PMG1123 – FUNDAMENTALS OF MANAGEMENT CHAPTER 1

1.0 Introduction to Management & Organization

1.1. Definition of Manager & Entrepreneur

Manager can be describes as;

1. Someone who coordinates and oversees the work of other people so that
organizational goals can be accomplished.
2. Manager is someone who works with and through other people, by
coordinating their work activities in order to achieve organizational goals.
3. Organizational members who told others what to do and how to do it.

Entrepreneur can be describes as;

1. A person who set up a business or businesses, taking on financial risks in the

hope of profit.
2. Entrepreneur are creative individuals who try to create new products or
services.
3. Entrepreneur are also innovative individuals who try to develop better
products or services.

 Entrepreneur responsible to searches organization environment for opportunities

and initiates improvement project to bring about changes.
 They plan, arrange and create the market for the products. They are willing to face
realistic and acceptable risks.

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1.1.1 Different between manager and entrepreneur

1.2. Definition of Management

Management can be describes as;

1. A process of coordinating or organizes work activities so that they will complete

efficiently and effectively with and through other people.
2. A process of completing tasks through and with other people.
3. Management is what a managers do.
4. The process of planning, organizing, leading and controlling is the efforts of
organization members and the using all other organizational resources to
achieve stated organizational goals.

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1.3.1 Managerial concern - Efficiency and effectiveness

1. Efficiency (kecekapan) means “ doing things right” or doing a task@ jobs

correctly with no wasting resources or can best describe as getting the most output
from the least inputs.

 Why efficiency is important to management?

- Managers deals with scare inputs @ limited resources in terms of people,
money and equipment.
- That why they are most concerned with “the efficient use of the resources and
they will make a great effort to achieve high efficiency level.

2. Effectiveness (keberkesanan) means “doing the rights things” or doing the

works/tasks that will help the organization reach its goals.

 Why effectiveness is important to management?

- Managers are also concerned with completing activities@ complete the work
task in order to achieve organization’s goals.
- That why they are makes a great effort to achieve high effectiveness.

 Although efficiency and effectiveness are different, they are interrelated. For
instance, it’s easier to be effective if you ignore efficiency.

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 Conclusion = Poor management is most often due to both inefficiency and

ineffectiveness or to effectiveness achieved without regard for efficiency.

 Good management is concerned with both attaining goals (effectiveness) and

doing so as efficiently as possible.

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1.3. Levels of Management

Identifying exactly who the managers are in an organization isn’t difficult, but be
aware that they can have a variety of titles. Managers can be classified into three
categories:

First-Line Managers / Lower Level Manager

1. The lowest level of management.

2. Include individual who responsible directing the day to day activities/jobs of

non-managerial employees especially those who involved in production of
the organizational products.
3. Example of first line managers are Supervisors, Team Leaders, Unit
Coordinators and etc.

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Middle Manager

1. Those managers that found between top and first line manager.
2. Middle managers will supervise and manage the work of first line manager.
3. Example of middle managers are Head of Department (HOD), Project
Leader, Division Manager, Store Manager and etc.

Top Managers

1. Manager at the top of an organization.

2. Top managers are responsible for making organizational wide decisions.
3. Top managers also responsible for establishing the plans and organization
goals that effect the entire organization.
4. Examples of top managers are Managing Director (MD), President,
Executive Vice President, Chief Executive Officer (CEO), Director of an
Organization, Executive Chairman and etc.

Manager Top Manager Middle manager First – Line Manager

Location Top of an organization.
Responsibility Making organizational wide
decisions and establishing
the plans and organization
goals that effect the entire
organization.
Between top and first Lowest level of
line manager management.
supervise and manage directing the day to day
the work of first line activities/jobs of non-
manager managerial employees

Example Chief Executive Officer Head of Department Supervisors, Team

(CEO), President. (HOD), Project Leader Leaders.

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1.4. Management skills

According to Robert L. Katz, managers are required to have three types of skill to perform
their duties effectively.

 Management skills can be classified into three types which are: Technical skills,
Human skills and Conceptual skills.

Technical skill
1. This skills are the ability to use tools, rules, procedure, and techniques in the job.
2. Proficient and knowledge of engineering, computers, accounting, manufacturing
or other specialized field.
3. Example: Supervise individual performance and instructing subordinates how to
do their jobs.
4. This skills are required of first-line managers, because managers are dealing
directly with the employees doing the organization’s work.

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Human skills
1. That gives a managers the ability to work effectively with other people.
2. It include ability to motivate, understand, lead, communicate, which manager
throughout his work.
3. Managers with good human skills are able to get the best out of their people.
4. Important at middle level managers.

Conceptual Skills
1. The managers’ ability and capability to think about methods and coordinate or
combine the activities of different units.
2. Ability to think and to conceptualize abstract and complex situation.
3. Able to see organization as whole, understand the relationship among various
subunit.
4. To identify of opportunity for innovation.
5. Most important to top managers.

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1.5. Management functions

Management functions comprises of activities of planning, organizing, leading
and controlling.

PLANNING ORGANIZING

CONTROLLING LEADING

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Management function 1 - Planning

Managerial activities that involves;

- Defining and setting goals.
- Establishing strategy.
- Developing plans to coordinate activities.

Management function 2 - Organizing

Process of arranging work to accomplish organizational goals.

- Determining what needs to be done, how it will be done and who is to do it.

Management function 3 - Leading

Process of motivating, leading and any others action involved dealing with people.
- Motivating workers.
- Influence individuals or work teams.
- Deal with any employee behavior issues.
- Help to resolve any conflict occur among employees.

