitor- In this role, you regularly seek out information related to your organization and industry,
looking for relevant changes in the environment. You also monitor your team, in terms in both their
productivity, and their well-being.
5. Disseminator- This is where you communicate potentially useful information to your colleagues and
your team.
6. Spokesperson- Managers represent and speak for their organization. In this role, you’re responsible
for transmitting information about your organization and its goals to the people.
7. Entrepreneur- As a manager, you create and control change within the organization. This means
solving problems, generating new ideas, and implementing them.
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8. Disturbance Handler- When an organization or team hits an unexpected roadblock. it’s the manager
who must take charge. You also need to help mediate disputes within it.
 9. Resource Allocator- You’ll also need to determine where organizational resources are best applied.
This involves allocating funding, as well as assigning staff and other organizational resources.
10. Negotiator- You may be needed to take part in, and direct, important negotiations within your team,
direct, important negotiations within your team, department, or organization.

Social psychologist Robert L. Katz in 1974, in his article,” Skills of an Effective Administrator” in Harvard Business
thought about the relationship of managerial skills (competences) and hierarchical management levels. The result
was the setting of the three areas of managers of managerial skills and determination, for which level they are
characterized:
 Technical skill- competencies important, particular for lower management. Job- specific knowledge and
techniques needed to proficiently perform specific tasks.
 Human skill- competencies needed for all levels of management. The ability ro work well with other
people individuals and in a group.
 Conceptual skills- competencies with a substantial importance, particularly for top management. The
ability to think and to conceptualize about abstract and complex situation.

What’s More…

I.FILL IN THE BLANKS

Directions: Fill in the blanks by choosing the CORRECT word/phrase in the box.

Objectives Modern theory Neo-classical theory workers

Managers works System Combine Act or bringing together

Goals multi-purpose organ

1) Management refers to the the work activities to achieve the organization’s

and .
 2) According to Peter Drucker, management is a that manages business and manages
managers and manages and .

3) Is built on the base of classical theory.The system approach to management

indicates the fourth major theory of management thought calle

4) . Is derived from the Greek word meaning to bring together or to

What I Have Learned?

Directions: You have to fill in the graphic organizer chart to generalize the thing you have learned about the
topic Write your answer in a blank sheet of paper.

Nature and
Concept of management

What I Need to Reflect?

After you have learned the lesson and, a few questions to ask yourself:

 Do I have technical and conceptual skills in doing managing a small organization or a business?
 Do I have the characteristic and potential to manage a business or organization?
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 What category of the role of manager many I consider myself in managing a small organization or a
business?
 What I Can Do?

Directions: After you have in the graphic organizer chart, please work on the WORK IN PROGRESS

List down the family members and identify each role. Explain their duties and responsibilities in a blank sheet of
paper.

Family Members Role Duties and Responsibilities

Assessment:

Multiple-choice
Directions: Choose the letter corresponding to the correct answer for each of the question provided below.
1. Brought out that the productivity of the employees is not the function of only physical conditions of work
and money wages paid to them.
a. Hawthorne Experiment
b. Multilevel and Multidimensional
c. Contingency Theory
d. Classical Theory
2. Is future-oriented and determines an organization’s direction. It is a rational and systematic way of
making decisions today that will affect the future of the company.
a. Staffing
b. Planning
c. Organizing
d. Directing

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 Organization and management theory is based on contributions from a number of sources. They ate
scientific management, Administrative management theory, bureaucratic model, and micro-
economics and public administration.
a. Classical Theory
b.
c. Neoclassical Theory
d. Modern Theory
e. Contingency Theory

3. Is a vital aspect of the economic life of man, which is an organized group activity. A centraldirecting and
controlling agency are indispensible for a business concern.
a. Directing
b. Management
c. Organization
d. Negotiator

5. This is where you communicate potentially useful information to your colleagues and your team.
a. Monitor
b. Disseminator
c. Spokesperson
d. Negotiator

6. The ability to think and to conceptualize about abstract and complex situations.
a. Technical Skills
b. Human skills
c. Conceptual Skill
d. Inter-relationship Skills

7. Function is connected with leadership, communication, motivation, and supervision so that the
employees perform their activities in the most efficient manner possible, in order to achieve the desired
goals.
a. Planning
b. Organizing
c. Staffing
d. Directing

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 9 Is a deliberate arrangement of people to accomplish some specific purpose. Organizations share three
common characteristic: (1) Each has a distinct purpose (2) Each is composed of people (3) Each develops some
deliberate structure so members can do their work.
a. Organizing
b. Organization
c. Management
d. Directing
e.

10 As a manager, you create and control change within the organization. This means solving problems,
generating new ideas, and implementing them.
a. Technical Skills
b. Human Skills
c. Conceptual Skill
d. None of the above

11 Management is an essential element of every organized activity irrespective of the size or the type of the
activity.
a. Management is goal oriented
b. Management is universal
c. Management is continuous process
d. Management is multi-disciplinary

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 Additional Activities

Directions: In the table below, write down at least five (5) skills you have learned and explain how those skills
help you to manage an organization.

1
2
3
4
5

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 Worksheet:

Rubrics in Checking Essays: Content= 30%, Understanding/Application=25%, Original Thinking=25%,

Structure=10% and Grammar=10%

Answer the following question below in space provided.

1. Is management art or science? Explain.

2. Management and organization are inseparable. Explain why.

3. What do you understand by term organization? And why people need them?

4. Do you managers should possess some skills different from other employees? Why? If yes, list
required of managerial skills.