Hawassa University

Introduction to Management

Instructor: Demeke .D (MBA)

Credit Hour : 3
 CHAPTER I: MANAGEMENT: AN
OVERVIEW
At the end of this chapter, students will be able to:
●Define Management
●Explain the Significance of Management
●List Managerial Functions
●List Levels of Management and Types of
Managers
●Describe Managerial Roles and Skills
●Agree on Universality of Management
●Identify whether Management is an art, science,
or both science and art
3
 Meaning of Management

● The word management has several meanings,

the most important of which are:
➢ Mgt refers to a group of people who are
responsible for guiding and controlling the
organization
➢ It is the process of running an organization
(planning, organizing, staffing, directing
and controlling).
➢ It is a body of knowledge, a discipline.

4
Cont’d
● There are several definitions of management given by
different authorities in the field.
➢ Management is the art of getting things done through and
with people in a formally organized group.
➢ It is the art of knowing what you want to do in the best
and cheapest way.
➢ It is the process of planning, organizing, staffing, directing
and controlling the use of a firm’s resources to effectively
and economically attain its objectives.
➢ It is the art of securing maximum results with a minimum
of efforts so as to secure maximum prosperity and
happiness for both the employer and employee and give the
public the best possible service.
5
 Significance of Management
• It helps in Achieving Group Goals: It arranges
the factors of production, assembles and
organizes the resources, integrates the resources
in effective manner to achieve goals.
• Optimum Utilization of Resources: Management
utilizes all the physical & human resources
productively. This leads to efficacy in
management.
• Reduces Costs: It gets maximum results through
minimum input by proper planning.
• Establishes Sound Organization: No overlapping
of efforts (smooth and coordinated functions). 6
Cont’d
● Establishes Equilibrium: It enables the
organization to survive in changing
environment.
● It keeps in touch with the changing
environment. So it adapts organization to
changing demand of market / changing needs
of societies.
● It is responsible for growth and survival of
organization.
● Essential for Prosperity of Society:
Efficient mgt leads to better economical production
which helps in turn to increase the welfare of people. 7
 Management Functions
● There are five basic Management Functions.
These are:
●Planning,
●Organizing,
●Staffing,
●Directing/ Leading, and
●Controlling

8
 Planning
● Planning is the first function that all managers engage in because it
lays the groundwork for all other functions.
● It identifies the goals and alternatives.
● It that will commit individuals, departments and the entire
organization for days, months and years to come.
● Planning achieves these ends after setting the following processes:
● Determination of what resources will be needed,
● Identification of the number and types of personnel the
organization will need,
● Development of the foundation for the organizational
environment in which work is to be accomplished, and
● Determination of standard against which the progress toward the
objective can be measured so that corrections can be made if
necessary 9
Cont’d
● The length of time and the scope of
planning will vary according to the level in
the company.
● Top-level management planning may cover
a period of five or ten years and can be
considered long-range planning.
● The plans at this level may cover expansion
of the business and how it will be financed.
● At lower levels of management, the
concern may be a plan for today’s activities
or planning tomorrow’s work schedule. 10

● Each manger’s plans are influenced by the

Organizing:
● Assembling the resources necessary to
achieve the organization’s objectives.
● Establish the activity-authority
relationships of the organization.
● Planning has established the goals of the
company and how they are to be achieved;
● Now organizing develops the structure to reach
these goals.

11
Staffing :
● Orienting the new employee to the
company environment, training the new
person for his or her particular job, and
keeping each employ qualified.
● The development and implementation of a
system for appraising performance and
providing feedback for performance
improvement.
● Determining the proper pay and benefits for
each job.
Leading/ Directing:
● Is aimed at getting the members of the
organization to move in the right direction
that will enable to achieve its objectives.
● The challenge for a manager in directing
is to create an environment in which both
the employee and organization will
achieve their objectives.
● Here, communication and motivation
should be on going.
Controlling:

● Deals with establishing standard for

performance, measuring performances
against established standards, and dealing
with deviations from established standards
and taking corrective action.
● The best controls ensure that work is
performed to standards as planned.
 Levels of Management
● Levels here refer to hierarchical
arrangement of managerial function in an
organization.
● The number of levels of management
depends on the size of the organization.
● In general there are three managerial levels:
Top, Middle, and Operating Level
Management.
Fig. Levels of Management

up-LeN
Managemet

Middle-Level
Management

Operating-LevelManagement
 1)Top Level Management: Functions

● Establishing broad objectives.