Management function 4 - Controlling

Process of monitoring activities in order to make sure they are accomplished as planned.
o Comparing work activities.
o Correcting work performance.

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1.6. Management roles

According to Henry Mintzberg, “Management roles” is refer to a specific categories of

managerial actions or behaviors of a manager.

 Mintzberg concluded that managers perform 10 different but interrelated roles.

 Management roles can be classified into three types: Interpersonal roles,
Informational roles and decisional roles.

1. Interpersonal Roles
Roles that involve people (inside and outside) of the organization and other duties that
are symbolic in nature.

Three Interpersonal roles are:-

a) Figurehead  The manager represent his/her organization in all formal matters.

Responsible to performing routine legal document or social nature.

a. Example: Greeting outside visitors, signing legal document or agreement,

perform cutting ribbon ceremony.

b) Leader  The leader role defines the relationships between the manager and
employees. Responsible to motivating employees and conducting training for
Example: Handle skill training for employees, conduct orientation program for new
employees etc.

c) Liaison The manager interacts with peers and people outside of the
organization. Responsible to maintaining self developed network of outside
contact.

a. Example: Doing external board work, performing activities that involve

outsider.

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2. Informational Roles
Roles that involve activities such as collecting, receiving and disseminating / spread out
information.

Three informational roles are:

a) Monitor The manager receives and collect information. Responsible for

seeks and receives a wide variety of internal and external sources of information.

a. Example: Seek and receive information through reading reports, email,

book or journal.

b) Disseminator  The manager spread out information within the organization.

Responsible to transmit @ give information that received from outsiders and
employees to others members of the organization.

a. Example: Transmit information through meeting, phone call, email or

memo.

c) Spokesperson The manager spread out information to its environment.

Responsible to transmit @ give information to outsiders on organization’s plans,
policies, actions and result.

a. Examples: Transmits information through board meeting, giving information

to media through press conferences, memos, reports or speeches.

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3. Decisional Roles
Roles that relate with making decisions or choices.

Four decisional roles are:

a) Entrepreneur  The manager initiates change. Responsible to searches

environment opportunities and initiate projects that will bring improve organization.

a. Example: Organized strategies and make a review session to develop new

programs.

b) Disturbance handler The manager deals with threats to the organization.

Responsible to make a correction action, when organization faces unexpected
disturbance or crisis.

a. Example: Reorganized strategy and make a post mortem@ review session

to solve any disturbances and crisis, resolves conflicts among subordinates.

c) Resources allocator The manager selects where the organization will extend
its efforts. Responsible to allocate organizational resources.

a. Example: Performing activities involved budgeting, set schedule and

projects.

d) Negotiator- The manager negotiates on behalf of the organization. Responsible

for presenting the organization’s at major negotiations.

a. Example: Represents department @ organization by participating in union

contract, sales, budgets and purchases negotiations.

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1.7. Organization
Organization can be describes as;

1. A deliberate arrangement of people to accomplish some specific purpose.

2. A group of people who work together to achieve common goals.

1.7.1. Characteristics of organization

1. Distinct Purpose
It is typically expressed in terms of goals @ purposes that the organization hopes
to accomplish.

2. People
Each organization is composed of people and one person working alone is not
classifying as an organization.

3. Deliberate Structure
Each organization develop some deliberate structure, so that their members can
work.

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1.8 Evolution Management

Management has been practiced a long time. Organized endeavors directed by people
responsible for planning, organizing, leading and controlling activities have existed for
thousands of years.

Four major approaches to management theory: classical, behavioral, quantitative and

contemporary.

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1.8.1 Henry Fayol 14 Principles of Management

Fayol was introduced in Chapter 1 as the person who first identified management
function. He also identified 14 principles of management, fundamental rules of
management that could be applied to all organizations.

1. Division of Work
This principle is the same as Adam Smith’s “division of labor.” Specialization
increase output by making employee more sufficient.

2. Authority
Managers must be able to give orders. Authority gives them this right. Along
with authority, however, goes responsibility. Whenever authority is exercise,
responsibility arises.

3. Discipline
Employee must obey and respect the rules that govern the organization. Good
discipline is the results of effective leadership, a clear understanding between
management and workers regarding the organization’s rules, and the judicious
use of penalties for infractions of the rules.
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4. Unity of Command
Every employees should receive orders from only one superior.

5. Unity of Direction
Each group of organizational activities that have the same objective should be
directed by one manager using one plan.

6. Subordinate of Individual Interest to General Interest

The interests of any employee of group of employees should not take
precedence over the interests of the organization as a whole.

7. Remuneration
Workers must be paid a fair wage for their services.

8. Centralization
Centralization refers to the degree to which subordinates are involved in
decision making. Whether decision making is centralized (to management) or
decentralized (to subordinates) is a question of proper proportion. The task is to
find the optimum degree of centralization for each situation.

9. Scalar Chain
The line of authority from top management to the lowest ranks represent the
scalar chain. Communication should follow this chain. However, if following the
chain creates delays, cross-communications can be allowed if agreed to by all
parties and if superiors are kept informed. Also called chain of command.

10. Order
People and materials should be in the right place at the right time.

11. Equity
Managers should be kind and fair to their subordinates.

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12. Stability of Tenure of Personal

High employee turnover is inefficient. Management should provide orderly
personnel planning and ensure that replacements are available to fill vacancies.

13. Initiative
Employees who are allowed to originate and carry out plans will expert high
levels pf effort.

14. Esprit de Corps

Promoting team spirit will build harmony and unity within the organization.

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