INTRODUCTION TO BUSINESS CH-2 STRAUB BY MD.MAHOFUZUR RAHMAN

MANAGEMENT
The word “Management” has been derived from the word
“menaggiare” which means “ to train up the horses “
According to L.A.Allen-” Management is what a manager
does”
According to Peter Drucker,
"Management is a multi-purpose organ that manages
business and manages managers and manages workers
and work."
This definition of management was given by Peter Drucker
in his book "The Principles of Management".

MANAGEMENT
According to Mary Parker Follet,
“Management is the art of getting things done through
people”
“ Management is a set of activities (including planning
and decision making, organizing , leading, and
controlling ) directed at on organization’s resources (
human , financial , physical & information )with the
aim of achieving organizational goals in an efficient &
effective manner”-R.W. Griffin

MANAGEMENT
 “ Management is simply the process of
decision making and control over the action
of human beings for the expressed purpose
of attaining predetermined goals”—Stanly
Vance

LEVELS OF MANAGEMENT:
Generally, there are Three Levels of Management, viz.
 Administrative or Top Level of Management.It
involves director general, assistant director general,
general manager, assistant general manager, directors
etc.
 Executive or Middle Level of Management.It involves
various departmental directors like- production
manager, financial manager , purchase manager etc.
 Supervisory or First line Level of Management.It
involves junior executives like supervisors, foreman etc.
At each level, individual manager has to carry out different
roles and functions.

MANAGEMENT FUNCTION:
For theoretical purposes, it may be convenient to separate
the function of management but practically these
functions are overlapping in nature i.e. They are highly
inseparable. Each function blends into the other & each
affects the performance of others.
1.Planning:
2. Organizing:
3. Staffing:
4. Leading:
5. Controlling:

MANAGEMENT FUNCTION:
Planning:
Setting the organizational goals and deciding how best to
achieve them
Organizing:
Determining how best to group activities and resources.
Staffing:
Positioning right people right jobs at right time.
Leading:
Motivating members of the organization to work in the best
interest of the organization.
Controlling:
Monitoring and correcting ongoing activities to facilitate goal
attainment.

MANAGEMENT ROLE:
A role is any of the several behaviors a manager display as
he or she functions in the organization.
 1. Figurehead Role : A manager is the head of his or her work
unit ,division , department , or section.
 2. Leadership Role: The manager is the environment creator
. He or she plays this role by working to improve employees
performance, reducing conflict , providing feedback on
performance and encouraging growth.

MANAGEMENT ROLE:
3. Liaison Role. Building the
relation between superiors and
subordinates.
4. Monitor Role. Constantly
monitoring the environment to
determine what is going on .
5. Disseminator Role. Passes the
information through subordinates

MANAGEMENT ROLE:
6. Spokesperson or representative Role:
Speaks internal and external work unit people
out side the work unit.
7. Entrepreneur Role. Expose new ideas that
may improve the work units operations, he or
she assumes the entrepreneur role.
8. Disturbance handler Role. Handle the
crises occurring in the organization.

MANAGEMENT ROLE:
9. Resource Allocator Role: managers are
responsible for determining who , in the
work unit, gets the resources and how much
each person gets.
10. Negotiator Role. Negotiating may be
required on contracts with suppliers or
simply on trading off resources inside the
organization.

MANAGEMENT SKILLS:
Three skills need all managers. These are:
 Technical Skill: is the knowledge of and ability to use the
processes, practices, techniques, or tools of a specialty
responsibility area.
Example :-Accountants ,Engineers , Sales Persons.
 Human Skill :is the ability to interact with other persons
successfully. a manager must be able to understand ,
work with , and relate to individuals and groups to build a
term-work environment.
 Conceptual Skill :deals with ideas and abstract
relationships. It is the mental ability to view the
organization as a whole and to see how the parts of the
organization relate to and depend on one another

THE DECISION MAKING PROCESS:
Decision making is the process of
making rational choices among
alternatives.

THE DECISION MAKING PROCESS:
Define the
problem
Identify the
limiting or
critical factors
Develop
potential
alternatives
Analyze the
alternatives
Select the best
alternatives
Implement the
solution
Establish a
control and
evaluation
system

ORGANIZATION
CREATING AN ORGANIZATION
An organization is a group of two or
more people that exists and operates to
achieve clearly stated, commonly held
objective.
Example: Churches, Social clubs,
Athletic teams, Local government and
Nonprofit organization

THE ORGANIZATIONAL PROCESS:
 Managers build organizations by using the organizing
process. The organizing processes are:
 Consider objective and plans
Objectives and plans are the starting point. The objectives
must consider the personal, social, environmental, and
financial components of the business.
Plan, and then annually review, business objectives to
check they are still appropriate and achievable.

