Organization and Management

Meaning, Functions, and Theories of Management

LESSON 1: The Meaning and Functions of Management

Management Defined
According to Cabrera, et.al, management is the process of coordinating and overseeing the work
performance of individuals working together in organizations so that they could efficiently
accomplish their chosen aims or goals.

DEFINITION AND FUNCTIONS OF MANAGEMENT

Various management personalities have defined management based on how they
experienced it in the course of doing about things as a manager. In the words of the Mother of
Modern Management, Mary Parker Follett, management is the art of getting things done through
other people.
Frederick W. Taylor, on the other hand, defined it as the art of being able to know what
needs to be done and that making sure that it will be achieved in the most economical way. Harold
Koontz, an American organizational theorist, viewed it as an art wherein things get done by people
in formally organized groups.
The manager has to successfully coordinate and oversee the work performance of
individuals and groups he is in charge with. In doing so, effectiveness and efficiency are expected
from every individual in the organization as these will assure the economical use of resources such
as money, time, manpower, and materials.
Effectiveness is being able to yield or generate the desired result or intended purpose. On
the other hand, efficiency is being able to produce maximum output with the use of minimum input
or doing things in the best manner without waste of resources. As Peter Drucker would state,
"Efficiency is doing things right; effectiveness is doing the right things."
A manager has to perform five major managerial duties otherwise known as the
management functions. It includes the following:

1. Planning. This function entails setting the organization’s goals or performance objectives.
Strategic actions necessary in accomplishing the goals are being defined at this stage while making
sure that these are well coordinated and integration of activities are in place.

2. Organizing. In order for the set goals to be put into action, necessary tasks must be identified. It is
in this stage that funds are made sure to be available. Since there will be several individuals and
teams who will work alongside each other, harmonious relations must be promoted in the
organization.

3. Staffing. Different job positions are identified with consideration to the size of the organization.
The type of jobs that will be undertaken and the number of employees that needs to be hired to do
the job must coincide. A manager has to make sure that he/she hires the right person for the right
job.
4. Leading. The organization exists for the attainment of its goals. With this in mind, employees must
be well-motivated and influenced to give their best as guided by the organization s endeavour to
achieve its set objectives. Incentives should be in place to encourage employee performance.

5. Controlling. It is necessary to evaluate whether the organization’s performance is on track and

whether its members are continuously working towards the achievement of the set goals of the
organization. Corrections and adjustment are done to ensure that the plans of the organization will
be well implemented.

LESSON 2: Management Theories

MANAGEMENT THEORIES

Managers follow a certain model in their management practice. At some point, he/she has in
his bag a set of rules where he draws ideas from guidelines that would aid him to arrive at sound,
fair and consistent decisions for the organization. Throughout the years, these management
practices have been tested, approved and disproved by various management practitioners and
forerunners and thus, these have evolved into theories.
These are management theories that exist as a set of general rules that would guide a
manager and his employees on how to do about the tasks in the organization that would lead
towards the successful achievement of itsset goals. The theories also serve as framework in fully
understanding the organization, how to motivate the employees to perform at their best and
accomplish things in the most efficient and economical way with the highest standards.
As management involves people in the organization, it is dynamic; as such management
theories have also evolved throughout time. Some of these continue to inspire even modern
managers and some have been replaced to suit the demands of the changing times. In this module,
we are going to learn about the Scientific Management Theory, General Administrative Theory, Total
Quality Management and the Organizational Behaviour Approach.

Scientific Management Theory (Taylorism)

This management theory promotes the use of scientific approaches to decision-making in
management. It involves using step by step procedures and finding the best way to perform a job. It
does not believe that the "rule of thumb", the "hit or miss", nor the "trial and error" will be used in
management. Frederick W. Taylor (1856-1915) is a mechanical engineer and is known as the Father
of Scientific Management. He established this theory after observing the inefficiencies and error
done by workers on the routine jobs in his workplace. According to Robins and Coultier, 2009 as
cited by Cabrera, et.al., 2016, this theory rests on the following fundamental principles:

1. develop a science for each element of an individual’s work to replace the old rule of thumb
method;

2. scientifically select and train, teach and develop workers;

3. heartily cooperate with workers so as to ensure that all work is done in accordance with the
principles of the science that has been developed; and

4. divide work and responsibility almost equally among management workers.

General Administrative Theory

This theory is based on the idea of departmentalization or the performance of various

activities by the different units or department of the organization. Doing sowill ensure that the tasks
involved for the attainment of the common goal of the organization will be effectively accomplished.
Henry Fayol (1841-1925) and Max Weber (1864-1920) are the major contributors to the General
Administrative Theory which gives focus on the manager’s functions and good management
practices. Fayol, who is a French mining engineer developed the general theory of business
administration or the Fayolism
Listed below are the contributions to the General Administrative Theory by Henry Fayol known as
the 14 Principles of Management.

