Chapter 1                                    Introduction to Management1. Chapter Introduction                            ...
Table 1.1. Major management functions.                   Activity                                        Definition or Exp...
agement. The second article, by Alec MacKenzie, is a         sic. It is still the most comprehensive yet condensedcondense...
Management: Science, Theory, and Practice1                                                       Heinz Weihrich           ...
tions, to profit and not-for-profit enterprises, to manu-       All managers carry out managerial functions.facturing as w...
This concept is sometimes called the universality                           3.   Conceptual skill is the ability to see th...
especially in large companies, that chief executives         and decreasing inputs to change the ratio favorably. Incan ut...
The Elements of Science                                           Principles in management are fundamental truths         ...
control techniques like the Program Evaluation and           model that includes interactions between the enterpriseReview...
The Managerial Transformation Process                           The Communication SystemManagers have the task of transfor...
The second function of the communication system             Re-energizing the System or Providingis to link the enterprise...
sense of making sure that all the tasks necessary to            accomplish specific goals. Then activities are checkedacco...
All managers carry out the functions of planning,organizing, staffing, leading, and controlling, al-though the time spent ...
R. Alec MackenzieThe management processin 3-DA diagram showing the activities, functions,and basic elements of the executi...
Exhibit I. The management process                                               This diagram shows the different elements,...
O Administration—managing the details of ex-                                 ing, directing, and controlling processes. Eq...
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  1. 1. Chapter 1 Introduction to Management1. Chapter Introduction • PlanningManagement can be defined as all the activities and • Organizingtasks undertaken by one or more persons for the pur- Staffingpose of planning and controlling the activities of oth-ers in order to achieve an objective or complete an • Directing (Leading)activity that could not be achieved by the others acting • Controllingindependently [1]. Management as defined by well-known authors in the field of management [2]—[6]contains the following components: For definitions of these terms see Table 1. WELL CHAPS...THE MISSION OF THE TEAM IS TO CATCH AND ELIMINATE THE NOTORIOUS COMPUTER BUG—ULTIMA RECTALGIA COMPUPESTI
  2. 2. Table 1.1. Major management functions. Activity Definition or Explanation Planning Predetermining a course of action for accomplishing organizational objectives Organizing Arranging the relationships among work units for accomplishment of objectives and the granting of responsibility and authority to obtain those objectives Staffing Selecting and training people for positions in the organization Directing Creating an atmosphere that will assist and motivate people to achieve desired end results Controlling Establishing, measuring, and evaluating performance of activities toward planned objectives From Weihrich [7] comes a definition of cept is crucial to the improvement of software engi-management: neering project management, for it allows us to apply the wealth of research in management sciences to im- All managers carry out the functions of proving the management of software engineering proj- planning, organizing, staffing, leading, and ects [8]. Additional discussion on the universality of management can be found in [9]. controlling, although the time spent in each This chapter and introduction is important to the function will differ and the skills required readers of this tutorial. The basic assumption of this by managers at different organizational lev- tutorial on software engineering project management els vary. Still, all managers are engaged in is based on a scientific management approach as getting things done through people. ... The follows: managerial activities, grouped into the managerial functions of planning, organiz- 1. Management consists of planning, organiz- ing, staffing, leading, and controlling, are ing, staffing, directing, and controlling. carried out by all managers, but the prac- 2. The concepts and activities of management tices and methods must be adapted to the applies to all levels of management, as well particular tasks, enterprises, and situation. as to all types of organizations and activities managed. This concept is sometimes called the universalityof management in which managers perform the same Based on these two assumptions, this tutorialfunctions regardless of their place in the organizationalstructure or the type of enterprise in which they are is divided into chapters, based on planning,managing. organizing, staffing, directing, and control- The statement from Weihrich means that ling, and includes articles from other disciplines that management performs the same functions re- illustrate the concepts of management that gardless of its position in the organization or can be applied to software engineering proj- the enterprise managed, and ect management. management functions and fundamental ac- tivities are characteristic duties of managers; 2. Chapter Overview management practices, methods, detailed ac- tivities, and tasks are particular to the enter- The two articles contained in this chapter introduce prise or job managed. management and show that the management of any endeavor (like a software engineering project) is the Therefore, the functions and general activities of same as managing any other activity or can be universally applied to managing The first article, by Heinz Weihrich, sets the stage byany organization or activity. Recognition of this con- defining management and the major functions of man-
