Chapter 1

Elements of Management
 Introduction to Management
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 Every organization
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needs to establish several
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goals and objectives in order to continue
- competing and existing in the industry. /I
47
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Management activities can assist

Y organizations achieve these goals and
objectives. Ei
Definition of Management
Management as a process involves several
work activities and functions that
must be followed and completed by
E
managers in order to achieve
organizational goals. Managers must
use management principles to guide them
in carrying out the management process.
 According to Certo (1997),
management is defined as a process
to accomplish organizational goals
by working with humans and other
organizational resources
 Ivan cevich et al. (1997) defined
management as a process that is
conducted by one or more
individuals to coordinate the work
activities of employees, capital, raw
material, and technology to achieve
results of high quality that might not
be achieved by individuals working alone.
 According to the Management Institute of
Malaysia (MIM), management is defined as
the process of completing tasks
through and with other people.
 Based on the above definitions, the
specific characteristics of management
can be summarised as follows:
(a) Management is a process or activity that
is conducted continuously.
(b) Management concentrates on achieving
organizational goals.
(c) Management tries to achieve
organizational goals with the effective and
efficient cooperation of organizational
 ①P

Planning

⑭C ②0

Controlling
Functions of Organizing
management
L
③
Leading / Leadership
1 Planning is the process of forming organizational
goals and objectives based on a logical plan.
Management will set goals and procedures to achieve
the goals based on the available resources in the
organization.

2 Organising involves the effort to coordinate

activities conducted by two or more individuals
in an organization.

3 Leading is the process of training employees on

how to perform their duties in the
organization.

4 Controlling is management's effort to ensure

that the organization is moving towards
achieving its goals based on developed plans.
The Evolution Of Management
 The field of management started to
emerge in the early twentieth century.
The evolution of management helps
explain the formation of various
management theories, concepts, and
practices which has become the
foundation and formation of different
approaches in management
 Management has evolved into three
stages:
(a) Early stage (before 1930);
(b) Middle stage (1930-1945);
(c) Final stage (1945 to the present).
Early Stage (Before 1930)
(i) Pre-classical Approach
This approach provides the basic concepts
of management. However, the approach is
shallow and incomprehensive as it only
concentrates on the development of a specific
technique to solve a problem. The pioneers in
this approach are Robert Owen, Charles
Babbage, and Henry R. Towne.
1 Robert Owen (1771-1858)
 Robert Owen stated that emphasis should be given
towards employee affair in terms of health, education,
and the working environment.
2 Charles Babbage (1792-1871) Charles Babbage is
known as the 'Father of Modern Computing” He
pointed out the idea of job or task specialization. He
also suggested the idea of profit sharing such as giving
bonuses to employees who contributed viable ideas and
paying salary based on the company's profitability.
3 Henry R.Towne (1844-1924)
Henry R. Towne emphasized the
importance of management skills in
running an organization. He also stated
that management is a field of science.
(ii) Classical Approach
 The Classical Approach focuses on two
main theories: (a) Scientific Management
Theory and (b) Classic Organization
Theory.
Scientific Management Theory

 The classical perspective on management

emerged during the nineteenth and early
twentieth centuries.
According to this approach, managers
should develop standard methods for
doing each job, select workers with
the appropriate abilities, train
workers using the standard
methods, support workers and
eliminate weakness, and provide
incentives for productive workers.
 As the 'Father of Scientific
Management,' Frederick W. Taylor
studied the relationship between
employees and the jobs designed to be
performed by these employees. He
suggested that jobs should be divided into
smaller scales in order to eliminate
unnecessary work movements. He
identified four basic principles in an effort
to increase efficiency in the workplace.
Basic principles
 Conducting scientific studies for each task in
order to determine the best method to
perform the task. The task is divided into
several main components.
 Employing suitable employees carefully and
providing training to increase employees' skills
through a scientific approach.
 Dividing tasks and responsibilities; for example,
the manager is responsible for planning the
tasks while employees are responsible for
performing the tasks.
 Implementing a fair reward system.
2. Frank Gilbreth (1868-1924) and Lillian Gilbreth (1878-1972)
 Husband and wife team Frank and Lillian Gilbreth
contributed towards work movements in their research of
'time and motion' study. The study of movements emphasized
reducing workflow to the most basic work movements. The
objectives of the study are:
(a) to analyse each work movement made by the employee
in performing a particular task to determine the time
duration taken to complete the particular task; and
(b) to identify better methods to perform a task and
eliminate unnecessary movements in order to avoid wasting
time and energy.
(iii) Classic Organization Theory
1. The Classic Organization Theory
emphasizes the setting of guidelines and
methods to manage a complex
organization such as a manufacturing
company.
2. The founders of this theory are Henri
Foyal and Max Weber.
1 Henri Fayol (1841-1925)
 (a) Fayol was the first individual to discuss management as a
process. According to him, management consists of specific
functions that must be followed by each manager. His contribution
of ideas to the management field led him to be known as the
'Father of Modern Management.
According to Fayol, every organization must be managed according
to five management functions:
(i) Planning;
(ii) Organizing;
(iii) Commanding;
(iv) Coordinating;
(v) Controlling.
2 Max Weber (1864-1920)
(a) Max Weber was born in 1864. He was a sociologist from
Germany. According to him, the bureaucratic Structure is the
most efficient organizational structure because all organizational
goals and activities are carefully and rationally viewed. Job division is
determined clearly. If an organization practises the bureaucratic
structure and applies all the bureaucratic characteristics, the
organization can be administered efficiently. Bureaucracy refers to a
formal system that is formed in the administration of an
organization in order to create efficiency and effectiveness
in organizational operations.
 During the late 1800s, many Western organizations
were managed on the basis of an individual- family-style
business. Employees were loyal to a single
individual rather than to the organization. The
dysfunctional consequence of this management practice
was that resources were used to realize individual
desires rather than organizational goals. Employees in
effect owned the organization' and used resources for
their own gain rather than in serving customers. Weber
foresaw that this type of organization would be
managed in an unfriendly manner, which was called
bureaucracy.
1. Workforce is divided with clear definitions of authority and
responsibility that are legitimized as official duties.
2. Positions are organized in a hierarchy of authority with each
position under the authority of a senior officer.
3. All human resources are selected and promoted based on
qualifications or in accordance with training and experience
acquired by employees.
4. Administrative acts and decisions are recorded in writing. Record-
keeping provides organization with information.
5. Separation of management and individual.
6. Managers are subject to rules and procedures that will ensure
reliable and predictable behavior. Rules are impersonal and
uniformly applied to all employees.
Middle Stage (1930-1945)

