Levels Of Management

Most people think of three basic levels of management:top, middle, and first-line
managers.
Top managers are responsible for the overall direction and operations of an
organization. Particularly, they are responsible for setting organizational goals,
defining strategies for achieving them, monitoring and implementing the external
environment, decisions that affect entire organization. They have such titles as chief
executive officer (CEO), president, chairman, division president, and executive vicepresident. Managers in these positions are responsible for interacting with
representatives of the external environment (e.g., important customers, financial
institutions, and governmental figures) and establishing objectives, policies, and
strategies.
Middle managers are responsible for business units and major departments.
Examples of middle managers are department head, division head, and director of
the research lab. The responsibilities of middle managers include translating
executive orders into operation, implementing plans, and directly supervising lowerlevel managers. Middle managers typically have two or more management levels
beneath them. They receive overall strategies and policies from top managers and
the translate them into specific objective and programs for first-line managers.
First-line managers are directly responsible for the production of goods and
services. Particularly, they are responsible for directing nonsupervisory employees.
First-line managers are variously called office manager, section chief, line manager,
supervisor.
Management Skills
Regardless of the sort of goals they must meet or their level of authority, managers
need to possess conceptual, human, technical, diagnostic, and political skills. The
first three skills have long been accepted as important for management, the last
two have received more recent attention.
According to a classic article by Robert L. Katz, managerial success depends
primarily on performance rather than personality traits. He indicates that three
types of skills are important for successful management performance:
* Conceptual skills. Conceptual skill is the cognitive ability to see the organization
as a whole and the relationship among its parts. Managers need the mental
capacity to understand how various functions of the organization complement one
another, how the organization relates to its environment, and how changes in one
part of the organization affect the rest of the organization.
* Human skills. The manager needs human skills: the ability to communicate with,
understand, and motivate both individuals and groups.
* Technical skills. Technical skills are skills necessary to accomplish specialized
activities (e.g., engineering, computer programming, and accounting).

The diagnostic skill is from Ricky Griffin, and the political skill is from Pavett and Lau
:
* Diagnostic skills. Diagnostic skills include the ability to determine, by analysis
and examination, the nature of a particular condition. A manager can diagnose a
problem in the organization by studying its symptoms. These skills are also useful in
favourable situations.* Political skills. Political skill is the ability to acquire the
power necessary to reach objectives and to prevent others from taking power.
Political skill can be used for the good of the organization and for self-interest.
The extent to which managers need different kinds of skills moves from lower
management to upper management. Most low-level managers use technical skills
extensively. At higher levels technical skills become less important while the need
for conceptual skills grows. However, human skills are very important to all
managers.
4 Functions of management
Planning
Planning is considered to be the central function of management because it sets the
pattern for the other activities to follow. "Planning means defining goals for future
organizational performance and deciding on the tasks and use of resources needed
to attain them" (Richard Daft). Planning encompasses four elements:
Evaluating environmental forces and organizational resources
Establishing a set of organizational goals
Developing strategies and plans to achieve the stated goals
Formulating a decision-making process
These elements are concerned with organizational success in the near future as well
as success in the more distant future. Planning to the future, the manager develops
a strategy for getting there. This process is referred to as strategic planning.
Chapters 2 and 3 address the topic of management strategy and strategic planning.
Organizing
Organizing is the managerial function of making sure there are available the
resources to carry out a plan. "Organizing involves the assignment of tasks, the
grouping of tasks into departments, and the allocation of resources to departments"
(Richard Daft)Managers must bring together individuals and tasks to make
effective use of people and resources. Three elements are essential to organizing:
Developing the structure of the organization
Acquiring and training human resources
Establishing communication patterns and networks