  3. 3. agement. The second article, by Alec MacKenzie, is a sic. It is still the most comprehensive yet condensedcondensed and comprehensive overview of manage- description of management in existence. MacKenziement from the Harvard Business Review. presents a top-down description of management start- ing with the elements of management—ideas, things,3. Article Descriptions and people—and ending with a detailed description of general management activities—all on one foldoutThe first article in this chapter is extracted from an page.internationally famous book, Management by Wei-hrich, 10th edition [10], and adapted specifically byWeihrich for this tutorial. Earlier editions of this book Referenceswere written by Harold Koontz and Cyril ODonnell 1. Koontz, H., C. ODonnell, and H. Weihrich, Manage-from the University of California, Los Angeles; Wei- ment, 7th ed., McGraw-Hill, New York, N.Y., 1980.hrich joined them as a co-author with the 7th edition.Both Koontz and ODonnell are now deceased, leav- 2. Koontz, H., C. ODonnell, and H. Weihrich, Manage-ing Weihrich to be the author of future editions. In this ment, 7th ed., McGraw-Hill, New York, N.Y., 1980.article, Weihrich 3. Cleland, D.I. and W.R. King, Management: A Systems Approach, McGraw-Hill, New York, N.Y., 1972. 1. defines and describes the nature and purpose 4. MacKenzie, R.A., "The Management Process in 3-D," of management, Harvard Business Review, Nov.-Dec. 1969, pp. 80-87. 2. states that management applies to all kinds of 5. Blanchard, B.S. and W.J. Fabrycky, System Engineer- organizations and to managers at all organ- ing and Analysis, 2nd ed., Prentice Hall, Englewood izational levels, Cliffs, N.J., 1990. 3. defines the managerial functions of planning, organizing, staffing, leading [directing], and 6. Kerzner, H., Project Management: A Systems Ap- proach to Planning, Scheduling, and Controlling, 3rd controlling, ed., Van Nostrand Reinhold, New York, N.Y., 1989. 4. states that managing requires a systems ap- proach and that practice always takes into ac- 7. Koontz, H. and C. ODonnell, Principles of Manage- count situations and contingencies, and ment: An Analysis of Managerial Functions, 5th ed., McGraw-Hill, New York, N.Y., 1972. 5. recognizes that the aim of all managers is to be productive—that is, to carry out their ac- 8. Thayer, R.H. and A.B. Pyster, "Guest Editorial: Soft- tivities effectively and efficiently and to cre- ware Engineering Project Management," IEEE Trans- ate a "surplus." actions on Software Engineering, Vol. SE-10, No. 1, Jan. 1984. Weihrich introduced the term "leading" to replace 9. Fayol, H., General and Industrial Administration, Sirthe term "directing" used by Koontz and ODonnell in Isaac Pitman & Sons, London, UK, 1949.their earlier books. The articles by Richard Thayer will 10. Weihrich, H. and H. Koontz, Management: A Globalstay with the older term "directing." Perspective, 10th ed., McGraw-Hill, New York, NY, The last article by Alec MacKenzie is also a clas- 1993.
  4. 4. Management: Science, Theory, and Practice1 Heinz Weihrich University of San Francisco San Francisco, CaliforniaOne of the most important human activities is man- The Functions of Managementaging. Ever since people began forming groups toaccomplish aims they could not achieve as individu- Many scholars and managers have found that theals, managing has been essential to ensure the coor- analysis of management is facilitated by a useful anddination of individual efforts. As society has come to clear organization of knowledge. As a first order ofrely increasingly on group effort and as many organ- knowledge classification, we have used the five func-ized groups have grown larger, the task of managers tions of managers: planning, organizing, staffing,has been rising in importance. The purpose of this leading, and controlling. Thus, the concepts, princi-book is to promote excellence of all persons in organi- ples, theory, and techniques are organized aroundzations, but especially managers, aspiring managers, these functions and become the basis for discussion.and other professionals. This framework has been used and tested for many years. Although there are different ways of organizing managerial knowledge, most textbook authors today have adopted this or a similar framework even afterDefinition of Management: Its Nature experimenting at times with alternative ways of struc-and Purpose turing knowledge. Although the emphasis in this article is on manag-Management is the process of designing and main- ers tasks in designing an internal environment fortaining an environment in which individuals, working performance, it must never be overlooked that manag-together in groups, accomplish efficiently selected ers must operate in the external environment of anaims. This basic definition needs to be expanded: enterprise as well as in the internal environment of an organizations various departments. Clearly, managers 1. As managers, people carry out the managerial cannot perform their tasks well unless they understand, functions of planning, organizing, staffing, and are responsive to, the many elements of the exter- leading, and controlling. nal environment—economic, technological, social, political, and ethical factors that affect their areas of 2. Management applies to any kind of operations. organization. 3. It applies to managers at all organizational Management as an Essential for Any levels. Organization 4. The aim of all managers is the same: to create Managers are charged with the responsibility of taking a surplus. actions that will make it possible for individuals to 5. Managing is concerned with productivity; make their best contributions to group objectives. that implies effectiveness and efficiency. Management thus applies to small and large organiza- This paper has been modified for this book by Heinz Weihrich from Chapter 1 of Management: A Global Perspective, 10th ed. by HeinzWeihrich and Harold Koontz, McGraw-Hill, Inc., New York, N.Y., 1993. Reproduced by permission of McGraw-Hill, Inc.
