Lesson 2

Management
Functions
 Figure 1 Management Functions

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Planning “is the process of anticipating future
events and conditions and determining courses
of action for achieving organizational
objectives.It is the one step in running a small
business that is most commonly skipped, but it is the
one thing that can keep a business on track and
keep it there. Planning helps a business realize its
vision, get things done, show when things cannot get
done and why they may not have been done right,
avoid costly mistakes, and determine the resources
that will be needed to get things done.
 

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 Process of setting goals in order to
achieve organizational goals.
 Characteristics of Goals (SMART)
oSpecific
oMeasurable
oAttainable
oRealistic
oTime-bound

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Goals - desired outcome or target that
needs to be accomplished by an
organization
 Types of Plans
1.Single-use plan – one time use
2.Standing Plan – ongoing plan without
a determined time period.
3.Contingency Plan – alternative plan
to be used for emergency,
uncontrollable events.
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Advantages of Planning
1.Reduces uncertainty – fear of the
unknown
2.Facilitates the formulation of goals
3.Gives direction to the organization
4.Improves performance of people
in the organization.
5.Improves coordination of work.
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 Levels of Planning

Types of Management Time Period Purpose

Planning Level
Strategic Top 3-7 years Long-range
planning

Tactical Middle 1-3 years Translate

strategic goals
into specific
goals

Operational Frontline Less than 1 year Day-to-day

operation

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Types of Goals
1.Short-term goal – less than 1 year
2.Long-term Goal – 1 year and above
 Decision-Making - process of selecting the best
course of action.
  
Types of Decisions
 1.Programmed Decision
- highly structured with predetermined decision rules
- used in repetitive situation
2. Non-programmed Decision
- unstructured with no predetermined decision rules
- used in special situations
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Basic Decision- Making Process
1.Statement of the Problem
2.Case Facts – Background of the
case/problem
3.Cause of Action – developing alternative
4.Select the best course of action/alternative
5.Implement the course of action/chosen
alternative
6.Evaluate the decision

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Mission
- reason or purpose for the organization’s
existence
Vision
- what the organization wants to become
in the future
- desirable future state of the organization

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Organizing “consists of grouping people and
assigning activities so that job tasks and the mission
can be properly carried out. Establishing a management
hierarchy is the foundation for carrying out the organizing
function.
Contrary to what some people may believe, the principle of
organizing is not dead. Rather, it is clearly important “to both
the organization and its workers because both the
effectiveness of organizations and worker satisfaction require
that there be clear and decisive direction from leadership;
clarity of responsibilities, authorities, and accountabilities;
authority that is commensurate with responsibility and
accountability; unified command (each employee has one
boss); a clear approval process; and, rules governing
acceptable employee behavior.

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Organizational Structure
(Organizational Chart) - formal
arrangement of people, functions and
lines of authority within an
organization
Departmentalization- process of
directing the organization into
departments (functional areas
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Types of Departmentalization
1.Functional Departmentalization
- An arrangement that defines a department
by the function it performs.
ex. basic departments of an organization
2.Geographic Departmentalization
Ex. Supervisors
• Manila area
• Makati area
• Quezon City area
Arrangement of departments according to
geographic areas or territories
  
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3. PRODUCT DEPARTMENTALIZATION
Arrangement of departments according to goods
and services they offer to the market.
Ex.
• Real Estate Development
• Telecommunications Department
• Food and beverage Department

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JOB DESIGN
 Process of laying out the duties and
responsibilities (job description) and the
knowledge, skills, abilities and other
characteristics an individual must have
in order to perform the job. (job
specification)
 It covers job description and job
specification
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Job Design must cover the following motivational approaches
Approach Increase in

Job Enrichment Level of difficulty

Job Enlargement Scope of responsibility

Job Rotation Variety in a job

Watch:
 
Video Link 12.1
Glassblowing Business Thrives
Lesson learned: Everyone should know his or her role in the business.
www.cnn.com/video/#/video/living/2010/10/15/mxp.sbs.glass.business.hln?iref=videosearch

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Staffing
The staffing function involves selecting,
placing, training, developing,
compensating, and evaluating (the
performance appraisal) employees. Small
businesses need to be staffed with
competent people who can do the work that
is necessary to make the business a
success. It would also be extremely helpful if
these people could be retained.
 