Determining the method of grouping these activities and resources is the organizing
process.
Leading
Leading is another of the basic function within the management process "Leading is
the use of influence to motivate employees to achieve organizational goals"
(Richard Daft).Managers must be able to make employees want to participate in
achieving an organization's goals. Three components make up the leading function:
Motivating employees
Influencing employees
Forming effective groups.
The leading process helps the organization move toward goal attainment.
Controlling
The final phase of the management process is controlling. "Controlling means
monitoring employees' activities, determining whether the organization is on target
toward its goals, and making correction as necessary (Richard Daft ). Controlling
ensures that, through effective leading, what has been planned and organized to
take place has in fact taken place. Three basic components constitute the control
function:
Elements of a control system
Evaluating and rewarding employee performance
Controlling financial, informational, and physical resources.
Controlling is ongoing process. An affective control function determines whether the
organization is on target toward its goals and makes corrections as necessary.
These all managerial functions are necessary and are related and interrelated to
each other.
The Scope Of Management
Management is needed in all types of organized activities. Moreover,
management principles are applicable to all types of organizations, including profitseeking organizations (industrial firms, banks, insurance companies, small business,
etc.) and not-for-profit organizations (governmental organizations, health care
organizations. educations organizations, churches, etc.). Any group of two or more
people working to achieve a goal and having resources at its disposal is engaged in
management. Obviously, a manager's job is somewhat different in different types of
organizations, exists in unique environments, and uses different technology.
However, all organizations need the common basic activities: planning, organizing,
leading, and controlling.

Management is also universal in that it uses a systematic body of knowledge

including economics, sociology, and laws. This knowledge can be applied to all
organizations, whether business, or government, or religious, and it is applicable at
all levels of management in same organizations.
Historical Theories of Management
Scientific Management Theory
(1890-1940)
At the turn of the century, the most notable organizations were large and
industrialized. Often they included ongoing, routine tasks that manufactured a
variety of products. The United States highly prized scientific and technical matters,
including careful measurement and specification of activities and results.
Management tended to be the same. Frederick Taylor developed the :scientific
management theory which espoused this careful specification and measurement of
all organizational tasks. Tasks were standardized as much as possible. Workers were
rewarded and punished. This approach appeared to work well for organizations with
assembly lines and other mechanistic, routinized activities.
Bureaucratic Management Theory
(1930-1950)
Max Weber embellished the scientific management theory with his bureaucratic
theory. Weber focused on dividing organizations into hierarchies, establishing strong
lines of authority and control. He suggested organizations develop comprehensive
and detailed standard operating procedures for all routinized tasks.
Human Relations Movement
(1930-today)
Eventually, unions and government regulations reacted to the rather dehumanizing
effects of these theories. More attention was given to individuals and their unique
capabilities in the organization. A major belief included that the organization would
prosper if its workers prospered as well. Human Resource departments were added
to organizations. The behavioral sciences played a strong role in helping to
understand the needs of workers and how the needs of the organization and its
workers could be better aligned. Various new theories were spawned, many based
on the behavioral sciences (some had name like theory X, Y and Z).
Traits of Progressive Management Development Programs
With the Human Relations movement, training programs recognized the need to
cultivate supervisory skills, e.g., delegating, career development, motivating,
coaching, mentoring, etc. Progressive management schools now have students
review a wide body of management topics and learn those topics by applying that
knowledge in the workplace and reflecting on that application. Learning activities
incorporate learners real-world activities in the workplaces or their lives.
Assignment include reflection and analysis on real-world experience. Learning is

enhanced through continuing dialogue and feedback among learners. Very good
schools manage to include forms of self-development, too, recognizing that the
basis for effective management is effective self-management.
Effective management development programs help students (learners) take a
systems view of their organizations, including review of how major functions effect
each other. Assignments include recognizing and addressing effects of one actions
on their entire organization.
Contemporary Theories of Management
Contingency Theory
Basically, contingency theory asserts that when managers make a decision, they
must take into account all aspects of the current situation and act on those aspects
that are key to the situation at hand. Basically, its the approach that it depends.
For example, the continuing effort to identify the best leadership or management
style might now conclude that the best style depends on the situation. If one is
leading troops in the Persian Gulf, an autocratic style is probably best (of course,
many might argue here, too). If one is leading a hospital or university, a more
participative and facilitative leadership style is probably best.
Systems Theory
Systems theory has had a significant effect on management science and
understanding organizations. First, lets look at what is a system? A system is a
collection of part unified to accomplish an overall goal. If one part of the system is
removed, the nature of the system is changed as well. For example, a pile of sand is
not a system. If one removes a sand particle, youve still got a pile of sand.
However, a functioning car is a system. Remove the carburetor and youve no
longer got a working car. A system can be looked at as having inputs, processes,
outputs and outcomes. Systems share feedback among each of these four aspects
of the systems.
Lets look at an organization. Inputs would include resources such as raw materials,
money, technologies and people. These inputs go through a process where theyre
planned, organized, motivated and controlled, ultimately to meet the organizations
goals. Outputs would be products or services to a market. Outcomes would be, e.g.,
enhanced quality of life or productivity for customers/clients, productivity. Feedback
would be information from human resources carrying out the process,
customers/clients using the products, etc. Feedback also comes from the larger
environment of the organization, e.g., influences from government, society,
economics, and technologies. This overall system framework applies to any system,
including subsystems (departments, programs, etc.) in the overall organization.
Systems theory may seem quite basic. Yet, decades of management training and
practices in the workplace have not followed this theory. Only recently, with
tremendous changes facing organizations and how they operate, have educators
and managers come to face this new way of looking at things. This interpretation

