MGT 420 :: PRINCIPLES AND PRACTICE OF MANAGEMENT

INTRODUCTION TO
MANAGEMENT

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Chapter 1 :: Introduction To Management

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Introduction
to Management

Organization

Definition Management
Type of Organization
Definition
Management Function
Importance of Effective management
Levels of Management

INTRODUCTION TO MANAGEMENT
When we talk about management, we cannot run away or ignore the concepts of
management. It is important to understand the concept or refresh our memory because to be
a better manager, we have to go back to the basic. So this chapter appears again even
though you have covered the topics earlier in MGT 162

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Chapter 1 :: Introduction To Management

Learning Objective

Upon completion of this chapter, you should able to;-

1. Define organization and management
2. Explain the different types of organizations
3. Explain the management functions and
process
4. Describe the managerial skills and roles.
5. Explain the contemporary manager

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What Is An Organization ?

There are a few ways of defining organization. Here, we have two definitions by
Stoner and Schermerhon. Basically, an organization is a group of people intentionally
organized to accomplish an overall, common goal or set of goals. Business
organizations can range in size from two people to tens of thousands.

An organization is a social unit in which two or more people interact to achieve a

common goal. (Stoner 1995).

Defining

An organization is defined as a collection of people working together in a division of

labour to achieve a common purpose. (Schermerhon).

Why do we need an organization?

• Accomplish objectives
• Preserve Knowledge
• Serve Society
• Provide Careers

1.1 Types of Organizations

For most of us, organizations are important part of our daily lives. This is a place
where we engage in a systematic effort to produce goods or services. An
organization can be formed according to formal and informal organization.

Formal organization
A formal organization is an organization that consists of two or more people who are
involved in a mutual effort with formal authority to achieve common objectives. This
is depicted by an organization chart.

Informal organization

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An informal organization is an organization that consists of two or more people

involved in a mutual effort without deliberate structures of authority (informal
authority) or the necessity of the common objectives.

Identify who perform formal functions and informal functions

in your organization. Describe their respective functions
Activity

1.2 What is Management?

The term "management" has many definitions;

• It is commonly defined as the art of getting work done work done through
other people.
• Another definition simply states that to manage is to make decision work done
through other people.
• Another definition simply states that to manage is to make decision.

Who practices management?

In formal organization, management is practiced by everybody and is supervised by
managers.

Management functions

For a manager to effectively manage an organization, he or she must perform

management functions.

What is management function?

It comprises the activities of planning, organizing, leading and controlling.

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Includes defining goal, establishing strategy and developing

Planning plans to coordinate activities

Determining the tasks to be done, who is to do them, how the

Organization tasks are to be grouped, who reports to whom, and where
decisions are to be made

Includes motivating subordinates, directing others, selecting the

Leading most effective communication channels, resolve conflicts
among individuals or groups and teams

Controlling Monitoring activities to ensure that they are being

accomplished as planned and correcting any deviations

LEADS

ACHIEVING ORGANIZATIONAL GOALS / MISSION

Managers And Managing

Managers’ are those individuals that manage people that reports to them. They are
responsible for different departments, work at different level in the management
hierarchy, and they should meet different requirements for achieving high
performance.

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What Do Managers Really Do?

• Managers performed the management functions of planning, organizing,
leading and controlling. The amount, scope and frequency spend on the
management functions depend on their position in the management
hierarchy.
• Managers are responsible for achieving organizational objectives through
efficient and effective utilization of resources. These resources are human,
financial, physical and informational.
• Besides that, to be a successful manager, a manager requires certain
competencies to manage in the 2151 century:
They must be more team-oriented, participatory, and flexible and
focused on results.
They also must be great communicators, team players, masters of
technology, problem solvers, foreign ambassadors, change makers
and leader.

Describe the use of the four management functions in the

management of your daily life.
Activity

1.3 Importance of Effective Management

• Help us understand many events, challenges and skills that will give meaning to
our future work experience and careers as managers.
• Make us become effective managers through effective utilization of its human
and material resources.
• Make us become effective managers who will be able to detect and locate
problems to be solved that results in good decision making.
• Enable us to assess the future and make plans for it.
• Make sure that as mangers, we will be responsible and accountable for ensuring

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that the work efforts of our employees are directed towards the accomplishment
of organizational objectives.

