PRINCIPLES OF MANAGEMENT University of Southeastern Philippines BSBA – BS Entrepreneurship Courses Lesson 1 Basic Management Concepts Prepared by: Samuel O. Parami, MPD, MM.
Learning ObjectivesAt the end of the session, the student should be able to: 1. Describe what management is, why management is important, what managers do, and how managers utilize organizational resources efficiently and effectively to achieve organizational goals; 2. Distinguish among the classical and contemporary managerial functions, and explain how the managers’ ability to handle each one can affect organizational performance;
Learning Objectives3. Differentiate among three levels of management, and discuss the responsibilities of managers at different levels in the organizational hierarchy.4. Identify the roles managers perform, the skills they need to execute those roles effectively and the way new information technology is affecting these roles and skills.5. Discuss the principal challenges managers face in today’s increasingly competitive global environment.
Topic Outline1. What is Management and Why Study It?2. Managerial Functions 1. Classical 2. Contemporary3. Types of Managers a) Levels of Management b) Areas of Managers c) Recent Changes in Managerial Hierarchies4. Challenges for Management
What is Management?• A set of activities directed at an organizations resources (human, financial, physical and information), with the aim of achieving of organizational goals in an efficient and effective manner Robbins, et al.,• Process of getting things done, Fundamentals of Management, 4th efficiently and effectively, through Canadian Edition and with other people (2005), Pearson Education Canada, Inc.
Management Key Concepts Organizations: People working together and coordinating their actions to achieve specific goals. Goal: A desired future condition that the organization seeks to achieve. Management: The process of using organizational resources to achieve the organization’s goals by... Planning, Organizing, Leading, and Controlling
Additional Key Concepts Resources are organizational assets and include: People, Machinery, Raw materials, Information, skills, Financial capital. Managers are the people responsible for supervising the use of an organization’s resources to meet its goals.
1-6 Organizational Performance Measures 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
Why Study Management? 1. The more efficient and effective use of scarce resources that organizations make of those resources, the greater the relative well-being and prosperity of people in that society 2. Helps people deal with their bosses and co- workers 3. Opens a path to a well-paying job and a satisfying career
Why Study Management? 4. Management affects everyone in an organization 5. Poorly managed organizations will not be successful 6. A good manager is a combination of many factors
Efficiency, Effectiveness, and Performance in anOrganization Contemporary Management 3rd Edition by Jennifer George and Gareth Jones
Managerial Functions Henri Fayol was the first to describe the four managerial functions in his book General Industrial Management when he was also the CEO of a large mining company (1800’s). Fayol noted managers at all levels, operating in a for profit or not for profit organization, must perform each of the functions of: Planning, organizing, leading, controlling.
PlanningPlanning is the process used by managers toidentify and select appropriate goals andcourses of action for an organization. 3 steps to good planning : 1. Which goals should be pursued? 2. How should the goal be attained? 3. How should resources be allocated? The planning function determines how effective and efficient the organization is and determines the strategy of the organization.
Example-Dell Computers Michael Dell needed a new strategy to compete with Apple, HP, and ACER In 2010, Dell introduced more powerful, custom laptops as well as their own Smartphone and tablet PC
Organizing In organizing, managers create the structure of working relationships between organizational members that best allows them to work together and achieve goals. Managers will group people into departments according to the tasks performed. Managers will also lay out lines of authority and responsibility for members. An organizational structure is the outcome of organizing. This structure coordinates and motivates employees so that they work together to achieve goals.
Leading In leading, managers determine direction, state a clear vision for employees to follow, and help employees understand the role they play in attaining goals. Leadership involves a manager using power, influence, vision, persuasion, and communication skills. The outcome of the leading function is a high level of motivation and commitment from employees to the organization.
Controlling In controlling, managers evaluate how well the organization is achieving its goals and takes corrective action to improve performance. Managers 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. The outcome of the controlling function is the accurate measurement of performance and regulation of efficiency and effectiveness.
Levels of Management First-line managers Responsible for day-to-day operations. Supervise people performing activities required to make the good or service. Middle managers Supervise first-line managers. Are 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. Establish organizational goals and monitor middle managers. Form the top management team along with the CEO and COO.
Strategic Managers The firm’s senior executives with overall responsibility for the firm. Developing the company’s goals Focus on long-term issues Emphasize the growth and overall effectiveness of the organization Concerned primarily with the interaction between the organization and its external environment.
Tactical Managers Responsible for translating the general goals and plans developed by strategic managers into specific objectives and activities. Shorter time horizon Coordination of resources These are middle managers
Operational Managers Lower-level managers who supervise the operations of the organization. Directly involved with non-management employees Implementing the specific plans developed with tactical managers. This is a critical role to the organization. Operational managers are the link between management and non-management staff
Areas of Management Marketing Managers Financial Managers Operations Managers Human Resource Managers Administrative Managers Other Kinds of Managers
Managerial Roles Described by Mintzberg. A role is a set of specific tasks a person performs because of the position they hold. Roles are directed inside as well as outside the organization. There are 3 broad role categories: 1. Interpersonal 2. Informational 3. Decisional
Interpersonal Roles Roles 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.
Informational Roles Associated 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.
Decisional Roles Associated 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.
Managerial SkillsThere are three skill sets that managers needto 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 formaltraining, reading, and practice.
