AN OVERVIEW OF MANAGEMENT AND ORGANIZATION Objectives At the end of this chapter, the students are expected to: describe the meaning of management; identify the scope of management; recognize the importance of effectiveness and efficiency in Organization; describe characteristics of a manager; 1 2. 3 4 5. examine the levels of managers in the organization; 6. compare the types of managers; 7. examine the skills required in managing; , 8. identify the various roles of a manager; 9. describe the nature of an organization; 10. identify the basic principles-of management and organization; and 11. recognize the importance of educating managers. INTRODUCTION The satisfaction of human wants is a universal concern and this is the basic reason why organizations are established. Limited resources and the ever-increasing demand for food, shelter, security, and other basic necessities drive people to devise or use means to ensure that the right moves are undertaken to satisfy those needs. A positive approach is the adoption of effective and efficient schemes related to management and organization. Governments, business firms, and even nonprofit organizations are expected to manage their resources properly, or they will fail in the attempt to contribute their share in the alleviation of poverty and want. __ Theforegoing brings to the fore the importance of studying management and organization. This chapter, as well as the succeeding ones, attempt to support the above-mentioned statement. WHAT IS MANAGEMENT? Management may be defined as the achievement of organizational objectives through per oe other resources. It consists of several functions, which may be briefly defined as 1. Decision makin, 7 g is the process by which a decision maker determines the available natives and chooses the best solution that suits a given problem. Planning is the process before taking action. Organizing is the process of arran, its managerial practices and use 4. Staffing refers to the Personnel, of establishing objectives and suitable courses of action ging an organization’s structure and coordinating, of resources to achieve its goals. ‘© Process of recruiting, Placing, training, and developing.CREO An Ovenew ot Manager aad 5, _ Communicating refers to transferring information fro mone commu 6. Motcating refers to the act of giving employees reas eee order to achieve organizational objectives, 8 OF incentives to work in 7. Leading is the proces organization members, of directing and influencing task elated activities of : ities of S Controlling is the process of monitoring actual orga ae ional activities they conform to planned activities and correcting de ran ties 10 see that 'viations or flaws, EFFECTIVENESS AND EFFICIENCY: A BASIC REQUIREMENT An organization can only survive if its activities are effective and efficient. It is the responsibility of the managet to see that his organization will achieve its ot jectives eff Ly and efficiently. This is so even if such objectives are parts of a bigger ebeaie stall fectioeness is a central element in the management process, which requires the achievement of an objective. For instance, a manufacturer chooses a supplier who provides needed materials at the required time and quantity. The action qualifies as effective. Efficiency is also a central element in the management process, which requires that the minimum amount of resources is used to achieve an objective. In the example cited above, the manufacturer may be able to get supplies from his chosen source, but if the costs associated with the purchase are too excessive, the operation will be inefficient and may place the organization ina disadvantageous position. This is especially true if profitability is compromised. Too much emphasis on efficiency, however, may affect effectiveness rendering any productive effort useless. An example is the trader who regularly delivers his products to customers. If the tires of his delivery van are of the lowest price but of the poorest quality, he may not be able to fulfill his commitments on time, making his service ineffective and eventually jeopardizing his business will be in trouble. It appears that the secret is to have a nice balance of both effectiveness and efficiency. To emphasize one and disregard the other is not in keeping with good management practices. WHAT IS A MANAGER? A manager is one who plans, organizes, leads, and controls other individuals in the process of pursuing organizational goals. Managers are vested titles like president, department head, dean, administrator, supervisor, team leader, and the like. ‘The manager is the one responsible for accomplishing the objectives of his particular unit, which could be a whole organization, a particular department, or a work group. Managers are responsible for using materials and talents in the most economical and Productive manner. As such, they are regarded as very important, if not the most important factor in the economic development of the nation. THE LEVELS OF MANAGERS Managers function according to the levels they are in. In a small organization, a Would normally be just a single manager who is expected to perform all the managerial roles and tasks,: oa | Business Organization and Management Inthe i sa transition from a small to a large organization, there may be two levels of managers » divide among themselves the managerial roles and asks. . There are times when the size of the organization justifies setting up three levels of : hone the top