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Principles of Management 
School Year 2014-2015
Chapter 1: Introduction to Management 
Management: A Definition 
• According to Terry and Rue define management as “ a process or form of work 
that involves the guidance and direction of a group of people toward 
organizational goals or objectives. 
• According to Stoner states that “management is a process of planning, 
organizing, leading and controlling the efforts of organization members and 
using all other organizational resources to achieve stated organizational goals. 
• According to Koontz, O’Donnell, and Weihrich point out that “management is 
the establishment of an environment for group effort in such a way that 
individuals will contribute to group objectives with the least amount of such 
money, time, effort discomfort and materials. 
• According to Johnson and Stinson say that “management is the process of 
working with and through other people to accomplish organizational goals.
Management: Functions and Processes (An Overview) 
1. Planning- the process of setting the objectives to be accomplished by 
an organization during a future time period and deciding on the 
methods of reaching them. 
2. Organizing- the process of grouping and assigning activities and 
providing the necessary authority to carry out the activities. 
3. Staffing- the process of filling positions in the organizational structure 
with the most qualified people available. 
4. Motivating- the process of getting people contribute their maximum 
effort toward the attainment of organizational objectives. 
5. Controlling- the process of ensuring the achievement of an 
organization’s objectives.
Two essential processes are involved in all these five 
managerial functions: 
1. Decision- Making. This is the process of choosing from two or more 
alternatives. 
2. Communicating. It is the impossible to perform the managerial 
functions without communication, which is the process of exchanging 
facts, ideas, opinions and emotions between two or more persons.
Chapter 2: The Evolution of Management Thought 
By 1860, or at the beginning of the Industrial Revolution in the United States, 
it was evident that the energy, transportation and communication fields have 
advanced to the point that they served as an incentive to the entrepreneur. 
In 1895, Frederick W. Taylor who challenged the previous methods of 
managing a business came up with Scientific Management. This was a 
philosophy that dealt with the relationship of people and work. 
Then another contribution to the Scientific Management was Henry L. Gantt 
who devised what is known as the Gantt Chart , this is bar chart comparing 
schedule with the actual performance widely used in production control and 
now on computer scheduling operations. 
In 1916, Henry Fayol, drew up of blueprint for a cohesive doctrine of 
management after investigating managerial behavior. He presented a 
breakdown of the functions of management which is: planning, organizing, 
commanding, coordinating and controlling.
Fayol’s: 14 Principles of Management 
1. Division of Labor 
2. Authority and Responsibility 
3. Discipline 
4. Unity of Command 
5. Unity of Direction 
6. Subordination of individual interest to the general interest 
7. Fair remuneration of personnel 
8. Centralization 
9. Scalar Chain 
10.Order 
11.Equity 
12. Stability of tenure 
13. Initiative 
14. Esprit de corps
In 1927, Elton Mayo’s studies began to determine the relationship between 
the physical and productivity emphasized the potential impact of the 
behavioral sciences on management. 
In 1930s, The Great depression shook the entire business structure. During 
this economic crisis, with widespread unemployment with the collapse or 
near collapse of major economic institutions, many companies disappeared. 
In late 1940s to the early 1960s, the management process or functional 
approach was accepted as the methodological approach to the study of 
management. 
From 1960s, many new schools of and approaches to management theory 
and knowledge surfaced; so many that Harold Koontz coined the term 
Management Theory Jungle.
Chapter 3: Planning 
Planning Defined: 
Planning is the process of setting the objectives to be accomplished by 
the organization during the future time period and deciding on the 
methods of reaching them. 
Kinds of Planning 
Strategic Planning is the type of that is generally reserved for the top-level 
managers since it involves the determination of overall direction-the 
direction the organization should be going. 
Tactical Planning is the type of planning generally reserved for the 
middle and lower level manager. This type of planning is primarily 
concerned with how get where the organization wants to go.
The Planning Function 
Firstly, the managers must critically appraise the present 
position of the organization. Must take a complete inventory and 
attempt to realistically determine just where organization is at 
the moment. 
Secondly, the manager must set objectives. Must decide where 
organization must go. Must set growth, profitability, and social 
responsibility objectives for this organization. 
Finally, must develop a set of plans to achieve these objectives.
Objectives: Defined 
Objectives are clear-cut and carefully considered statements designed to 
give the organization and its member direction and purpose. Goals, 
aims, purposes or missions are commonly used interchangeably for 
objectives. 
Characteristics of Effective Objectives 
1. Objectives must be specific. They must have precise meaning for the manager. 
Goals such as to maximize profits, to minimize expenses, to promote growth. 
2. Objectives must be practical. They must be within the capacity of the individual 
or group to achieve. The best approach is to aim for levels of achievement 
which are difficult but attainable 
3. Objectives must be quantifiable or measurable. An objective like “to develop 
management’ can be quantified by reporting the number of qualified 
promotions for a given period.
Setting Objectives 
The managerial objectives sets normally fall into one of four general 
categories: 
1. Profitability. This can be expressed in terms of profits, return of 
investments or earning per share. 
2. Customer Service. This can be expressed in very explicit terms. 
Example: To reduce the number of customer complaints. 
3. Employee- Management Needs and Well Being. This may be 
quantitatively expressed in the terms of number grievances, training 
and etc. 
4. Social Responsibility. This objective may be expressed in types of 
activities, number of days of services or financial contributions.
Chapter 4: Organizing 
Organizing Defined: 
Organizing is the process of grouping and assigning activities and 
providing the necessary authority to carry out the activities. 
It is differentiated from staffing in that in organizing, the manager 
decides what jobs will have to be filled and what the people who hold 
them must do.