  5. 5. tions, to profit and not-for-profit enterprises, to manu- All managers carry out managerial functions.facturing as well as service industries. The term However, the time spent for each function may differ."enterprise" refers to business, government agencies, Figure I 2 shows an approximation of the relative timehospitals, universities, and other organizations, be- spent for each function. Thus, top-level managerscause almost everything said in this book refers to spend more time on planning and organizing thanbusiness as well as nonbusiness organizations. Effec- lower level managers. Leading, on the other hand,tive managing is the concern of the corporation presi- takes a great deal of time for first-line supervisors. Thedent, the hospital administrator, the government first- difference in time spent on controlling varies onlyline supervisor, the Boy Scout leader, the bishop in the slightly for managers at various, the baseball manager, and the universitypresident. All Effective Managers Carry Out EssentialManagement at Different Organizational Levels FunctionsManagers are charged with the responsibility of taking All managers carry out the functions of planning, or-actions that will make it possible for individuals to ganizing, staffing, leading, and controlling, althoughmake their best contributions to group objectives To the time spent in each function will differ and the skillsbe sure, a given situation may differ considerably required by managers at different organizational levelsamong various levels in an organization or various vary. Still, all managers are engaged in getting thingstypes of enterprises. Similarly, the scope of authority done through people. Although the managerial con-held may vary and the types of problems dealt with cepts, principles, and theories have general validity,may be considerably different. Furthermore, the per- their application is an art and depends on the situation.son in a managerial role may be directing people in the Thus, managing is an art using the underlying sci-sales, engineering, or finance department. But the fact ences. Managerial activities are common to all manag-remains that, as managers, all obtain results by estab- ers, but the practices and methods must be adapted tolishing an environment for effective group endeavor. the particular tasks, enterprises, and situations. Organizational Hierarchy Precent Effort 100 % Figure 1. Time spent in carrying out managerial functions. This figure is partly based on and adapted from T.A. Money, T.H. Jerdee, and S.J. Carrolls "The Job(s) of Management," Industrial Relations, Feb. 1965, pp. 97-110.
  6. 6. This concept is sometimes called the universality 3. Conceptual skill is the ability to see the "bigof management in which managers perform the same picture," to recognize significant elements infunctions regardless of their place in the organizational a situation, and to understand the relation-structure or the type of enterprise in which they are ships among the elements.managing. 4. Design skill is the ability to solve problems in ways that will benefit the enterprise. To be ef-Managerial Skills and the Organizational fective, particularly at upper organizationalHierarchy levels, managers must be able to do more than see a problem. If managers merely seeRobert L. Katz identified three kinds of skills for ad- the problem and become "problem watchers,"ministrators.3 To these may be added a fourth—the they will fail. They must have, in addition,ability to design solutions. the skill of a good design engineer in working out a practical solution to a problem. 1. Technical skill is knowledge of and profi- ciency in activities involving methods, proc- The relative importance of these skills may differ esses, and procedures. Thus it involves at various levels in the organization hierarchy. As working with tools and specific techniques. shown in Figure 2, technical skills are of greatest im- For example, mechanics work with tools, and portance at the supervisory level. Human skills are their supervisors should have the ability to also helpful in the frequent interactions with subordi- teach them how to use these tools. Similarly, nates. Conceptual skills, on the other hand, are usually accountants apply specific techniques in do- not critical for lower level supervisors. At the middle- ing their job. management level, the need for technical skills de- 2. Human skill is the ability to work with peo- creases; human skills are still essential; and the con- ple; it is cooperative effort; it is teamwork; it ceptual skills gain in importance. At the top- is the creation of an environment in which management level, conceptual and design abilities and people feel secure and free to express their human skills are especially valuable, but there is rela- opinions. tively little need for technical abilities. It is assumed, TP O 4 Conceptual & Management Design Skills Human Skills L Middle ^^anagement 1 w V •1 . J Technicak Skills ••TTB B HUM t H H 1 ••I I • • Suppervisor Figure 2. Skills versus management levels. R.L. Katz, "Skilh of an Effective Administrator," Harvard Busi-ness Review, jan.-Feb., 1955, pp. 33-42, and R.L. Katz,"Retrospective Commentary," Harvard Business Review, Sept.-Oct. 1974, pp. 101-102.
