SHORT NOTE FOR STUDENRS OF MANAGEMENT 2D YEAR 1ST

SEM Rift valley university prepared by Temesgen(MBA)

 Management is the attainment of organizational goals in an effective

and efficient manner through planning, organizing, staffing,
directing and controlling organizational resources.

 Organizational resources include men(human beings), money,

machines and materials.

Definition of managemt

 Louis E Boone & David L Kurtz- The use of people and other
resources to accomplish objectives.

 Mary Parker Follet- the act of getting things done through people.

Frederick Taylor defines Management as the art of knowing what you

want to do in the best and cheapest way.

Charactesrtics of management

 Management is a distinct process.

 Management is an organized activity

 Management aims at the accomplishment of predetermined

objectives.

 Management is both a science and an art.

 Management is a group activity

 Management principles are universal in nature

Management integrates human and other resources

Banefty of MOB

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 SHORT NOTE FOR STUDENRS OF MANAGEMENT 2D YEAR 1ST
SEM Rift valley university prepared by Temesgen(MBA)

 The need for planning will be recognized

 It provides for objectives and accountability for performance

 It encourages participative management

 It helps in job enrichment

 It provides for a good feedback system

TYPES OF MANAGERS

 FIRST-LINE MANAGERS- often called supervisors stand at the

base of the managerial hierarchy

 MIDDLE MANAGERS- heads of various departments and organise

human and other resources to achieve organizational goals

 TOP MANAGERS- set organizational goals, strategies to implement

them and make decisions

MANAGER’S ROLES

1. Interpersonal role

2. Informational role

3. Decisional role

1. INTERPERSONAL ROLE

 Figurehead- ethical guidelines and the principles of behavior employees

are to follow in their dealings with customers and suppliers

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 SHORT NOTE FOR STUDENRS OF MANAGEMENT 2D YEAR 1ST
SEM Rift valley university prepared by Temesgen(MBA)

 Leader- give direct commands and orders to subordinates and make

decisions

 Liaison-coordinate between different departments and establish alliances

between different organizations

2. Informational role

 Monitor- evaluate the performance of managers in different functions

 Disseminator-communicate to employees the organization’s vision and

purpose.

 Spokesperson- give a speech to inform the local community about the

organization’s future intentions.

3. Decisional role

 Entrepreneur- commit organization resources to develop innovative goods

and services

 Disturbance handler- to take corrective action to deal with unexpected

problems facing the organization from the external as well as internal
environment

 Resource allocator- allocate existing resources among different functions

and departments

 Negotiator- work with suppliers, distributors and labor unions

MANAGEMENT SKILS

When these skills listed from lower to higher level

1. TECHNICAL SKILLS

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 SHORT NOTE FOR STUDENRS OF MANAGEMENT 2D YEAR 1ST
SEM Rift valley university prepared by Temesgen(MBA)

 A persons’ knowledge and ability to make effective use of any process or

technique constitutes his technical skills.

For eg: Engineer, accountant, data entry operator, lawyer, doctor etc.

2. HUMAN SKILLS

 An individuals’ ability to cooperate with other members of the organization

and work effectively in teams.

For eg: Interpersonal relationships, solving people’s problem and acceptance

of other employees.

3. CONCEPTUAL SKILLS

 Ability of an individual to analyze complex situations and to rationally

process and interpret available information. For eg: Idea generation and
analytical process of information

WHAT MAKE MANAGERS SUCCESSFUL?

1. Hard work
2. Smart work
3. Patience
4. Out of box thinking
5. Reading and acquiring knowledge
6. Ethical consciousness
7. Collaborative relationship
8. Perseverance

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 SHORT NOTE FOR STUDENRS OF MANAGEMENT 2D YEAR 1ST
SEM Rift valley university prepared by Temesgen(MBA)

Management is essential for an organized life and necessary to run all types of
organizations. Managing life means getting things done to achieve life’s
objectives and managing an organization means getting things done with and
through other people to achieve its objectives.