Skill Type Needed by Manager Level Top Managers Middle Managers Line Managers Conceptual Human Technical
Conceptual or Strategizing Skills Strategizing involves the ability to see “the big picture” to: Focus on key objectives without getting mired in details Sense what is happening inside and outside the company Respond in an appropriate and timely fashion
Human or People-Related Skills Involve getting work done through others and with others. People skills include the ability to: Delegate tasks Share information Resolve conflicts Be a team player Work with people from very different backgrounds
Technical or Task-Related Skills Involve the ability to define the best approach to accomplish personal and organizational objectives. They include consideration of all resources, including: Time Organizational structure Financial resources People
Technical or Task-Related Skills They also involve the ability to: Prioritize Remain flexible to make changes if necessary Ensure that value is being created In contemporary organizations, task-related skills are demanded of most employees from factory workers to top executives.
Self-Awareness Skills Being aware of your personal characteristics can help you adapt to others. To also help you understand why you react to them the way you do. Avoid rushed judgments Appreciate the nuances of particular situations Size up opportunities Capitalize on your personal strengths Avoid situations in which you are likely to fail
Skills for Managerial Success Strategic Skills Task Skills Environmental assessment Setting and prioritizing scanning objectives Developing plan of action Strategy formulation and implementation Mapping strategic intent Responding in a flexible and defining mission manner Strategy implementation Creating value Human resource congruency Working through the organizational structure Allocating human resources Managing time efficiently
Skills for Managerial Success (continued) People Skills Self-Awareness Skills Delegating Personal Influencing Motivating adaptability Handling conflict Understanding Win-win negotiating Networking personal biases Communicating Internal locus of Verbal Nonverbal control Listening Cross-cultural management Heterogeneous teamwork
Management Skills and Management Function Matrix
Recent Changes in Managerial Hierarchies1. Factors Creating Change Global Competition New Information Technologies (IT)2. Restructuring Downsizing an organization by eliminating jobs at all levels in the organization. Reduces labor costs by cutting jobs Promotes higher efficiency in use of resources May result in low morale and overwork complaints for surviving employees May increase customer complaints about service.
Management Trends Empowerment: expand the tasks and responsibilities of workers. Supervisors might be empowered to make some resource allocation decisions. Self-managed teams: give a group of employees responsibility for supervising their own actions. The team can monitor its members and the quality of the work performed.
Management Trends The Increasing Importance of Customers Customers: the reason that organizations exist Managing customer relationships is the responsibility of all managers and employees. Consistent high quality customer service is essential for survival. Innovation Doing things differently, exploring new territory, and taking risks Managers should encourage employees to be aware of and act on opportunities for innovation.
Management Trends Old Manager New Manager Operates in climate Thrives on chaos of predictability and stability The coach The boss Empowers employees Covets authority Shares info Hoards info Is sensitive to Treat people as all differences the same Oversees on-site Oversees on-site and virtual employees employees
Management Trends The Management Bible – Bob NelsonManagers and workers are entering into a new kind ofpartnership that is forming the basis of a new reality in theworkplace.Today’s managers are discovering that they cannot commandan employee’s best work; they can, however, create anenvironment that encourages employees to want to do theirbest work.And workers are discovering that, if they expect to survivethe constant waves of change sweeping across businesses ofall types, they have to find ways to contribute in theirorganizations in ways that they have never before beencalled on to do.
Management Trends The Management Bible – Bob NelsonNew Functions of Management1.Energize: Today’s managers are masters of makingthings happen.The best managers create far more energy than theyconsume. Successful managers create compellingvisions—visions that inspire employees to bring outtheir very best performance—and they encouragetheir employees to act on these visions.
Management Trends The Management Bible – Bob NelsonNew Functions of Management2.Empower: Empowering employees doesn’t mean thatyou stop managing. Empowering employees meansgiving them the tools and the authority to do great work.Effective management is the leveraging of the efforts ofyour team to a common purpose. When you let youremployees do their jobs, you unleash their creativity andcommitment.
Management Trends The Management Bible – Bob NelsonNew Functions of Management3.Support: Today’s managers need to be coaches,counselors, and colleagues instead of watchdogs orexecutioners.The key to developing a supportive environment is theestablishment of a climate of open communicationthroughout the organization. Employees must be able toexpress their concerns—truthfully and completely—without fear of retribution. Similarly, employees must beable to make honest mistakes and be encouraged to learnfrom those mistakes.
Management Trends The Management Bible – Bob NelsonNew Functions of Management4.Communicate: Communication is the lifeblood ofevery organization.Information is power, and, as the speed of businesscontinues to accelerate, information—the rightinformation—must be communicated to employees fasterthan ever.More communication, not less—information that helpsemployees better do their jobs, information on changesthat can impact their jobs, and information onopportunities and needs within the organization.
Management Challenges Increasing number of global organizations. Building competitive advantage through superior efficiency, quality, innovation, and responsiveness. Increasing performance while remaining ethical managers. Managing an increasingly diverse work force. Using new technologies.
Building a Competitive Advantage Increasing Efficiency Reducing the quantity of resources used to produce goods and services Increasing Quality Introducing Total Quality Management (TQM) to improve quality Increasing Speed, Flexibility, and Innovation Adapting to bring new products to market faster Increasing Responsiveness to Customers Empowering employees to deal with customers
References Nelson, Bob. 2005. The Management Bible, John Wiley & Sons, Inc., Hoboken, New Jersey Robbins, et al. 2005. Fundamentals of Management, 4th Canadian Edition. Pearson Education Canada, Inc. Daft, Richard L. 2010. Management, 9th Edition. South Western College Publishing. George, Jennifer M. & Gareth, Jones R. 2010. Contemporary Management 6th Edition. McGraw-Hill Companies, Inc.