Types of Organization 
Line Organization. The line 
organization illustrated is the 
simplest and the oldest type of 
organization. It is characterized by 
direct vertical flow of authority 
from the top man through the 
various managers down to the 
workers. 
PRESIDENT 
PLANT 
MANAGER 
MANAGER 
PRODUCT A 
MANAGER 
PRODUCT B 
MANAGER 
PRODUCT C 
WORKERS WORKERS WORKERS
PRESIDENT 
PLANT 
MANAGER 
PERSONNEL 
DIRECTOR 
PLANT 
MANAGER 
ASSISTANT TO 
THE PRESIDENT 
ACCOUNTING 
MANAGER 
MANAGER 
PRODUCT A 
MANAGER 
PRODUCT B 
MANAGER 
PRODUCT C 
WORKERS WORKERS WORKERS 
Line and Staff Organization. Consists of the addition of staff specialists, In essence 
the staff component of a line and staff organization is advisory and supportive in 
nature and added to contribute to the efficiency and maintenance of the 
organization.
Matrix Organization 
An advantage of the matrix organization is its ability to 
meet unusual, innovative or complicated projects often 
shunned by the typical organizational with its functional 
departments. One potential disadvantage is that matrix 
organization can cause conflict of authority.
PRESIDENT 
PRODUCTION ENGINEERING PERSONNEL FINANCE 
PRODUCT 
GROUP 
PRODUCT 
GROUP 
PRODUCT 
GROUP 
ENGINEERING 
GROUP 
PERSONNEL 
GROUP 
PROJECT 
MANAGER 
A 
PROJECT 
MANAGER 
B 
PROJECT 
MANAGER 
C 
ENGINEERING 
GROUP 
PRODUCT 
GROUP 
PERSONNEL 
GROUP 
PERSONNEL 
GROUP 
FINANCE 
GROUP 
FINANCE 
GROUP 
PERSONNEL 
GROUP
Principles of Organization 
1. Consideration of Objectives. This principle scarcely need 
starting if we accept the definition of organization as a 
facilitating mechanism which enables us to achieve goals. 
2. Division of Work or Specialization. The narrowing scope of a 
person’s job to one or a few major functions to enable to 
specialize on these few and to increase efficiency. 
3. Delegation of Authority. Authority is the right to command or 
act and expend resources. This is right may come ownership, 
legal decree or status in the organization.
Principles of Organization 
4. Parity of Responsibilities and Authority. Responsibility or 
accountability is the obligation of a subordinate to a superior 
to perform assigned activities to the best of activities. 
5. Span of Control. Refers to the number of subordinates a 
manager can effectively control. This question of span of 
control is one wherein there is little agreement among 
experts. 
6. Unity of Command. This principle states that each member of 
an organization should be accountable to, and receive 
directions from only one supervisor, or immediate supervisor.
Principles of Organization 
7. Short Chain of Command. This principle states that there should be 
as few levels of supervision between the highest authority in an 
organization and the rank and file as possible. 
8. Coordination. This principle states that all individuals activities in an 
organization must be synchronized with the respect to their amount 
, time and direction to avoid duplication of work that results in 
wasted effort and to obtain consolidated action toward a common 
goal. 
9. Efficiency. This principle in organizing specifies that “the 
organization should be planned that the objectives can be attained 
with the lowest possible cost, which may mean either money cost 
or human cost.
Principles of Organization 
10. Separation of Line and Staff Functions. This principles states 
that where separation of functions is possible, no individual or 
department should be given both line and staff functions. 
11. Consideration of Policies, Procedures and Rules. This are all 
guides to action which relate to the goal attainment. Policies 
are general principles which indicate the intentions of those 
who guide the organization and declare the attitude its 
executives must adopt toward major issues. 
12. Job Groupings. It is developing the organizational structure, 
creates operating basic. Basic operations are assigned to 
different individuals.
Principles of Organization 
13. Flexibility. The organization is a dynamic not a static entity. 
The environment in which it exist and the people who makes 
it up continue to change. The changes in the environment are 
bought about by new developments in technology and the 
economy. 
14. Communication. Aside reducing the number of levels of 
authority to help in the smooth flow of communication. 
15. Balance. The organization should be periodically assessed to 
ensure that a reasonable balance exists in size of its various 
segments.
Chapter 5: Staffing 
Staffing Defined: 
Staffing refers to the task of filling positions in the organization 
with the most qualified people available. 
First, to emphasize the fact that a body of knowledge and 
experience has been developed in this area. 
Second, to highlight the fact that staffing is a manager’s 
responsibility and not that of the personnel department which 
merely provides assistance in this regard.
The Staffing Process 
A. Personnel Acquisition 
1. Human Resource Forecasting 
2. Preparation of job descriptions 
3. Recruitment of applicants for the job 
4. Selection of the best qualified among the applicants 
5. Orientation of the new personnel 
B. Personnel Retention 
6. Appraisal of Performance 
7. Transfer and Promotion 
8. Human Resource Development
Human Resource Forecasting 
Human Resource Forecasting is the first step in the staffing process. 
Management must determine how many people it will need to manage 
operations. 
Preparation of Job Descriptions 
A job description must include a brief statement of the responsibilities 
of the job, a listing of the various duties to be performed, and a 
statement of what constitutes satisfactory and unsatisfactory standards 
of performance for each duty. 
Recruitment of Applicants for the Job 
Recruitment means attracting or bringing in a few applicants for a single 
position or hundreds for a major expansion.
Selection of the Best Qualified 
Several aids are available to improve the selection process. These are 
the examination of biological data, observation of the candidate’s 
performance in actual tryouts, psychological tests, interviews and 
physical examination. 
Selection Process 
A. Biological Data- showing personal data, educational qualifications 
and past experience give some kind of a track record on which 
applicant’s competent can be assessed. 