 Determine the necessary work activities
Creating a list of tasks to be accomplished begins with
those that will be ongoing tasks and ends with the
unique or one time line tasks.
Classify and Group Activities
Managers perform three processes:
I. Examine each activity identified to determine its
general nature.(Marketing, Production , Finance ,
Personnel)
II. Group the activities into these related areas.
III. Establish the basic department design for the
organization structure.

Organizational structure
Abc Company
Finance Production Marketing
Western
Region
Division
Typewriters Calculators
Government Retail Hospital
Western
Region
Division
Personnel

Assign work and delegate appropriate authority
The activities must be assign to individuals who are
simultaneously given the appropriate authority to
accomplish the tasks.
Design a hierarchy of relationships:
 It requires the determination of both the vertical and
horizontal operational relationships of the
organization as a whole.
 This structure is shown by an organization chart-------
-------

President
Vice- President-
Production
GM-
Manufacturing
GM-Quality
Control
Vice-President-
Marketing
GM-Sales
GM-Advertising
GM-Research

Key Terms:
 Chain of command : Hierarchy of decision
making levels in the company.
 Span of control :The number of
subordinates under the direction of a
manager.
 Organizational chart :The visual
representation of the way an organization
and each of its parts fit together.

MANAGING THE ORGANIZATION
STRUCTURE:
 Managers need to understand and utilize the concepts
of Authority , Delegation , Responsibility ,
Accountability, Span of Control , Centralization and
Decentralization
 Authority:
 Authority is a manager‘s tool, it can be described that
commit resources or the legal right to give orders.
 There are three types authority:
Authority
Line
Authority
Staff
Authority
Functional
Authority

Line Authority is direct supervisory
authority from superior to subordinate.
Staff Authority is the authority to
serve in an advisory capacity.
Functional Authority is the authority
to make decisions on specific activities
that are undertaken by personnel in
other departments.

Line organization
President
Sales Manager
Sales
Person
Sales
Person
Sales
Person
Production
Manager
Machinist Welder Assembler

The flow of line and staff authority
President
Manufacturing Finance Production
Legal
Research and
DevelopmentStaff authority
Line authority

Functional Authority
President
Marketing
Advertising Sales
Production Finance
Credit
Fund
Acquisition
Personnel
Functional
Authority

 Delegation:
Delegation is a concept describing the downward transfer of
formal authority from one person to another.
When Manager chooses to delegate a sequence of events is created.
 Assignment of tasks: Specific tasks or duties that are to be
undertaken are identified by the manager for assignment to the
subordinates.
 Delegation of authority: Manager should delegate authority to
the subordinates for the accomplishment of the work.
 Acceptance of responsibility: Responsibility is the obligation to
carry out one’s assigned duties to the best of one’s ability..
Responsibility will not be delegated by the manager .
 Creation of accountability: Accountability is having to answer
to someone for your action .

Span of Control:
Span of Control refers to the number of
subordinates a manager supervises.
The exact number for each manager is determined
by
1.The complexity and variety of the
subordinate’s work
2.The ability of the manager
3.The ability and training of the subordinates
themselves
4.The supervisor’s willingness to delegate the
authority.

Spans of control
Narrow Span
Of Control
President
Vice-President-
Marketing
Vice-
President-
Production
Manager-
Manufact
ure
Employee
-1
Employee
-2
Employee
-3
Employee
----
Manager-
QC
Vice-
President-
Personnel
Wide span of control

Centralization and
Decentralization:
Centralization --- The top level
management may centralize all
decision.
Decentralization--- The hiring the
decisions to first level management for
clerical workers and let operational
decisions be made where appropriate.

TYPES OF FORMAL ORGANIZATION
STRUCTURE:
 Formal organization structures are
developed by companies to help achieve
their specific objectives. Four types of
organization, these are:
1. Line Organization: “A straight line of
authority originating from the top manager
that connects each successive management
level until it reaches the operating employee
level”

2. Line-and-staff Organization: It blends into the
line organization staff personnel that advise and
serve the line managers. Staff personnel advise the
line managers in case of decision making.
3. Functional Organization: is an attempt by
management to provide expert technical
supervision to operating employees by providing
separate supervisors for each task.
it violates the principles of unity of command
4. Matrix Organization: It temporary groups
together specialists from different divisions to
work on special projects

Line-and-staff organization
President
Research
Sales
manager
Sales
person
Sales
person
Sales
person
Production
manager
Legal

Functional organization
Foreperson
Cutting
supervisor
Trimming
supervisor
Polishing
supervisor
Operating
employees
Assembling
supervisor
Printing
supervisor
Packing
supervisor

INFORMAL ORGANIZATION:
The informal organization is a network
of personnel and social relationships
that arises spontaneously as people
associate with each other in the work
environment.