1.4 Process of management

The management process involved these four functions:

• Planning
Setting goals and defining the actions necessary to achieve those goals.
3 steps involved:
ƒ Deciding which goals the organization should pursue
ƒ Deciding what courses of action to adopt to attain those goals
ƒ Deciding how to allocate organizational resources
The outcome of the process is the organization’s strategy, a pattern of
decisions concerning what goals to pursue, what actions to take, and
what resources to use.
Planning is very complex and difficult because of the level of
uncertainty.

• Organizing
The process of determining the tasks to be done, who will do them, and
how those tasks will be managed and coordinated.
At this stage managers establish the structure of working relationships
between organization members that best achieves organizational goals.
ƒ Here it involves grouping people into departments according to
the tasks they perform.
ƒ Managers need to lay out lines of authority and responsibility
between groups and people.
The outcome of the process is an organizational structure, the formal
system of reporting relationships.

• Leading
The capacity to lead the members of work groups toward the
accomplishment of organizational goals.
Managers determine direction, articulate a vision, and energize

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employees so that they can play a part in achieving goals.

Requires a number of skill sets including:
ƒ Understanding individual/group behavior dynamics
ƒ The ability to motivate employees
ƒ Be effective communicators
ƒ Able to envision future and share that vision
ƒ 3C’s Leadership Model

• Controlling
Monitoring the performance of the organization and the progress in
implementing strategic and operational plans.
Identifying the deviations between planned actual actions.
Taking corrective action.
Ensuring that the organization is moving toward the achievement of its
goals.
This involves designing appropriate measurements and information and
control systems.

These four processes are essential to a manager’s job;

• The relative importance of each change with a manager’s position in the
hierarchy.
• The amount of time spent planning and organizing increases the higher up a
manager is.
• The lower the manager’s position, the more time spent leading and controlling
others.

1.5 Levels of Management

There are three levels of management in an organization. Managers are classified

based on these managerial levels. (Figure 1.0a and 1.0b)

First Line Management

This level refers to the lowest level of management in which individuals are
responsible for the work of others. First line or first level managers manage
operating employees only. Examples are retail supervisors at the floor operations,

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clerical supervisor in a large office an production supervisors in a manufacturing

plant.

Middle Management
Middle management refers to the level whereby managers would direct the
activities of lower level managers and sometimes , also those of the operating
employees. Middle mangers' main responsibilities are to direct the activities that
implement the organization's policies and to balance the demands of their
superiors with the capacity of their subordinates.

Top Management
The top management level refers to the top managers that are responsible for the
overall management of the organization. It establishes long term strategies and
policies for the organization. Examples of the managers are Director, Chief
Executive Officer (CEO), Senior Vice President, Chairman and others.

THREE TYPES OF MANAGERS AND THEIR PRIMARY FUNCTIONS

Top Managers

Middle Managers

Lower / First-line Managers /

Operating Employees

Figure 1.0a

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Planning Organizing Leading Controlling

Top Managers

Middle
Managers

First-line
Managers

Figure 1.0b

Managerial Skills
A manager must have three basic managerial skills when managing resources in an
organization. They are as follows:
Technical skills - ability to use the procedures, techniques, and knowledge of a
specialized field. Examples are surgeons, accountants, engineers, technicians
etc.
Human skills - the ability to work with, understand and motivate other people,
as individuals or in group.
Conceptual skills - the ability to coordinate and integrate all of organization's
interest and activities.

Take a look at the diagram below. You will see how the need of each skill varies with
the level of management.

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Skills Needed at Different Levels of Management

First-line Middle Top-level

Manager Manager Manager

Conceptual Conceptual Conceptual

Human
Human
Human
Technical

Technical
Technical

Figure 2.0

Now, what about communication skills? Communication skills

refer to a person's ability to convey information, thoughts, feelings
and attitudes. It is both oral and written.
Activity Do you think it is essential for managers at all levels to have this
skill?

Managerial Roles
There are three roles that managers perform in an organization. Each role is
concerned with influencing the behavior of people inside and outside the
organization. Managers may perform several roles at once. They are as follows:

Interpersonal roles - Interacting with others, external or internal the organization

Informational roles - Gathering/Obtaining of information for decision making

Decisional roles - Allocating of resources

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Among these three roles, decisional roles are the most important.

There are ten (10) roles classified under the three (3) main roles..

NO. MAIN ROLE ROLE DEFINATION

Helps the manager in the organization
1. Interpersonal
smoothly.
A department head performing ceremonial
Figurehead duties greeting visitors, signing legal
documents.