There are basically five primary functions of management. These are:

1. Planning
2. Organizing
3. Staffing
4. Directing
5. Controlling

The controlling function comprises coordination, reporting, and budgeting, and

hence the controlling function can be broken into these three separate functions.
Based upon these seven functions, Luther Gulick coined the word
POSDCORB, which generally represents the initials of these seven functions
i.e. P stands for Planning, O for Organizing, S for Staffing, D for Directing, Co
for Co-ordination, R for reporting & B for Budgeting.

But, Planning, Organizing, Staffing, Directing, and Controlling are widely

recognized functions of management.

Five Functions of Management

1. Planning is:

 future-oriented
 determines an organization’s direction.
 a rational and systematic way of making decisions.
 organized foresight as well as corrective hindsight.

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 SHORT NOTE FOR STUDENRS OF MANAGEMENT 2D YEAR 1ST
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 predicting of the future as well as attempting to control the

events.
 the ability to foresee the effects of current actions in the
long run in the future.

Peter Drucker has defined planning as follows:

“Planning is the continuous process of making present entrepreneurial

decisions systematically and with best possible knowledge of their futurity,
organizing systematically the efforts needed to carry out these decisions and
measuring the results of these decisions against the expectations through
organized and systematic feedback”

An effective planning program incorporates the effect of both external as well

as internal factors.

The external factors are shortages of resources; both capital and material,
general economic trend as far as interest rates and inflation are concerned,
dynamic technological advancements, increased governmental regulation
regarding community interests, unstable international political
environments, etc.

The internal factors that affect planning are limited growth opportunities
due to saturation requiring diversification, changing patterns of the
workforce, more complex organizational structures, decentralization, etc

Types of planning

1. Purposes or missions,
2. Objectives-It is the ultimate goal towards which the activities of the
organization are directed
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 SHORT NOTE FOR STUDENRS OF MANAGEMENT 2D YEAR 1ST
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3. Strategies-general program of action and deployment of resources

4. Policies-general statement or understanding which guide or channel
thinking in decision making
5. Procedures-states a series of related steps or tasks to be performed in a
sequential way
6. Rules-prescribes a course of action and explicitly states what is to be
done
7. Programs-comprehensive plan that includes future use of different
resources
8. Budgets-statement of expected results expressed in numerical terms

Principles of planning

1. Take Time to Plan

2. Planning can be Top to Down or Bottom to Top
3. Involve and Communicate with all those Concerned
4. Plans must be Flexible and Dynamic
5. Evaluate and Revise

Steps of planning

1. Determining the goals or objectives for the entire organization.

2. Making assumptions on various elements of the environment.
3. To decide the planning period.
4. Examine alternative courses of actions.

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 SHORT NOTE FOR STUDENRS OF MANAGEMENT 2D YEAR 1ST
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5. Evaluating the alternatives.

6. Real point of decision making
7. To make derivative plans.

Types of managerial decision making

1. Programmed
2. Non programmed.
3. Mechanistic-It is one that is routine and repetitive in nature
4. Analytical-It involves a problem with a larger number of decision
variables
5. Judgmental-It involves a problem with a limited number of decision
variables, but the outcomes of decision alternatives are unknown
6. Adaptive-It involves a problem with a large number of decision variables,
where outcomes are not predictable

2. Organizing

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 so as to attain the prescribed objectives.
According to Henry Fayol, “To organize a business is to provide it with
Thus the function of organizing involves the determination of activities that
need to be done in order to reach the company goals, assigning these activities
to the proper personnel, and delegating the necessary authority to carry out
these activities in a coordinated and cohesive manner.

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 SHORT NOTE FOR STUDENRS OF MANAGEMENT 2D YEAR 1ST
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It follows, therefore, that the function of organizing is concerned with:

 Identifying the tasks that must be performed and grouping them whenever
necessary.
 Assigning these tasks to the personnel while defining their authority and
responsibility.
 Delegating this authority to these employees
 Establishing a relationship between authority and responsibility
 Coordinating these activities

Process of oranizations
1. Determine what is to be done/ Division of Work:
2. Assign Tasks: Departmentalization:
3. Link Departments: Hierarchy Development:
4. Decide how much Authority to Designate/ Authority, Responsibility and
Delegation:
5. Decide the Levels at which Decisions are to be made / Centralization vs.
Decentralization:
6. Decide how to Achieve Coordination:

3. Staffing

 Staffing is the function of hiring and retaining a suitable work-force for

the enterprise both at managerial as well as non-managerial levels.
 It involves the process of recruiting, training, developing, compensating
and evaluating employees and maintaining this workforce with proper
incentives and motivations.

