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
Understand the Universality of Management
Identify whether Management is an art, science, or both
science and art?

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 Activity 1:

• What is Management?

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 Meaning of Management
– The word management has several meanings, the
most important of which are:
• Management 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.

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 Management cont’d……….

– There are several definitions of management given by different

authors 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. 4
 It is impossible to provide a single, comprehensive, universally accepted definition of management because:

• Management has various aspects, that all of which

cannot be represented by a single definition.

• The theorists who gave the definitions had

different areas of interest or training, and all
defined management from their perspective
(engineering, sociology, psychology, mathematics,
etc.)

• Management as a discipline is young and there is

lack of clarity of concepts and principles. 5
 Activity 2

• What are the significances of

management?

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“Without Management Country's Resource of
production Remain resource and never become
products”

Peter Drucker

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 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
efficiency 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).
– It establishes effective authority & responsibility relationship i.e.
who is accountable to whom, who can give instructions to whom,
who are superiors & who are subordinates.
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 Significance…. Cont’d
• Establishes Equilibrium: It enables the
organization to survive in changing environment.
– It keeps in touch with the changing environment. It
adapts the organization to changing demand of market
/changing needs of societies.
– It is responsible for growth and survival of the
organization.
• Essential for Prosperity of Society: Efficient mgt
leads to better economical production which helps in turn to
increase the welfare of people.
– Organization comes with new products and researches
beneficial for the society.
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 Management Functions

• There are five basic Management Functions.

These are:
»Planning,
»Organizing,
»Staffing,
»Directing/ Leading, and
»Controlling

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 Activity 3

• What is Planning?

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 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 maps out the courses of action 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
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 Planning……… 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.
• Each manger’s plans are influenced by the plans of other
mangers.
• E.g. Lower level mangers’ plans are strongly guided by the
directions of the plans of top – level mangers
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 Organizing: is concerned with:

• Bringing together and coordinating human and

physical resources to accomplish the objectives
established in the planning process.
• 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.

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 Organizing….cont’d….
• The activities necessary to achieve the objectives
are grouped into working divisions, department or
other identifiable units primarily by clustering
similar and related duties.

• The result is a network of independent units.

• Each unit (each person in the unit) should have

clearly defined authority or a clearly defined list of
duties, and one person to whom to report.
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 Staffing
• Locating prospective employee to fill the jobs
created by the organizing process.

• The process of recruiting potential candidates

for a job, reviewing the applicant’s
credentials/qualifications and trying to match the
job demands with candidate’s abilities.

• After the employment decision has been made-

the position is offered and accepted.
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 Staffing: is concerned with:
• Orienting the new employee, 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.

– Many aspects of the staffing function are the responsibility
of the personnel department.
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 Leading/ Directing:
• Is aimed at getting the members of the
organization move in the right direction that will
enable it to achieve its objectives.

• The challenge for a manager in directing is to

create an environment in which both the employee
and the organization will achieve their objectives

• Here, communication and motivation should be

ongoing and personalized.
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 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 the standards as planned.

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 Levels of Management
• Levels here refer to hierarchical arrangement of
managerial positions 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.

• Top Level Management

• Includes BOD, CEO, Executive Committee,
President or General Managers etc.
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 Top Level Management: Functions

• Establishing broad objectives and take strategic decisions

• Designing major strategies.
• Outlining principal policies.
• Providing effective organizational structure that ensures
integration.
• Providing overall leadership and direction.
• Making overall control of the organization.
• Dealing with external parties such as government,
community etc by representing the organization.
• Analyzing the changes in the external environment and
responding to it.
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 Middle Level Management

• Encompasses all management levels below top

level management and above operational level of
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.

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 Middle Level Management: Functions

• 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.
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 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.

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 Fig. Levels of Management

Top-Level
Management

Middle-Level
Management

Operating-Level Management

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 Types of Managers

Based on the scope of their tasks

1. Functional Manager: They supervise with specialized
skills in a single area of operations such as Accounting,
Marketing, Finance, HRM, and Production.
– All these functions are necessary for the success of the
organization.
2. 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.
• Their decision affects broader areas of the organization. 26
 Managerial Roles