Administrative and Behavioural Approach

 The Administrative and Behavioural Approach
emerged as an alternative to the Classical
Approach. This approach emphasized the human
aspect in the production process. The
Administrative and Behavioural Approach can
be divided into two theories:
(a) Human Relations Movement;
(b) Behavioural Science Theory.
Human Relations Movement
1 Human relations refer to ways managers
interact with their employees. Good
human relations enable managers to
motivate employees to work harder and
better.
2 The Human Relations Movement is based
on a series of researches known as the
Hawthorne Studies. This approach
focused on social aspects and the
recognition of teamwork at the
workplace.
(iii) Behavioural Science Theory

The Behavioural Science Theory emphasized scientific

research as the foundation for understanding human
behaviour in an organization. Contributions of this
theory to the management field are important as it
explains the complex nature of individuals and their
needs together with scientific research techniques
which can be used to study human behaviour in an
organization.
Douglas McGregor (1906-1964) had become frustrated with the early
simplistic human relations notion.
McGregor formulated his Theory X and Theory Y. McGregor believed
that the classical perspective was based on Theory X assumptions
about workers. He also felt that a slightly modified version of Theory
X fit early human relations ideas. In other words, human relations
ideas did not go far enough. McGregor proposed Theory Y as a more
realistic view of workers for guiding management theory.
Assumptions of Theory X (Bad workers)
 The average worker has an intense dislike of work and
will avoid responsibility if possible.
 Because of the human characteristic of dislike for work,
most workers must be threatened with punishment to
force them toward the achievement of organizational
objectives.
 The average worker prefers to be directed, to avoid
responsibility, has relatively little ambition and wants
security.
Assumptions of Theory Y (Good workers)
 The physical and mental effort in work is
likened to play or rest. The average
worker does not inherently dislike work.
 A worker will exercise self-direction and
self-control in achieving objectives to
which the worker is committed to.
3. The founders of this theory are Abraham Maslow, who developed
the Theory ofMaslow's Five Hierarchy of Needs and Douglas
McGregor, who introduced Iheory X and Theory Y. Abraham
Maslow and Douglas McGregor introduced behavioural science in
order to help managers to be more efficient in their administration
and human resources.
Abraham Maslow (1908-1970)
1 Maslow was a famous psychologist. He was one of the researchers
in the Organizational Behaviour Approach.
2 According to Maslow, when a need is fulfilled, the need can no
longer motivate an individual. He also stated that humans have five
levels of needs that need to be fulfilled. Therefore, he introduced a
motivational theory known as Maslow's Hierarchy of Five Human
Needs Theory.
3 The five human needs based on Maslow's
Hierarchy of Needs are as follows:

(a) Physiological Need

(b) Safety Need
(c) Social Need
(d) Esteem Need
(e) Self-actualization Need
Present Approach (1945 to the
Present)
Contemporary/Current Approach
 Contemporary Approach is an
innovative approach in current
management theory, there are two
main theories in this approach: (a)
Systems Theory and (b) Contingency
Theory.
Systems Theory
1 The Systems Theory is based on the assumption that the
organization is a system which comprises various divisions
related to one another but have one common goal. As a
system, an organization receives inputs (information and human
resources), then changes these inputs through a transformation
process (technology and management skills) to produce outputs
(products or services).

2 This theory emphasizes the need of the organization to

interact with the organization's internal and external
elements in order to ensure the organization's success.
Contingency/Current Theory
1 The Contingency/Current Theory emphasizes that every
action taken by a manager must suit the situation. The
Contingency Theory is also known as the Situational
Theory.
2 According to this theory, universal principles are not
suitable for all situations. For example, an autocratic
leadership style may not be appropriate for all
situations, but it is probably suitable during warfare,
whereby the army must follow the leader's commands
at all times. But in an organization, it might impact
negatively on employees who want freedom at work.