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Directing is the managerial function that
initiates action: issuing directives,
assignments, and instructions; building
an effective group of subordinates who
are motivated to do what must be done;
explaining procedures; issuing orders;
and making sure that mistakes are
corrected. Directing is part of the job for
every small business owner or manager.  

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Leading and motivating work together in the
directing function. Leading “is the process of
influencing people to work toward a common
goal [and] motivating is the process of providing
reasons for people to work in the best interests
of an organization. Different situations call for
different leadership styles. In a very influential
research study, Kurt Lewin established three
major leadership styles: autocratic, democratic,
and laissez-faire. Although good leaders will use
all three styles depending on the situation, with
one style normally dominant, bad leaders tend to
stick with only one style.
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Leading
Leading- process of influencing the
behaviour of other people
Leadership- the ability to inspire
and support people to achieve
organizational goals.
 
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Leadership Styles
 
1. Participative - allows subordinates to participate
in decision-making
2. Democratic - encourages consultation of
subordinates to arrive in decision-making
3. Autocratic - assures a paternalistic role which
forces subordinates to rely on the leads
4. Laissez- Faire - depends completely on
subordinates to make own decisions
5. Charismatic- possesses charm to influence his
subordinates
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6. Transformational - uses persuasion to bring
changes to the organization
7. Servant Leadership- focuses on serving the
organization
8. Strategic- focuses on strategy and the
environment
9.Transactional-focuses on the task and its output
10. Visionary- focuses on the future of the
organization
11. Situational - focuses on addressing the
situation or circumstances

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Theories of Motivation
1. Maslow’s Hierarchy of Needs
- identifies the basic needs of man
(individual)
- Psychological, Safety, Belongingness,
Self-esteem, Self-actualization
2.Expectancy Theory
- based on the premise that input and
output.
3.Goal Theory
- behavior is regulated by goals and
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4. Achievement-Power- Affiliation Theory
- developed by David McClelland
Three management desires of an individual
1. Achievement - goal
2. Power - status
3. Affiliation – social acceptance
5. ERG Theory
Existence
Relatedness
Growth
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 6. Theory X and Theory Y (Douglas McGregor)
  Theory X and Theory Y are theories of human work
motivation and management developed by Douglas
McGregor.
 Theory X assumes that people dislike work and must be
coerced, controlled, and directed toward organizational
goals.
 Theory Y assumes that people are interested in their work,
initiative or self-directing, responsible and creative in solving
problems.
 7. Theory Z (Willian Ouchi)
Theory Z promotes employee loyalty to the company by
providing employees long- term employment (job security)
and focusing on their well-being.
 
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A. Autocratic leadership occurs when a leader
makes decisions without involving others; the
leader tells the employees what is to be done
and how it should be accomplished. However,
this style works when all the information needed for
a decision is present, there is little time to make a
decision, the decision would not change as a result
of the participation of others, the employees are
well motivated, and the motivation of the people
who will carry out subsequent actions would not be
affected by whether they are involved in the
decision or not. This leadership style should not be
used
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B. Democratic Leadership involves other people in the
decision making—for example, subordinates, peers,
superiors, and other stakeholders—but the leader makes
the final decision. Rather than being a sign of weakness, this
participative form of leadership is a sign of strength because it
demonstrates respect for the opinions of others. The extent of
participation will vary depending on the leader’s strengths,
preferences, beliefs, and the decision to be made, but it can be
as extreme as fully delegating a decision to the team. This
leadership style works well when the leader has only part of
the information and the employees have the other part. The
participation is a win-win situation, where the benefits are
mutual. Others usually appreciate this leadership style, but it
can be problematic if there is a wide range of opinions and no
clear path for making an equitable, final decision.
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C.Laissez-faire leadership (or delegative or free-
reign leadership) minimizes the leader’s
involvement in decision making. Employees are
allowed to make decisions, but the leader still
has responsibility for the decisions that are
made. The leader’s role is that of a contact person
who provides helpful guidance to accomplish
objectives. This style works best when employees
are self-motivated and competent in making their
own decisions, and there is no need for central
coordination; it presumes full trust and confidence in
the people below the leader in the hierarchy.
 