1. Work Division -Workers must have work specialization.

2. Authority-This gives managers the right to give orders.

3. Discipline - Individuals must submit to rules and directions that govern the organization.
4. Unity of Command - Orders and directives must come from one administrator.
5. Unity of Direction - Employees must be guided by one plan of action.
6. Subordination of Individual to the Group - Group interest must prevail over individual interest.

7. Remuneration -Payment of fair pay or the proper compensation to employees must be observed.

8. Centralization - Decision making should not only come from the top but should be balanced, such
that employees down the organizational structure are being involved and are empowered.
9. Scalar Chain of Authority - Promoting constant contact from the top level managers down to the
lowest rank/level of employees makes them feel free to communicate.

10. Order - To enable employees to complete their tasks, necessary resources should be provided/
at hand.
11. Equity - Fair and good treatment among employees is a must.

12. Stability of Tenure - Frequent employee turnover can be avoided by hiring the right people for
the job.

13. Initiative - Employees must be given opportunities to get involved and share their ideas and
contribute to the progress of the organization.

14. Esprit de Corps - Managers should continuously provide encouragement to employees to foster
trust and harmonious working relations and promote team spirit within the organization.

Weber on the other hand is a German sociologist who believed that the most efficient way
to set up and manage an organization is having bureaucracy. It is with due consideration that in
bureaucracy, an individual is treated with equality, there is a clear division of or work responsibilities
in accordance with their expertise.
Weber described bureaucracy as an organizational with the following components:

1. division of labor
2. hierarchical identification of job positions
3. detailed rules and regulations

4. impersonal connections with one another

Total Quality Management (TQM)

Total Quality Management or TQM was a customer-oriented concept first introduced by
quality experts W. Edwards Deming (1900-1993) and Joseph M. Juran (1904-2008) in the 1950s. It
gives utmost attention and detail on customer needs, expectations and their satisfaction.
It did not gain instant support in the business world, particularly in the United States who at
that time was leading in the global market. It was the Japanese manufacturers who gave attention to
it and conducted experiments to prove its effectiveness. It placed them in a spot where they were
renowned for their quality products. Western managers took notice, wasted no time and began
applying the theory in their management practices. From then on, quality management practices of
modern businesses rests on the TQM.

Organizational Behaviour (OB) Approach

As organizations are made up of teams and individuals, the Organizational Behaviours (OB)
approach promotes that the behaviour, actions and conduct of worker in the workplace must be
studied as basis for management decisions. It will be very helpful to the manager as he carries out
his functions in leading, conflict resolutions and igniting team spirit to name a few. Hereunder are
renowned supporters of the OB Approach and their propositions in management based on the
theory:

Robert Owen - He proposed that workplace conditions must be improved after observing the
conditions of workers in factories are awful and dangerous for all employees. He put an end to long
working hours, only accepted children 10 years old and up when before, factories hire children as
young as five years old who are beaten up and work in the same condition as adults. He was known
as the father of personnel management.

Mary Parker Follett - She is an American Social Worker who introduced the idea that individual or
group behaviour must be considered in managing the organization. She stressed that working in
groups is more important than working individually. She believes in the "power with" approach to
maintaining employeemanagement relations rather than "power over".

Hugo Munsterberg - He is a German-American psychologist and was considered the father of

industrial/ organizational psychology. He recommended the administration of psychological tests on
aspiring employees so that the right person will be hired for the right job. It would be contributory to
the organization’s achievement of optimum efficiency if psychological conditions, particularly the
individual’s behaviour, will be in sync with that of the organization’s goal. He further stressed the
importance of having cooperation within the organization being a social system.

Chester Barnard - He is an American business executive and public administrator who viewed
organizations as cooperative systems mainly because it is composed of at least two persons working
together for a common end. As these common end or goals emanate from the top, the willingness to
accomplish and achieve it comes from the bottom going up which can be obtained with the use of
inducements or incentives for the employees.

FUNCTIONS OF A MANAGER

The managerial functions may vary according to level of managerial positions.

1. First-line Managers. Flores (2016) stated that they are the lowest level of management and are
often called supervisors. They are managers who supervise the work of the employees who are
directly involved in the production of products and delivery of services of the company or
organization.