B. Tests 
1. Intelligence Tests- are designed to measure person’s mental capacity, 
to test the mental and ability to see relationship in problematic 
problems.
2. Aptitude Tests- are designed to discover interests, existing skills, and 
the candidates’ potential for acquiring skills. 
3. Personality Tests- are devised to reveal a candidate’s personal 
qualities and the way they may affect others. 
C. Interview- is really the most crucial part of the selection process and 
often carries the most weight. It is also here where the managers can 
make the greatest contribution to better staffing. 
Orientation of the New Personnel 
Orientation refers to the introduction of the new personnel to the 
organization. This involves giving them an overview of what the 
company does, what its objectives are, how it is organized, what 
benefits it offers, what its general policies and practices.
Appraisal of Performance 
Appraisal is a must in every organization. Both the managers and 
subordinates want to know the qualities of their performance. 
1. Production Records. These are applicable to work that is repetitive . 
Figures the actual production rate are combined with other factors 
such as punctuality, industry and observation. 
2. Graphic Rating Scale. A linear scale, these is a provision for checking 
the individual’s rating on these traits from maximum to minimum 
attainment. 
3. Performance against verifiable objectives. A relatively recent method 
which has gained widespread acceptance; this method grades the 
subordinate’s work, on-the-job activity rather than personal qualities.
Promotion and Transfer 
Promotion may amount of filling a vacancy or may be an appointment to 
a new position. More specifically , a promotion involves change of 
duties, more difficult work and an increase in pay. 
Transfer involves no change of class but a change in the organizational 
unit. 
Human Resource Development 
The development of personnel is one of the fundamental pillars of good 
management. Human resource development refers to the updating of 
the personnel’s knowledge and attitudes with the end in view of 
improving their skills and performance to organizational objectives.
Chapter 6: Motivating 
Motivating Defined: 
Motivating can be defined as getting people to contribute their 
maximum effort toward the attainment of organizational 
objectives. 
Approaches to Motivation 
1. Work Performance Approach. This approach stresses rewards 
based on the individual’s productivity. Job descriptions are 
specific, work performance is carefully measured and the wage 
is explicitly stated.
2. Environmental Approach. This approach assumes that a 
worker will perform best in a comfortable environment. To 
motivate , the manager must extend friendliness and personal 
considerations to the workers. 
3. Needs- Satisfaction Approach. This approach adopts the 
standpoint that a satisfied worker is a productive worker and 
that management, therefore should aim to identify worker’s 
needs and find ways of satisfying them.
Theories of Motivation 
1. Classical Theory 
Frederick W. Taylor propounded the theory that people will be highly 
motivated if their reward is tied directly to performance. His 
theory assumes that man consciously chooses the course that is 
most profitable financially and that money is the best motivation. 
2. Human Relations Theory 
The human relations approach to motivation is commonly credited to 
the studies of Elton Mayo, the theory evolved from these studies 
states that informal groups exists alongside the formal 
organization and that those informal groups could exert a greater 
pull on the worker’s motivation than combined strength of 
money, discipline and job security.
Theories of Motivation 
3. Field Theory 
Kurt Lewin explained how motivation depends on organizational 
environment through his celebrated formula for human 
behavior : B=(P,E)26 
B stands for human behavior, P a person, and E environment. In 
other words, human behavior is a function of a person and 
his environment. If we relate this to motivation, it implies 
that people can have different motivations at different times 
and what motivates an individual depends on the 
environment.
Theories of Motivation 
4. Hierarchy of Needs Theory 
According to Abraham Maslow, 
each of us wanting being; 
there is always a need to 
satisfy. He visualized human 
needs as taking the form of a 
hierarchy. He put forth the 
idea that once a low- level is 
satisfied, it ceases to become 
a motivator and only a higher-level 
need could then fulfil the 
same functions. 
Self- Actualization Needs 
Esteem Needs 
Social Needs 
Safety and Security 
Needs 
Physiological Needs
Maslow’s Hierarchy of Needs 
a. Physiological Needs 
At the base of the hierarchy are physiological needs: those 
needs for sustaining human life itself. They include food, 
water, clothing, shelter, sleep and sexual gratification. 
b. Safety and Security Needs 
These needs are those connected with protection from possible 
harm. They do not only include protection from physical 
dangers, but also freedom from fear of loss of job, property, 
food, clothing or shelter.
Maslow’s Hierarchy of Needs 
c. Social Needs 
When physiological safety and security needs are basically 
satisfied, social needs become the predominant motivators. 
People need to belong, to be accepted by the others. 
d. Esteem Needs 
These needs refer to the individual’s need for self-respect and 
good opinion of others. 
e. Self- Actualization Needs 
When the previous needs have been satisfied, self actualization 
needs become active. At this level, the individual attempt to 
maximize his full potential.
Theories of Motivation 
5. Need Theory 
a. Need for Power. People who have a high need for power 
express great concern for exercising influence and control 
over others. 
b. Need for Affiliation. People with a high need for affiliation 
seek acceptance by social groups. They are likely to be 
concerned with maintaining pleasant relationships and 
avoiding rejection by social groups. 
c. Need for Achievement. People having a high need for 
achievement have a intense desire for success and an 
equally intense dread of failure.
Theories of Motivation 
5. Need Theory 
a. Need for Power. People who have a high need for power 
express great concern for exercising influence and control 
over others. 
b. Need for Affiliation. People with a high need for affiliation 
seek acceptance by social groups. They are likely to be 
concerned with maintaining pleasant relationships and 
avoiding rejection by social groups. 
c. Need for Achievement. People having a high need for 
achievement have a intense desire for success and an 
equally intense dread of failure.