  7. 7. especially in large companies, that chief executives and decreasing inputs to change the ratio favorably. Incan utilize the technical abilities of their subordinates. the past, productivity improvement programs wereIn smaller firms, however, technical experience may mostly aimed at the worker level. Yet, as Peter F.still be quite important. Drucker, one of the most prolific writers in manage- ment, observed, "The greatest opportunity for in- creasing productivity is surely to be found in knowl-The Aim of All Managers edge, work itself, and especially in management."4 Definitions of effectiveness and efficiency. Produc-Nonbusiness executives sometimes say that the aim of tivity implies effectiveness and efficiency in individualbusiness managers is simple—to make a profit. But and organizational performance. Effectiveness is theprofit is really only a measure of a surplus of sales achievement of objectives. Efficiency is the achieve-dollars (or in any other currency) over expense dollars. ment of the ends with the least amount of resources.In a very real sense, in all kinds of organizations, To know whether they are productive, managers mustwhether commercial and noncommercial, the logical know their goals and those of the organization.and publicly desirable aim of all managers should be asurplus—managers must establish an environment inwhich people can accomplish group goals with the Managing: Science or Art?least amount of time, money, materials, and personaldissatisfaction, or where they can achieve as much as Managing, like so many other disciplines—medicine,possible of a desired goal with available resources. In music composition, engineering, accountancy, or evena nonbusiness enterprise such as a police department, baseball—is in large measure an art but founded on aas well as in units of a business (such as an accounting wealth of science. It is making decisions on the basisdepartment) that are not responsible for total business of business realities. Yet managers can work better byprofits, managers still have budgetary and organiza- applying the organized knowledge about managementtional goals and should strive to accomplish them with that has accrued over the decades. It is this knowledge,the minimum of resources. whether crude or advanced, whether exact or inexact, that, to the extent it is well organized, clear, and perti-Productivity, Effectiveness, and Efficiency nent, constitutes a science. Thus, managing as prac- ticed is an art; the organized knowledge underlying theAnother way to view the aim of all managers is to say practice may be referred to as a science. In this contextthat they must be productive. After World War II the science and art are not mutually exclusive but areUnited States was the world leader in productivity. But the late 1960s productivity began to decelerate. To- As science improves so should the application ofday government, private industry, and universities this science (the art) as has happened in the physicalrecognize the urgent need for productivity improve- and biological sciences. This is true because the manyment. Until very recently we frequently looked to Ja- variables with which managers deal are extremelypan to find answers to our productivity problem, but complex and intangible. But such management knowl-this overlooks the importance of effectively perform- edge as is available can certainly improve managerialing fundamental managerial and nonmanagerial practice. Physicians without the advantage of scienceactivities. would be little more than witch doctors. Executives Definition of productivity. Successful companies who attempt to manage without such management sci-create a surplus through productive operations. Al- ence must trust to luck, intuition, or to pastthough there is not complete agreement on the true experiences.meaning of productivity, we will define it as the out- In managing, as in any other field, unless practitio-put-input ratio within a time period with due consid- ners are to learn by trial and error (and it has been saideration for quality. It can be expressed as follows: that managers errors are their subordinates trials), there is no place they can turn for meaningful guidance other than the accumulated knowledge underlying theirProductivity = —— within a time period, practice. inputquality considered Thus, productivity can be improved by increasingoutputs with the same inputs, by decreasing inputs but P.F. Drucker, Management, Tasks, Responsibilities, Practices,maintaining the same outputs, or by increasing output Harper & Row, New York, 1973, p. 69.
  8. 8. The Elements of Science Principles in management are fundamental truths (or what are thought to be truths at a given time), ex-Science is organized knowledge. The essential feature plaining relationships between two or more sets ofof any science is the application of the scientific variables, usually an independent variable and a de-method to the development of knowledge. Thus, we pendent variable. Principles may be descriptive orspeak of a science as having clear concepts, theory, predictive, and are not prescriptive. That is, they de-and other accumulated knowledge developed from scribe how one variable relates to another—what willhypotheses (assumptions that something is true), ex- happen when these variables interact. They do notperimentation, and analysis. prescribe what we should do. For example, in physics, if gravity is the only force acting on a falling body, the body will fall at an increasing speed; this principle does not tell us whether anyone should jump off theThe Scientific Approach roof of a high building. Or take the example of Parkin-The scientific approach first requires clear concepts— sons law: Work tends to expand to fill the time avail-mental images of anything formed by generalization able. Even if Parkinsons somewhat frivolous principlefrom particulars. These words and terms should be