• Managers perform the basic managerial functions by

playing a variety of managerial roles.
• A role is an organized set of behaviors. Henry
Mintzberg, studied a variety of managerial jobs and
identified ten most common roles of top managers.
• They are classified under three categories. However,
• Every manager’s job consists of some combinations
of roles.
• These roles are highly interrelated
• The relative importance of each role varies
considerably by managerial level.
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 I. Interpersonal Roles:
– It involves developing and maintaining positive interpersonal relationships.
– Managers play the following three interpersonal roles.
1. Figure – Head Role: the manger represents the organizations at ceremonial
and symbolic functions.
E.g. The supervisor who attends the wedding of the employees
representing his/her organization.
The sales manager who takes an important customer to lunch.
They symbolize management’s concern for employees, customer and the
community.
2. Leadership Role: It involves responsibility for directing and coordinating the
activities of subordinates in order to accomplish organizational objectives.
3. 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.
• Here the manager seeks support from people who can affect the organization
success. 28
 II. Informational Roles:
• The following three roles describe the informational
aspects of managerial work.
• Monitor Role: involves seeking out, receiving and
screening information.
• Since much of the information received is oral (from
gossip and hearsay, as well as formal meetings), managers
must evaluate and decide whether to use this 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.
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 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/product, launch a survey, new
market or enter a new business.
• Disturbance Handler Role: managers play the
disturbance handler role when dealing with problems,
crisis, and changes beyond their immediate control.
– Typical problems include strikes by labor, bankruptcy of major
supplier which may affect the company’s performance, breaking
of contracts by customers.

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 Cont’d…..
• Resource Allocator Role: this role involves choosing
among competing demands for money, equipment,
personnel, and other’s demands on manager’s time.
– What portion of the budget should be allocated for
advertising and what portion for improving an existing
product line?
– Deciding on the allocation of the organization’s
physical, financial and human resources
• Negotiator Role: representing the organization in all
important/major negotiations.
 Negotiations are especially tough when a manger must deal with
others (such as unions or political action groups) who don’t share
the manger’s objectives. E.g: Union collective bargaining
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 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 with others.
Technical skills emphasize working with things
(techniques or physical objects) where as
interpersonal skills focus on working with people. 32
 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 writing, oral and non – verbal
(facial expressions) etc.
– are very crucial to all managers.
– are necessary for effectively displaying interpersonal,
technical and conceptual skills. 33
 Fig. Relative Importance of Managerial Skills at
different Levels of Management

Top Level
Management

Middle Level
Management

Lower Level
Management

Conceptual Technical Interpersonal Communication

Skills Skills Skills Skills

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 Universality of Management

• Although the type, objectives and problems of different

organizations vary widely, the functions performed by each
manager are nearly the same.

• In all kinds of organizations, the basic managerial functions

are used to make individuals contribute to group objectives.
• From small to large and complex.
• In profit making and non – profit making.
• In manufacturing and services giving.
• Managers in all levels of organizational hierarchy perform
the same basic managerial functions.
• The principles of management are universal. They are
applicable to any kind of organization. 35
 Is Management a Science or Art?
• The essential characteristic of science is that knowledge is based
not on emotions or feelings but on systematic measurement and
objectivity.
• This has arisen through the application of scientific method to
such an extent that whoever follows the same method will
ultimately arrive at the same conclusion.
• Management has a structured body of knowledge with its
distinct concepts and principles that are developed with
reference to the general truth underlying the management
practice.
– Thus, management is a Science.
• The application of principles is what is referred to as an art.
• Art is the application of knowledge and doing things in the light
of the realities of the situation.
– Therefore, management is both a Science and an Art. 36
 History of Management
• The development of management thought dates
back to the days when people first attempted to
accomplish goals by working together in groups.

• Hunting and gathering bands/groups have rules

and obeyed a leader or a group of decision makers
responsible for welfare of the band.
• As societies grew larger and more complex, the
need for organizations and managers became
increasingly apparent.
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 Cont’d……..
 Early contributors to management thought;
 Ancient Egyptians- construction of the Egyptian Pyramid
 Roman Catholic Church- introduced job description, authority
r/ships, specialization of activities etc.
Greece - recognized the means to maximize output
through the use of uniform methods.
 The industrial revolution gave rise to the need for
a systematic approach to management.

 The development of management as a field of

knowledge is much more recent.
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 Pre-classical
Robert Own (1771 - 1858) - British
industrialist and reformer. He was one
of the first managers to recognize the
importance of human resource in an
organization.
He was called ‘father of modern personnel
management. He said that workers in
organizations need special attention and
dignity or respect and doing so improves
organizational productivity/profits. 39
 Cont’d…..
 Charles Babbage - built the first practical
mechanical calculator and a prototype of modern
computers. Supported the idea of work
specialization, profit sharing, and scientific
principles to work process.

 Adam Smith – advocated the impact of division

of labor on manufacturing.
His conclusion was specialization could lead to
increased efficiency.

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 Classical Management Theories
 Emphasizes finding ways to manage work and
organizations more efficiently.
 Three approaches: Scientific management,
administrative management (Classical
Organization) theory, and bureaucratic
management.
 The four pioneers are: Frederick W. Taylor,
Frank and Lillian Gilbreth, Henry Fayol (14
principles of effective management), Henry Gantt.
Since Taylor played the major role, he is called the
father of scientific management.
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The End!
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