Theories of Motivation 
6. Theory X and Theory Y 
According to Douglas Mcgregor, there are two types of employees the Theory X 
and Theory Y assumptions. 
Theory X Workers: Theory Y Workers: 
1. Dislikes work and will avoid it 1. Work is natural as play 
possible. or rest. 
2. Lack of responsibility, has little 2. People are not inherently lazy. 
ambition and seeks security 
above all. 
3. Must be coerced, controlled and 3. Self direction and Self- control 
threatened with punishment to 
get them to work. 
-With these the managerial role is to -With these assumptions the managerial 
coerced and control employees. role is to develop the potential in employees.
Chapter 7: Controlling 
Controlling Defined: 
Controlling may be defined as the managerial activity for 
ensuring the achievement of an organization’s objectives. 
The Control Process 
1. Establishing standards against which performance can be 
measured. These standards are closely tied up with the 
objectives which the manager formulates during the planning 
stage. These standards which are often expressed in terms of 
money, time, quotas and etc.
2. Comparing actual performance against standards. This step, 
which necessitates the collection of accurate data relating to 
actual performance, helps the manager see how things really 
are. 
3. Correcting deviations or straightening up what is crooked. 
After the causes of the deviations have been identified, 
appropriate corrective action should be taken so that 
performance takes place according to plans.
Types of Control 
1. Preliminary Control. This a type of control which identifies 
major problems before they occur. It is pre-emptive and 
focuses on the preventions of deviations in planning, 
organizing, staffing and motivating by assuring that every 
possible malfunction has been taken care of. 
2. Concurrent Control. This form of control endeavours to 
monitor the operation in progress, work may not proceed to 
the next step unless it passes a screening test. 
3. Post-Action Control. This type is carried out after the event. 
It exist only for the improvement of the next attempt.
Control Techniques 
Managers in the field use various control techniques. These may 
be classified in three: traditional, specialized and over-all 
performance techniques. 
Traditional Control Techniques 
1. Budgetary Control. A budget is a financial statement 
prepared and approved prior to a defined period of time of 
the policy to be pursued during that period for the purpose 
of achieving a predetermined objective. 
2. Break- Even Point Analysis. This is the point when income is 
equal to the total cost, that is, the level of activity when 
neither profit or loss is made by the organization.
Specialized Control Techniques 
1. Gantt Chart Technique. This is a way of presenting control 
information to management developed by Henry L. Gantt. Data 
relating to costs, sales or production and plotted by time period 
as a series of bars, the length of bars depends upon the value of 
the data represented. 
2. Network Analysis. This is a technique for controlling a 
complex project which requires analyses into its various 
activities and events. 
3. Milestone Scheduling. This is a schedule and control 
procedure developed by the National Aeronautics and Space 
Administration (NASA). Like the Gantt chart, it uses bar chart to 
monitor progress.
Controlling Overall Performance 
1. Income Statement. This is a statement compiled at the 
conclusion of an accounting period for the purpose of 
calculating the net profit or loss from the business operations. 
This is done by deducting administration expenses, financial, 
selling, and deducting overheads from the gross profit, derived 
from the trading account, financial charges such as bank 
interests. 
2. Return in Investment (ROI). Every business organization must 
control its operations to achieve on optimum rate of return, that 
is, a rate of return on investments which is adequate to satisfy 
the shareholders, and which satisfactory for the type of 
business.
3. Key Area Control. This is a control technique by which an 
organization rates its performance in a number of critical areas. 
Key areas control may include quantity, quality of time and cost 
with profit as the criterion of success. 
4. Audits. 
a. Internal Audits. This type of audit is conducted by internal 
auditors who are employees of the organization and are 
responsible for performing impartial monitoring activities. 
b. External Audits. This type of audit is conducted by external 
auditors who are not employees of the company. 
c. Management Audit. Essentially, a management audit is a 
periodic assessment of managerial performance conducted 
by internal and external auditors.
Chapter 8: Decision- Making 
Decision- Making Defined: 
Decision-making is the conscious act of choosing from among a 
number of option or courses of action. A decision always has 
several components: a desire for a better state of affairs, a 
manager who wishes to change the present state of affairs, and 
a manager who has the needed abilities and resources to effect 
the change.
Types of Decision 
1. Policy Decision. These are decision which will affect the 
prospects of the organization for a very long time. These 
decisions are made by the top management, who are charged 
with responsibility of the survival and prosperity of the 
organizations. Such decisions include major capital investments, 
product and market choice of key executives, volume of 
production output and similar long- term problems. 
2. Administrative Decision. These decision are less far-reaching, 
involving such problems as minor capital investment, market 
planning, and those decisions that are needed to keep the 
organization on course with top level objectives.
Types of Decision 
3. Executive Decisions. These that have immediate results and 
such are made by supervisors at the lower levels of 
management. Examples are, replenishment of stocks, routes for 
deliveries and so on.
Chapter 9: Communicating 
Communicating Defined: 
Communicating is the exchange (sending and receiving) of 
intelligence, information or emotions by two or more persons by 
writing, verbal and non- verbal means. 
Approaches to Communicating 
1. Developmental Communicating. The manager assumes that 
two heads is better than one. He does not think that he is always 
right. He encourages the contribution in the form of suggestion 
and ideas from people he works with.
2. Controlling Communication. A manager who subscribes to this 
approach believes that there are no alternatives to his ideas so 
he find no need to consult others. He believes that his own ideas 
or solutions are best. 
3. Relinquishing Communication. In this approach, the manager 
relinquishing his role as manager, makes few contributions of his 
own ideas and tries to shift the burden to this employees. 
4. Withdrawing Communication. The manager completely 
withdraws. He avoids interaction with the people he works with 
and is simply interested in maintaining the status.