INFORMAL ORGANIZATION:
5
4.1
30 31
201 202 203
101 102 103 104 105
204
32 33
4.2 4.3 4.4
34
205 206
35

ACQUIRING AND DEVELOPING
HUMAN RESOURCES
 HUMAN RESOURCES MANAGEMENT (HRM):
 HRM is the staffing function of the organization.
It is includes the activities of human resources
planning, recruitment, selection, orientation,
training, performance appraisal, compensation
and safety.

HUMAN RESOURCES PROCESS:
Human
Resources
Planning
Recruiting Selection Orientation
Orientation Training
Performance
Appraisal
Separation

HUMAN RESOURCES PROCESS:
Human resource planning process
The process for an organization , which includes
forecasting the demand for and supply of
personnel.
It includes
1. Forecasting the personnel
2.Comparing the requirements with the talents
of present employees
3.Developing specific plans for how many
people to recruit

Human Resource Planning Process
Employee History
(Retirement,Resignations<Ter
minations <Promotions )
Human Resource Inventory
(Compare Inventory With Initial
Forecast)
1.Present Qualification
2. Training Potential
Strategic Plans
(Expansion , Contraction
,Status Quo)
Initial
Forecast
Human
Resource
Forecasting
Plans For
Recruitment
Plans for
training

RECRUITMENT
By Recruitment the organization attempts
to identify and attract candidates to meet
the requirements of anticipated or actual
job opening.
There are two sources of applicants----
Internal source
External source

SELECTION:
Selection is the process of deciding which candidate
out of the pool of application developed in recruiting
has the abilities, skills and characteristics that most
closely match job demands.
 SELECTION PROCESS:
Application
Blank
Preliminary
Interview
Testing
In-depth
Interview
Reference
Checks
Physical
Examination
Offer of
Employment

Applicant Pool
Application Blank
Preliminary
Interview
Testing
In-Depth
Interview
Reference Check
Physical
Examination
Offer Employment

Orientation
 An orientation program is a series of
activities that gives the new employees
information to help them adapt to the
organization and their new jobs. Its purpose
is to turn “them” (new employees) and “us”
(the company ) into “we”.

TRAINING:
Training supplies the skills, knowledge and attitude
needed by subordinates to improve their abilities to
perform their jobs.
Several training methods can be used.
 Classroom training (It is training conducted away
from the pressures of the work environment. The
employee learns the basic skills of the job and then is
sent to the work force)
 On-the-job training ( It is a technique of teaching
job skills while the person performs the job)
 Vestibule training ( It is training conducted in a
simulated work environment complete with sample
equipment)

Performance Appraisal:
 Performance Appraisal is a formal measure or rating of an
employee’s job performance compared with established job
standards.
A company may use two types Performance Appraisal:
Subjective Performance Appraisal System (is based on the
personal viewpoint of the manager)(Page-155, Table-6.3)
Objective Performance Appraisal System (In this system
the specific performance areas are identified for the
employee as are the results expected) Page-156, Table-6.4)

PERSONNEL CHANGES: MOVING UP AND MOVING ON
 Promotion : A promotion is a movement by a person
into a position with higher pay and greater responsibly
 Transfer : A transfer is a lateral move from one
position to another that has similar pay and
responsibility levels.
Demotion : A demotion is a movement from one
position to another that has less pay or responsibility
attached to it .

Separation
Separation is the loss of an employee to an
organization through layoff, termination
,retirement or resignation.
 A layoff is a temporary separation dictated
by the level of business a company is
experiencing when and if business
condition improve employees are recalled to
work.

 Termination is a permanent separation
from the company . An employee is
terminated, or fired , owing to
unsatisfactory performance or violation of
work rules.
 Retirement is a persons intention to stop
working for the rest of his or her life.
 Resignation is a voluntary separation in
which a worker leaves to accept another
position.

Compensation:
Compensation is the total amount of
the monetary and non-monetary pay
provided to an employee by an
employer in return for work performed
as required.

Types of compensation -----
Wages, Salary: Wages is compensation based on hours
worked while salary is compensation based on weeks or
months worked.
Piece work :pays employees according to the number of
units they produce.
Commission : A percentage paid to a salesperson of the
price of each item sold.
Bonus : is an incentive money paid to employees in addition
to their regular compensation .
Profit Sharing: refers to paying a portion of company profits
to employees as a performance incentive in addition to
their regular compensation.
Stock Option: A stock option is a plan that permits
employees to buy shares of stock in the employees firm at
or below the present market price.

