1.

1 Introduction - Basic concepts of Organization and

Management
A person giving orders to others in an
organization/entity is generally known as a
manager while running an organization/entity is
called managing the organization. With the
development of business activities, more emphasis
fell upon management because it has contributed
immensely in running a business successfully.
Over the last few decades, management has developed rapidly as a
discipline and has been expanded to numerous branches such as Operations
Management, Human Resource Management, Time Management, Portfolio
Management etc. As a student of the Business Administration programme,
you need to study the subject, Management in a systematic way. So, you
may need to know what management is about before learning about its
various branches.
Also, you are aware that various types of organizations, big and small,
formal and informal, educational and cultural, government and private, exist
in an economy. Learning the concepts, nature, and the trends of these
organizations is also important for further studies in business. With the
intention of discussing the above areas this lesson is divided into three
sections. First the nature of the management discipline, then the types, role
and responsibilities of managers and finally the types of organizations are
discussed. The topics covered in this lesson would also help you to identify
present day practices of management.
1.2

The nature of management

1.2.1 Defining management

Various contributors to the subject have defined management differently
from time to time from individual points of view. Hence many definitions are
partial. The generally accepted definition can be written as:
Management is the process of planning, organizing, leading and
controlling the work of members of an organization, using available
organizational resources efficiently and effectively, to reach established
organizational goals.
This definition covers a number of important points.
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Management is a process involving four functions

It is concerned with Efficiency & Effectiveness when using funds
The prime objective of all the above procedures is to reach established
organizational goals

Now, let us examine these significant points a little further.

1.2.2

The Management Process

Management is a process as its functions of planning, organizing, leading

and controlling are ongoing. These four management functions are
interrelated.

Planning is the process of establishing goals and building suitable

activities for achieving those goals.

Organizing is the process of arranging people in a structured way to

achieve goals.

Leading is the process of directing and influencing task related

activities of members.
Controlling is the process of ensuring that actual activities conform to
planned activities.
You can see the interrelated nature of the management process in Exhibit
1.1.
Exhibit 1.1

: The interactive nature of the Management Process

Planning
Setting up targets logic & methods

Controlling
Making sure that the org.
moves towards objectives

Organizing
Arranging and
allocating work,
authority & resources

Leading
Directing, influencing &
motivating employees
to perform tasks

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1.2.3

Efficiency and Effectiveness in Management

Efficiency: Efficiency can be explained as the use of available resources in

the best possible way to get the maximum output so that waste would be
minimal. This is called as doing things right.
Effectiveness:
Completing activities to achieve set goal/s of the
organization in best possible way is termed as effectiveness. This is called as
doing right things.
No matter how efficiently one tries to use inputs, the focus should be on
achieving set goal/s or target/s. If not, all the effort is worthless. Therefore,
both concepts are equally important in managing organizations. As exhibit
1.2 indicates management is concerned with both efficiency and
effectiveness.
Exhibit 1.2

Efficiency and Effectiveness in Management

Efficiency (Means)
Resource Usage

Effectiveness (Ends)
Goal
Attainment

Management Strives for:

Low resource waste (high efficiency)
High goal attainment (high effectiveness)

Source: Robbins ,SP & Coulter M,2002,Management(7th edition)p.8

1.2.4 The nature of management
Management is explained as a science, a profession and an art. Let us
examine why we describe management in this manner.
First let us look at why management is described as a science. There
are specific scientific aspects in management. Many management
issues and problems can be approached in ways that are rational,
logical, and systematic. Managers can gather data and information and
use quantitative models and decision making techniques to arrive at
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correct decisions. When dealing with relatively routine and

straightforward issues, managers use the scientific approach to solve
problems. For example, if the cost of production is known, subject to
constraints it would be possible to find the optimum production which
generates the highest profit. Therefore, management can be described
as a science.
Management is a profession as there are certain skills and knowledge
necessary for a successful manager. Technical and diagnostic skills are
especially important in managing a business. Management is not a
formal or traditional profession, but education and experience is
necessary for a good manager. For example, when making a decision
on centralization or decentralization of activities, or organizing
activities it should be done with specific management concepts.
Management is an art as managers often make decisions and solve
problems on the basis of experience, personal insights and sense. For
example for solving unusual and non- routine problems requires this
personal insight and sixth sense.
Successful managers apply the scientific methods and knowledge in
their own way to each and any given situation, issue or problem. Effective
management is a mix of the above three.
1.2.5

Universality of management

Management is a global activity and there are lessons to be learnt from

everywhere in the world. Management activities - planning, organizing,
leading, and controlling- are universal, because they commonly apply to all
types of organizations (businesses, churches, societies, athletic teams,
hospitals, etc).
Naturally, managers jobs vary somewhat from one type of organization to
another. Each organizational type exists in a unique working and political
environment, uses different technology, and requires the use of specialized
knowledge.
Therefore we can conclude that management principles more or less are
universal but practicing them varies from situation to situation, or country
to country.

