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Management
concepts

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Management Key Concepts

z Organizations: People working together and
coordinating their actions to achieve specific
goals.
z Goal: A desired future condition that the
organization seeks to achieve.
z Management: The process of using
organizational resources to achieve the
organization’s goals by...
„ Planning, Organizing, Leading, and Controlling
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Additional Key Concepts

z Resources are organizational assets and
include:
‹ People,
‹ Machinery,
‹ Raw materials,
‹ Information, skills,
‹ Financial capital.

z Managers are the people responsible for

supervising the use of an organization’s
resources to meet its goals.
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Achieving High Performance

z Organizations must provide a good or
service desired by its customers.
„ David Johnson of Campbell Soup manages
his firm to provide quality food products.
„ Physicians, nurses and health care
administrators seek to provide healing from
sickness.
„ McDonald’s restaurants provide burgers,
fries and shakes that people want to buy.
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Organizational Performance
zMeasures how efficiently and effectively
managers use resources to satisfy customers and
achieve goals.
„ Efficiency: A measure of how well resources are
used to achieve a goal.
‹ Usually, managers must try to minimize the input
of resources to attain the same goal.
„ Effectiveness: A measure of the appropriateness of
the goals chosen (are these the right goals?), and
the degree to which they are achieved.
‹ Organizations are more effective when managers
choose the correct goals and then achieve them.
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Functions of Management
zHenri Fayol was the first to describe the four
managerial functions when he was the CEO of a
large mining company in the later 1800’s.
zFayol noted managers at all levels, operating in for
profit or not for profit organization, must perform
each of the functions of:
Planning,
Organizing,
Staffing,
Directing or Leading and
Controlling.

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Management Process
Figure 1.2

Planning
Choose Goals

Controlling Organizing
Monitor & measure Working together

Directing
Coordinate
Staffing
Employment

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Planning
z Planning refers to the rational and orderly thinking about
the ways and means for the realization of the objective of
the organization.
z In the words of Lundy,

Planning means “the determination of what is to be

done, how and where it is to be done, who is to do it, and
how the results are to be evaluated.”
z Planning means deciding” well in advance what to do”.

z It involves thought and decision pertaining to a future

course of action. And planning may be short-term or long
term. It is also an on-going process.
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Organising
z Organising refers to the systematic arrangement of
different aspects of the business operations to achieve
the planned objectives.
z Since management refers to the task getting things
done through other people, the manager must pay
attention on organising people and their work.
z Organisation provides the means and avenues along
which efforts are directed for making the joint efforts
more productive and effective. Without proper
organisation, other functions of management are of
no use.
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 Staffing
z As such, the staffing function comes next to planning and
organising.
z In the words of H. Koontz, staffing involves “man in the
organisational structure through proper and effective
selection, appraisal and development of personnel to fill
the roles designed into the structure.”
z E. Saksena observes that “staffing function is concerned
with the placement of growth and the development of all
those members of the organisation.”
z Thus the Staffing function relates to the recruitment,
selection, training, promotions and transfers of personnel
at all levels of management.

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Directing
zIn Directing, managers determine direction,
state a clear vision for employees to follow,
and help employees understand the role they
play in attaining goals.
zLeadership involves a manager using power,
influence, vision, persuasion, and
communication skills.
zThe outcome of the leading function is a high
level of motivation and commitment from
employees to the organization.
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Controlling
zIn controlling, managers evaluate how well the
organization is achieving its goals and takes
corrective action to improve performance.
zManagers will monitor individuals, departments,
and the organization to determine if desired
performance has been reached.
„ Managers will also take action to increase
performance as required.
zThe outcome of the controlling function is the
accurate measurement of performance and
regulation of efficiency and effectiveness.
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Management Levels
zOrganizations often have 3 levels of managers:
First-line Managers: responsible for day-to-day
operation. They supervise the people performing
the activities required to make the good or service.
Middle Managers: Supervise first-line managers.
They are also responsible to find the best way to
use departmental resources to achieve goals.
Top Managers: Responsible for the performance of
all departments and have cross-departmental
responsibility. They establish organizational goals
and monitor middle managers.
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Three Levels of Management

Top
Managers
Middle
Managers

First-line Managers

Non-management
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Roles of Manager
zDescribed by Mintzberg.
„A role is a set of specific tasks a person performs
because of the position they hold.
zRolesare directed inside as well as outside the
organization.
zThere are 3 broad role categories:
1. Interpersonal
2. Informational
3. Decisional
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Interpersonal Roles
zRoles managers assume to coordinate and
interact with employees and provide direction
to the organization.
„ Figurehead role: symbolizes the organization and
what it is trying to achieve.
„ Leader role: train, counsel, mentor and encourage
high employee performance.
„ Liaison role: link and coordinate people inside and
outside the organization to help achieve goals.

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Informational Roles
zAssociated with the tasks needed to obtain
and transmit information for management of
the organization.
„ Monitor role: analyzes information from both the
internal and external environment.
„ Disseminator role: manager transmits
information to influence attitudes and behavior of
employees.
„ Spokesperson role: use of information to
positively influence the way people in and out of
the organization respond to it.
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Decisional Roles
zAssociated with the methods managers use to
plan strategy and utilize resources to achieve
goals.
„ Entrepreneur role: deciding upon new projects or
programs to initiate and invest.
„ Disturbance handler role: assume responsibility for
handling an unexpected event or crisis.
„ Resource allocator role: assign resources between
functions and divisions, set budgets of lower
managers.
„ Negotiator role: seeks to negotiate solutions between
other managers, unions, customers, or shareholders.
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Managerial Skills
There are three skill sets that managers need
to perform effectively.
1. Conceptual skills: the ability to analyze and
diagnose a situation and find the cause and effect.
2. Human skills: the ability to understand, alter, lead,
and control people’s behavior.
3. Technical skills: the job-specific knowledge
required to perform a task. Common examples
include marketing, accounting, and manufacturing.
All three skills are enhanced through formal
training, reading, and practice.
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Skill Type Needed by Manager Level

Figure 1.5

Top
Managers

Middle
Managers

Line
Managers

Conceptual Human Technical

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