Chapter-One Management - An Over View Chapter Objectives
Chapter-One Management - An Over View Chapter Objectives
Chapter-One Management - An Over View Chapter Objectives
Chapter Objectives:
After completing the chapter, you should be able to:
Explain the different meanings and definitions of management.
Describe the significance of management
Discuss why management is both an art and a science
Identify the different classifications of management
Identify the five basic managerial functions and describe their relationships
Describe the roles managers play and skills they need
Identify the difference between Administration and management
1.1. INTRODUCTION
Is management necessary? Why? What does a manager actually do? What are some of the
characteristics of the field of management? These are the questions that beginning student of
management often asks. To answer some of these concerns, just look at yourself. You are a
manager of your time, energy, and talents. The decisions you make each day in these three areas
will have a far-reaching influence on your career, your life and the lives of others.
Think of yourself getting up on the morning you must decide at once: You must plan what you
want to accomplish during the day, organize the resources to achieve your plan and periodically
check on those activities to see if your plan is being achieved. Realizing it or not, you are
performing three of the management function – planning, organizing and controlling. This is
simply to show you how the task of managing is performed in our day-to-day life. Therefore, this
chapter is designed to introduce you with the meaning, features, significance, function and roles
of management in general.
i. Management has various aspects, that all of which cannot be represented by a single
definition
ii. The theorists who gave the definitions has different areas of interest or training, they
all defined management from their perspective (engineering, sociology, psychology
mathematics, etc.
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iii. Management as a discipline is young and there is a lack of clarity of concepts and
principles
Despite all the above reasons for different definitions, the definitions are not contradictory or
mutually exclusive. Management is the synthesis of all the definitions given by different
theorists.
The following are some of the different definitions given by different scholars of management:
i. Management is the art of getting things done through and with people in a formally
organized group.
ii. Management is the art of knowing what you want to do in the best and cheapest way.
iii. Management is the process of planning, organizing, staffing, leading and controlling.
The uses of a farm’s resources to effectively and economically attain its objectives.
iv. Management may be defined as the art of securing maximum result with a minimum
effort so as to secure maximum prosperity and happiness for both the employer and
employee and give the public the best possible service.
v. Management is the process of working with and thought others to effectively achieve
the organization in a changing environment.
Every field of study should have its own features those distinct from other. Management as a
separate field of study has also its distinctive characteristics.
1. Organized activity: When a group of people come together to achieve a common
objective or objectives, they need to coordinate & cooperate among each other &
this is organized activity.
2. It is a process: process means a systematic method of doing some work.
Management is recognized as a continuous process. It is that process in which work is
done with others or it is got done from them. In order to achieve the pre-determined
objective a manager performs the work of planning, organizing, staffing, leading and
controlling. A manager did these works in a continuous order. So, it is a process.
3. Existence of objectives: Without objectives no organization is complete.
4. Relationship among resources: Integration of various resources: money, machinery,
materials & men. The most important resource is man, which can create this
integration.
5. Working with and through people: Management involves working with people, and
also commanding, directing and controlling their activities.
6. Decision making is one of the most important activities in management and it
involves selecting the best alternative among many.
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7. Human Activity: Managers will never be substituted by substituted by technological
advancement. However the work of management is evolved through the contribution
of different disciplines including psychology, sociology, law, economics,
mathematics, and so on
According to Drucker, management is a dynamic and life-giving element of every business. In its
absence the means of production remain merely the means and can never be the producers. We
know that not only in the field of business but in other fields also management has come to
occupy an important place. In this reference, it is said that “anything minus management is
nothing.” These are some topics, which clearly highlight the importance of management.
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consumers and workers satisfied to this way manager’s help an enterprise to fulfill its
obligation towards different sections of society.
9. Management minimizes risks
10. Reduces cost of production
11. Economic growth: Management is the catalyst of economic growth, development is a matter
of human energies rather than of economic growth and generation of human energies is the
task of management. Management is the mover and development in the consequence.