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(Now try Self- assessment 01)

1.3

Manager and his/her mission in an organization

1.3.1

The Manager

Manager is the person who allocates and oversees the use of

resources. Management consists of one or more managers.
Management, individually or collectively, sets and achieves goals by
coordinating various resources and by applying related functions.
Presently, there is more attention on practical management. i.e. Who
is a manager? Instead of what is management? The reason is that
management principles are almost same but the success depends on
the way those principles apply and that is done by the manager.
A managers primary responsibility is to carry out the management
process. How successfully an organization achieves its objectives
depends to a large extent on its managers. Therefore, there is a high
demand for competent managers all over the world. The best
managers are educated, committed and dedicated leaders with
exceptional analytical and critical ability.
According to literature, personal qualities required for a manager
include:
Ambition, energy, great commitment, and self-motivation
Job, product and service knowledge
Creativity and imagination
A thirst for knowledge
A commitment to improvement
The ability to grow and broaden the outlook and vision of the
organization
A
positive
and
dynamic
attitude,
self-discipline
and
understanding about the staff
1.3.2

Role of a manager
Henry Mintzberg (1973) described managers task by looking at the
roles they perform at work. Managers perform 10 interrelated roles
which can be grouped under three categories. Refer to exhibit 1.3.
It shows ten roles and sample activities.

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Exhibit 1.3 Mintzbergs managerial Roles

Category
Role
Sample activities
Inter
-Figurehead
Attending ceremonies, welcoming
personal
visitors
-Leader
Encourage employees to improve
productivity
-Liaison
Coordinating activities
Informational -Monitor
Scanning industry reports
-Disseminator
Holding informational meetings;
sending memos
-Spokesperson
Giving information to the media;
making speeches
Decisional
-Entrepreneur
Developing new ideas for innovation
-Disturbance
Resolving conflicts
handler
-Resource
Reviewing and revising budgets
allocator
- Negotiator
Reaching agreements with other
parties
Source: Robbins ,SP & Coulter M,2002,Management(7th edition)p.11
However, there is a view that some other key management tasks, such as
structuring the organization & determining strategies are also role of
managers.
1.3.3

Managerial Skills and Management Levels

Managers need certain skills to perform duties and activities associated

with being a manager. Knowledge alone does not develop the skill. Managers
exercise ability with varying degrees of competency and proficiency.
It has been identified three basic skills.

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Technical skills: Ability to work with tools (eg. computers) and

specific field (eg. accounting )
Human Skills: Ability to work with others, understand and
motivate others.
Conceptual skills: Ability to recognize significant elements
in a situation, and to understand the relationship
among the elements.

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The most common view considers three basic levels of managers:

Top managers
They are responsible for managing the overall organization.
Different titles are used for them. i.e. President, CEO
Top managers establish goals, overall strategy, and operating
policies. They are mostly interrelated with the external
environment. Major decisions related to the organization are made
by them.
Middle level managers
Common titles used are operations manager, marketing manager
etc.
They implement the policies and plans developed by the top
managers and supervise & coordinate the activities of first line
managers. Traditionally we find more middle level managers in
organizations, but with the recent trend of downsizing, there is a
greater removal of managers from this level.
First line managers
Supervise and coordinate the activities of operating employees.
Common titles are supervisor, coordinator

The relative importance of these skills may differ according to various levels
in the organizational hierarchy. E.g. Technical skills are of greatest
importance at the supervisory level, while conceptual skills are more
important at the top level.

(Now try Self- assessment 02)

Activity 1
Think of a manager you are familiar with or the principal of your
previous school and list 10 roles s/he performs

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1.4 Organizations: An overview

All of us belong to organizations. Your parents or you probably work in an
organization. It may be a large company or a much smaller firm. These
organizations are created based on the view that more can be achieved by
working together rather than by trying individually. As we mentioned earlier
in the lesson, various types of organizations, large and small, formal and
informal, profit making and non-profit making, educational and cultural,
government and private are visible in a society. Though we label
organizations in this way, any organization can have combined
characteristics. For example, Nawaloka group of companies is a large,
formal, profit making, private organization. The University of Peradeniya is
a large, formal, non-profit making, educational, government organization.
The attainment of organizational goals by using resources in an efficient and
effective manner is the responsibility of managers.