management, the middle management, and the lower management. Figure shows the levels at the various stages of organizational growth. SMALL MEDIUM LARGE ORGANIZATIONS ORGANIZATIONS: ORGANIZATIONS Single Employees Figure 1 Levels of Managers (by size of organization) Top managers are responsible for the overall performance of the organization. They formulate ‘strategies, provide leadership, evaluate and shape the method of organizing, and control the direction of the organization in the effort to accomplish goals. Top managers usually hold titles such as chief executive officer, president, chairman or senior vice president. Middle managers direct the activities of other managers and sometimes also those of operating employees. They work with top managers and coordinate with peers to develop andChaper :An Overview of Managernant and Oganizaton implement action plans to accomplish ory are the dean of the business school in concern, and the branch Manager of ‘anizational objectives, Example: 4 University, the pl a trading firm of middle managers ant manager in a manufacturing Lower level managers are responsible for lo contribute to the organization’s goals, OF the direct contact with the employees, Because of this, they are also referred t first fi a area eterred to as “first line” or fuse pin apart om Performing the other managerial functions ofa directing, organizing, their tasks include correcting errors or solving. prob Planning, related to the production of goods and services ee 18 Problems directly ‘ding employees in the day-to-day tasks, which Various levels of managers, they are the ones in TYPES OF MANAGERS, Managers may be different from one another teiefly described a6 fellowes 1 in terms of the work they do. They may be 1, Line managers ate directly concerned with accomplishing the goals of the organization. The decisions they make with regards to operations are expected to be final and must be implemented. For example, the university president, the dean, and the department heads all have line responsibilities, 2. Staff managers are in charge of units that provide support to the line units. In doing their work, they use special expertise to advise the line workers. The director of personnel and the controller are examples of staff managers. 3. _ Administrators are managers working in government or in nonprofit organizations. Examples include school administrators, provincial administrators, and hospital administrators. MANAGEMENT SKILLS : ao : oy The effective and efficient performance of management functions such as plannin; organizing, leading, and controlling are possible only if the manager is well-equipped with the necessary management skills. Such requirements may be briefly described as follows: ical skil i i ficiencies or expertise in 1. Technical skills refer to the abilities to use special proficier tise performing specific tasks. They refer to the use of tools, techniques, and aie knowledge. Examples of technical skills are an accountant preparing a financial report, an architect working on a building, plan, and a professor writing abook. : 2. Human skills refer to the abilities to work well in cooperation bk | inected whether they are subordinates, peers, or superiors. A Pare wy pee nee skills will have a high degree of self-awareness and a capacity for un empathizing with the feelings of others. it i kills at Different Levels of Management pnanenes fer from level to level in the management The application of various management skills di ST ls the hierarchy. As shown in Figure 2, first line manager needs I performance of his work, and more human and technical skills. Spell te Compared to the first line managers, middle mange bs et nal ill. same degree of human skills as that of first line managers, but lessEE i ad degree of 1 is ON conceptual skills; the same ers, and with the list concer about Man The biggest ne middle mana mghesnip an such human skill A top MANAGERS Tesu techn Conceptual Numan Technica Figure 2 Management Skills Needed at Different Levels of Management « of the human skills necessary for managers are effectivé oral and written snicstons, creating positive attitude toward others and in the work setting oping cooperation among group members, and motivating subordinates. Human skill is a difficult one to master. Emotionally sound managers perform this skill better than those who are not. 3. Conceptual skills refer to the ability of the manager to see the organization as a whole and to solve problems in ways that benefit the total system. Specifically, the manager possesses these skills is expected to analyze and solve complex problems. Thus, enager with good conceptual skills will have the mental capacity to perform the following % identity problems and opportunities; >. gather and interpret relevant information; and © @ecute problem-solving decisions that serve the organization's purpose. Examples of situations that requ ills i ion of t won Cine reduire conceptual skills include the promulgation anew Jaw (e, Bs, the Senior Citizen’s law, or a Policy to change the economic conditiot Sine country; one that addresses the declining purchasing power of consumers). In # the oe, 2 manager’s conceptual skills are Tequired in decisions such as those that affed « selling procedures ofthe organization in choosi : company.