Personal Factors Affecting the Quality of Communication 
1. Self- Concept. A person with a poor opinion or a negative self-image 
of himself usually experiences difficulty in communicating 
with others. A positive self- image is needed for a healthy 
exchange of ideas and feelings. 
2. Coping with angry feelings. Communication breakdown is 
usually the result of angry exchange. Angry feeling should be 
expressed constructively rather destructively. 
3. Self- disclosure. People find it difficult to talk honestly about 
themselves for fear of being branded too forward or rude, to 
communicate, people should learn to talk truthfully about their 
ideas and feelings.
Reference: 
Lorenzana, Carlos C. , M.A; Management, Theory and Practice 
Revised Edition; 2003; REX Bookstore Inc.

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Principles of Management Lecture

  • 1. Principles of Management School Year 2014-2015
  • 2. Chapter 1: Introduction to Management Management: A Definition • According to Terry and Rue define management as “ a process or form of work that involves the guidance and direction of a group of people toward organizational goals or objectives. • According to Stoner states that “management is a process of planning, organizing, leading and controlling the efforts of organization members and using all other organizational resources to achieve stated organizational goals. • According to Koontz, O’Donnell, and Weihrich point out that “management is the establishment of an environment for group effort in such a way that individuals will contribute to group objectives with the least amount of such money, time, effort discomfort and materials. • According to Johnson and Stinson say that “management is the process of working with and through other people to accomplish organizational goals.
  • 3. Management: Functions and Processes (An Overview) 1. Planning- the process of setting the objectives to be accomplished by an organization during a future time period and deciding on the methods of reaching them. 2. Organizing- the process of grouping and assigning activities and providing the necessary authority to carry out the activities. 3. Staffing- the process of filling positions in the organizational structure with the most qualified people available. 4. Motivating- the process of getting people contribute their maximum effort toward the attainment of organizational objectives. 5. Controlling- the process of ensuring the achievement of an organization’s objectives.
  • 4. Two essential processes are involved in all these five managerial functions: 1. Decision- Making. This is the process of choosing from two or more alternatives. 2. Communicating. It is the impossible to perform the managerial functions without communication, which is the process of exchanging facts, ideas, opinions and emotions between two or more persons.
  • 5. Chapter 2: The Evolution of Management Thought By 1860, or at the beginning of the Industrial Revolution in the United States, it was evident that the energy, transportation and communication fields have advanced to the point that they served as an incentive to the entrepreneur. In 1895, Frederick W. Taylor who challenged the previous methods of managing a business came up with Scientific Management. This was a philosophy that dealt with the relationship of people and work. Then another contribution to the Scientific Management was Henry L. Gantt who devised what is known as the Gantt Chart , this is bar chart comparing schedule with the actual performance widely used in production control and now on computer scheduling operations. In 1916, Henry Fayol, drew up of blueprint for a cohesive doctrine of management after investigating managerial behavior. He presented a breakdown of the functions of management which is: planning, organizing, commanding, coordinating and controlling.
  • 6. Fayol’s: 14 Principles of Management 1. Division of Labor 2. Authority and Responsibility 3. Discipline 4. Unity of Command 5. Unity of Direction 6. Subordination of individual interest to the general interest 7. Fair remuneration of personnel 8. Centralization 9. Scalar Chain 10.Order 11.Equity 12. Stability of tenure 13. Initiative 14. Esprit de corps
  • 7. In 1927, Elton Mayo’s studies began to determine the relationship between the physical and productivity emphasized the potential impact of the behavioral sciences on management. In 1930s, The Great depression shook the entire business structure. During this economic crisis, with widespread unemployment with the collapse or near collapse of major economic institutions, many companies disappeared. In late 1940s to the early 1960s, the management process or functional approach was accepted as the methodological approach to the study of management. From 1960s, many new schools of and approaches to management theory and knowledge surfaced; so many that Harold Koontz coined the term Management Theory Jungle.
  • 8. Chapter 3: Planning Planning Defined: Planning is the process of setting the objectives to be accomplished by the organization during the future time period and deciding on the methods of reaching them. Kinds of Planning Strategic Planning is the type of that is generally reserved for the top-level managers since it involves the determination of overall direction-the direction the organization should be going. Tactical Planning is the type of planning generally reserved for the middle and lower level manager. This type of planning is primarily concerned with how get where the organization wants to go.
  • 9. The Planning Function Firstly, the managers must critically appraise the present position of the organization. Must take a complete inventory and attempt to realistically determine just where organization is at the moment. Secondly, the manager must set objectives. Must decide where organization must go. Must set growth, profitability, and social responsibility objectives for this organization. Finally, must develop a set of plans to achieve these objectives.
  • 10. Objectives: Defined Objectives are clear-cut and carefully considered statements designed to give the organization and its member direction and purpose. Goals, aims, purposes or missions are commonly used interchangeably for objectives. Characteristics of Effective Objectives 1. Objectives must be specific. They must have precise meaning for the manager. Goals such as to maximize profits, to minimize expenses, to promote growth. 2. Objectives must be practical. They must be within the capacity of the individual or group to achieve. The best approach is to aim for levels of achievement which are difficult but attainable 3. Objectives must be quantifiable or measurable. An objective like “to develop management’ can be quantified by reporting the number of qualified promotions for a given period.
  • 11. Setting Objectives The managerial objectives sets normally fall into one of four general categories: 1. Profitability. This can be expressed in terms of profits, return of investments or earning per share. 2. Customer Service. This can be expressed in very explicit terms. Example: To reduce the number of customer complaints. 3. Employee- Management Needs and Well Being. This may be quantitatively expressed in the terms of number grievances, training and etc. 4. Social Responsibility. This objective may be expressed in types of activities, number of days of services or financial contributions.