● Designing major strategies.
● Outlining principal policies.
● Providing effective organizational structure
that ensures integration.
● Providing overall leadership and direction.
● Making overall control of the organization.
● Analyzing the changes in the external
environment and responding to it
2) Middle Level Management:
● Includes Divisional Heads,
Department Managers, Section Heads,
and Branch Managers etc.
● Managers in this level are specialists
and their activities are limited to a
particular area of operation or
department.
 Cont’d
● Acting as intermediary between top level
and operating level management
● Translating long term plans of top
management into medium term plans.
● Developing specific targets in their areas of
responsibility.
● Developing specific schedules to guide
actions and facilitate control.
● Coordinating inputs, productivity and
output of operating management
3) Operating Level Management
● Directs a small team of workers
● The typical titles in this level are section
chief, office manager, foreman, supervisor
etc.
●Functions
● Planning daily and weekly activities.
● Assigning operating employees to specific
task.
● Issuing instruction at the work place,
following up, motivating and evaluating
workers and reporting to their superiors.
 Types of Managers
● Functional Manager: They supervise with
specialized skills in a single area of
operations such as Purchasing, Marketing,
Finance, HR and Production.
● General Managers: are responsible for the
overall operations of the organizations of a
more complex unit, such as a company.
• General Managers hold functional
management accountable for their
specialized areas and coordinate them.
 A) Managerial Roles
● Managers perform the basic managerial
functions by playing a variety of managerial
roles.
● A role is an organized set of behaviors.
● They are classified under three categories.
However,
• Interpersonal Roles:
• Informational Roles:
• Decisional Roles:
I. Interpersonal Roles:
Managers play the following three interpersonal roles.
● Figure – Head Role: in the figurehead role, the manger
represents the organizations at ceremonial and symbolic
functions.
• It is the most basic and the simplest of all managerial roles.
• They symbolize management’s concern for employees, customer
and the community.
● Leadership Role: It involves responsibility for directing and
coordinating the activities of subordinates in order to accomplish
original objectives.
● Liaison Role: refers to dealing with people outside the
organization such as clients, government officials, customers and
suppliers.
• It also involves dealing with managers in other departments, staff
specialists and other departments’ employees.
II. Informational Roles:
● The following three roles describe the
informational aspects of managerial work.
● Monitor Role: involves seeking out,
receiving and screening information.
● Disseminator Role: the manager shares
information with subordinates and other
members of the organization.
● Spokes – Person Role: managers transmit
information to others, especially those
outside the organization, as the official
position of the company.
 III. Decisional Roles:
•are perhaps the most important of the three
categories of roles.
● Entrepreneurial Role: involves designing
and initiating planned change in order to
improve the organizations position. E.g.
new project, launch a survey, new market or
enter a new business.
● Disturbance Handler Role: managers play
the disturbance handler role when dealing
with problems and changes beyond their
immediate control.
 B) Managerial Skills
● Skill is ability to do something expertly
and well. It is related to performance that
is not necessarily born but which can be
developed/ acquired.
● Technical Skills: involve the ability to
apply specific methods, procedures and
techniques in a specialized field. For
example Musicians, Computer
Programmers and Engineers etc.
● Interpersonal Skills: Includes the ability to
lead, motivate, manage conflicts and work
Cont’d
● Conceptual Skills: Involve the ability to
view the organization as a whole and
recognizes its relationship to the larger
environment (business world). The
conceptual skills are especially important to
managers in making decisions.
● Communication Skills: It reflects a
managerial ability to send and receive
information, thoughts, feelings and
attitudes.
➢It is classified into writen, oral and non
– verbal (facial expressions) etc.
End of Chapter
One
 CHAPTER TWO: PLANNING
● After completing this chapter, you should
be able to:
● Explain what planning is and its
importance in management
● List the major steps in planning
● Describe different types and classifications
of plans
● Describe the steps in decision making
 Introduction
● Planning is the most fundamental function
of management.
● An organization can succeed in effective
utilization of its resources when its
management decides in advance its
objectives and methods of achieving them.
● In order to progress in life, an individual
must plan.
● He must choose what he wants to be and
where he is going.
 Cont’d
● Planning at organizational level is carried
out to attain proactive benefits in reaching
organizational objectives.
● Naturally planning would be divided into
proactive and reactive planning.
● Proactive planning is to plan for the future
before the future happens, while
● Reactive planning is to plan for situations
after situations has already occurred.
● All level management engage in planning
 Cont’d
● Accordingly, these magnitudes can be
cited as:
● Where are we now? A plan defines the
current situation and implies what needs to
be improved.
● Where do we want to be? This is concerned
with finding out desirable objectives and
position that an organization wants to
attain.
● What is the Gap? What is the difference
between where we are now and where we
want to be?
 Importance of Planning
1. Planning minimizes risk and
uncertainty: by providing a more rational
and fact-based procedure for making
decisions.
2. Planning leads to success: Companies
which plan enjoy more success than the
non-planners
3. Planning provides direction: It helps in
knowing what to do and when to do it.
4. Planning focuses attention on
organizational goals: If a manager focuses
 Cont’d
1. Planning facilitates control: The goals
and plans become standards against which
performance can be measured.
2. Planning is Economical: It eliminates
unproductive effort. This will finally
minimize costs of performance.
3. Planning helps management to adopt
and adjust to changing environments:
Planning enables a manager to affect
rather than being commanded by it.
4. Planning lays ground for other
 Planning Process/ Steps in
Planning-10
1. Define the mission.
● A mission is the purpose of the
organization.
● It is what the organization exists for.
● Thus, planning begins with clearly defining
the mission of the organization.
● The mission statement is broad, yet clear
and concise, summarizing what the
organization does.
Cont’d
2. Conduct a situation or SWOT Analysis
● Is concerned with the assessment of
internal and external environment to
understand the prevailing situation of the
organization.
● The step is divided into four:
➢ analyzing the Strengths= (internal, +)
➢ analyzing Weakness= (internal, -)
➢ identifying Opportunities= (external, +)and
➢ identifying Threats= (external, -)
 Cont’d
3. Set goals and objectives:
● A goal is an end that the organization
strives to attain.
● However, the manager cannot "do" a goal.
● Managers break down processes, analyze
them, set objectives and then drive hard to
achieve them.
● The manager must write an objective for
what he is trying to accomplish.
● Thus, an objective is the object or aim of
an action.
Cont’d
4. Develop related strategies (tactical and
operational).
● The 7th step is to construct a list of
possible courses of action that will lead to
the goals specified in the 6th step of
planning.
● A strategy is a way that leads to specified
objectives.
● Those strategic plans are further broken
down into tactical and operational plans.
● Tactical plans are based on the
organization's strategic plan.
Cont’d
5. Monitor the Plan:
● Once the plan is implemented, the manager
must monitor the progress that is being
made; evaluate reported results and make
any modifications necessary.
● Through this step, the management will
make sure that the plan is going according
to expectations.
Types of Plan
● Plans can be classified based on the
following dimensions:
●Repetitiveness
Standing Plans
Single use plans
●Time dimension, and
• Long-range Plans
• Short-range Plans
• Intermediate range Plans:
●Scope
• Strategic Plans
• Tactical Plans
• Operational Plans
 Classification of Plans Based
on Repetitiveness
● Based on repetitiveness, plans can be
classified into two major divisions:
1. Standing Plans
● can be used again and again.
● include: mission or purpose, goal or
objective, strategy, policy, procedure,
method and rule.
 Ii, Standing Plans
●Purposes or Missions:
● identifies the basic function or task that is
performed by the enterprise.
● For instance, the purpose of university is
teaching and research; the purpose of
business generally is the production and
distribution of goods and services.
●Objectives or Goals:
●are the ends toward which activity is aimed.
● represent not only the end point of
planning, but also the endpoints of
 Cont’d
●Strategies:
● are ways and means to achieve the
established objectives.
● Hence objective mainly answers what
question where as strategy answers the how
question.
●Policies:
● establishes general guidelines for decision
making.
● It is a general statement designed to guide
employees' actions in recurring situations.
 Cont’d
●Procedures:
● show the chronological sequences of
required actions.
● Contain detailed guidelines for handling
organizational actions that occur regularly.
● is a sequence of steps describing how to
carry out an activity.
●Methods:
● is a more detailed description than
procedure.
● a procedure shows a series of steps to be
 Cont’d
●Rules:
● are usually the simplest type of plan that
spells out specific required actions or non-
actions to be taken in a given situation,
allowing no discretion/ freedom to decide
● A rule is an established guide for conduct.
● Rules include definite things to do and not
to do.
● There are no exceptions to the rules.
◦ E.g. "No Smoking."
◦ A student with a GPA below 2.0 cannot graduate
 Single Use Plans
● plans that are not used once the objective is
accomplished.
● are used only once and not over and over again.
● Programs:
● are complex set of goals, policies, procedures,
rules, task assignments, steps to be taken,
resources to be employed, and other elements
necessary to carry out a given course of action,
ordinarily supported by budgets.
◦ E.g. the expansion program of hospitals.
Cont’d
• Budgets:
• may be expressed in financial terms, in
terms of labor hours, units of production,
machine hours or in any other numerically
measurable term.
• A budget is a plan that shows how money
will be spent over a certain period of time.
 There are three types of budgets.

