Chapter 1 Nature and Concept of Management

HAND OUTS FOR ORGANIZATION AND MANAGEMENT

CHAPTER 1- NATURE AND CONCEPT OF MANAGEMENT

1.1 Definition and Functions of Management

MANAGEMENT
- is the function that coordinates the efforts of people to accomplish goals and objectives by using
available resources efficiently and effectively.
Definition of Management
According to:
Harold Koontz- “Management is the art of getting things done through and with people in formally organized
groups.”
Henri Fayol- “To manage is to forecast and to plan, to organize, to command, to co-ordinate and to control.”
F.W Taylor- “Management is an art of knowing what to do, when to do and see that is done in the best and
cheapest way.”
Peter Drucker - Basic task of management as twofold: Marketing and Innovation.
Functions of Management
1. PLANNING- is a process that involves the setting of the organization’s goals, establishing strategies for
accomplishing those goal and developing plans of actions that managers intend to use to achieve said
organizational goals.
2. ORGANIZING- is the process of arranging and allocating work, authority, and resources among an
organization’s members so that they can achieve organizational goal.
3. STAFFING- is a process through which capable employees are selected, recruited, properly trained,
effectively developed, rightfully rewarded and their joint efforts are harmoniously.
- A managerial function that takes people with necessary skills into the organization and develops them
into precious organizational resources.
4. LEADING/ DIRECTING- involves the social and informal sources of influence that you use to inspire action
taken by others.
5. CONTROLLING- involves ensuring that performance does not deviate from standards. Controlling consists of
three steps, which include (1) establishing performance standards, (2) comparing actual performance against
standards, and (3) taking corrective action when necessary.
Managements Primarily Function

1. SHAREHOLDERS- making profit
2. CUSTOMERS- creating valued products at a reasonable cost.
3. EMPLOYEES- providing great employment opportunities.
1.2 EVOLUTION OF MANAGEMENT
1. Classical Theories of Management
2. The Modern Management Theories
CLASSICAL THEORIES OF MANAGEMENT

1. Scientific Management Theory
2. Bureaucratic Management Theory
3. Administrative Management Theory
4. Human Relations
1. Scientific Management Theory

Frederick Taylor- father of Scientific Management
- He proposed work methods designed to increase worker productivity.
- Scientific Management focuses on worker and machine relationships.
2. Bureaucratic Management Theory

- developed by Max Weber.
- Rules and regulations to eliminate managerial inconsistencies
- Positions in the firm should be held based on performance not social contacts.
- Position duties are clearly identified. People should know what is expected of them.
- Lines of Authority should be clearly identified. Workers know who reports to whom.
PRINCIPLES OF BUREACRATIC MANAGEMENT THEORY

1. Proper Division of Labor- should be fixed and there should be a balance between power and
responsibilities.
2. Chain of Command- should be constructed in a way that information related to decision and works
can flow effectively from top to bottom.
3. Formal Selection- employees are selected on the basis of technical skills and competencies
Rules and requirements
-required to ensure uniformity, so that employees know exactly what is expected of them
3. Administrative Management Theory

HENRI FAYOL- Father of Modern Management
Management Consists of 6 Types of Activities:
1. Technical Activities ( Production and Manufacturing)

2. Commercial Activities (Purchasing and Selling)
3. Financial Activities (Optimum Use of Capital)
4. Security ( Protection of Property and Persons)
5. Accounting ( Balance Sheets, Costing, Statistics)
6. Managerial )( Planning, Organizing, Coordinating, Controlling)
HENRI FAYOL’S 14 PRINCIPLES
1. Division of Work
2. Authority and Responsibility
3. Discipline
4. Unity of Command
5. Unity of Direction
6. Subordination of Individual to general interest
7. Remuneration
8. Centralization of Authority
9. Scalar Chain or Line Authority
10. Order
11. Equity of Treatment
12. Stability of Workers
13. Initiative
14. Team Spirit ( Espirit de crops)
4. Human Relations
- It has been referred to as the neo-classical school because it was initially a reaction to the
shortcoming of the classical approaches to management
THE MODERN MANGEMENT THEORIES