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 SHORT NOTE FOR STUDENRS OF MANAGEMENT 2D YEAR 1ST
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 Since the human element is the most vital factor in the process of
management, it is important to recruit the right personnel.

According to Kootz & O’Donnell,

“Managerial function of staffing involves manning the organization structure

through the proper and effective selection, appraisal & development of
personnel to fill the roles designed in the structure”.

 This function is even more critically important since people differ in their
intelligence, knowledge, skills, experience, physical condition, age and
attitudes, and this complicates the function.
 Hence, management must understand, in addition to the technical and
operational competence, the sociological and psychological structure of
the workforce.
 Selecting and training individuals for specific job functions, and charging
them with the associated responsibilities.
 Number of employed personnel in an organization or program. Also
called workforce.

4. Directing

 Provides positive and dynamic leadership/leadership

 Provides maximum opportunities/communication
 Provides proper motivation of personnel/motivatio
 Ability to command people/lead

The directing function is 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.

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 SHORT NOTE FOR STUDENRS OF MANAGEMENT 2D YEAR 1ST
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The leadership element involves issuing of instructions and guiding the

subordinates about procedures and methods.

The communication must be open both ways so that the information can be
passed on to the subordinates and the feedback received from them.

Motivation is very 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 are being properly carried out.

5. Controlling

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

According to Koontz & O’Donnell, “Controlling is the measurement

The controlling function involves:

1. Establishment of standard performance.

2. Measurement of actual performance.
3. Measuring actual performance with the pre-determined standard
and finding out the deviations.
4. Taking corrective action.

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 SHORT NOTE FOR STUDENRS OF MANAGEMENT 2D YEAR 1ST
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All these five functions of management are closely interrelated. However, these
functions are highly indistinguishable and virtually unrecognizable on the job. It
is necessary, though, to put each function separately into focus and deal with it.

There are three types of controlling

1. Feed Forward Control-Control that attempts to identify and prevent

deviations before they occur is called feed forward control, sometimes
called preliminary or preventive control.

2. Concurrent Control-Control that monitors ongoing employee activities

during their progress, to ensure they are consistent with quality standards,
is called concurrent control.

3. Feedback Control-In this case, the control takes place after the action.
Sometimes called post-action or output control

Management as a Science or Art

Characteristics of pure science:

Body of knowledge - logical, reasonable and rational

Theories can be tested and verified

Results are the same under identical conditions

Principles, laws and observations are universal

Requires constant efforts to attain objectivity.

hManagement as Science-

 Management has develop its own theory over the period of time .

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 Taylor, Max Weber, Henry Fayol contributed to the management principles

 These principles and rules aims to achieving efficiency in productivity-

 Singer, Churchman and Ackoff worked for managementas a system of

science-

 Now managers can use systematised body of knowledge to tackle

management problems and issue.

 Informations are gathered in an objective manner, statistically analyse and

decisions are made using decision making techniques- Scientific methods to
solve managerial problems.

Against Management as Science

 Management theory cannot show up the same results every time –

 as it deals with the human behavior

 It can not guarantee continuous success, especially in social and economic

organization

 Managers use their personal intuitions, past experiences and incidents in the
decision making

 Management principles are bound to change continuously due to frequent

changes in human behaviour

Management as an Art –

 Practising management knowledge in the real world to achieve the desired

result is an art

 Application of managerial rules and principles as well as managers’

abilities,experiences, wisdom and expertise in decision making
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 Success of managerial decision determined by managers’ efficiency in

human relations, conceptual and time management skills

 As human behaviour is unpredictable in decision making management is

more of art than science

 To improve the practices improvement in theory is also required, which is

there in management too.

 Without scientific knowledge of management managers may compelled to

adopt a trial-and-error method.

 Thus management as a science and an art are not mutually exclusive

 complementary in nature Education (Science) and Experience (Art) both are

equally important in Management.

 Hence management being a science and an art as just two sides of the same
coin

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