organization and management

1. Concept of Management
MARITES D. ERUM
MAED-EA

2. WHAT IS CONCEPT OF MANAGEMENT?
 Concept of Management
 Some of the common definition of management given by famous writers and thinkers are:
 According to Harold Koontz and Heinz Weihrich, Management is the process of designing and maintaining
an environment in which individuals, working together in groups, efficiently accomplish selected aims.
 According to Robert L. Trewelly and M. Gene Newport, Management is defined as the process of planning,
organizing, actuating and controlling an organization’s operations in order to achieve coordination of the
human and material resources essential in the effective and efficient attainment of objectives.
 According to Kreitner, “Management is the process of working with and through others to effectively
achieve organizational objectives by efficiently using limited resources in the changing environment.
 According to George R Terry, Management consists of planning, organizing, actuating and controlling,
performed to determine and accomplish the objectives by the use of people and resources.

3.  So Management can be defined as a process of getting things done with the aim of achieving goals effectively
and efficiently. Some important terms in this definition are:
1. Process: Process means the primary functions or activities that management performs to get
things done. These functions are planning, organising, staffing, directing and controlling.
2. Effectiveness: Effectiveness is concerned with the end result. It basically means finishing the
given task. Thus Effectiveness in management is concerned with doing the right task, completing
activities and achieving goals
3. Efficient: Efficiency means doing the task correctly and with minimum cost. Management is
concerned with the efficient use of input resources which ultimately reduce costs and lead to
higher profits.
 it is important for management to achieve goals (effectiveness) with minimum resources i.e., as
efficiently as possible while maintaining a balance between effectiveness and efficiency

4. Characteristics of Management
 Basic characteristics of management are:
1. Management is a goal-oriented process: An organization has a set of basic goals which are the
basic reason for its existence. Management unites the efforts of different individuals in the organization
towards achieving these goals.
2. Management is all pervasive: The activities involved in managing an enterprise are common to all
organizations whether economic, social or political.
3. Management is multidimensional: Management is a complex activity that has three main
dimensions:
1. Management of work: All organizations exist for the performance of some work. Management translates this
work in terms of goals to be achieved and assigns the means to achieve it.
2. Management of people: Human resources or people are an organization’s greatest asset. Managing people
has two dimensions:
1. it implies dealing with employees as individuals with diverse needs and behavior;
2. it also means dealing with individuals as a group of people

5.  The task of management is to make people work towards achieving the organization’s goals, by
making their strengths effective and their weaknesses irrelevant.
 3. Management of operations: It requires a production process which entails the flow of input
material and the technology for transforming this input into the desired output for consumption
4. Management of operations: It requires a production process which entails the flow of input material
and the technology for transforming this input into the desired output for consumption
5. Management is a continuous process: The process of management is a series of continuous,
composite, but separate functions (planning, organizing, directing, staffing and controlling). These
functions are simultaneously performed by all managers all the time.
6. Management is a group activity: An organization is a collection of diverse individuals with different
needs. Management should enable all its members to grow and develop as needs and opportunities
change.
7. Management is a dynamic function: Management is a dynamic function and has to adapt itself to
the changing environment. In order to be successful, an organization must change itself and its goals
according to the needs of the environment.
8. Management is an intangible force: Management is an intangible force that cannot be seen but its
presence can be felt in the way the organization functions

6. What are Management Theories?
 Management theories are concepts surrounding recommended management strategies,
which may include tools such as frameworks and guidelines that can be implemented in
modern organizations. Generally, professionals will not rely solely on one management
theory alone, but instead, introduce several concepts from different management theories
that best suit their workforce and company culture.

7.  At a Glance
 Until the day that machines are able to think, talk, and experience emotions, humans will remain
the most complicated beings to manage. Humans can never achieve the kind of error-free
performance that machines provide. On the upside, there are tons of things that machines aren’t
capable of doing, making humans indispensable assets. For such reason, proper management is
one of the most crucial things for an organization.
 For a long time, theorists have been researching the most suitable forms of management for
different work settings. This is where management theories come into play. Although some of
these theories were developed centuries ago, they still provide stable frameworks for running
businesses

