LECTURE NO: 1 14-10-

2010

MANAGEMENT

DEFINITION

“Management” (from Old French ménagement “the art of conducting, directing”,

from Latin manu agere “to lead by the hand”) characterizes the process of leading
and directing all or part of an organization, often a business, through the
deployment and manipulation of resources (human, financial, material, intellectual
or intangible). …

Management in all business areas and organizational activities are the acts of
getting people together to accomplish desired goals and objectives efficiently and
effectively.

OR

Management is the organizational process that includes strategic planning, setting

objectives, managing resources, deploying the human and financial assets needed
to achieve objectives, and measuring results.

OR

Management is the activity of getting things done with the aid of people and other
resources.

OR

Effective utilization and coordination of resources such as capital, plant, materials

and labour to achieve defined objectives with maximum efficiency.

OR

The process of getting activities completed efficiently with and through other
people;

OR

The process of setting and achieving goals through the execution of five basic
management functions:

 Planning,

 Organizing,

 Staffing,

 Directing,

 Controlling;

That utilizes human, financial, and material resources.

OR

The process of planning, leading, organizing and controlling people within a group in
order to achieve goals; also used to mean the group of people who do this.

MANAGEMENT PROCESS/FUNCTIONS

Management is creative problem solving. This creative problem solving is

accomplished through four functions of management:

1. Planning,
  Planning is the function of management that involves setting objectives
and determining a course of action for achieving these objectives

2. Organizing

 Organizing is the function of management that involves developing an

organizational structure and allocating human resources to ensure the
accomplishment of objectives

3. Staffing

4. Leading/Directing

 Leading involves influencing others toward the attainment of

organizational objectives. Effective leading requires the manager to
motivate subordinates, communicate effectively, and effectively use
power

5. Controlling.

 Controlling involves ensuring that performance does not deviate from

standards. Controlling consists of three steps, which include establishing
performance standards, comparing actual performance against standards,
and taking corrective action when necessary

The intended result is the use of an organization's resources in a way that

accomplishes its mission and objectives.

The Five Functions of Management

MANAGERIAL LEVELS:

The term “Levels of Management’ refers to a line of demarcation (Separation)

between various managerial positions in an organization. The number of levels in
management increases when the size of the business and work force increases and
vice versa. The level of management determines a chain of command, the amount
of authority & status enjoyed by any managerial position. The levels of
management can be classified in three broad categories:

LEVELS OF MANAGEMENT

1. Top-Level Managers/Administrative level

2. Middle-Level Managers/Middle Management

3. First-line managers/Low level/Supervisory/Operative

Managers at all these levels perform different functions. The role of managers at all
the three levels is discussed below:

1. TOP-LEVEL MANAGERS

 Top-level managers, or top managers, are also called senior management

or executives.

 These individuals are at the top one or two levels in an organization,

 Top-level managers make decisions affecting the entirety of the firm.

 Top managers do not direct the day-to-day activities of the firm; rather,
they set goals for the organization and direct the company to achieve
them.

 It devotes more time on planning and coordinating functions

 Top managers are ultimately responsible for the performance of the

organization, and often, these managers have very visible jobs.

They hold titles such as:

o Board of directors

o Chief executive or managing director

o Chief Executive Officer (CEO), Chief Financial Officer (CFO)

o Chief Operational Officer (COO)

o Chief Information Officer (CIO)

o Chairperson of the Board

o President

o Vice president

o Corporate head.

Role of Top Management:

The role of the top management can be summarized as follows –

 Top management lays down the objectives and broad policies of the
enterprise.

 It issues necessary instructions for preparation of department budgets,

procedures, schedules etc.

 It prepares strategic plans & policies for the enterprise.

 It appoints the executive for middle level i.e. departmental managers.

 It controls & coordinates the activities of all the departments.

  It is also responsible for maintaining a contact with the outside world.

 It provides guidance and direction.

 The top management is also responsible towards the shareholders for the
performance of the enterprise.

2. MIDDLE-LEVEL MANAGERS:

 Middle-level managers, or middle managers, are those in the levels below

top managers.

 Middle-level managers are responsible for carrying out the goals set by
top management.

 They do so by setting goals for their departments and other business

units.

 Middle managers can motivate and assist first-line managers to achieve

business objectives.

 Middle managers may also communicate upward, by offering suggestions

and feedback to top managers.

 Because middle managers are more involved in the day-to-day workings

of a company, they may provide valuable information to top managers to
help improve the organization's bottom line

Middle managers' job titles include:

o General manager

o Plant manager

o Regional manager and

o Divisional manager

ROLE OF MIDDLE MANAGERS/MIDDLE MANAGEMENT:

Their role can be emphasized as –

 They execute the plans of the organization in accordance with the policies
and directives of the top management.