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Don’t Be This Kind of Leader or Manager

Here are some examples of Common

Leadership Styles that should be avoided.
 

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1. Post-hoc Management. As
judge and jury, management is
always right and never to blame. This
approach ensures security in the
leader’s job. This style is very common
in small companies where there are few
formal systems and a general autocratic
leadership style.“Post-hoc Management

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2. Micromanagement. Alive and
well in businesses of all sizes, this
style assumes that the subordinate is
incapable of doing the job, so close
instruction is provided, and
everything is checked. Subordinates
are often criticized and seldom
praised; nothing is ever good enough.
It is really the opposite of leadership.
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3. Seagull Management. This humorous term
is used to describe a management style whereby
a person flies in, poops on you, and then flies
away.“Leadership Styles. When present, such
people like to give criticism and direction in equal
quantities—with no real understanding of what
the job entails. Before anyone can object or ask
what the manager really wants, he or she is off to
an important meeting. Everyone is actively
discouraged from saying anything, and eye contact
is avoided.“Seagull Management.

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4. Mushroom Management. This
manager plants you knee-deep (or worse) in the
smelly stuff and keeps you in the
dark. Mushroom managers tend to be more
concerned about their own careers and images.
Anyone who is seen as a threat may be
deliberately held back. These managers have their
favorites on whom they lavish attention and give
the best jobs. Everyone else is swept away and
given the unpopular work. Oftentimes, mushroom
managers are incompetent and do not know any
better. We have all seen at least one manager of
this type.
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5. Kipper management. This is the manager
who is, like a fish, two-faced because
employees can see only one face at a time. To
senior managers, this person is typically a model
employee who puts business first and himself last.
To subordinates, however, the reverse is often the
case. The subordinates will work hard to get things
done in time, but they are blamed when things go
wrong—even if it is not their fault. The kipper will
be a friend when things need to get done and then
stab the subordinates in the back when glory or
reward is to be gained. We have all seen this kind
of manager, perhaps even worked for one.
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Controlling is about keeping an
eye on things. It is “the process of
evaluating and regulating ongoing
activities to ensure that goals are
achieved. Controlling provides
feedback for future planning activities
and aims to modify behavior and
performance when deviations from
plans are discovered.
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1.Setting performance standards is the first step.
Standards let employees know what to expect in terms
of time, quality, quantity, and so forth.
2.Measuring Performance, where the actual
performance or results are determined.
3. Comparing Performance is step three. This is when
the actual performance is compared to the standard. The
fourth and last step,
4. Taking corrective action, involves making whatever
actions are necessary to get things back on track. The
controlling functions should be circular in motion, so all the
steps will be repeated periodically until the goal is achieved.
 
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 Figure .2 The Controlling Function

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Controlling -management function involving
taking corrective action and establishing
standards.
 The Control Process
1. Standards- basis of comparison for measuring
organizational performance
2. Comparison of standards- compares
performance standards and actual performance.
3. Corrective Action - identify and analyze
performance deviations (correction program) -
develop and implement program to correct them

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Methods of Control
1.Bureaucratic Control - top to down
control where managers influence
employee behavior by awarding or
punishing employees for compliance or
non-compliance with organizational
policies, rules, procedure.
2.Objective Control - use of observable
measures of employee behavior or
output to assess performance and
influence behaviour.
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 3.Normative Control - influencing
performance and behavior based on
norms, standards, or practice
4. Concertive Control- influencing
performance and behavior based on
beliefs that are shaped and negotiated
by work groups
5. Self-Control- Managers and workers
control their own behavior.
 
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