Mod 1 - Meaning, Functions, Types and Theories of Management

MEANING, FUNCTIONS,
TYPES AND THEORIES

OF MANAGEMENT
ORGANIZATION AND
MANAGEMENT
MODULE
No. 1
ORGANIZATION AND MANAGEMENT | NIKOLAI ADAM F. MARASIGAN | ICSM SHS 2020-2021

INTRODUCTION
Every human being has several needs and desires. But no

individual can satisfy all his wants.
• people work together to meet their mutual needs which they cannot
fulfill individually.
• man is a social being as he likes to live together with other people.
• it is by working and living together in organized groups and
institutions that people satisfy their economic and social needs.
2
INTRODUCTION
As a result there are several types of groups, e.g., family, school,
government, army, a business firm, a basketball team and the like. Such
formal groups can achieve their goals effectively only when the efforts of
the people working in these groups are properly coordinated and
controlled.
The task of getting results through others by coordinating their efforts is
known as MANAGEMENT. Just as the mind coordinates and regulates all
the activities of a person, management coordinates and regulates the
activities of various members of an organization.
3
I. DEFINITION OF MANAGEMENT
A. DEFINITION OF MANAGEMENT
B. OBJECTIVES OF MANAGEMENT
C. THREE KEY CHARACTERISTICS
DEFINE THE PROCESS OF
MANAGEMENT
4
A. DEFINITION OF
MANAGEMENT
 the process of coordinating all resources

through Planning, Organizing, Staffing,
Leading and Controlling to achieve
Organizational objectives.
Efficiency is getting the most output from the
 the art of getting things done through other
least amount of inputs in order to minimize
people by making work environment resource costs. Efficiency is often referred to as
conducive for others ― “doing things right”
 the utilization of scientifically derived

principles to examine and improve
collective efforts. Effectiveness is completing activities so that
organizational goals are attained and is often
 the process of attaining organizational
described as ― “doing the right thing”
objective in an efficient and effective
manner
5
B. OBJECTIVES OF
MANAGEMENT
 Organizational Objectives – Reasonable profits,
survival and growth of business, improving the
goodwill of the enterprise, etc.
 Personal Objectives – Fair remuneration for work
performed, reasonable working conditions,
opportunities for training and development,
reasonable security of service, etc.
 Social Objectives – Quality of goods and services
at fair price to customers, honest and prompt
payment of taxes, conservation of environment and
natural resources, preservation of ethical values of
the society, etc.
6
MANAGEMENT
1.Management is a process
of continuing and related
activities. Each of the
functions is related to
each other and the
functions complement
each other.
7
MANAGEMENT
2. Management is about
involving and
concentrating on
organizational goals.
Management is largely
focused on achieving the
key mission of the
organization, its vision.
8
MANAGEMENT
3. Management achieves
the organizational
goals by working with
people and
organization resources.
9
II. FUNCTIONS OF MANAGEMENT
Management is not an unstructured exercise
based on intuition. Effective managers
undertake specific functions, which when
carried out increase a firm’s profitability.
Managers must have the ability to influence
employees toward goal achievement, so the
leadership style a manager adopts can affect
his success. Successful managers are most
often persuasive leaders.
10
1. PLANNING
• Planning entails the setting of goals and includes the creation of a
blueprint to achieve them. It is essential that managers create
objectives, which serve to focus the efforts of employees,
motivate them and provide a standard against which performance
can be measured. Plans also serve as a guide to action and assist
managers in resource allocation. For example, if growth is an
objective, a budget may include funds for expansion of facilities.
11
2. ORGANIZING
• Another important managerial function is organizing, which can
be defined as the allocation of resources to achieve goals. It is
clear that this function relates to the planning function, as goals
must be set before organizational resources can be deployed to
assist in the achievement of them. An important component of
organizing is the defining of the chain of command and the
utilization of human resources.
12
3. LEADING
• Without the ability to influence subordinates toward goal
achievement, a manager cannot be effective. No matter how well-
crafted the objectives or how well-organized the resources,
nothing can be achieved if employees are unwilling or unable to
work toward the objectives. Managers who lack the ability to
influence subordinates are often ineffective and find it difficult to
motivate their workers to increase productivity.
13
4. CONTROLLING
• Control can be defined as a methodical process through which
managers monitor employees and their activities to ensure that
they are in alignment with the company’s objectives. Control is
an extremely important management function, as without it
organizational activities would go unchecked, leading to
inefficiencies and unfulfilled targets. The control exercise allows
managers to take corrective action and contains an element of
feedback so that there can be continuous improvement.
14
Leadership Styles
Leadership is critical to a company’s profitability or achievement of goals.