is correct (as it probably is), it does not mean that aexact, relevant to the things being analyzed, and in- manager should lengthen the time available for peopleformative to the scientist and practitioner alike. From to do a job.this base, the scientific method involves determining To take another example, in management the prin-facts through observation. After classifying and ana- ciple of unity of command states that the more often anlyzing these facts, scientists look for causal relation- individual reports to a single superior, the more thatships. When these generalizations or hypotheses are individual is likely to feel a sense of loyalty and obli-tested for accuracy and appear to be true, that is, to gation, and the less likely it is that there will be confu-reflect or explain reality, and therefore to have value sion about instruction. The principle merely predicting what will happen in similar circum- It in no sense implies that individuals should neverstances. They are called principles. This designation report to more than one person. Rather, it implies thatdoes not always imply that they are unquestionably or if they do so, their managers must be aware of the pos-invariably true, but that they are believed to be valid sible dangers and should take these risks into accountenough to be used for prediction. in balancing the advantages and disadvantages of mul- Theory is a systematic grouping of interdependent tiple command.concepts and principles that form a framework for a Like engineers who apply physical principles to thesignificant body of knowledge. Scattered data, such as design of an instrument, managers who apply theory towhat we may find on a blackboard after a group of managing must usually blend principles with realities.engineers has been discussing a problem, are not in- A design engineer is often faced with the necessity offormation unless the observer has knowledge of the combining considerations of weight, size, conductiv-theory that will explain relationships. Theory is, as ity, and other factors. Likewise, a manager may findC.G. Homans has said, "in its lowest form a classifica- that the advantages of giving a controller authority totion, a set of pigeonholes, a filing cabinet in which fact prescribe accounting procedures throughout an organi-can accumulate. Nothing is more lost than a loose zation outweigh the possible costs of multiple author-fact." ity. But if they know theory, these managers will know that such costs as conflicting instructions and confu- sion may exist, and they will take steps—such as making the controllers special authority crystal clearThe Role of Management Theory to everyone involved—to minimize or outweigh any disadvantages.In the field of management, then, the role of theory isto provide a means of classifying significant and perti-nent management knowledge. In designing an effective Management Techniquesorganization structure, for example, a number of prin-ciples are interrelated and have a predictive value for Techniques are essentially ways of doing things, meth-managers. Some principles give guidelines for dele- ods of accomplishing a given result. In all fields ofgating authority; these include the principle of dele- practice they are important. They certainly are in man-gating by results expected, the principle of equality of aging, even though few really important managerialauthority and responsibility, and the principle of unity techniques have been invented. Among them areof command. budgeting, cost accounting, network planning and
  9. 9. control techniques like the Program Evaluation and model that includes interactions between the enterpriseReview Technique (PERT) or the critical path method and its external environment.(CPM), rate-of-return-on-investment control, variousdevices of organizational development, managing by Inputs and Stakeholdersobjectives, total quality management (TQM). Tech-niques normally reflect theory and are a means of The inputs from the external environment may includehelping managers undertake activities most effectively. people, capital, and managerial skills, as well as tech- nical knowledge and skills. In addition, various groups of people make demands on the enterprise. For ex- ample, employees want higher pay, more benefits,The Systems Approach to Operational and job security. On the other hand, consumers de-Management mand safe and reliable products at a reasonable price. Suppliers want assurance that their products will beAn organized enterprise does not, of course, exist in a bought. Stockholders want not only a high return onvacuum. Rather, it depends on its external environ- their investment but also security for their money.ment; it is a part of larger systems such as the industry Federal, state, and local governments depend on taxesto which it belongs, the economic system, and society. paid by the enterprise, but they also expect the enter-Thus, the enterprise receives inputs, transforms them, prise to comply with their laws. Similarly, the commu-and exports the outputs to the environment, as shown nity demands that enterprises be "good citizens," pro-by the very basic model in Figure 3. However, this viding the maximum number of jobs with a minimumsimple model needs to be expanded and developed of pollution. Other claimants to the enterprise mayinto a model of operational management that indicates include financial institutions and labor unions; evenhow the various inputs are transformed through the competitors have a legitimate claim for fair play. It ismanagerial functions of planning, organizing, staffing, clear that many of these claims are incongruent, and itleading, and controlling. Clearly, any business or other is the managers job to integrate the legitimate objec-organization must be described by an open-system tives of the claimants. Re-energizing the System Transformation Process External Environment Figure 3. Input-output model.