‘Chapler 1: An Overview of Management and Organization MANAGERIAL ROLES The manag such, he is results, the manager 1 er is expected to lead his unit or department in achieving its objectives. As .s bound to interact with people and deal with processes, In the attempt to produce assumes roles as varied as the following: Interpersonal Roles. These are the roles the manager plays when he interacts with others. The specific roles under this category are: Figurehead, When the manager performs this role, he acts as the symbolic head of the organization and as a result, he is expected to perform a number of duties of a legal or social nature. For example, when a manager cuts the ceremonial ribbon of a company-sponsored project such as a school building, it provides an example of his figurehead role. b. Leader, This role makes the manager responsible for the motivation and activation of subordinates. As such, he is responsible for actions in staffing, training, and other associated duties. He performs the role of leader in virtually all managerial activities involving subordinates. . Liaison. In assuming the liaison role, the manager makes contacts with individuals in and out of the organization to facilitate the accomplishment of work in his department. Examples of such activities are acknowledgment of mail, external board work, and other activities involving outsiders. a 2. Informational Roles. A very important aspect of the manager's jab is to receive and communicate information. Such roles are vital to his decision making tasks. If he wants his subordinates to improve the quality of their decisions, he provides them with information. On receiving and sharing information, the manager assumes three specific roles. These are briefly described as follows: a. Monitor. In making the right decisions concerning the various aspects of an organization, the manager is expected to collect information that will be useful in performing his job. This information is shared with other members of the organization whenever they are needed. In acting as a monitor, he handles all mails and contacts categorized as concerned primarily with receiving information using such sources as news bulletin, special magazines, and observational tours. b. — Disseminator. There are certain types of information that the manager may consider useful to his subordinates. When he receives such information from outsiders or from subordinates, he transmits them to the concerned members of the organization. Some of this information may be factual, and some may involve interpretation and integration. As information disseminator, the manager sees to it that relevant incoming information is properly shared with subordinates. ©. Spokesperson. There are occasions when outsiders seek information about the organization and the manager, as spokesperson accordingly. He also serves as expert on organization’s industry. To effectively perform the role of spokesperson, the manager sees to it that his views are heard on occasions requiring his presence such as board meetings. He also maintains contact with outsiders and provides information when they are required.Busines Oranzaton and Managemen | 3. Decisional Roles. The major part of the manager's job is to m, lake decisions he must use the information he processes to make decisions As that solve prop, lem roles a Entrepreneur. In acting this role, the manager search and its environment for opportunities and initiates Projects to bon Positive change. He also supervises the design of certain pro Nia as entrepreneur requires his participation in strategy and mre, rq involving initiative or design of projects to improve performance ~~ b. Disturbance Handler. Sometimes, organizations face important but unex, surtancs such as stkng employees dssatisied withthe ene oe scheme, a disagreement among middle managers involving questions jurisdiction, and the sudden decrease in sales of the diferent bratche Ofte organization. As disturbance handler, the manager is expected to to such unwelcome pressures by formulating strategies and reviewing suc disturbances. © Resource Allocator. The manager is responsible for the allocation oforganirat; resources ofall kinds suchas personnel, funds, machines, or buildings and facilities to individual employees or units. As such, heis expected to be actively involved in scheduling, acting on requests for authorization, budgeting, ang the programming of subordinates’ work. As decision maker, the manager assumes the following res the OrBAMIzati, WHAT IS AN ORGANIZATION? An organization is a collection of people working together to achieve a common Purpose. Itis the means used by people to achieve certain objectives, A mere grouping of people will not qualify as an organization unless it has some objectives to achieve. In order to do this, people in a group must interact, use knowledge and techniques, and work together in patterned relationships. it Our ability to communicate was enhanced to a great degree by organizations like Nokia, Samsung, Apple, and some others with the latest handy phones they sell. Charitable organizations like the Red Cross, sick. Local governments are organizations that municipalities, The various types of organization Provide assistance to the poor and the Tun the political affairs of provinces and are illustrated in Figure 3. Figure 3 Types of Organizations‘Chapler 1: An Overview of Management and Organization The Function of Organizations There are certain objectives that the indivi ill fi i i Themassprocction af appliances like levine nal aha enone ach independently, such activity will be very difficult and costly, The ariety of sorcidized tacke would be enough to