 They make plans for the sub-units of the organization.

 They participate in employment & training of lower level management.

 They interpret and explain policies from top level management to lower
level.

 They are responsible for coordinating the activities within the division or
department.

 It also sends important reports and other important data to top level
management.

 They evaluate performance of junior managers.

 They are also responsible for inspiring lower level managers towards
better performance.

3. FIRST-LINE MANAGERS
  First-level managers are also called first-line managers or supervisors.

 First-line managers are responsible for the daily management of line

workers—the employees who actually produce the product or offer the
service.

 There are first-line managers in every work unit in the organization.

 Although first-level managers typically do not set goals for the

organization, they have a very strong influence on the company.

 These are the managers that most employees interact with on a daily
basis, and if the managers perform poorly, employees may also perform
poorly, may lack motivation, or may leave the company.

These managers have job titles such as:

o Office manager

o Shift supervisor

o Department manager

o Foreperson

o Crew leader

o Store manager

ROLE OF FIRST LINE MANAGERS/LOWER MANAGEMENT

Their role includes:

 Assigning of jobs and tasks to various workers.

 They guide and instruct workers for day to day activities.

 They are responsible for the quality as well as quantity of production.

 They are also entrusted with the responsibility of maintaining good

relation in the organization.

 They communicate workers problems, suggestions, and recommendatory

appeals etc to the higher level and higher level goals and objectives to the
workers.

 They help to solve the grievances of the workers.

 They supervise & guide the sub-ordinates.

 They are responsible for providing training to the workers.

 They arrange necessary materials, machines, tools etc for getting the
things done.

 They prepare periodical reports about the performance of the workers.

 They ensure discipline in the enterprise.

 They motivate workers.

 They are the image builders of the enterprise because they are in direct
contact with the workers.

MANAGEMENT ROLES:
In addition to the broad categories of management functions, managers in different
levels of the hierarchy fill different managerial roles. These roles were categorized
by researcher Henry Mintzberg, and they can be grouped into three major types:

1. Decisional

2. Interpersonal

3. Informational.

1. DECISIONAL ROLES:

Decisional roles require managers to plan strategy and utilize resources. There are
four specific roles that are decisional. The entrepreneur role requires the manager
to assign resources to develop innovative goods and services, or to expand a
business. Most of these roles will be held by top-level managers, although middle
managers may be given some ability to make such decisions. The disturbance
handler corrects unanticipated problems facing the organization from the internal or
external environment. Managers at all levels may take this role. For example, first-
line managers may correct a problem halting the assembly line or a middle level
manager may attempt to address the aftermath of a store robbery. Top managers
are more likely to deal with major crises, such as requiring a recall of defective
products. The third decisional role, that of resource allocator, involves determining
which work units will get which resources. Top managers are likely to make large,
overall budget decisions, while middle managers may make more specific
allocations. In some organizations, supervisory managers are responsible for
determine allocation of salary raises to employees. Finally, the negotiator works
with others, such as suppliers, distributors, or labor unions, to reach agreements
regarding products and services. First-level managers may negotiate with
employees on issues of salary increases or overtime hours, or they may work with
other supervisory managers when needed resources must be shared. Middle
managers also negotiate with other managers and are likely to work to secure
preferred prices from suppliers and distributors. Top managers negotiate on larger
issues, such as labor contracts, or even on mergers and acquisitions of other
companies.

2. INTERPERSONAL ROLES:

Interpersonal roles require managers to direct and supervise employees and the
organization. The figurehead is typically a top of middle manager. This manager
may communicate future organizational goals or ethical guidelines to employees at
company meetings. A leader acts as an example for other employees to follow,
gives commands and directions to subordinates, makes decisions, and mobilizes
employee support. Managers must be leaders at all levels of the organization; often
lower-level managers look to top management for this leadership example. In the
role of liaison, a manger must coordinate the work of others in different work units,
establish alliances between others, and work to share resources. This role is
particularly critical for middle managers, who must often compete with other
managers for important resources, yet must maintain successful working
relationships with them for long time periods.

3. INFORMATIONAL ROLES:

Informational roles are those in which managers obtain and transmit information.
These roles have changed dramatically as technology has improved. The monitor
evaluates the performance of others and takes corrective action to improve that
performance. Monitors also watch for changes in the environment and within the
company that may affect individual and organizational performance. Monitoring
occurs at all levels of management, although managers at higher levels of the
organization are more likely to monitor external threats to the environment than are
middle or first-line managers. The role of disseminator requires that managers
inform employees of changes that affect them and the organization. They also
communicate the company's vision and purpose.