  10. 10. The Managerial Transformation Process The Communication SystemManagers have the task of transforming inputs, effec- Communication is essential to all phases of the mana-tively and efficiently, into outputs. Of course, the gerial process: It integrates the managerial functionstransformation process can be viewed from different and links the enterprise with its environment. A com-perspectives. Thus, one can focus on such diverse en- munication system is a set of information providersterprise functions as finance, production, personnel, and information recipients and the means of transfer-and marketing. Writers on management look on the ring information from one group to another group withtransformation process in terms of their particular ap- the understanding that the messages being transmittedproaches to management. Specifically, as you will see, will be understood by both groups. For example, thewriters belonging to the human behavior school focus objectives set in planning are communicated so thaton interpersonal relationships; social systems theorists the appropriate organization structure can be devised.analyze the transformation by concentrating on social Communication is essential in the selection, appraisal,interactions; and those advocating decision theory see and training of managers to fill the roles in this struc-the transformation as sets of decisions. However we ture. Similarly, effective leadership and the creation ofbelieve that the most comprehensive and useful ap- an environment conducive to motivation depend onproach for discussing the job of managers is to use the communication. Moreover, it is through communica-managerial functions of planning, organizing, staffing, tion that one determines whether events and perform-leading, and controlling as a framework for organizing ance conform to plans. Thus, it is communication thatmanagerial knowledge (see Figure 4). makes managing possible. Planning Organizing Figure 4. Management model. 10
  11. 11. The second function of the communication system Re-energizing the System or Providingis to link the enterprise with its external environment, Feedback to the Systemwhere many of the claimants are. Effective managerswill regularly scan the external environment. While it Finally, we should notice that in the systems model ofis true that managers may have little or no power to operational management, some of the outputs becomechange the external environment, they have no alter- inputs again. Thus, the satisfaction of employees be-native but to respond to it. For example, one should comes an important human input to the enterprise.never forget that the customer, who is the reason for Similarly, profits, the surplus of income over costs, arethe existence of virtually all businesses, is outside a reinvested in cash and capital goods, such as machin-company. It is through the communication system that ery, equipment, buildings, and inventory.the needs of customers are identified; this knowledgeenables the firm to provide products and services at aprofit. Similarly, it is through an effective communi-cation system that the organization becomes aware of The Functions of Managerscompetition and other potential threats and constrain- Managerial functions provide a useful framework foring factors. organizing management knowledge. There have been no new ideas, research findings, or techniques that cannot readily be placed in the classifications of plan- ning, organizing, staffing, leading, and controlling.OutputsManagers must secure and utilize inputs to the enter- Planningprise, to transform them through the managerial Planning involves selecting missions and objectivesfunctions—with due consideration for external vari- and the actions to achieve them; it requires decisionables—to produce outputs. making, that is, choosing future courses of action from Although the kinds of outputs will vary with the among alternatives. There are various types of plans,enterprise, they usually include a combination of ranging from overall purposes and objectives to theproducts, services, profits, satisfaction, and integra- most detailed actions to be taken, such as to order ation of the goals of various claimants to the enter- special stainless steel bolt for an instrument or to hireprise. Most of these outputs require no elaboration, and train workers for an assembly line. No real planand only the last two will be discussed. exists until a decision—a commitment of human or The organization must indeed provide many material resources or reputation—has been made. Be-"satisfactions" if it hopes to retain and elicit contri- fore a decision is made, all we have is a planningbutions from its members. It must contribute to the study, an analysis, or a proposal, but not a real plan.satisfaction not only of basic material needs (for ex-ample, earning money to buy food and shelter orhaving job security) but also of needs for affiliation,acceptance, esteem, and perhaps even self- Organizingactualization. Another output is goal integration. As noted People working together in groups to achieve someabove, the different claimants to the enterprise have goal must have roles to play, much like the parts actorsvery divergent—and often directly opposing— fill in a drama, whether these roles are ones they de-objectives. It is the task of managers to resolve con- velop themselves, are accidental or haphazard, or areflicts and integrate these aims. This is not easy, as defined and structured by someone who wants to makeone former Volkswagen executive discovered. Eco- sure that people contribute in a specific way to groupnomics dictated the construction of a Volkswagen effort. The concept of a "role" implies that what peo-assembly plant in the United States. However, an ple do has a definite purpose or objective; they knowimportant claimant, German labor, out of fear that how their job objective fits into group effort, and theyjobs would be eliminated in Germany, opposed this have the necessary authority, tools, and information toplan. This example illustrates the importance of inte- accomplish the task.grating the goals of various claimants to the enter- Organizing, then, is that part of managing that in-prise, which is indeed an essential task of any volves establishing an intentional structure of roles formanager. people to fill in an organization. It is intentional in the 11