overwhelm the individual worker if he ls required wo do al of the oe elimination of such kinds of difficulties Provides a rationale for te aintenea st cr arate In addition, a fully organized group offers some advantages, which cannot be derived from an unorganized group of people. Even wild animals know the value of organizing themselves for survival. Scientists observed that when carnivores like lions and hyenas hunt for food, these animals find it easier to catch a prey if they do it as an organized group. a Common Characteristics of Organization The following are the four characteristics commonly shared by organizations: 1, Coordination of Effort. When properly directed, persons working in coordination with others will produce better outputs than when they work independently. Studies indicate that persons who cooperate with one another in an organized manner will produce better output than when they don’t. 2. Common Goal or Purpose. In order to make employees work with proper direction, they must be provided with a common goal or purpose. Organizations that do not make their goals or purposes clear run the risk of failure. Division of Labor. When the total job is divided into manageable parts, workers wilk be more familiar with their assignments, making them more proficient. A manufacturing firm, for instance, will undertake various activities like production planning, materials procurement, manpower acquisition, manning the production line, and others. When the firm’s employees are assigned to do all the functions (eg, no specific assignment for each employee), they will find it hard to master any activity. The result will, most probably, be poor production. 4. Hierarchy of Authority, In controlling the behavior of employees, positions are established and linked by a chain of command in.a continuous branching out so that multiple layers exist in the hierarchy. w BASIC PRINCIPLES OF MANAGEMENT AND ORGANIZATION There are certain principles that should be considered in the study of management and organization of business enterprises. These principles are enumerated below. 1. Management Principles, The various management principles applicable to managing, a business enterprise are as follows: a. _ Division of Labor. This means breaking a job into specialized tasks to increase productivity. For example, the total job of financing appliance sales may be divided into tasks such as credit investigation, collection, sales, and accounting. b. Authority. This is the right of a person in position to give orders and the power to exact obedience. For example, a sales manager has the right to expect from the sales supervisors the required volume of sales for a given period.Business Organization and Management © Discipline, This provi i * This provides uniform applicati a ides m application of behayj ‘ ‘come of which is readily predicted, If disc Pin ore adi es, ‘ectives will be very hard to achieve, Pine Is not praca’ le, a. Unity ofc ty ‘ommand. This means that each Supervisor, Reporting directly t aa ae int ly to more than one superior Unity of Direction. Thi Hy . This means that the efforts of everyone i ty of Direct fone in the mage be coordinated and focused inthe same direction, fer eatin Heve an organizational objective if some components of tha ye Mt are not moving toward the identified objective, a. £ Subordination of the Indivic te Individual Interests to the General Interest. Thi the goals of the organization (e.g, 25% ROI for the current ee ens thy Precedence over individual goals like a 10% increase in the Tai ae take employees, When the reverse hay it ffi ES Of certain 5 h ippens, it will be difficult for the organizati '0 succeed because its goals will always be set aside. ee 8 Remuneration. Employees should be paid fai i a paid fairly in accordance with the contribution to the organizational effort. This must be sh bonuses, and benefits. ee h. Centralization. Power and authority must be central ion. centralized as much as practicable, Decentralization must be instituted, however, when the firm grows to a considerable size. i. Scalar Chain. This means that subordinates should observe the official chain bad ae? authorized by their Tespective superiors to communicate each other. j. Order. This means that human and non-human resources must be in their proper places. The production manager, for example, must hold office at the production site. Kk, Equity. This is the result of kindliness and justice and is a principle to guide management and employee relations. 1 Stability of Tenure. High employee turnover is counterproductive. To motivate employees to stay with the company, effective manpower planning and implementation are necessary. m. Initiative. Management should: encourage employees to act on their own volition when confronted with an opportunity to solve a problem. n. Esprit de Corps. This means that managers should emphasize teamwork by building harmony and a sense of unity among employees. Harmony breeds high morale and is more productive than discord. 