1. Quantitative Approach
2. System Approach
3. Contingency Approach
1. Quantitative Approach
- Management is concerned with problem solving and it must make use of mathematical tools and
techniques for the purpose.
- The different factors involved in management can be quantified and expressed in the form of
equations.
- Management problems can be described in mathematical models.
2. System Approach
- considers the organization as a dynamic and inter-related set of parts
- All organizations are open system
3. Contingency Approach
- Latest approach to management which interact the various approaches to management
- also known as situational approach, is a concept in management stating that there is no one
universally applicable set of management principles (rules) to organizations.
1.3 FUNCTIONS, ROLES AND SKILLS OF A MANAGER
MANAGER
- is responsible for planning and directing the works of groups of individuals and monitoring
their performance and taking corrective action when necessary for the accomplishment of
organizational goals and objectives.
ROLES OF A MANAGER
1. Interpersonal Role
2. Informational Roles
3. Decisional Roles
1. Interpersonal Roles
- The roles in this category involve providing information and ideas.
1. Figurehead- A manager has social, ceremonial and legal responsibilities. He is expected to be a
source of inspiration. People look up to him as a person with authority, and as a figurehead.
2. Leader- this is where manager provides leadership for his team/ department/ organization
3. Liaison- Managers must communicate with internal and external contacts. He needs to be able to
network effectively on behalf of his organization
2. Informational Roles
- involves processing information
1. Monitor- regularly seeks out information related to his organization and industry, looking for
relevant changes in the environment. He also monitors his team, in terms of both their productivity,
and their well being.
2. Disseminator- communicates potentially useful information to his colleagues and his team.
3. Spokesperson- represents and speaks for his organization.
3. DECISION MAKING/ DECISIONAL ROLE

- involves using information
1. Entrepreneur- A manager creates and control change within the organization. This means solving
problems, generating new ideas, and implementing them.
2. Disturbance Handler- When an organization or team hits an unexpected roadblock; it’s the
manager who must take charge. He also needs to help mediate disputes within it.
3. Resource Allocator- A manager also needs to determine where organizational resources are best
applied. This involves allocating funds, as well as assigning staff and other organizational resources.
4. Negotiator- A Manager may be needed to take part in, and direct, important negotiations in his
team, department, or organization.
SKILLS OF MANAGER
1. Technical Skills- necessary to accomplish or understand the specific kind of work being done in an
organization.
2. Interpersonal Skills- the ability to communicate with understand and motivate both individuals and
groups.
3. Conceptual Skills- are the ability to think and to conceptualize about abstract and complex situation.
4. Communication Skill- refers to manager’s ability both to effectively convey ideas and information to
others and to effectively receive ideas and information from others.
5. Decision Making Skills- refers to manager’s ability to correctly recognize and define problems and
opportunities and to then select an appropriate course of action to solve the problems and capitalize
on opportunities.
6. Time-Management Skills- refers to manager’s ability to prioritize work, to work effectively, and to
delegate appropriately.

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HAND OUTS FOR ORGANIZATION AND MANAGEMENT

CHAPTER 1- NATURE AND CONCEPT OF MANAGEMENT

1.1 Definition and Functions of Management

Managements Primarily Function

CLASSICAL THEORIES OF MANAGEMENT

1. Scientific Management Theory

- Scientific Management focuses on worker and machine relationships.

2. Bureaucratic Management Theory

PRINCIPLES OF BUREACRATIC MANAGEMENT THEORY

3. Administrative Management Theory

Management Consists of 6 Types of Activities:

1. Technical Activities ( Production and Manufacturing)

HENRI FAYOL’S 14 PRINCIPLES

THE MODERN MANGEMENT THEORIES

1.3 FUNCTIONS, ROLES AND SKILLS OF A MANAGER

3. DECISION MAKING/ DECISIONAL ROLE

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