CHAPTER 1: Nature and Concept of Management

IN THIS CHAPTER, you will discover that all organizations-public or private, large,
medium-size, or small, profit or nonprofit-need good managers in order to accomplish
their goals; that organizational management is, definitely, not an easy task; and that
coordination, efficiency , and effectiveness are required to carry it out.

As you read and study this chapter, concentrate on the following objectives,
and at the end of the chapter, be able to:
1. Discuss the meaning and functions of management;
2. Explain the various types of management theories;
3. Explain the functions, roles, and skills of a manager; and
4. Understand the basic concepts and theories of management.

Lesson 1
Definition and Functions of Management
Management is the process of coordinating and
overseeing the work performance of individuals working
together in organizations, so that they could efficiently Definition of Terms
accomplish their chosen aims or goals. It is also defined as
the process of designing and maintaining an environment for Management functions –
efficiently accomplishing selected aims (Heinz, Weihrich, and functions needed in order to
Koontz, 2005). Management analysis is done by breaking it accomplish the management
down into five major managerial duties; thus, making process of coordinating and
managerial knowledge more understandable. Management overseeing the work performance
functions include the following: of individuals working together in
organizations
Planning. Involves determining the organization’s goals
or performance objectives, defining strategic actions that Coordination – harmonious
must be done to accomplish them, and developing integrated action of the various
coordination and integration activities. parts and process of an
Organizing. Demands assigning task, setting aside organization
funds, and bringing harmonious relations among the
individuals and work groups or teams in the organization. Efficiency – the character of being
Staffing. Indicates filling in the different job positions able to yield the maximum output
in the organization’s structure; the factors that influence this from a minimum amount of input
function include; size of the organization, types of jobs,
Effectiveness – being adapted to
number of individuals to be recruited, and some internal or
external pressures produce an effect that will help the
Leading. Entails influencing or motivating organization attain it aims
subordinates to their best so they would be able to help the
organization’s endeavor to attain their set goals.
Controlling. Involves evaluating and, if necessary, correcting the performance of
the individuals or work groups or teams to ensure that they are all working toward the
previously set goals and plans of the organization.
Coordination, Efficiency, and Effectiveness: Intrinsic to the Nature of
Management
Management functions- planning, organizing, staffing, leading, and controlling-
will all go to waste if coordination, efficiency, and effectiveness are not practiced by an
organization’s appointed managers. In other words, top-level managers, middle level
managers, and team leaders or supervisors must all be conscious of the said practices
of successful organizations as they perform their management functions.
Webster’s Dictionary defines coordination as the harmonious, integrated action
of the various parts and processes of an organization; efficiency is being able to yield tj
maximum output form a minimum amount of input; and effectiveness as being
adopted to produce an effect, or being able to do things correctly. When applied to
management functions, coordination ensures that all individuals, groups, or teams are
harmoniously working together and moving toward the accomplishment of the
organization’s vision, mission, goals, and objectives; efficiency, meanwhile, refers to
the optimal use of scarce resources-human, financial, physical and mechanical-in
order to bring maximum productivity; and effectiveness means “doing things correctly”
when engaged in activities that will help the organization attain its aims.