2. Principles of Organization. Knowledge of the basic principles of organization is a useful guide in organizing business enterprises. These principles are as follows: a. Principle of Objective. The objective of the organization must first be determined and laid out clearly before any activity is undertaken. The objective will serve as the guide in determining whether a certain activity is required or not. If the company’s objective, for example, is to sell financing services, then the entire organization must be built around that objective, and every employee of the company must think and actin terms of selling financing services. must have on) Creates problen’, ™ lems ngChaps 1: An Overview of Management ad Organization b. _Principleof Analysis. Managers in ong down into its components, analyze a feasible solution. In the attem nizations must be able to break a problem : these components, and then come up with pL to achieve objectives, the analytic Principle of Simplic . te x imply. The organization should be built in the simplest manner ioe Pais ¢ the achievement of objectives possible. Only activities that are Aboclely necenmary should be undertaken, and those, which are not, should ee a For example, a business engaged in manufacturing, men and dope lothing should not include choir singing in its activities. If it does, it will only draw their attention from becoming more productive. Principle of Functionalization. Business firms are not supposed to be organized to accommodate individuals. Rather, it should be ult around the main functions of the business. For example, if the company’s objective is to sell financing services, the functions should be related to such objectives like credit Separteent collection department, financial planning department, sales, and so forth. EDUCATING MANAGERS ‘A very important concern in management is training managers. Business firms should make sure that their managers are well qualified to handle the jobs assigned to them. As mentioned earlier, the skills required of managers in the effective performance of their jobs are those referred to as technical, human, and conceptual. ‘Among the three skills, technical is said to be the easiest to acquire. Universities and colleges provide students with opportunities to acquire technical skills rélated to management ‘These management courses are offered at the undergraduate and graduate levels. Another way of acquiring technical skills is through company sponsored training programs. ‘Human skills are more difficult to teach and learn. This is so ‘because human relations involve many complex emotional elements, and it is not easy to convince students that a particular interpersonal approach is superior to another. Nevertheless, schools attempt to teach human skills by requiring business students to take subjects in psychology, human behavior, and public relations. For the most part, however, the prospective manager can acquire human skills through more direct means like on-the-job training and observation tours. Conceptual skills appears to be the most difficult to teach because it involves mental habits that hove to be developed early in life. As conceptual skills constitute a large part of the managerial skills needed by top managers, executive development programs were designed for them. SUMMARY nizations have become indispensable in man’s quest for survival. However, if they are to help mankind to survive, they must be managed and organized properly ‘Management is the process of planning, organizing, leading, and controlling activities in a systematic way in order to achieve a common goal. Planning is the process of setting performance objectives and determining, what actions should be taken to accomplish them. Organizing refers to ‘mobilizing material and human resources to put plans into effect. Leading isthe process of making decisions about how to treat tfr Business Organization and Management people and then carrying out these decisions to influence behavior. Controlling is the process of evaluating performance, comparing results to objectives, and taking corrective action as needed. The person who plans, organizes, leads, and controls other individuals in the process of pursuing organizational goals is referred to as the manager. They may be situated at the top level, middle level, or lower level of management. They may be classified as either line, staff or administrator. Technical, human, and conceptual skills are those needed by managers for effective and efficient performance of their jobs. : In the course of his responsibilities as manager, he assumes roles that may be classified as interpersonal, informational, or decisional. An organization is a collection of people working together to achieve a common purpose. An organized group offers advantages, which cannot be derived from an unorganized group. Organizations share common characteristics such as coordination of effort, common goal or purpose, division of labor, and hierarchy of authority. The management principles consist of division of labor, authority, discipline, unity of command, unity of direction, subordination of individual interests ey the general eon remuneration, centralization, scalar chain, order, equity, stability of ees a esprit de corps. equity, ity of tenure, initiative, and The principles of organization consist of jecti . a pe functionalization. of objective, analysis, simplicity, and A person may prepare himself for management . provide students with opportunities to acquire technical ihe sgh Yarious means. Schools also attempt to teach human skills by requiring students related to management. They behavior, and public relations. As those courses alone to take courses in psy chology, jee by on-the-job training and observation tours, While a not enough, they are supplemented pools may be training grounds for technical and human skills executive are designed to teach conceptual ski ee ‘ment programs provided by most cone . nies