  • 12. Chapter 4: Organizing Organizing Defined: Organizing is the process of grouping and assigning activities and providing the necessary authority to carry out the activities. It is differentiated from staffing in that in organizing, the manager decides what jobs will have to be filled and what the people who hold them must do.
  • 13. Types of Organization Line Organization. The line organization illustrated is the simplest and the oldest type of organization. It is characterized by direct vertical flow of authority from the top man through the various managers down to the workers. PRESIDENT PLANT MANAGER MANAGER PRODUCT A MANAGER PRODUCT B MANAGER PRODUCT C WORKERS WORKERS WORKERS
  • 14. PRESIDENT PLANT MANAGER PERSONNEL DIRECTOR PLANT MANAGER ASSISTANT TO THE PRESIDENT ACCOUNTING MANAGER MANAGER PRODUCT A MANAGER PRODUCT B MANAGER PRODUCT C WORKERS WORKERS WORKERS Line and Staff Organization. Consists of the addition of staff specialists, In essence the staff component of a line and staff organization is advisory and supportive in nature and added to contribute to the efficiency and maintenance of the organization.
  • 15. Matrix Organization An advantage of the matrix organization is its ability to meet unusual, innovative or complicated projects often shunned by the typical organizational with its functional departments. One potential disadvantage is that matrix organization can cause conflict of authority.
  • 16. PRESIDENT PRODUCTION ENGINEERING PERSONNEL FINANCE PRODUCT GROUP PRODUCT GROUP PRODUCT GROUP ENGINEERING GROUP PERSONNEL GROUP PROJECT MANAGER A PROJECT MANAGER B PROJECT MANAGER C ENGINEERING GROUP PRODUCT GROUP PERSONNEL GROUP PERSONNEL GROUP FINANCE GROUP FINANCE GROUP PERSONNEL GROUP
  • 17. Principles of Organization 1. Consideration of Objectives. This principle scarcely need starting if we accept the definition of organization as a facilitating mechanism which enables us to achieve goals. 2. Division of Work or Specialization. The narrowing scope of a person’s job to one or a few major functions to enable to specialize on these few and to increase efficiency. 3. Delegation of Authority. Authority is the right to command or act and expend resources. This is right may come ownership, legal decree or status in the organization.
  • 18. Principles of Organization 4. Parity of Responsibilities and Authority. Responsibility or accountability is the obligation of a subordinate to a superior to perform assigned activities to the best of activities. 5. Span of Control. Refers to the number of subordinates a manager can effectively control. This question of span of control is one wherein there is little agreement among experts. 6. Unity of Command. This principle states that each member of an organization should be accountable to, and receive directions from only one supervisor, or immediate supervisor.
  • 19. Principles of Organization 7. Short Chain of Command. This principle states that there should be as few levels of supervision between the highest authority in an organization and the rank and file as possible. 8. Coordination. This principle states that all individuals activities in an organization must be synchronized with the respect to their amount , time and direction to avoid duplication of work that results in wasted effort and to obtain consolidated action toward a common goal. 9. Efficiency. This principle in organizing specifies that “the organization should be planned that the objectives can be attained with the lowest possible cost, which may mean either money cost or human cost.
  • 20. Principles of Organization 10. Separation of Line and Staff Functions. This principles states that where separation of functions is possible, no individual or department should be given both line and staff functions. 11. Consideration of Policies, Procedures and Rules. This are all guides to action which relate to the goal attainment. Policies are general principles which indicate the intentions of those who guide the organization and declare the attitude its executives must adopt toward major issues. 12. Job Groupings. It is developing the organizational structure, creates operating basic. Basic operations are assigned to different individuals.
  • 21. Principles of Organization 13. Flexibility. The organization is a dynamic not a static entity. The environment in which it exist and the people who makes it up continue to change. The changes in the environment are bought about by new developments in technology and the economy. 14. Communication. Aside reducing the number of levels of authority to help in the smooth flow of communication. 15. Balance. The organization should be periodically assessed to ensure that a reasonable balance exists in size of its various segments.
  • 22. Chapter 5: Staffing Staffing Defined: Staffing refers to the task of filling positions in the organization with the most qualified people available. First, to emphasize the fact that a body of knowledge and experience has been developed in this area. Second, to highlight the fact that staffing is a manager’s responsibility and not that of the personnel department which merely provides assistance in this regard.
  • 23. The Staffing Process A. Personnel Acquisition 1. Human Resource Forecasting 2. Preparation of job descriptions 3. Recruitment of applicants for the job 4. Selection of the best qualified among the applicants 5. Orientation of the new personnel B. Personnel Retention 6. Appraisal of Performance 7. Transfer and Promotion 8. Human Resource Development
  • 24. Human Resource Forecasting Human Resource Forecasting is the first step in the staffing process. Management must determine how many people it will need to manage operations. Preparation of Job Descriptions A job description must include a brief statement of the responsibilities of the job, a listing of the various duties to be performed, and a statement of what constitutes satisfactory and unsatisfactory standards of performance for each duty. Recruitment of Applicants for the Job Recruitment means attracting or bringing in a few applicants for a single position or hundreds for a major expansion.
  • 25. Selection of the Best Qualified Several aids are available to improve the selection process. These are the examination of biological data, observation of the candidate’s performance in actual tryouts, psychological tests, interviews and physical examination. Selection Process A. Biological Data- showing personal data, educational qualifications and past experience give some kind of a track record on which applicant’s competent can be assessed. B. Tests 1. Intelligence Tests- are designed to measure person’s mental capacity, to test the mental and ability to see relationship in problematic problems.