2. Middle Managers. According to Flores (2016), middle managers are those who look into the work
of the supervisors or other employees/members of the organization. They maybe the branch
heads,division heads, or department heads, depending on the size and nature of the organization.
3. Top Managers. They are at the top level of the organization who, aside from managing the middle
managers, they are positioned to have larger responsibilities and accountabilities. Flores (2016)
stated that top managers are responsible for “wide decisions, establishing policies and strategies
that affect the entire organization.” They are the Organization’s President, Chief Executive Officer or
Chief Operating Officer, Vice President , Chief Financial Officer, Board of Directors.
The following are some of the successful managers that we are familiar with: Steve Jobs of Apple
Computer; Bill Gates of Microsoft; Socorro Ramos of National Bookstore; the late Henry Sy of SM;
Cecilio Pedro of Lamoiyan Corporation (maker of Hapee toothpaste); Tony Caktiong of Jollibee.
ROLES OF A MANAGER (Flores, 2016)
Most of the time a manager is like an actor who can perform any appropriate role, at any specific
situation.
1. Interpersonal Role - As a leader of the organization, the manager shall provide direction to the
activities and outputs of his/her subordinates. Having this role, the manager acts as liason who
coordinates theactivities of his/her members with the activities of the other groups within their
organization. The interpersonal role is subdivided into the following:
a. Figurehead role – this is assumed by managers when they represent their organizations or groups
as a person in authority in ceremonies, and in legal and social gatherings.
b. Leadership role – this done when coordinating and initiating activities in their group or
organization.

c. Liaison role – this is what is assumed when the manager communicates with internal and external
contacts or networks in behalf of his group.
2. Informational Role - The manager shall monitor the gathering of relevant information and
tracking of what is happening inside and outside the organization (monitor role). He/She also
disseminates information that will help the improvement of their team or the entire organization
(disseminator role). This role also calls for being the spokeperson who acts as the official
communicator for the organization (spokesperson role).

3. Decisional Roles- As a leader, the manager is also an entrepreneur, developing new opportunities
for the business/organization(entrepreneurial role). He/She is also the disturbance handler (or
problem solver) who resolves conflicts among members; a resource allocator who allocates funds
and distribute resources for effective use; and a negotiator who makes effective agreements with
various parties.
SKILLS OF A MANAGER (Quero, 2017)
Skills are abilities, expertise to do something. Being a manager, we must wlling to learn different
skills for us to be effective leaders. The following are necessary skills of a manager.
1. Technical Skills. It is the ability of a manager to do the job required. For example, a human
resource manager has to know how to evaluate the job applicants, who will be the right employee
for the job and the trainings to be supplied for them.

2. Human Skills. It has something to do with interpersonal skills or the ability to work well with other
people. It is essential in handling and addressing individual differences in the organization, making
them perform their best as one, despite their differences.

3. Conceptual Skills. Managers must have the ability to think critically and analytically. He/She sees
the big picture of what is happening, understand the interrelationship of things, and analyze the
causes and implications of actions or situations.All the skills needed by the manager should relate
with his/her different roles. As such, let’s discuss the detailed various skills required of a manager.
Interpersonal Roles are also social skills such as:
a. knowing how to gain the cooperation of others
b. learning to adjust to different personalities
c. communicating clear messages and intentions
d. being appreciative and respectful of people coming from different backgrounds
e. motivating employees to do their best.
f. guiding people in their work to achieve a common purpose
The following specific skills must be developed by the manager to perform his/her informational
roles:

a. identifying the key information that needs to be gathered

b. knowing where and how to source the required information

c. identifying inaccuracies in the information

d. keeping track of progress of desired activities.
e. using the proper medium or media for communication
f. being proficient in basic computer applications
g. disseminating information in a clear and timely manner
While the decisional roles of a manager will require the following skills:
a. identifying the main problem, its causes, symptoms, effects, and impacts
b. providing alternative solution to the problem
c. determining the specific criteria to weigh the advantages and disadvantages of the alternative
solutions
d. committing to a decision to choose the best alternative or courseof action
e. knowing how to translate a solution to a problem into a concrete plan
f. being firm to implement a well-designed plan

Activity 1. What I have learned?

1. How do you understand Conceptual Skills of a manager? Explain and cite an example.

2. Explain the human skills of a manager.

3. How can you have the technical skills? Explain.

Activity 2. What role or skill of a manager is being performed from the following given situations?

_____________1. There was a shortage of inventories in the essential stock of a supermarket

because their regular supplier was in a lockdown situation due to pandemic. The manager was
offered a much higher price by other supplier. She accepted the offer and received the inventories
and were sold out.

_____________2. An employee who always comes late was noticed by the head department and he
asked to come to his office and talk about the reason of his habitual tardiness. He gave options so
that the said employee would make an effort to come on time.