8. Popular Management Theories
 1. Scientific Management Theory
 American mechanical engineer Frederick Taylor, who was one of the earliest management theorists,
pioneered the scientific management theory. He and his associates were among the first individuals to
study work performance scientifically. Taylor’s philosophy emphasized the fact that forcing people to
work hard wasn’t the best way to optimize results. Instead, Taylor recommended simplifying tasks so as
to increase productivity.
 The strategy was a bit different from how businesses were conducted beforehand. Initially, a factory
executive enjoyed minimal, if any, contact with his employees. There was absolutely no way of
standardizing workplace rules and the only motivation of the employees was job security.
 According to Taylor, money was the key incentive for working, which is why he developed the “fair
day’s wages for a fair day’s work” concept. Since then, the scientific management theory has been
practiced worldwide. The resulting collaboration between employees and employers evolved into the
teamwork that people now enjoy.

9.  2. Systems Management Theory
 Systems management offers an alternative approach to the planning and management of
organizations. The systems management theory proposes that businesses, like the human body,
consists of multiple components that work harmoniously so that the larger system can function
optimally. According to the theory, the success of an organization depends on several key
elements: synergy, interdependence, and interrelations between various subsystems.
 Employees are one of the most important components of a company. Other elements crucial
to the success of a business are departments, workgroups, and business units. In practice,
managers are required to evaluate patterns and events in their companies so as to determine the
best management approach. This way, they are able to collaborate on different programs so that
they can work as a collective whole rather than as isolated units.
 3. Contingency Management Theory
 The main concept behind the contingency management theory is that no one management
approach suits every organization. There are several external and internal factors that will
ultimately affect the chosen management approach. The contingency theory identifies three
variables that are likely to influence an organization’s structure: the size of an organization,
technology being employed, and style of leadership.

10.  Fred Fiedler is the theorist behind the contingency management theory. Fiedler proposed that
the traits of a leader were directly related to how effectively he led. According to Fiedler’s theory,
there’s a set of leadership traits handy for every kind of situation. It means that a leader must be
flexible enough to adapt to the changing environment. The contingency management theory can
be summed up as follows:
 There is no one specific technique for managing an organization.
 A leader should be quick to identify the particular management style suitable for a particular
situation.
 The primary component of Fiedler’s contingency theory is LPC – the least preferred co-worker
scale. LPC is used to assess how well oriented a manager is.
 4. Theory X and Theory Y
 Do you believe that every individual gets maximum satisfaction from the work they do? Or are
you of the opinion that some view work as a burden and only do it for the money? Such
assumptions influence how an organization is run. The assumptions also form the basis of Theory
X and Theory Y.

11.  Douglas McGregor is the theorist credited with developing these two contrasting concepts.
More specifically, these theories refer to two management styles: the authoritarian (Theory X)
and participative (Theory Y).
 In an organization where team members show little passion for their work, leaders are likely
to employ the authoritarian style of management. But if employees demonstrate a willingness to
learn and are enthusiastic about what they do, their leader is likely to use participative
management. The management style that a manager adopts will influence just how well he can
keep his team members motivated.
 Theory X holds a pessimistic view of employees in the sense that they cannot work in the
absence of incentives. Theory Y, on the other hand, holds an optimistic opinion of employees.
The latter theory proposes that employees and managers can achieve a collaborative and trust-
based relationship.
 Still, there are a couple of instances where Theory X can be applied. For instance, large
corporations that hire thousands of employees for routine work may find adopting this form of
management ideal.

13. Types of Management Theories
 Management theories can be classified into three types.
1. Classical Management Theory
2. Behavioral Management Theory
3. Modern Management Theory
 1. Classical Management Theory
 Classical management theory is based on the belief that workers only have physical and
economic needs and prescribes specialization of labor. Classical theories recommend centralized
leadership and decision-making and focus on profit maximization. Three streams of classical
management theory are - Bureaucracy (Weber), Administrative Theory (Fayol), and Scientific
Management (Taylor).

14.  2. Behavioral Management Theory
 The behavioral management theory is focused on the human aspects of work.
They are also often referred to as the human relations movement. These theories
aspire to gain a better understanding of human behavior at work to improve
productivity. It focuses on behavioral aspects like motivation, conflict, expectations,
and group dynamics.
 3. Modern Management Theory
 Modern management theory emphasizes the use of systematic mathematical
techniques to analyze and understand the inter-relationship of management and
workers in all aspects. Three streams of modern management theories are -
Quantitative Approach, System Approach, and Contingency Approach.
The quantitative approach to management uses statistics
and mathematical techniques to solve complex problems.
Depending on the business area, managers may use
techniques like computer simulations or information
models to assess performance

15.  The systems approach of management states that organizations represent a complex
collection of various components that work together to reach a common goal. An organization
is made up of numerous subsystems, such as different departments.
 The contingency approach is a management theory that suggests the most appropriate style
of management is dependent on the context of the situation and that adopting a single, rigid
style is inefficient in the long term.