has brought about a significant change (or paradigm shift) in the way management
studies and approaches organizations.
The effect of systems theory in management is that writers, educators, consultants,
etc. are helping managers to look at the organization from a broader perspective.
Systems theory has brought a new perspective for managers to interpret patterns
and events in the workplace. They recognize the various parts of the organization,
and, in particular, the interrelations of the parts, e.g., the coordination of central
administration with its programs, engineering with manufacturing, supervisors with
workers, etc. This is a major development. In the past, managers typically took one
part and focused on that. Then they moved all attention to another part. The
problem was that an organization could, e.g., have a wonderful central
administration and wonderful set of teachers, but the departments didnt
synchronize at all. See the category Systems Thinking
Chaos Theory
As chaotic and random as world events seem today, they seem as chaotic in
organizations, too. Yet for decades, managers have acted on the basis that
organizational events can always be controlled. A new theory (or some say
science), chaos theory, recognizes that events indeed are rarely controlled. Many
chaos theorists (as do systems theorists) refer to biological systems when
explaining their theory. They suggest that systems naturally go to more complexity,
and as they do so, these systems become more volatile (or susceptible to
cataclysmic events) and must expend more energy to maintain that complexity. As
they expend more energy, they seek more structure to maintain stability. This trend
continues until the system splits, combines with another complex system or falls
apart entirely. Sound familiar? This trend is what many see as the trend in life, in
organizations and the world in general.
Evolution of management
1910s-1940s: Management as Science
Management as Science was developed in the early 20th century and focused on
increasing productivity and efficiency through standardisation, division of labour,
centralisation and hierarchy. A very top down management with strict control over
people and processes dominated across industries.

1950s-1960s: Functional Organisations

Due to growing and more complex organisations, the 1950s and 1960s saw the
emergence of functional organisations and the Human Resource (HR) movement.

Managers began to understand the human factor in production and productivity and
tools such as goal setting, performance reviews and job descriptions were born.

1970s: Strategic Planning

In the 1970s we changed our focus from measuring function to resource allocation
and tools like Strategic Planning (GE), Growth Share Matrix (BCG) and SWOT were
used to formalise strategic planning processes. After several decades of best
practice and one size fits all solutions, academics began to developing
contingency theories.

1980s: Competitive Advantage

As the business environment grew increasingly competitive and connected, and
with a blooming management consultancy industry, Competitive Advantage became
a priority for organisations in the 1980s. Tools like Total Quality Management (TQM),
Six Sigma and Lean were used to measure processes and improve productivity.
Employees were more involved by collecting data, but decisions were still made at
the top, and goals were used to manage people and maintain control.

1990s: Process Optimisation

Benchmarking and business process reengineering became popular in the 1990s,
and by the middle of the decade, 60% of Fortune 500 companies claimed to have
plans for or have already initiated such projects. TQM, Six Sigma and Lean remained
popular and a more holistic, organisation-wide approach and strategy
implementation took the stage with tools such as Strategy Maps and Balance
Scorecards.

2000s: Big Data

Largely driven by the consulting industry under the banner of Big Data,
organisations in the 2000s started to focus on using technology for growth and
value creation. Meanwhile, oversaturation of existing market space drove to
concepts such as Blue Ocean Strategy and Value Innovation.

Its 2013. Globalisation, advances in technology and increased diversity have put
organisational challenges into hyper drive. Despite the inspirational stories we read
about companies like Zappos, Innocent Drinks and Google, the truth is that most of
us are using out-dated management practices and failing to get the most out of our
people. Not convinced? Consider this: 65% of people are unhappy at work, only 14%
understand their companys strategy, and 75% are seeking jobs as we speak. Now,
what do you think that does for your bottom line?