12. Stability: management ensures the survival of an organization in a fast changing
environment. It co-ordinates the activities of different departments in an organization and
maintains team spirit amongst the personnel.
13. Human development: Management is not simply directions of things but the development
of men. It improves the personality and caliber of people to raise their efficiency and
productivity. A good manager serves as a friend and guide to his subordinates.
I .Argument against
a. The persons arguing against the concept of universality of management say that
management is culture bound. Culture means the attitudes, values, and beliefs of a
society. The cultures of different societies are different and also the organizational
cultures of the various organizations are not similar. When there is this difference in
cultures the principles or techniques of management will not have the same result, hence,
management is not universal.
For example, in a country with strong tradition, religion and culture, introduction of
modern management methods become difficult.
b. Objectives of different organizations will be different and these objectives dictate the
kind of managerial practices followed in these organizations. Thus we cannot call
management as universal. Ex. The objectives of the Red Cross and Bahir Dar textile
factory are different and the techniques of management followed in these organizations
are also different.
c. Philosophy is the attitude towards certain activity or the way one looks at life.
Differences in the management philosophies have a profound impact on the managerial
practices of the organization. If the philosophy of the top management is to make as
much profit as possible, then the managerial practices of the organization will be different
from the organization whose philosophy is service to the society.
II Arguments for
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Researchers had conducted various studies carried out in different organization and in different
countries to formulate these arguments, which support the concept of universality of
management.
a) Management as a process or the various elements of management like planning,
organizing, staffing, leading and controlling is common for all organizations, throughout
the world.
b) Management Fundamentals and Techniques /Practices may differ from organization to
organization and from country to country but the fundamental concept of management is
the same throughout. Universality means that fundamentals are the same through our the
world, but the techniques to achieve/fulfill this fundamental may be different
III Conclusion
Most of the management theories have come from one country, i.e. USA and have been used
successfully in different countries with different cultures. This shows that management is
universal when it adapts a little.
Management is art:
Art implies the application of knowledge and skills to bring about the desired results.
Features:
1. Practical knowledge: every art signifies practical knowledge. An artist must not only learn
the theory but also its application in practice. Similarly a person cannot become a successful
manager simply by reading the theory he must also learn to apply his knowledge in solving
managerial problems in practical life. A manager is judged not just by his technical
knowledge but his efficiency in applying that knowledge.
2. Personal skill: every artist has his own style and approach to his job. Similarly every
manager has his individual approach and style on solving managerial problems. The success
of a manager depends on his personality in addition to his technical knowledge.
3. Result oriented approach: art seeks to achieve concrete results. Every manager applies
certain knowledge and skills to achieve the desired results.
4. Creativity: art is basically creative therefore every piece of art requires imagination and
intelligence to create. A manager effectively combines and coordinates the factors of
production to create goods and services.
5. Improvement through practice: every artist becomes more and more efficient through
constant practice. Similarly a manager gains experience through regular practice and
becomes more effective.
Conclusion: One cannot become efficient and effective manager simply by learning.
Management principle by itself requires practical application of those results.
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Management as a science:
Science means a systematic body of knowledge pertaining to a specific field of study. It contains
general principal and facts which explains a phenomenon.
Features:
1. Systematic body of knowledge: management is a systematic body of knowledge consisting
of general principles and techniques. These help to explain events and serve as guidelines
for managers in different types of organization.
2. Universal application: scientific principles represent basic facts about and a particular field
of enquires. These principles may be applied in all situations and at all times. Management
contains some fundamentals principles, which can be universally applied. These principles
are flexible and need to be modified in different situations.
3. Scientific enquiry and experiment: scientific principles are derived through scientific
investigation and reasoning. So they can be explained logically. Scientific principles are
critically tested. Management principles are also based on scientific enquiry and
investigation. These have been developed through practical and experimental experience of
a large number of managers.
4. Test of validity: validity of scientific principles can be tested at any time and any number of
times. Every time the test will give the same result. Principles of science can also be tested
for their validity.