Pension Plan: is a program to provide a retirement
income to workers by holding a percentage of their
earning s in reserve.
Fringe Benefits : Non –financial rewards provided for
employees.
1.Life,health,and Dental insurance
2.Paid vacations
3.Sick pay.
4. Holidays
5.Paid lunch
6.Discounts on merchandise or service
7.Child care

MANAGING PEOPLE
Motivation:
 Motivation basically means an individual’s
needs, desires and concepts that cause him or
her to act in a particular manner.
 “ Feeling that drive someone toward a
particular time or things that are missing from
a person's life’’

Basic motivation model
Tension
( Stimuli )
Wants
Behavior
Action Toward
Goal
Achievement
Feedback

Basic motivation model
Tension
( Stimuli )
Food
Cook rice
Eat rice
No more
hunger
I’ m
hungry

MASLOW’S HIERARCHY OF NEEDS:

 Physiological need: is the fundamental need for
food, clothing , and shelter.
 Safety and security need : is the need to avoid bodily
harm and uncertainty about one’s well-being.
 Social need :is the need to be accepted by people
whose opinions and companionship you value.
 Esteem needs :is the need to feel important ,
admired, and worthwhile.
 Self actualization or self realization needs : is the
need to get the maximum reward from one , s life
experience: to maximize one , s skills, abilities , and
potential.

Physical needs Safety needs Social needs Esteem needs Self-
realization
needs
1.Food 1.Security for
Self &
possessions
Companion ship Responsibility Reaching your
potential
2.Clothing 2. Avoidance of
risks
acceptance Self-respect Independence
3.Sheiter 3.Avoidance of
harm
Love & affection Recognition Creativity
4.Comfort &
Self-
preservation
4. Avoidance of
pain
Group
membership
Sense of
accomplishment
Self-expression

HERZBERG’S MOTIVATION-
MAINTENANCE MODEL:
 Frederick Herzberg developed a theory of
motivation in his motivation-maintenance
model. he indicates that two sets of factors,
or conditions , affect how people behave in
organizations. These two are maintenance
and motivation factors.
 Maintenance factors :Maintenance or
hygiene factors are those job factors that
prevent dissatisfaction but do not generate
satisfaction or motivate workers to generate
effort.

 1.Salary: Adequate wages, salaries, and fringe benefits
 2.Job security : Company grievance procedures and
seniority privileges
 3.Working conditions : Adequate heat, light ,
ventilation, and hours of work
 4.Status : Privilege , job titles, and other symbols of rank
and position
 5.Company policies :The policies of the organization
and fairness in administrating those policies
 6.Quality of technical supervision :Whether or not the
employees is able to receive answers to job-related
questions. Quality of interpersonal relations among peers
, supervisors , and subordinates .
 Presence of above facility will not satisfy staffs , but
absence of those facility will make them dissatisfied.

 Motivation factors : Motivation factors are those job factors
that provide satisfaction and therefore motivation, but whose
absence causes no satisfaction to be achieved. Herzberg,s
motivation factors are ;
 1.Achievement: Opportunity for accomplishment and for
contributing something of value when presented with a
challenge
 2.Recognition : Acknowledgement that contributions have
been worth the effort and that the effort has been noted and
appreciated
 3.Responsibility: Acquisition of new duties and
responsibilities, either through the expansion of a job or by
delegation.
 4. Advancement: Opportunity to improve one’s organizational
position as a result of job performance.
 5. The work itself: Opportunity for self-expression, personal
satisfaction and challenge.

LEADERSHIP:
Leadership is the process of encouraging and helping others to
work enthusiastically toward objective.
STYLES OF LEADERSHIP:
Leadership style is the approach a manager uses to influence
subordinates. This influence may take the form of making a
decision for a subordinate, guiding the subordinate in decision
making.
Thus a manager has a number of option s for a decision-making
style. The range of styles shown on the continuum can be grouped
under three heading:
1. Autocratic Leadership Style:
The autocratic leadership style is characterized by decision
making solely by the manager, subordinates are excluded from
the process.

2. Participative leadership style:
The participated leadership style is characterized by
the manager involving the subordinates in the
decision.
3. Free-rein or Laissez-faire leadership style:
The free-rein or laissez-faire leadership style by the
leader permitting the subordinates to function
independently. The leader exercises little direct
supervision over subordinates, allowing them to use
considerable judgments in accomplishing tasks.

INTRODUCTION TO BUSINESS CH-2 STRAUB BY MD.MAHOFUZUR RAHMAN

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INTRODUCTION TO BUSINESS CH-2 STRAUB BY MD.MAHOFUZUR RAHMAN