  • 26. 2. Aptitude Tests- are designed to discover interests, existing skills, and the candidates’ potential for acquiring skills. 3. Personality Tests- are devised to reveal a candidate’s personal qualities and the way they may affect others. C. Interview- is really the most crucial part of the selection process and often carries the most weight. It is also here where the managers can make the greatest contribution to better staffing. Orientation of the New Personnel Orientation refers to the introduction of the new personnel to the organization. This involves giving them an overview of what the company does, what its objectives are, how it is organized, what benefits it offers, what its general policies and practices.
  • 27. Appraisal of Performance Appraisal is a must in every organization. Both the managers and subordinates want to know the qualities of their performance. 1. Production Records. These are applicable to work that is repetitive . Figures the actual production rate are combined with other factors such as punctuality, industry and observation. 2. Graphic Rating Scale. A linear scale, these is a provision for checking the individual’s rating on these traits from maximum to minimum attainment. 3. Performance against verifiable objectives. A relatively recent method which has gained widespread acceptance; this method grades the subordinate’s work, on-the-job activity rather than personal qualities.
  • 28. Promotion and Transfer Promotion may amount of filling a vacancy or may be an appointment to a new position. More specifically , a promotion involves change of duties, more difficult work and an increase in pay. Transfer involves no change of class but a change in the organizational unit. Human Resource Development The development of personnel is one of the fundamental pillars of good management. Human resource development refers to the updating of the personnel’s knowledge and attitudes with the end in view of improving their skills and performance to organizational objectives.
  • 29. Chapter 6: Motivating Motivating Defined: Motivating can be defined as getting people to contribute their maximum effort toward the attainment of organizational objectives. Approaches to Motivation 1. Work Performance Approach. This approach stresses rewards based on the individual’s productivity. Job descriptions are specific, work performance is carefully measured and the wage is explicitly stated.
  • 30. 2. Environmental Approach. This approach assumes that a worker will perform best in a comfortable environment. To motivate , the manager must extend friendliness and personal considerations to the workers. 3. Needs- Satisfaction Approach. This approach adopts the standpoint that a satisfied worker is a productive worker and that management, therefore should aim to identify worker’s needs and find ways of satisfying them.
  • 31. Theories of Motivation 1. Classical Theory Frederick W. Taylor propounded the theory that people will be highly motivated if their reward is tied directly to performance. His theory assumes that man consciously chooses the course that is most profitable financially and that money is the best motivation. 2. Human Relations Theory The human relations approach to motivation is commonly credited to the studies of Elton Mayo, the theory evolved from these studies states that informal groups exists alongside the formal organization and that those informal groups could exert a greater pull on the worker’s motivation than combined strength of money, discipline and job security.
  • 32. Theories of Motivation 3. Field Theory Kurt Lewin explained how motivation depends on organizational environment through his celebrated formula for human behavior : B=(P,E)26 B stands for human behavior, P a person, and E environment. In other words, human behavior is a function of a person and his environment. If we relate this to motivation, it implies that people can have different motivations at different times and what motivates an individual depends on the environment.
  • 33. Theories of Motivation 4. Hierarchy of Needs Theory According to Abraham Maslow, each of us wanting being; there is always a need to satisfy. He visualized human needs as taking the form of a hierarchy. He put forth the idea that once a low- level is satisfied, it ceases to become a motivator and only a higher-level need could then fulfil the same functions. Self- Actualization Needs Esteem Needs Social Needs Safety and Security Needs Physiological Needs
  • 34. Maslow’s Hierarchy of Needs a. Physiological Needs At the base of the hierarchy are physiological needs: those needs for sustaining human life itself. They include food, water, clothing, shelter, sleep and sexual gratification. b. Safety and Security Needs These needs are those connected with protection from possible harm. They do not only include protection from physical dangers, but also freedom from fear of loss of job, property, food, clothing or shelter.
  • 35. Maslow’s Hierarchy of Needs c. Social Needs When physiological safety and security needs are basically satisfied, social needs become the predominant motivators. People need to belong, to be accepted by the others. d. Esteem Needs These needs refer to the individual’s need for self-respect and good opinion of others. e. Self- Actualization Needs When the previous needs have been satisfied, self actualization needs become active. At this level, the individual attempt to maximize his full potential.
  • 36. Theories of Motivation 5. Need Theory a. Need for Power. People who have a high need for power express great concern for exercising influence and control over others. b. Need for Affiliation. People with a high need for affiliation seek acceptance by social groups. They are likely to be concerned with maintaining pleasant relationships and avoiding rejection by social groups. c. Need for Achievement. People having a high need for achievement have a intense desire for success and an equally intense dread of failure.
  • 37. Theories of Motivation 5. Need Theory a. Need for Power. People who have a high need for power express great concern for exercising influence and control over others. b. Need for Affiliation. People with a high need for affiliation seek acceptance by social groups. They are likely to be concerned with maintaining pleasant relationships and avoiding rejection by social groups. c. Need for Achievement. People having a high need for achievement have a intense desire for success and an equally intense dread of failure.
  • 38. Theories of Motivation 6. Theory X and Theory Y According to Douglas Mcgregor, there are two types of employees the Theory X and Theory Y assumptions. Theory X Workers: Theory Y Workers: 1. Dislikes work and will avoid it 1. Work is natural as play possible. or rest. 2. Lack of responsibility, has little 2. People are not inherently lazy. ambition and seeks security above all. 3. Must be coerced, controlled and 3. Self direction and Self- control threatened with punishment to get them to work. -With these the managerial role is to -With these assumptions the managerial coerced and control employees. role is to develop the potential in employees.
  • 39. Chapter 7: Controlling Controlling Defined: Controlling may be defined as the managerial activity for ensuring the achievement of an organization’s objectives. The Control Process 1. Establishing standards against which performance can be measured. These standards are closely tied up with the objectives which the manager formulates during the planning stage. These standards which are often expressed in terms of money, time, quotas and etc.