Conclusion: Management is not a perfect science like other physical science such as astronomy,
physics, chemistry, and biology etc. Management deals with people and it is very difficult to
predict their behavior accurately so management is a social science.
Management as a profession:
A profession is a caving that requires specialized knowledge and often long intensive academic
preparation:
Features:
1. Specialized body of knowledge: every profession has a well-defined body of knowledge
relevant to the area of specialization. In order to practice a profession a person requires
specialized knowledge of its principles and techniques. There exists a substantially and
rapidly expanding body of knowledge in management. Today, management is a separate
discipline having a specialized and organized body of knowledge.
2. Restricted entry: there exist institutions and universities to impart education and training for
a profession. No one can enter a profession without going through the prescribe course of
learning. Many institutions have been set up which offer courses for specialized training in
management. Formal education and training has become very helpful in getting jobs as
managers.
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3. Service motive: a profession is a source of livelihood but professional are primarily
motivated by the desire to serve the community. A profession enjoys community sanction or
respect. A manager of a factory is responsible not only to its owners, but also expected to
produce quality goods at reasonable costs and to contribute to the well being of the
community.
4. Representative association: in every profession there is a statutory association or institution,
which regulates that profession. Managers have formed certain associations for the regular
exchange of knowledge and experience.
5. Code of conduct: members of one profession have to abide by a code of conduct, which
contains rules and regulations providing the norms of honesty integrity and professional
ethics. The representative association to ensure self-discipline among its members enforces
the code of conduct. Any member violating the code can be punished and his membership
can be cancelled.
Conclusion: Management fulfills several essentials of a profession but like other professions
management does not restrict entry into managerial jobs, to people with a special academic
degree.
Top-Level Management – Top – Level management includes that of board of directs executive
committee, and chief executive, or president, or general manger, etc. of an organization.
Function of top managements includes:
Establishing broad objectives
Designing major strategies
Outlining principle policies
Providing effective organizational structure that insures integration,
Proving over all leadership and direction
Making overall control of the organization
Dealing with external parties such as the government, community, business etc, by
representing the organization and
Analyzing the change in the external environmental and response to it
Middle –Level Management- These managers include heads of the different functional area and
their assistants: divisional heads, departmental mangers, section heads, plants mangers, branch,
managers etc. Manages in this level are specialists and their activities are limited to a particular
area of operation or to a section or department. Middle level managers direct the activities of
lower level managers and sometimes extend to supervision of operating employees. They
balance the demand of top, managers and the capacity of lower level managers.
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First line mangers (Lower-Level managers) - are responsible for the work of operation
employees and do not supervise other managers. Their tasks include planning of day to day
work, assignment of jobs, keeping a watch on workers performance, sending reports and
statements to middle level managers, evaluating workers and maintaining close contract with
workers.
Functional managers
Functional managers supervise with specialized skills in a single area of operation, such as
accounting, personnel, finance, marketing and production. All these functions are necessary for
the success of t he organization.
General Managers
General Managers are responsible for the overall operation of a more complex unit, such as a
company or a division. General Managers hold functional managements accountable for their
specialized area as and usually coordinate two or more departments. In their jobs, general
managers have to deal with major uncertainties, great diversity, and a larger volume of
information.
I. Skills of Management
What skills are necessary for managers? Ask yourself if you acquire the required skills to be a
manager. In a general discussion of management such as this, it is useful to describe what skills
are necessary to operate successfully as a manager. Skill is the ability to do something expertly
and well. It is meant ability related to performance that is not necessarily in both but which can
be developed /acquired. Managerial skills can be classified in to three distinct categories;
technical, interpersonal and conceptual skills. However in practice the skills are closely related
and it may be difficult to tell where one begins and the others end.
Technical Skills
This skill requires the ability to use a special proficiency or expertise to perform particular tasks.
Managers acquire these skills initially through formal education and then further develop them
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through training and job experience. Technical skills are most important at lower levels of
management.