16. General Management Theories
 There are four general management theories.
 Frederick Taylor – Theory of Scientific Management
 Henri Fayol – Administrative Management Theory
 Max Weber - Bureaucratic Theory of Management
 Elton Mayo – Behavioral Theory of Management (Hawthorne Effect)
 1. Frederick Taylor’s Theory of Scientific Management:
 Taylor’s theory of scientific management aimed at, improving economic efficiency, especially labor
productivity. Taylor had a simple view about, what motivated people at work, - money. He felt that
workers should get a fair day's pay for a fair day's work, and that pay should be linked to the amount
produced. Therefore he introduced the differential piece rate system, of paying wages to the workers.

17.  Taylor's Differential Piece Rate Plan:
 If Efficiency is greater than the defined Standard then workers should be paid 120 % of the
Normal Piece Rate.
 If Efficiency is less than standard then workers should be paid 80% of the Normal Piece
Rate.
 Principles of Scientific Management
 Four Principles of Scientific Management are:
 Time and motion study: - Study the way jobs are performed and find new ways to do them.
 Teach, train, and develop the workman with improved methods of doing work. Codify the
new methods into rules.
 The interest of the employer & employees should be fully harmonized so as to secure
mutually understanding relations between them.
 Establish fair levels of performance and pay a premium for higher performance.

18.  2. Henri Fayol’s Administrative Management Theory:
 Henri Fayol known as the Father of Management laid down the 14 principles of Management. These 14
principles of management are used to manage an organization and are beneficial for prediction, planning,
decision-making, organization and process management, control, and coordination.
 Division of Work: Improves productivity, efficiency, accuracy, and speed
 Equity: Employees should be treated equally and respectfully
 Discipline: Makes the management job easy and make progress
 Initiative: support and encourage employees taking initiatives
 Authority and Responsibility: Efficient delivery of work with defined responsibility
 Esprit de Corps: Develop trust and mutual understanding
 Subordination of Individual Interest: Company over personal interest and respect the chain of command
 Stability: offer job security to their employees
 Remuneration: motivating factor linked to the individual’s efforts
 Unity of Direction: Unified goals and motives for all personnel working in a company
 Centralization: Balance between the hierarchy and division of power
 Scalar Chain: Hierarchy steps should be from top to the lowest
 Unity of Command: More than one boss brings a conflict of interest and confusion
 Order: the positive atmosphere in the workplace boosts productivity

19.  3. Max Weber’s Bureaucratic Theory of Management:
 Weber made a distinction between authority and power. Weber believed that power educes obedience through force or the
threat of force which induces individuals to adhere to regulations. According to Max Weber, there are three types of power in an
organization:-
 Traditional Power As the name implies, traditional authority is power that is rooted in traditional, or long-standing, beliefs
and practices of a society. It exists and is assigned to particular individuals because of that society's customs and
traditions.
 Example: Hereditary nobles in Europe, particularly the monarchy
 Charismatic Power is the influence created by an individual's exceptional personal qualities. Martin Luther King, Jr. is an
example of a leader with charismatic power because he empowered followers to action through his empathy for a cause
and clear communication.
 Example: Martin Luther King, Jr. is an example of a leader with charismatic power because he empowered followers to action
through his empathy for a cause and clear communication.
 Bureaucratic Power or Legal Power. Rational-legal authority is also known as bureaucratic authority or legal authority. With this type of
authority, an individual or ruling group exerts power based on legal office. Once the person in power leaves their official position, their authority
is lost.
 Military

20.  Features of Bureaucracy:
 Division of Labor.
 Formal Hierarchical Structure.
 Selection based on Technical Expertise.
 Management by Rules.
 Written Documents.
 Only Legal Power is Important.
 Formal and Impersonal relations.
4. Elton Mayo’s Behavioral Theory of Management:
 Elton Mayo's experiments showed an increase in worker productivity was
produced by the psychological stimulus of being singled out, involved, and
made to feel important. Hawthorne Effect can be summarized as “Employees
will respond positively to any novel change in a work environment like better
illumination, clean work stations, relocating workstations, etc. Employees are
more productive because they know they are being studied.