A person responsible for hiring, training

Leader and motivating subordinates in the
organization.

A person who perform and interacts with

Liaison
other people outside organization.

Assist the manager in receiving and

2. Informational communicating information to make the
right decision.

Managers continuously seek information

Monitor
that can be used to advantage.
Information received internally or externally
Disseminator
will be transmitted to be subordinates.

Information will be transmitted to people

Spokesperson
outside the organization or unit.

It assists managers in making decision that

3. Decisional solve problem or analyze and take
advantage of opportunities.

Manager tries to improve that units and

Entrepreneur
initiate changes

Manager is responsible for corrective

Disturbance handler actions the organization faces important
unexpected disturbances.

Manager is responsible in allocating

Resource Allocator
resource for the organization.

Manger is responsible for representing the

Negotiator
organization at major negotiations.

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Managerial Roles

Interpersonal
figurehead
leader
liaison

Informational Decisional
monitor entrepreneur
disseminator disturbance handler
spokesperson resource allocator
negotiator

Figure 3.0

(Source : H. Mintzberg, The Nature of Managerial Work (New York: Harper & Row, 1973)

1.6 Contemporary Manager

The roles that managers have to fulfill today are quite different from the ones they
have traditionally occupied. Managers will no longer think of themselves as “the
boss,” but will view themselves as sponsors, team leaders, or internal
consultants. Today’s leaders can no longer wield control from the top of the
pyramid; nor can they control the action from the sidelines. Leaders must
empower individual employees to do whatever is necessary to achieve goals…
and make sure that employees have the resources to get the job done.

Competencies of Tomorrow’s Managers

• The great communicator

• The individual coach
• The team player
• The technology master
• The problem solver
• The foreign ambassador

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• The change agent

• The lifelong learner

Implications for Future Leaders

Keep abreast of changing conditions that affect the organization.

• Develop and understanding of the major environmental trends that are

affecting organizations across the globe.
• Be flexible and adaptable to organizational changes, as well as proactive
in initiating change when appropriate.
• Understand the changing role of the manager within the corporate
structure.
• Make the most of your education and develop the skills and competencies
necessary for managerial success.
• Focus on excellence and quality in everything you do.
• Take every opportunity to enhance your leadership skills.

Interview a manager at any level in your organization. Determine

which of the managerial roles the managers you interview apply to
Activity his or her job.

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Summary

An organization is a collection of people working together in a division of labor to

achieve a common purpose. The organization can be structured according to formal
and informal organization.

Management is a process whereby the managers performed the various functions of

planning, organizing, leading and controlling. There are various types of manager
found - top, middle and lower manager. They performed various skills and roles to
manage the organization effectively.

Being a manager involves acting both logically and emotionally. For top managers,
decision making is challenging, as the current situation is constantly changing.
Managers are often forced to deal with problems simultaneously and make snap
decisions. Experienced managers accept failure by their subordinates as a normal
part of learning.

References
1. James A. F. Stoner, R. Edward Freeman and Daniel R. Gilbert jr. Management.
Prentice Hall 6'" Edition 1995

2. Pamela S. Lewis, Stephen H. Goodman, Patricia M Fandt., Management:

st
Challenges for 21 Century. South Western, 2001
3. Stephen H. Goodman, Patricia M Fandt, Joseph F Michlitsch, & Pamela S. Lewis,
Thomson South Western, 2007.
4. Gareth R. Jones, Jennifer M. George and Charles W.L. Hill, Contemporary
Management. 2nd edition, McGraw Hill, 2000.

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Checklist
Are you now able to:

9 To differentiate between organizations and management

9 Explain formal and informal organization

9 Specify the various functions perform by a manager in an

organization

9 Relate the level of management with managerial skill

9 Discuss the various roles performed by manager.

Key Terms for Review

• Conceptual skill
• Informational roles
• Interpersonal roles
• Decisional roles
• Human skill
• Middle management
• Lower management
• Technical skill
• Organization
• Management
• Top management

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Discussion Questions
1. What is an organization?
Why are managers important to an organization’s success?

2. Compare and contrast between Top Management and Middle Management

3. Differentiate the various types of skill performed by a manager

4. What are the various roles that will affect managerial effectiveness?

5. Contrast planning, organizing, leading and controlling.

6. In what ways can managers at the three levels of management contribute to

organizational efficiency and effectiveness?

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Study Notes

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