Involve the ability to apply specific methods, procedures, and techniques in a specialized field. It
is easy to visualize the technical skills of design engineers, market researches, accountants,
musicians, and computer programmer. If the manager lacks these skills, he will not be able to
make correct decisions or answer employee’s questions
Conceptual skills
It involves the ability to view the organization as a whole and recognize its relationships to the
large environment. In other words, conceptual skill involves visualizing the different parts of an
organization as one big whole and or understands the whole interaction with its relevant
environment. More specifically
How the organization’s various and functional depend on each other and thus, how
changes in one area can affect other areas.
How each part contributes to the achievement of the overall organizational goal.
Managers with conceptual skill understand all activities, and interests of the organization and
how they interrelate. This skill is highly important to top-level managers.
Although all three categories contain skills essential for managers, their relative importance
tends to vary by level of managerial responsibility.
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The relationship bet ween
manager ial levels and manager ial
skills
Human
skill
Top level
Middle level
Lower level
Technical
skill
Please discuss the relative importance of skill to the three levels of managers. What managerial
skill is more important to which level of management? Why?
The ten roles are classified in to three categories: Inter personal roles, information roles, and
decisional roles.
1. Inter personal roles- refers to activities that involve interacting with others who may be
external or internal to the organization and at a higher or lower level of the manager.
Figurehead-describes the formal activities in which the manager acts as a public official
for the company. The manager represents the organization at the ceremonial and
symbolic functions. It is the most basic and the simplest of all managerial roles. The
president who greats a touring dignitary, the mayor who presents a key to the city to a
local hero, the supervisor who attends the wedding of the clerk, the sales manager who
takes an important customer to lunch, all are performing ceremonial duties important to
the organization’s image and success. While these duties may not seem important, they
are expected of managers. They symbolize management’s concern for employees’
customers and the community.
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to do with staffing, hiring and promoting. Other aspects involve motivating subordinates
to meet the organization’s needs. Still other aspects relate to creating a vision that
company employees can identify with.
Liaison role- The manager interacts with peers outside of the organization such as
clients, government officials, customers, and suppliers. It also refers to dealing with
managers in other departments, staff specialists, and other departments’ employees. In the
liaison role, the manger seeks support from people who can affect the department’s and
the organization’s success. This role is therefore, composed of a net work of
relationships.
2. Informational Roles
Managers should first build networks of contacts for exchanging information. Many contacts
made while performing figureheads and liaison roles give mangers access to a great deal of
important information. Therefore, informational roles are activities that focus on obtaining and
disseminating data important for the decisions the manger needs to make.
Disseminator- the manager sends information from external sources to various parts of
the work group and information from internal sources to others both internal and external to
the organization.
Spokesperson role – the management provides information about the work group to
those outside the group. The manager will provide information to public, which includes
customer, suppliers, trade organizations, government agencies, consumer groups, and the
press. Managers used information to make decisions about when and how to commit their
organization to new objectives and actions.
3. Decisional Roles
These are activities that deal primarily with the allocation of resources in order to reach
organizational objectives. Decisional roles are perhaps the most important of the three categories
of roles.
Entrepreneurial Roles: - the management acts as the initiator and designer or changes
within the work group to improve organization position. These changes may be in
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employee skills, work redesign, information reports, and goods or services provided.
Managers play this role when they initiate new projects, launce a survey, test a new
marker or enter a new business.
Disturbance handler: - deals with change forced on the manager by other factors. The
management acts because it is necessary to handle a disturbance when occurs and a
solution must be found. Some types of disturbances are conflicts among individuals,
international difficulties between one unit and another, and conflicts over resource losses,
breaking of contracts by customers, strikes by labor and bankruptcy of major suppliers.
Resource allocator: - Which both protects and uses the unit’s assets: money, time,
material, equipment, human resources.
Negotiator: Which focuses on reaching an agreement with other outside the workgroup
on work related issues or materials, such negotiation with union and leasing agreements
concerning machinery and vehicles. This role includes agreements with other units within
the organization.