1.4.1. Common characteristics of an organization

An organization can be defined as a group of people working together in
a structured and coordinated fashion to achieve a set of goals. From
this definition, some important features of an organization can be
traced.
Each has a distinct purpose: i.e. a goal or a set of goals that the
organization hopes to accomplish.
An organization is composed of people: i.e. More than one person
to perform the work that is necessary for the organization to
achieve its goals. (When there is one person we cannot call it as
an organization.)
All organizations have a planned structure.
Organizations enable individuals to satisfy their needs for interaction,
companionship and contribution to a common purpose.

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1.4.2 Traditional and new organizations

The concept of an organization is changing because of environmental
changes. Specific characteristics of traditional and new organizations can be
summarized as follows.
Exhibit 1.4 Characteristics of traditional and new organizations
Traditional organization

New organization

Stable

Dynamic

Inflexible
Job-focused
Work is defined by job
positions
Individual-oriented
Permanent jobs
Command-oriented
Managers always make
decisions
Rule-oriented
Relatively homogeneous
workforce
Working hours defined
Hierarchical relationships

Flexible
Skills-focused
Work is defined in terms of tasks
to be done
Team-oriented
Temporary jobs
Involvement oriented
Employees participate in decision
making
Customer-oriented
Diverse workforce
Workdays have no time boundaries
Lateral and networked
relationships

Work at organizational facility

Work anywhere, anytime
during specific hours
Source: Robbins and Coulter, 2002, Management, Prentice-Hall,p.17
Traditionally the organization was viewed as a closed system (sealed
off from the outside world). It was assumed that the environment is
stable, and would not pose problems. Managers are expected to find
out ways for increasing internal efficiency. From the above
characteristics it is clear that in traditional organizations, various jobs
and relationships are strictly designed that they have great difficulty in
adapting to changing circumstances. In new organizations differing
characteristics are visible as shown in Exhibit 1.4. They are more open
and flexible and responsiveness to change. For rapidly changing
environment (economic, political, technological, global, and social
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changes are more frequent) new types of organizations are more

suitable. Thus, managers and management continues to be important
despite the fact that the concepts of organizations have been changed.

1.4.3 Organizational Development

The size of an organization can be measured in a number of ways.
Some common measures are:
The number of employees
Profit level
Market share
Capital employed
Turnover
Most organizations try to grow and develop into larger organizations.
Organizations grow either because there are opportunities for growth,
or because their managers have deliberately practiced policies to
achieve growth. Managers use different techniques such as team
building, survey feedback in organizational development. By growing,
organizations may gain greater security (e.g. by offering a wider range
of products), economies of scale (e.g. Buying in bulk, spreading
overhead costs over a bigger output), and prestige power (i.e. power
of controlling the market with high share).
Organizational growth can take place in different ways.
Increasing sales volume and market share
Expansion of geographical markets
Takeover or mergers- i.e. two or more organizations join
together to eliminate competition and expand into new markets.
For example, Sri Lanka Telecom Ltd.(SLT) with Mobitel, National
Insurance Corporation Ltd. With Janashakthi Insurance Ltd.
Joint ventures- two or more organizations agree to work
together for their mutual benefits.
However, some owners and/or managers may resist growth due to
their pursued problems, such as difficulty of control.

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Activity 2
Identify 20 organizations in your surroundings and group them as:
A)Profit Making

B)Non Profit Making

Government

1.5

Privet

Summary
At present, more attention is on managers as their contribution is
immense for the success of a business. A manager is the person
who allocates and oversees the use of resources. Management is
the process of planning, organizing, leading and controlling the
work of members of an organization to reach established
organizational goals. Management principles more or less are
universal but practicing them varies from situation to situation.
Management is explained as a science, a profession and an art.
Effective management is a combination of these three.
A group of people working together in a structured and
coordinated fashion to achieve a set of goals is called an
organization. The concept of an organization has changed along
with environmental changes. The importance of managers,
especially top level skilled managers, is continued despite the fact
that concepts of organizations change.
The practice of management has a long history. It has its origin in
the earliest points of civilization. Over the years many people from
various subject backgrounds have contributed to the discipline of
management. Management has drawn concepts and principles
from economics, sociology, psychology, anthropology, statistics,
mathematics etc. Let us look at the evolution of management in
the next lesson.

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