The methods and manner that a manager uses to spur workers toward the
achievement of the company’s objectives is termed leadership style. There
are four main leadership styles: autocratic, democratic, and paternalistic
and laissez faire. A manager may have a prevailing style or may change
his style depending on the situation. This is known as situational
leadership.
15
Autocratic vs. Democratic Leadership
Autocratic leaders control the decision-making

entirely and express no interest in the suggestions
of employees. This leadership style is useful in
situations that demand speedy decision-making
and when information is confidential, but it may
demoralize employees and result in less creative
decision-making. Democratic leaders seek the
input of employees in decision-making. This style
motivates employees, but it may be time-
consuming because of the ongoing consultations.
16
Paternalistic Leadership
A paternalistic leader, as the name suggests,

adopts a father-like approach. This style is a
hybrid of the democratic and autocratic styles.
Paternalistic leaders may allow employee input,
but they ultimately make the final decision based
on what they think is best. The solicitation of
feedback can improve morale, but this may be
only temporary if employees realize that none of
their suggestions are being implemented.
17
Laissez Faire Leadership
Laissez faire means allowing persons to do as

they please. Managers that adopt this style give
their employees significant freedom and
autonomy. A leader with this style provides very
little guidance to his subordinates. Laissez faire
leadership is effective when employees are highly
skilled or are experts in their field and require
little supervision.
18
III. EVOLUTION OF MANAGEMENT THEORIES
A. MANAGEMENT THEORIES
B. THE FAMOUS THEORIES ON THE
FUNCTIONS OF MANAGEMENT
19
THEORIES OF
MANAGEMENT
The simplest definition of management is getting things done through
people. It implies that an organization, whether small, medium, or large,
is composed of people. A business organization exists for a purpose.
Management is a function that directs and coordinates the efforts of the
people to accomplish goals and objectives by using available resources
efficiently and effectively. It is also a process of accomplishing the
organization’s goals by working with and through people.
20
1910s-1940s: Management as Science
Management as Science was

developed in the early 20th century and
focused on increasing productivity and
efficiency through standardization,
division of labor, centralization, and
hierarchy. A very ‘top-down’
management with strict control over
people and processes dominated across
industries.
21
1950s-1960s:
Functional
Organizations
Due to growing and more complex
organizations, the 1950s and 1960s saw
the emergence of functional
organizations and the Human Resource
(HR) movement. Managers began to
understand the human factor in
production and productivity and tools
such as goal-setting, performance
reviews, and job descriptions were born.
22
1970s: Strategic Planning
The focus is from measuring function to

resource allocation and tools like Strategic
Planning, Growth Share Matrix, and SWOT
(identification and analysis of the company’s
Strengths, Weaknesses, Opportunities, and
Threats) were used to formalize strategic
planning process. After several decades of
‘best practice’ and ‘one size fits all’ solutions,
academics began to develop contingency
theories.
23
1980s:
Competitive
Advantage
As the business environment grew increasingly
competitive and connected, and with a blooming
management consultancy industry. Competitive
Advantage became a priority for organizations
in the 1980s. Tools like Total Quality
Management (TQM), Six Sigma, and Lean
Management were used to measure processes
and improve productivity. Employees were
more involved by collecting data, but decisions
were still made at the top, and goals were used
to manage people and maintain control.
24
1990s: Process Optimization
Benchmarking and business process

reengineering became popular in the 1990s,
and by the middle of the decade, 60% of
Fortune 500 companies claimed to have plans
for or have already initiated such projects.
TQM, Six Sigma, and Lean remained popular
and more holistic, organization-wide approach
and strategy implementation took the stage
with tools such as Strategy Maps and Balance
Scorecards.
25
2000s: Big Data
Largely driven by the consulting industry under

the banner of Big Data, organizations in the
2000s started to focus on using technology for
growth and value creation. Big data is a broad
term for data sets so large or complex that
traditional data processing applications are
inadequate. Accuracy in big data may lead to
more confident decision-making. And better
decisions can mean greater operational
efficiency, cost-reductions, and reduced risk.
26
THE FAMOUS THEORIES ON THE
FUNCTIONS OF MANAGEMENT
Since management involves solving the problems within an organization in order to
reach the desired objectives, the focus is on understanding the functions that make up
the process. As experts began studying and theorizing the essence of management,
different ideas and concepts regarding the functions were born.
Although the theories about the functions of management lead to rather similar
results, it can be helpful to study the differences as well as the historical journey to
our current understanding of the functions. Here are a few of the most influential
theories and theorists, who’ve outlined their ideas about the functions of management.
27
HENRI FAYOL
The first to attempt classifying managerial activities into specific functions. The French
engineer who established the first principles of the classical management theory at the
start of the last century.
Considered the founding father of concepts such the line and staff organization. When
Fayol developed his strategies and ideas, managers in organizations didn’t have any kind
of formal training and therefore Fayol’s ideas were ground-breaking.
Set out 14 general principles of management, Fayol also defined the five core functions
of management, which are still used and which form the basis of much of the later
theories. To Fayol, manages is a process, which includes forecasting, planning,
organizing, commanding and controlling. These are the foundation of setting the
relationship between the subordinates and the superior and the five core functions help
the management to solve problems in the relationship or within the organization in a
creative manner.
28
Henri Fayol’s
14 Principles of Management
1. Division of Work: When employees are
specialized, output can increase because they
become increasingly skilled and efficient.
2. Authority and Responsibility: Managers must have the