____________3. After the meeting with the top managers, Mr Symon gathered his team and
discussed to them what has been transpired during their meeting with the board of directors.

____________4. Ms. Ezra, head of Marketing Department talked to the head of Accounting
Department regarding the expenses that would be incurred in their promotions out of town.

____________5. In this new normal, the branch manager created a media team who will handle
their customers online. What role of a manager did the manager perform?

____________6. Which function of a manager can you see being performed by your class president
in the school?

____________7. Mr. Enriquez is being respected as the Branch Manager of their bank. Their clients
from different folks of life are also fond of him because he knows how to get along with them and
really knows how their branch could serve them better. What managerial skill/s are being practiced
by Mr. Enriquez?

____________8. An employee spread news that affects the credibility of their manager. Clients
started leaving. The manager, instead of scolding the employees did an investigation to find out why.
____________9. In these new normal, the sales of the company decreased. And they might
terminate some employees to cope up with their expenses. Ms Padilla, introduced online selling and
trained their people new ways of promoting their products and the company. They were able to
catch up and even surpassed the sales from previous months doing the new strategies

Organization and Management module 3

Environmental Forces that Affect Local and International Business

The following words will help you understand the lesson:

International Business – business activities are carried outside the country.

Domestic/Local Business – a business operating in their own country and are affected by the
economic, legal and cultural factors specific to that domestic environment, or nation.
Environmental Scanning – a method used to analyze strategic plan of action and helps organizations
to gain knowledge of possible influences from the outside environment that affect the business.

Internal Environment – are factors that occur within the premises of an organization and direct
affect the different functional areas in the organization.

External Environment – are those that exist outside the firm and often regarded as uncontrollable
factors.
SWOT Analysis – the oldest popular method used for environmental scanning.

When a business activity is performed in an international level, this can be termed as

international business. The functions, techniques and processes are just the same with the domestic
or local business. The only difference is that in International business, activities are carried outside
the country. While the term environment of a business firm, pertains to external factors and forces
that surround the firm and at the same time influence the firm in decision making and operations.
The international business environment includes different aspects like: social, political,
economic, regulatory, tax, cultural, legal and technology. They do not have control over the external
environment, their success depends upon how well they adapt to it.
A domestic environment in business is affected by economic, legal and cultural factors
specific to its domestic environment, or nation. A business can’t control these factors, but it can
work to respond to these factors appropriately. Despite its complications, is far simpler than
international domestics business business.

The different environmental factors that affect the business can be broadly categorized as
internal and external factors. Internal factors are those that occur within the premises of an
organization and directly affect the different operations of the business.
The internal factors are:
1. Value System- It denotes the culture and norms of the business. This is the regulatory framework
of a business which every employee must abide and act within the context.
2. Missions and Objectives- Different priorities, policies, and philosophies of a business are guided
by the mission and vision of a business.
3. Financial Factors- These are the factors like financial policies, FINANCIAL position and capital
structure which also affect a business performance and its strategies.
4. Internal Relationship-Factors like the amount of support the top management enjoys from its
shareholders, employees and the board of directors also affects the smooth functioning of a
business.

Micro environment includes the following factors:

1. Suppliers are those people who are responsible for supplying necessary inputs to the organization
and ensure the smooth flow of production.
2. Competitors are the close challengers of the business. It also refers to the numbers of similar
competitive product brand, size, and market capitalizations. And in order to survive the competition,
one has to keep a close look in the market and formulate policies and strategies to produce
innovative output.
3. Marketing Intermediaries aid the company in promoting, selling and distributing goods and
services to its consumers. Therefore, marketing intermediaries are vital link between business and
the consumers.

Macro environment includes the following factors:

1. Economic Factors include economic conditions such as growth rate, inflation, restrictive trade
practices and others which have considerable impact on the business.
2. Social Factors include the society together with its preferences, priorities, pattern of beliefs,
purchasing power, educational background and others.
3. Demographic Factors refer to the study of people, such as their age, sex, marital status,
occupation, family size etc. Since demography is uncontrollable because you cannot control the sex,
age, marital status in the environment, this enabling you to predict future trends and consumptions
of your product.
4. Political Factors include government policies, laws and legalities. This, in a way, affects the
business operation. For instance, the government restricted the importation of a particular
substance and as a result this action will delay the production of your product.
5. Technological Factors. Technology sets challenges to dealer. It affects the kind of product that a
dealer is offering. You cannot stop the advancement of technology, but you can learn to adapt to its
changes and maximize it for the advancement of the organization.