Lesson 2
Evolution of Management Theories
Evolution is usually defined as slow stages of growth and Definition of Terms
development, starting form a simple forms to more complex forms. Management Theories- theories
This, too, could be applied to management theories, which have
that help improve the
evolved from simple improvement of work methods to more
complex ones focus not only on work method improvement, but management process.
also on customer satisfaction and the conduct of people at work. Management Process- the
Studying the evolution of management theories will help
coordinating and overseeing of
you understand the beginnings of present-day management
the work performance of
practices; why some are still popular and why others are no longer
in uses; and why the expansion and development of these theories individuals working together in
are necessary in order to adapt to the changing times. organizations so that they could
Management theories include the following: efficiency and effectively
accomplish their chosen goals.
Scientific Management Theory
This management theory makes use of step by step, scientific
methods for finding the single best way for doing a job. Frederick W. Taylor (1856-
1915) is known as the Father of Scientific Management. While working as a
mechanical engineer in a steel company in Pennsylvania in the United States of
America (USA) he could not help but noticed the worker’s mistakes and inefficiencies
in doing their routing jobs. Their Lack of enthusiasm, the discrepancy between their
abilities and aptitudes, and their job assignments result to low output. Because of
these observation, he tried to identify clear guidelines for the improvement of their
productivity.
Taylor’s Scientific Management Principles (Robbins and Coulter 2009) are as follows:
 1. Develop a science for each element of an individual’s work to replace the old
rule of thumb method;
2. Scientifically select and then train, teach, and develop the workers;
3. Heartily cooperate with the workers so as to ensure that all work is done in
accordance with the principles of the science that has been developed; and
4. Divided work and responsibility almost equally between management and
workers.
General Administrative Theory
The General Administrative Theory concentrates on the manager’s functions and what
makes up good management practice or implementation. Henri Fayol (1841-1926) and
Max Weber (1864-1920) are the personalities most commonly associated with it.
Fayol’s 19th century writings were concerned with managerial activities which he based
on his actual experience as a managing director in a big coal mining company. He
believed that management is an activity that all organizations must practice and
viewed it as spate from all other organizational activities such as marketing, finance,
research, and development, and others. Weber, a German sociologist wrote in the early
1900s that ideal organizations, especially large ones, must have authority structures
and coordination with other based on what he referred to as bureaucracy Present-day
organizations still makes us of Weber’s structural design.
Henri Fayol’s Management Principles Weber’s Bureaucracy
1. Work division or specialization
2. Authority
3. Discipline According to Weber, bureaucracy is an
4. Unity of command organizational form distinguished by the
5. Unity of direction following components
6. Subordination of individual interest to
general interest  Division of labor
7. Remuneration/pay  Hierarchical identification job
8. Centralization positions
9. Scalar chain of authority  Detailed rules and regulations
10.Maintenance of order  Impersonal connections with one
11.Equity/fairness another
12.Stability/security of tenure of workers
13.Employee initiative
14.Promotion of team spirit or spirit de corps

Total Quality Management (TQM)

Total Quality Management is a management philosophy that focuses on the
satisfaction of customers, their needs, and expectations. Quality experts W. Edwards
Deming (1900-1993) and Joseph M. Juran (1904-2008) introduced this customer-
oriented idea in the 1950s, however, the concept had few supporters. The Americans
did not immediately take to the idea since the US was enjoying supremacy in the
global market at the time. Japanese manufacturers, on the other hand, took notice of
it and enthusiastically experimented on its application. When Japanese firms began to
be recognized for their quality products, Western managers were forced to give a more
serious consideration of Deming’s and Juran’s modern management philosophy that
eventually became the foundation of today’s quality managements practices.
Demings’s 14 Points for Top Management Juran’s Fitness of Quality
1. Create constancy of purpose for 1. Quality of Design – through
improvement of products and services market research, product,
and concept
2. Adopt the new TQM philosophy 2. Quality of Conformance –
through management,
manpower, and technology
3. Cease dependence on mass inspection by 3. Availability – through
doing it right the first time reliability, maintainability,
and logistic support
4. End the practice of awarding business on 4. Full Service – through
the basis of price tag alone promptness, competence,
and integrity
5. Constantly improve the system of Juran’s Quality Planning
production and services Roadmap
6. Institute training 1. Identify your customers
7. Adopt and institute leadership 2. Determine their needs
8. Drive our fear 3. Translate them into one’s
language
9. Break down barriers between staff areas 4. Develop a product that can
Respond to needs
10.Eliminate slogans, focus on correcting of 5. Develop processes which
defects in the system are able to produce those
product features
11.Eliminate numerical quota for the work 6. Prove that the process can
force Produce the product
12.Remove barriers the rob people of “pride of 7. Transfer the resulting
workmanship.” plans to the operating
forces
13.Encourage education and self-
improvement for everyone
14.Take action to accomplish the
transformation

Lesson 3
Functions, Roles, and Skills of a Manager  Top-level management
An individual engaged in management activities is called is typically composed
a manager. Managers supervise, sustain, uphold and assume of the organization’s
responsibility for the work of others in his or her work group, chairman or
team, department, or the organization, in the general. chairwomen, chief
Therefore, it is safe to assume that organizational success executive officer,
president, managing
director and other
depends upon managers who practice optimal utilization of their human and material
resources, and who encourage high care.