  12. 12. sense of making sure that all the tasks necessary to accomplish specific goals. Then activities are checkedaccomplish goals are assigned and, it is hoped, as- to determine whether they conform to plans.signed to people who can do them best. Imagine what Control activities generally relate to the measure-would have happened if such assignments had not ment of achievement. Some means of controlling, likebeen made in the program of flying the special aircraft the budget for expense, inspection records, and theVoyager around the globe without stopping or refuel- record of labor hours lost, are generally familiar. Eaching. The purpose of an organization structure is to help measures and shows whether plans are working out. Ifin creating an environment for human performance. It deviations persist, correction is indicated. But what isis, then, a management tool and not an end in and of corrected. Nothing can be done about reducing scrap,itself. Although the structure must define the tasks to for example, or buying according to specifications, orbe done, the roles so established must also be designed handling sales returns unless one knows who is re-in light of the workers abilities and motivations. sponsible for these functions. (Compelling events to conform to plans means locating the persons who are responsible for results that differ from planned action and then taking the necessary steps to improve per-Staffing formance. Thus, controlling what people do controls outcomes.Staffing involves filling, and keeping filled, the posi-tions in the organization structure. This is done byidentifying workforce requirements, inventorying thepeople available, recruiting, selecting, placing, pro- Coordination, the Essence of Managershipmoting, planning the career, compensating, and train-ing or otherwise developing both candidates and cur- Some authorities consider coordination to be an addi-rent job holders to accomplish their tasks effectively tional function of management. It seems more accu-and efficiently. rate, however, to regard it as the essence of manager- ship, for managings purpose is to harmonize individ- ual efforts in the accomplishment of group goals. Each of the managerial functions is an exercise contributingLeading to coordination.Leading is influencing people so that they will con- Even in the case of a church or a fraternal organi-tribute to organization and group goals; it has to do zation, individuals often interpret similar interests in different ways, and their efforts toward mutual goalspredominantly with the interpersonal aspect of man- do not automatically mesh with the efforts of others. Itaging. All managers would agree that their most im- thus becomes the central task of the manager to recon-portant problems arise from people—their desires and cile differences in approach, timing, effort, or interest,attitudes, their behavior as individuals and in groups— and to harmonize individual goals to contribute to or-and that effective managers also need to be effective ganization goals.leaders. Since leadership implies followership andpeople tend to follow those who offer a means of satis-fying their own needs, wishes, and desires, it is under-standable that leading involves motivation, leadershipstyles and approaches, and communication. SummaryControlling Management is the process of designing and main- taining an environment in which individuals, workingControlling is the measuring and correcting of activi- together in groups, accomplish efficiently selectedties of subordinates, to ensure that events conform to aims. Managers are charged with the responsibility ofplans. It measures performance against goals and taking actions that will make it possible for individualsplans, shows where negative deviations exist, and, by to make their best contributions to group objectives.putting in motion actions to correct deviations, helps Managing as practiced is an art; the organized knowl-ensure accomplishment of plans. Although planning edge underlying the practice may be referred to as amust precede controlling, plans are not self-achieving. science. In this context science and art are not mutu-The plan guides managers in the use of resources to ally exclusive but are complementary. 12
  13. 13. All managers carry out the functions of planning,organizing, staffing, leading, and controlling, al-though the time spent in each function will differ andthe skills required by managers at different organiza-tional levels vary. Managerial activities are common toall managers, but the practices and methods must beadapted to the particular tasks, enterprises, and situa-tions. The universality of management states that man-agers perform the same functions regardless of theirplace in the organizational structure or the type of en-terprise in which they are managing. 13
  14. 14. R. Alec MackenzieThe management processin 3-DA diagram showing the activities, functions,and basic elements of the executives jobForewordTo many businessmen who are trying to keep up with Mr. Mackenzie is Vice President of The Presidentsmanagement concepts, the literature must sometimes Association, Inc., an organization affiliated with theseem more confusing than enlightening. In addition American Management Association. He has had ex-to reflecting differences of opinion and semantics, it tensive experience in planning, organizing, and teach-generally comes to the reader in fragments. The aim ing seminars for businessmen here and abroad. He isof this diagram is not to give the executive new in- coauthor with Ted W. Engstrom of Managing Yourformation, but to help him put the pieces together. Time (Zondervan Publishing House, 1967).T -he chart of "The Management Process/ fac-ing this page, begins with the three basic ele- cially planning and managing a campaign, rath- er than for his leadership.ments with which a manager deals: ideas, things,and people. Management of these three elements Similarly in industry, education, and govern-is directly related to conceptual thinking (of ment it is possible to have an outstanding man-which planning is an essential part), administra- ager who is not capable of leading people buttion, and leadership. Not surprisingly, two schol- who, if he recognizes this deficiency, will staffars have identified the first three types of man- his organization to compensate for it. Alterna-agers required in organizations as the planner, tively, an entrepreneur may possess charismaticthe administrator, and the leader.1 qualities as a leader, yet may lack the adminis- Note the distinction between leader and man- trative capabilities required for overall effectiveager. The terms should not be used interchange- management; and he too must staff to make upably. While a good manager will often be a good for the deficiency.leader, and vice versa, this is not necessarily the We are not dealing here with leadership incase. For example: general. We are dealing with leadership as a • In World War II, General George Patton function of management. Nor are we dealingwas known for his ability to lead and inspire with administration in general but, again, as amen on the battlefield, but not for his concep- function of management.tual abilities. In contrast, General Omar Brad- The following definitions are suggested forley was known for his conceptual abilities, espe- clarity and simplicity:1. Sec H. Igor Ansoff and R.G. Brandenburg, "The General Manager of O Management—achieving objectives throughthe Future," California Management Review, Spring 1969, p. 61. others. Reprinted by permission of the Harvard Business Review. "The Management Process in 3-D" by R. Alex Mackenzie, Nov./Dec. 1969, pp. 80-87. Copyright © 1969 by the President and Fellows of Harvard College. All rights reserved. 14