Have you ever confused between the function of managers and non-managers? There is a hope
that your confusion will be removed after reading and understanding this section. Scholars in the
field of management have their own classification of functions of management some scholars
add few functions and delete some other functions. However, the important functions of
management are briefly discussed below; the detail discussions will be made in the latter
chapters.
1. Planning
Planning is the primary function of management. Nothing can be performed without planning. In
the business world, the organization should achieve the objectives. In order to achieve objective,
the organization plans what is to be done, when it is to be done, how it is to be done, and by
whom it is to be done. As George R.Terry pointed out planning is a constructive reviewing of
future needs so that present actions can be adjusted in view of the established goal.
2. Organizing
Organizing as a management functions is concerned with (1) assembling the resources necessary
to achieve the organization’s objectives and (2) establishing the activity- authority relationship of
the organization. It is function dealing about building the framework (Skeleton) of the future
organization to achieve objective. 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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The activities necessary to achieve the objectives are grouped in to working divisions,
department, or other identifiable units and primarily by grouping similar and related duties. The
result is a network of interdependent units. Each unit or person in the unit should have clearly
defined role responsibility, authority and list of duties. Authority and reporting relationship
among different units and positions are clearly stated.
3. Staffing
Staffing is concerned with locating prospective employees to fill the jobs created by the
organizing process. It involves the recruitment, selection, development, and retention employees
with appropriate qualification for positions created. It is one of the most important duties of
managers because successes of organization depend on the quality of its employees.
4. Leading /Directing
Directing is aimed at getting the members of t he organization to move in the direction that will
achieve its objectives. Leadership is the heart and soul of management. To be effective
leaders/managers need understand individual and group behavior, techniques of motivation, and
effective styles of leadership.
5. Controlling
Controlling deals with establishing standards for performance, against established standards, to
determine when problems do exist, and to solve the problems that occur as quickly and
effectively as possible, controlling depends on accurate, reliable and enforceable standards and
on monitoring performances by people, machines, and processes. The best control sure that work
is performed to standards as planned.
The terms administration and management are used synonymously. Some writers argue that both
these terms have same meanings and there is no difference between these two terms. Others tried
to indicate differences and said that running of a business requires managerial skill, which is
called management, and functioning of government departments and non-profit institutions
requiring administrative skill called as administration.
Some writers argue that executive functions of business unit are referred to as administration and
operative functions of the same unit referred to as administration. In this way, administration
distinguished as a top level function while management is a lower level function. Policy and
objectives of a business are determined by the top-level executives (Administration). At the same
time, the lower level people (management) work to attain the objectives of the business unit and
follow the policy framed by the administrations.
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As Oliver Sheldon stated, administration is the function in industry concerned with the
determination of the corporate policy, the co-ordination of finance, production and distribution,
the establishment of the structure of the organization under the ultimate control of the executive.
However, management in industry concerned with the execution of policy within the limits set
up by the administration and the employees of the organization for the particular objectives set
before it.
Summary
It is impossible to provide single, comprehensive, universally accepted definition of
management.
Management is the process of maximizing the potential of an organization’s
people and coordinating their efforts to attain predetermined goals. Essentially the
practice of management involves co-coordinating and utilizing human and non
human resources in the purist of such goals.
It can be concluded that management is both science and art. Management can
apply the scientific method of enquiry as well as subjective judgments like an art.
Certain skills are essential to successful management. They can be classified as
technology interpersonal, communication, and conceptual. The relative
importance of most of this skill differs across the three level of management. A
successful manger does not role on a single managerial skill, rather a combination
of skills.
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Certain types of roles are essential for performance and to enable manger to
respond to the eternal environment that influences organizations. Managers play
ten roles that fall in to three areas. Interpersonal (figurehead, leader, and liaison
roles), Information (monitor, disseminator, and spokesperson roles) decision
entrepreneur, disturbance handler, resource allocator, and negation roles).
All managers, regardless of their position and type, perform five basic functions:
Planning, organizing staffing, leading and controlling.
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