Managerial Levels
Organizations typically have three levels of management with
their respective – managers- top level managers, middle level Definition of Terms
managers, and frontline or lower-level managers.
Manager- an individual
Top-level Managers. Top-level managers are the general
engaged in management
or strategic managers who focus on long-term organizational
concerns and emphasize the organization’s stability, activities such as and
development, progress, and overall efficiency and effectiveness. assuring responsibilities for
They are also concerned with the organization’s inter- the work of others in his/her
relationships with their external environment. Chief executive work group, team,
officers (CEOs), chief operating officers (COOs), presidents, department, on the
and vice presidents are examples of top-level managers in bid organization in general
corporations; they have authority over all other human
Managerial Roles- the
resources of their organization. Traditionally, top-level
executives set the company’s general direction by designing various roles played by
strategies and by controlling various resources. At present, managers, such as
however, they, too, must act as organizational existence, so interpersonal, informational
that their subordinates could identify and be committed to its and decision-making roles
success in the three levels of management in Figure 1.6
Managerial Skills- the
various skill that managers
must posses, such as
conceptual human and
technical skills

Top-level
Managers
(Corporate Managers)

Middle-level Managers
(Tactical Managers)

Frontline Managers
(Operational Managers)
 Middle-level Managers. Middle-level managers are the
 Middle-level managers tactical manager in charge of the organization’s middle levels or
lead frontline or departments. They formulate specific objectives and activities
lower-level managers based on the strategic or general goals and objectives developed
and are accountable by top-level managers. Their traditional role is to act as go-
to top-level betweens between higher and lower levels of the organization;
management they announce and interpret top management priorities to
human resources in the middle hierarchical level of the
company. It has been observed that the middle-level managers in the higher level
because of their closer contacts with customers, frontline managers, and other
subordinates. To be an ideal middle-level manager, one must be creative so that they
could provide sound ideas regarding operational skills as well as problem-solving skills
that will help keep the organization afloat.
Frontline or Lower-level Managers. Lower-level managers
 Frontline or lower-level are also known as operational managers and are responsible
managers are for supervising the organization’s day-to-day activities; they
responsible for dealing are the bridges between management and non-management
with operating employees. Traditionally, they are controlled and instructed by
personnel. It requires top-and middle-level managers to follow their orders in
high level of support of the organization’s major strategy. Lately, however,
interpersonal and their role has be expanded in some large companies, as they
are now encouraged to be more creative and intuitive in the
technical skills.
exercise of their functions, so that they, too, could contribute
to their company’s
Managerial roles are classified into three types; interpersonal, informational, and
decision-making. Henry Mintzberg, professor at McGill University, conducted a
research on what real managers do. See Table 1.3 for the managerial roles by
Mintzberg.
Definition of Terms
Leader- on who possesses Categories of Managerial Roles according to Mintzberg
good leadership qualities or a
combination of good moral  leader
character, strong professional Interpersonal  liaison
will, humility that builds  figurehead
enduring greatness and  spokesperson
commands loyalty and Informational  monitor
respect among subordinates  disseminator
Liaison- one who is capable  disturbance handler
Decisional or  resource all allocator
of maintaining unity of action
Decisional-making  negotiator
in the organization
Figurehead- one who has  entrepreneur
nominal leadership but
without real power, as this
power is possessed only by
the company’s
President/Owner
Spokesperson- one who
speaks on the name and
behalf of another; as in
behalf of the company
President/Owner
Managerial Skills
Managerial skills may be classified as conceptual, human, and technical.
Conceptual Skills. Conceptual skills enable managers to think of possible
solutions to complex problems. Through their ability to visualize abstract situations,
they develop a holistic view of their organization and its relation to the wider external
environment surrounding it. Top-level managers must have these conceptual skills in
order to be successful in their work.
Human Skills. Human skills enable managers in all levels to relate well with
people. Communicating, leading, inspiring, and motivating them become easy with the
help of human skills. Dealing with people, both in the organization’s internal and
external environment, is inevitable, so it is necessary for managers to develop these
human skills.
Technical Skills. Technical skills are also important for managers for them to
perform their task with proficiency with the use of their expertise. Lower-level
managers find these skills very important because they are the ones who manage the
non-management workers who employ varied techniques and tools to be able to yield
good quality products and services for their company.