  15. 15. Exhibit I. The management process This diagram shows the different elements, functions, and activities which are part of the management process. At the center are people, ideas, and things, for these are the basic components of every organization with which the manager must work. Ideas create the need for conceptual thinking; things, for administration , people, for leadership. • Three functions—problem analysis, decision making, and communication—are important at all times and in all aspects of the managers iob; therefore, they are shown to permeate his work process. However, other functions are likely to occur in predictable sequence,- thus, planning, organizing, staffing, directing, and controlling arc shown in that order on one of the bands. A managers interest in any one of them depends on a variety of factors, including his position and the stage of completion of the projects he is most concerned with. He must at all times sense the pulse of his organization. The activities that will be most important to him as he concentrates— now on one function, then on another—are shown on the outer bands of the diagram. PEOPLE TO ACCOMPU OFCtSfONSOti ADMINISTRATION MUVRTANT STANDARDIZE METHODS O Nil rma . ^ - • ^ R. Alec Mackenzie, The Management Process in 3- Harvard Business Review, November-December 1969 Copyright
  16. 16. O Administration—managing the details of ex- ing, directing, and controlling processes. Equally,ecutive affairs. there must be communication for many of the O Leadership—influencing people to accom- functions and activities to be effective. Andplish desired objectives. the active manager will be employing problem analysis throughout all of the sequential func- tions of management.Functions described In actual practice, of course, the various func- tions and activities tend to merge. While select-The functions noted in the diagram have been ing a top manager, for example, an executiveselected after careful study of the works of many may well be planning new activities which thisleading writers and teachers.2 While the authori- managers capabilities will make possible, andties use different terms and widely varying clas- may even be visualizing the organizational im-sifications of functions, I find that there is far pact of these plans and the controls which willmore agreement among them than the variations be necessary.suggest. Simplified definitions are added for each of Arrows are placed on the diagram to indicate the functions and activities to ensure under-that five of the functions generally tend to be standing of what is meant by the basic elements"sequential." More specifically, in an undertak- one ought first to ask what the purpose orobjective is which gives rise to the function ofplanning; then comes the function of organiz- Prospective gainsing—determining the way in which the work isto be broken down into manageable units; after Hopefully, this diagram of the managementthat is staffing, selecting qualified people to do process will produce a variety of benefits forthe work; next is directing, bringing about pur- practitioners and students. Among these bene-poseful action toward desired objectives; finally, fits are:the function of control is the measurement of O A unified concept of managerial functionsresults against the plan, the rewarding of the and activities.people according to their performance, and O A way to fit together all generally acceptedthe replanning of the work to make corrections activities of management.—thus starting the cycle over again as the process O A move toward standardization of termi-repeats itself. nology. Three functions—analyzing problems, making O The identifying and relating of such activi-decisions, and communicating—are called "gen- ties as problem analysis, management of change,eral" or "continuous" functions because they and management of differences.occur throughout the management process rath- O Help to beginning students of managementer than in any particular sequence. For example, in seeing the "boundaries of the ballpark" andmany decisions will be made throughout the sensing the sequential relationships of certainplanning process as well as during the organiz- functions and the interrelationships of others.2. The following studies were particularly helpful: Harold Koontz, O Clearer distinctions between the leadership,Toward a Unified Theory of Management (New York, McGraw-Hill administrative, and strategic planning functionsBook Company, 1964); Philip W. Shay, "The Theory and Practice of of management.Management," Association of Consulting Management Engineers, 1967;Louis A. Allen, The Management Profession (New York, McGraw-HillBook Company, 1964), a particularly useful analysis of managerial In addition, the diagram should appeal to thosefunctions and activities; Ralph C. Davis, fundamentals of TopManagement (New York, Harper & Brothers, 1951); Harold F. Smiddy, who, like myself, would like to see more em-"GEs Philosophy & Approach for Manager Development," General phasis on the "behaviorist" functions of man-Management Series # 174, American Management Association, 1955;George R. Terry, Principles of Management (Homewood, Illinois, Richard agement, for it elevates staffing and communi-D. Irwin, Inc., 19S6); William H. Newman, Administrative Action cating to the level of a function. Moreover, it(Englewood Cliffs, N.J., Prentice-Hall, Inc., 1950); Lawrence A. Appley,Values in Management (New York, American Management Association, establishes functions and activities as the two1969); Ordway Tead, Administration: Its Purpose and Performance most important terms for describing the job of(New York, Harper & Brothers, 1959); Peter F. Dnicker, The Practiceof Management (New York, Harper & Row, 19S4). the manager. 15