  • 40. 2. Comparing actual performance against standards. This step, which necessitates the collection of accurate data relating to actual performance, helps the manager see how things really are. 3. Correcting deviations or straightening up what is crooked. After the causes of the deviations have been identified, appropriate corrective action should be taken so that performance takes place according to plans.
  • 41. Types of Control 1. Preliminary Control. This a type of control which identifies major problems before they occur. It is pre-emptive and focuses on the preventions of deviations in planning, organizing, staffing and motivating by assuring that every possible malfunction has been taken care of. 2. Concurrent Control. This form of control endeavours to monitor the operation in progress, work may not proceed to the next step unless it passes a screening test. 3. Post-Action Control. This type is carried out after the event. It exist only for the improvement of the next attempt.
  • 42. Control Techniques Managers in the field use various control techniques. These may be classified in three: traditional, specialized and over-all performance techniques. Traditional Control Techniques 1. Budgetary Control. A budget is a financial statement prepared and approved prior to a defined period of time of the policy to be pursued during that period for the purpose of achieving a predetermined objective. 2. Break- Even Point Analysis. This is the point when income is equal to the total cost, that is, the level of activity when neither profit or loss is made by the organization.
  • 43. Specialized Control Techniques 1. Gantt Chart Technique. This is a way of presenting control information to management developed by Henry L. Gantt. Data relating to costs, sales or production and plotted by time period as a series of bars, the length of bars depends upon the value of the data represented. 2. Network Analysis. This is a technique for controlling a complex project which requires analyses into its various activities and events. 3. Milestone Scheduling. This is a schedule and control procedure developed by the National Aeronautics and Space Administration (NASA). Like the Gantt chart, it uses bar chart to monitor progress.
  • 44. Controlling Overall Performance 1. Income Statement. This is a statement compiled at the conclusion of an accounting period for the purpose of calculating the net profit or loss from the business operations. This is done by deducting administration expenses, financial, selling, and deducting overheads from the gross profit, derived from the trading account, financial charges such as bank interests. 2. Return in Investment (ROI). Every business organization must control its operations to achieve on optimum rate of return, that is, a rate of return on investments which is adequate to satisfy the shareholders, and which satisfactory for the type of business.
  • 45. 3. Key Area Control. This is a control technique by which an organization rates its performance in a number of critical areas. Key areas control may include quantity, quality of time and cost with profit as the criterion of success. 4. Audits. a. Internal Audits. This type of audit is conducted by internal auditors who are employees of the organization and are responsible for performing impartial monitoring activities. b. External Audits. This type of audit is conducted by external auditors who are not employees of the company. c. Management Audit. Essentially, a management audit is a periodic assessment of managerial performance conducted by internal and external auditors.
  • 46. Chapter 8: Decision- Making Decision- Making Defined: Decision-making is the conscious act of choosing from among a number of option or courses of action. A decision always has several components: a desire for a better state of affairs, a manager who wishes to change the present state of affairs, and a manager who has the needed abilities and resources to effect the change.
  • 47. Types of Decision 1. Policy Decision. These are decision which will affect the prospects of the organization for a very long time. These decisions are made by the top management, who are charged with responsibility of the survival and prosperity of the organizations. Such decisions include major capital investments, product and market choice of key executives, volume of production output and similar long- term problems. 2. Administrative Decision. These decision are less far-reaching, involving such problems as minor capital investment, market planning, and those decisions that are needed to keep the organization on course with top level objectives.
  • 48. Types of Decision 3. Executive Decisions. These that have immediate results and such are made by supervisors at the lower levels of management. Examples are, replenishment of stocks, routes for deliveries and so on.
  • 49. Chapter 9: Communicating Communicating Defined: Communicating is the exchange (sending and receiving) of intelligence, information or emotions by two or more persons by writing, verbal and non- verbal means. Approaches to Communicating 1. Developmental Communicating. The manager assumes that two heads is better than one. He does not think that he is always right. He encourages the contribution in the form of suggestion and ideas from people he works with.
  • 50. 2. Controlling Communication. A manager who subscribes to this approach believes that there are no alternatives to his ideas so he find no need to consult others. He believes that his own ideas or solutions are best. 3. Relinquishing Communication. In this approach, the manager relinquishing his role as manager, makes few contributions of his own ideas and tries to shift the burden to this employees. 4. Withdrawing Communication. The manager completely withdraws. He avoids interaction with the people he works with and is simply interested in maintaining the status.
  • 51. Personal Factors Affecting the Quality of Communication 1. Self- Concept. A person with a poor opinion or a negative self-image of himself usually experiences difficulty in communicating with others. A positive self- image is needed for a healthy exchange of ideas and feelings. 2. Coping with angry feelings. Communication breakdown is usually the result of angry exchange. Angry feeling should be expressed constructively rather destructively. 3. Self- disclosure. People find it difficult to talk honestly about themselves for fear of being branded too forward or rude, to communicate, people should learn to talk truthfully about their ideas and feelings.
  • 52. Reference: Lorenzana, Carlos C. , M.A; Management, Theory and Practice Revised Edition; 2003; REX Bookstore Inc.

Editor's Notes

  1. This functions is not concentrated among the top managers only, The planning is a never-ending activity because manager must examine plans regularly and if necessary modify them in view of new situations and variables.
  2. Organizational objectives- subordinates but directly related to the organizational objectives
  3. Organizing- The manager have a right to choose who going to do the job. Staffing- The manager look for the right people who going to do the job they will trained job and develop specifically.
  4. The essential of line and staff organization requirement avoiding waste of time and effort.
  5. Short Chain of Command- minimizes distortion in the downward and upward communication.