➢ Variable or flexible budget: vary

according to the organizations level of
output.
➢ Program budget: the organization and
each department within the organization
identify goals, develops detailed program
to meet the goals, and estimate the cost of
each program.
➢ Zero base budgets: is a budget for
programs that start from a scratch or base
of zero.
 Classification of Plans Based on
Time
●We can classify plans into three based on
time as:
1. Long-range Plans (5-10 years):
• have longer time horizon.
• mainly concerned with future direction of
the organization.
2. Short-range Plans (1-2 years):
• are complementary of LRPs and are not
prepared separately
• they constitute the steps toward the
implementation of LRPs
 Classification of Plans Based on
Scope
• Based on their scope or breadth, plans
can be classified in to three categories.
1. Strategic Plans

2. Tactical Plans

3. Operational Plans
 1. Strategic Plans:
• Here, missions, objective, or strategy is
analyzed and decided.
• done by the top level managers by taking
into account environmental threats and
opportunities and internal weaknesses and
strengths.
• are mostly long-range in their time frame.
• are expressed in general, non-specific term
• provides general direction to the
organization and there by affects a wide
range of organizational activities.
2. Tactical Plans:
● TPg refers to the process of developing
action plans through which strategies are
executed.
● It is the process of making detailed
decisions about what to do, who will do it,
and how to do it.
● TPs have shorter time frames and
narrower scopes than strategic plans.
● TPg provides the specific ideas for
implementing the strategic plan.
● Departmental managers are often
 3. Operational Plans:
● OPg is the most specific and is concerned
with the day to day, week to week activities
of the organization.
● OPs are mainly of short-range and more
specific.
● They have a narrow and more limited
scope.
● They support tactical plans.
● They are the manager's tools for executing
daily, weekly, and monthly activities.
Examples are:
 Principles of Effective Planning
• The following points help the manager to plan effectively:
● Develop Accurate Forecasts: Better
forecasts/predictions lead to better plans.
● Gain Acceptance for the Plan: by promoting
subordinates participation in the planning process.
● Be Objective: Managers should not hesitate to
verify the truth behind the reality.
● Set up Monitoring System: Appraise and review
the plans continuous appraisal and review.
● Revise your Plan on a Constant Basis: Because
changes in the dynamic environments of
economic, technical, political and social pose a
 Decision Making
● DM is defined as a rational choice among
alternatives.
● A decision is a solution chosen from among
alternatives b/c decisions are made when the
manager is faced with a problem. Therefore,
● Decision-making is the process of selecting
an alternative course of action that will
solve a problem.
● Decision-making and Problem solving
can be used interchangeably since a manger
solves a problem through making decisions
Decision Making Process: 6
steps
(1) define the problem,
(2) identify decision criteria,
(3) develop alternatives,
(4) decide,
(5) implement the decision, and
(6) evaluate the decision
Cont’d
Step 1. Define the problem
• state the underlying problem that has to be
solved.
• state the outcome that you desire after you
have made the decision.
• The most obviously troubling situations
found in an organization can usually be
identified as symptoms of underlying
problems.
• These symptoms all indicate that something
is wrong with an organization, but they
don't identify root causes.
Cont’d
Step 2. Identify decision criteria
● Since there is no single best criterion for
decision making, a set of criteria must be
used for the problem at hand.
● These decision criteria identify what will
guide the decision-making process.
● Decision criteria are also much attributed to
limiting or critical factors.
● Limiting factors are those constraints that
rule out certain alternative solutions.
◦ Time, resources, personnel, money, facilities and
equipment are common limiting factors.
Cont’d
• Step 3: Develop alternatives.
• a manager should think thorough and
investigate several alternative solutions to a
single problem before making a quick
decision.
• One of the best known methods for
developing alternatives is through
brainstorming,
where a group works together to generate
ideas and alternative solutions.
Cont’d
Step 4: Decide/Select the best alternative
● The best alternative is the one that
produces the most advantages and the
fewest serious disadvantages.
● Sometimes, the selection process can be
fairly straightforward, such as the
alternative with the most pros and fewest
cons.
● Other times, the optimal solution is a
combination of several alternatives.
Cont’d
Step 5: Implement the decision.
• Once the solution is chosen, the decision is
shared with those whose work will be
affected.
• Including employees who are directly
involved in the implementation of a
decision, or who are indirectly affected by
that decision, will help foster their
commitment.
• Without their commitment, gaining support
and achieving outcomes becomes
increasingly difficult.
Cont’d
Step 6: Evaluate the decision.
• The manager must follow up and appraise
the outcomes from the decision to
determine if desired results were achieved
• The main function of the follow up is to
determine whether or not the problem has
been resolved.
End of Chapter two
CHAPTER THREE:
• ORGANIZING