21.  5 Relationship Theories or Transformational Theories of
Management
 Relationship theories (also known as "Transformational theories") focus upon the
connections formed between leaders and followers. These leaders motivate and inspire people
by helping group members see the importance and utility of the task. Transformational leaders
are focused on the performance of group members, but also want each person to fulfill his/her
potential. These leaders often have high ethical and moral standards.
 There are different thoughts on management. According to one school of thought, history is
of no relevance to the real problems faced by modern world managers in today's dynamic
environment. However, both management theory and its history are indispensable tools for
managing complex digitally-enabled organizations in a modern context.

22. Forces Influencing Management Theories
 The following three forces had a major influence on the concept and evolution of
management theories.
 Social Forces:
 Social forces are the norms and values that characterize a culture. Early social forces
allowed workers to be treated poorly. However, more recent social forces have provided for
more acceptable working conditions for the workforce. Social forces have greatly influenced
the management thought in the areas of motivation and leadership.

23.  Economic Forces
 Economic factors have influenced the way businesses developed and designed their
organizational structures, workforce, etc. Examples of these economic forces are Ideas like a market
economy, public enterprise, and private ownership of property, economic freedom, competitive
markets, and globalization.
 Political Forces
 Political forces such as governmental regulations play a significant role in how organizations
choose to manage themselves. Government actions and political realities often influence the success
and failure of a business and most of the time political factors that affect a business are often
completely out of the company's control. Political forces have influenced management theory in the
areas of environmental analysis, planning, control, and organizational design and employee rights.

25. Environmental Scanning
 Environmental scanning is the process of gathering information about events and their
relationships within an organization's internal and external environments. The basic purpose of
environmental scanning is to help management determine the future direction of the organization.
 Internal analysis of the environment is the first step of environment scanning. Organizations
should observe the internal organizational environment.
 This includes employee interaction with other employees, employee interaction with
management, manager interaction with other managers, and management interaction with
shareholders, access to natural resources, brand awareness, organizational structure, main staff,
operational potential, etc. Also, discussions, interviews, and surveys can be used to assess the
internal environment.

26. Analysis of internal environment helps in
identifying strengths and weaknesses of an
organization
 information from external environment adds crucial elements to the effectiveness
of long-term plans.
 As environment is dynamic, it becomes essential to identify competitors’ moves
and actions. Organizations have also to update the core competencies and internal
environment as per external environment.
 Environmental factors are infinite, hence, organization should be agile and vigil
to accept and adjust to the environmental changes.

27.  Components of external scanning that could be considered include:
 Trends: What trends are occurring in the marketplace or industry that could affect the
organization either positively or negatively?
 Competition: What is your competition doing that provides them an advantage? Where
can you exploit your competition's weaknesses?
 Technology: What developments in technology may impact your business in the
future? Are there new technologies that can make your organization more efficient?
 Customers: How is your customer base changing? What is impacting your ability to
provide top-notch customer service?
 Economy: What is happening in the economy that could affect future business?
 Labor supply: What is the labor market like in the geographies where you operate? How
can you ensure ready access to high-demand workers?
 Political/legislative arena: What impact will election outcomes have on your business? Is
there impending legislation that will affect your operations?

28.  Each organization must identify what external factors are most impactful to make the
environmental scan a useful tool.
 The next step is to conduct an internal scan of the organization. Review the company's
vision, mission and strategic plan. Examine the organization's strengths and
weaknesses. Consider where the company is now and where it plans to be in five or 10
years. Interview or survey leaders of the company.
 Once an organization has gathered information about the external world, its competitors
and itself, it should then develop strategies to respond to impacts when the need arises.
 When conducting an environmental scan, a variety of methods should be used to collect
data, including reviewing publications, conducting focus groups, interviewing leaders
inside and outside the organization, and administering surveys.
 Environmental scanning is an important component of strategic planning as it provides
information on factors that will affect the organization in the future. The information
gathered will allow leadership to proactively respond to external impacts.
 Why is Environmental Scanning important?
 Environmental scanning is important because it provides information on factors that will
affect the organization in the future, allowing leadership to proactively respond to external
impacts.