How we lead our people and how we solve problems and innovate, are some of the
most important aspects of Management to get right. In our research, weve
therefore looked specifically at two aspects of Management throughout history, and
how these will develop in the future (Figure 1):
1. Management Approach: the style of top management, ranging from:
a. Control (i.e. your boss tells you what to do and how to do it).
b. Set Goals (i.e. your boss sets goals and expectations, but you have more freedom
with regards to how you achieve them).
c. Inspire (i.e. your boss gives you scope and freedom to innovate on both the what
and the how).

2. Approach to Innovation / Problem Solving: how leaders solve strategic problems

and develop new products and services. This ranged from:
a. Top Down (i.e. solutions are created and come from the top)
b. Top Down with Bottom Up Data (i.e. the rest of the organisation contributes
information and experiences, but solutions are still created at the top).
c. Participatory (i.e. solutions are created collaboratively, and throughout the
organisational levels).

The Evolution of Management

After a century of trying to control people, processes and information, we have

come to a point in organisational history where we need to recognise that what
worked before just simply isnt enough anymore. Traditional Management is fine if
you want compliance, but if you want innovation and growth, you need to engage
your people on a whole new level. Top down control is a thing of the past.
Succeeding in todays environment requires a management style that inspires and
is participatory.

Over the next couple of weeks I will discuss the future of organisations, and what it
really takes to increase value creation, innovation and employee engagement in
todays business environment.
Principles of Management
Management principles are guidelines for the decisions and actions of managers.

The Principles of Management are the essential, underlying factors that form the
foundations of successful management. According to Henri Fayol in his book General
and Industrial Management (1916), there are fourteen 'Principles of Management'.

Division of Work - According to this principle the whole work is divided into small
tasks.The specialization of the workforce according to the skills of a person ,
creating specific personal and professional development within the labour force and
therefore increasing productivity; leads to specialization which increases the
efficiency of labour.
Authority and Responsibility - This is the issue of commands followed by
responsibility for their consequences. Authority means the right of a superior to give
enhance order to his subordinates; responsibility means obligation for performance.
Discipline - It is obedience, proper conduct in relation to others, respect of authority,
etc. It is essential for the smooth functioning of all organizations.
Unity of Command - This principle states that each subordinate should receive
orders and be accountable to one and only one superior. If an employee receives
orders from more than one superior, it is likely to create confusion and conflict.
Unity of Direction - All related activities should be put under one group, there should
be one plan of action for them, and they should be under the control of one
manager.
Subordination of Individual Interest to Mutual Interest - The management must put
aside personal considerations and put company objectives firstly. Therefore the
interests of goals of the organization must prevail over the personal interests of
individuals.
Remuneration - Workers must be paid sufficiently as this is a chief motivation of
employees and therefore greatly influences productivity. The quantum and methods
of remuneration payable should be fair, reasonable and rewarding of effort.
The Degree of Centralization - The amount of power wielded with the central
management depends on company size. Centralization implies the concentration of
decision making authority at the top management.
Line of Authority/Scalar Chain - This refers to the chain of superiors ranging from top
management to the lowest rank. The principle suggests that there should be a clear
line of authority from top to bottom linking all managers at all levels.
Order - Social order ensures the fluid operation of a company through authoritative
procedure. Material order ensures safety and efficiency in the workplace. Order
should be acceptable and under the rules of the company.
Equity - Employees must be treated kindly, and justice must be enacted to ensure a
just workplace. Managers should be fair and impartial when dealing with employees,
giving equal attention towards all employees.

Stability of Tenure of Personnel - Stability of tenure of personnel is a principle stating

that in order for an organization to run smoothly, personnel (especially managerial
personnel) must not frequently enter and exit the organization.
Initiative - Using the initiative of employees can add strength and new ideas to an
organization. Initiative on the part of employees is a source of strength for
organization because it provides new and better ideas. Employees are likely to take
greater interest in the functioning of the organization.
Esprit de Corps/Team Spirit - This refers to the need of managers to ensure and
develop morale in the workplace; individually and communally. Team spirit helps
develop an atmosphere of mutual trust and understanding. Team spirit helps to
finish the task on time.