authority to give orders, but they must also keep in mind that
with authority comes responsibility.
29
Henri Fayol’s
3. Discipline: Discipline must be upheld in organizations, but methods for doing so
can vary.
4. Unity of Command: Employees should

have only one direct supervisor.
30
Henri Fayol’s
5. Unity of Direction: Teams with the same
objective should be working under the
direction of one manager, using one plan. This
will ensure that action is properly coordinated.
6. Subordination of Individual Interest to General Interest: The interests of one

employee should not be allowed to become more important than those of the group.
This includes managers.
31
Henri Fayol’s
7. Remuneration of Personnel: Employee satisfaction
depends on fair remuneration for everyone. This
includes financial and non-financial compensation.
8. Centralization: This principle refers to how

close employees are to the decision-making
process. It is important to aim for an appropriate
balance.
32
Henri Fayol’s
9. Scalar Chain: Employees should be aware of where
they stand in the organization's hierarchy, or chain of
command.
10. Order: The workplace facilities must be

clean, tidy and safe for employees. Everything
should have its place.
33
Henri Fayol’s
11. Equity: Managers should be fair to staff at all times,
both maintaining discipline as necessary and acting with
kindness where appropriate.
12. Stability of Tenure of Personnel:

Managers should strive to minimize
employee turnover. Personnel planning
should be a priority.
34
Henri Fayol’s
13. Initiative: Employees should be given the necessary level of freedom
to create and carry out plans.
14. Esprit de corps: Organizations should strive to

promote team spirit and unity.
35
GEORGE R. TERRY
After Fayol, many theorists have looked at the

functions and crafted their own ideas,
deviating only slightly from Fayol’s core
functions. George R. Terry wrote a book
Principles of Management in 1968 and
outlined his view on the principles. Terry
believed there to be four core functions, each
function posing and responding to a specific
question the management must solve.
36
George R. Terry’s
Four Core Functions of Management
The question, the fundamental function and the resulting action are outlined in the
below graph:
The Question The Function The Result
What is the need? Planning Objectives, policies, procedures and methods
Where should actions take place and who

Organizing Work division, work assignment, and authority utilization
should do what work?
Why and how should group members

Actuating Leadership, communication, development, and incentives
perform their tasks?
Are the actions being performed

Controlling Reports, comparisons, costs and budgets
according to plan?
37
HAROLD KOONTZ &
CYRIL O’DONNELL
In 1976, Harold Koontz and Cyril O’Donnell
published an essay Management: A Systems
and Contingency Analysis of Managerial
Functions. They felt the previous studies have
been effective in describing the functions, but
believed the division should be more detailed.
Koontz and O’Donnell believed there to be
five key functions of management: Planning,
Organizing, Staffing, Directing/Leading, and
Controlling.
38
THANK
YOU!
Nikolai Adam
Marasigan
Email
marasigannikolaiadam@icsb-icsm.edu.ph

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MEANING, FUNCTIONS,

TYPES AND THEORIES

ORGANIZATION AND MANAGEMENT | NIKOLAI ADAM F. MARASIGAN | ICSM SHS 2020-2021

Every human being has several needs and desires. But no

 the process of coordinating all resources

Leadership is critical to a company’s profitability or achievement of goals.

Autocratic leaders control the decision-making

A paternalistic leader, as the name suggests,

Laissez faire means allowing persons to do as

Management as Science was

The focus is from measuring function to

Benchmarking and business process

Largely driven by the consulting industry under

2. Authority and Responsibility: Managers must have the

4. Unity of Command: Employees should

6. Subordination of Individual Interest to General Interest: The interests of one

8. Centralization: This principle refers to how

10. Order: The workplace facilities must be

12. Stability of Tenure of Personnel:

14. Esprit de corps: Organizations should strive to

After Fayol, many theorists have looked at the

What is the need? Planning Objectives, policies, procedures and methods

Where should actions take place and who

Why and how should group members

Are the actions being performed

ORGANIZATION AND MANAGEMENT | NIKOLAI ADAM F. MARASIGAN | ICSM SHS 2020-2021

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