Managers at each level disseminate information to those below them, and much
information of this nature trickles from the top down. Finally, a spokesperson
communicates with the external environment, from advertising the company's
goods and services, to informing the community about the direction of the
organization. The spokesperson for major announcements, such as a change in
strategic direction, is likely to be a top manager. But, other, more routine
information may be provided by a manager at any level of a company. For example,
a middle manager may give a press release to a local newspaper, or a supervisor
manager may give a presentation at a community meeting.

MANAGEMENT SKILLS:

Regardless of organizational level, all managers must have five critical skills:

1. Technical skill

2. Interpersonal skill

3. Conceptual skill

4. Diagnostic skill

5. Political skill.

1. TECHNICAL SKILL:

Technical skill involves understanding and demonstrating proficiency in a particular

workplace activity. Technical skills are things such as using a computer word
processing program, creating a budget, operating a piece of machinery, or
preparing a presentation. The technical skills used will differ in each level of
management. First-level managers may engage in the actual operations of the
organization; they need to have an understanding of how production and service
occur in the organization in order to direct and evaluate line employees.
Additionally, first-line managers need skill in scheduling workers and preparing
budgets. Middle managers use more technical skills related to planning and
organizing, and top managers need to have skill to understand the complex
financial workings of the organization.

2. INTERPERSONAL SKILL:

Interpersonal skill involves human relations, or the manager's ability to interact

effectively with organizational members. Communication is a critical part of
interpersonal skill, and an inability to communicate effectively can prevent career
progression for managers. Managers who have excellent technical skill, but poor
interpersonal skill are unlikely to succeed in their jobs. This skill is critical at all
levels of management.

3. CONCEPTUAL SKILL:

Conceptual skill is a manager's ability to see the organization as a whole, as a

complete entity. It involves understanding how organizational units work together
and how the organization fits into its competitive environment. Conceptual skill is
crucial for top managers, whose ability to see "the big picture" can have major
repercussions on the success of the business. However, conceptual skill is still
necessary for middle and supervisory managers, who must use this skill to envision,
for example, how work units and teams are best organized.

4. DIAGNOSTIC SKILL:

Diagnostic skill is used to investigate problems, decide on a remedy, and implement

a solution. Diagnostic skill involves other skills—technical, interpersonal,
conceptual, and politic. For instance, to determine the root of a problem, a manager
may need to speak with many organizational members or understand a variety of
informational documents. The difference in the use of diagnostic skill across the
three levels of management is primarily due to the types of problems that must be
addressed at each level. For example, first-level managers may deal primarily with
issues of motivation and discipline, such as determining why a particular
employee's performance is flagging and how to improve it. Middle managers are
likely to deal with issues related to larger work units, such as a plant or sales office.
For instance, a middle-level manager may have to diagnose why sales in a retail
location have dipped. Top managers diagnose organization-wide problems, and may
address issues such as strategic position, the possibility of outsourcing tasks, or
opportunities for overseas expansion of a business.

5. POLITICAL SKILL:

Political skill involves obtaining power and preventing other employees from taking
away one's power. Managers use power to achieve organizational objectives, and
this skill can often reach goals with less effort than others who lack political skill.
Much like the other skills described, political skill cannot stand alone as a manager's
skill; in particular, though, using political skill without appropriate levels of other
skills can lead to promoting a manager's own career rather than reaching
organizational goals. Managers at all levels require political skill; managers must
avoid others taking control that they should have in their work positions. Top
managers may find that they need higher levels of political skill in order to
successfully operate in their environments. Interacting with competitors, suppliers,
customers, shareholders, government, and the public may require political skill.

Conceptual Skills:

Ability to use information to solve business problems, identification of opportunities

for innovation, recognizing problem areas and implementing solutions, selecting
critical information from masses of data, understanding the business uses of
technology, understanding the organization's business model.

Communication Skills:

Ability to transform ideas into words and actions, credibility among colleagues,
peers, and subordinates, listening and asking questions, presentation skills and
spoken format, presentation skills; written and graphic formats

Effectiveness Skills:

Contributing to corporate mission/departmental objectives, customer focus,

multitasking; working at multiple tasks at parallel, negotiating skills, project
management, reviewing operations and implementing improvements, setting and
maintaining performance standards internally and externally, setting priorities for
attention and activity, time management.

Interpersonal Skills:

Coaching and mentoring skills, diversity skills; working with diverse people and
culture, networking within the organization, networking outside the organization,
working in teams; cooperation and commitment.

Evolution of Management Thought in changing Environment:

I have to find the relevant material from Books or Internet?

Management’s Ethical and Social Responsibilities

Ethical Conduct
Ethical conduct is the foundation of effective management. Department heads
and budget authorities are responsible for establishing an ethical “tone at the
top” in their respective areas. To discharge this responsibility, department
heads and budget authorities must

1. Behave in an ethical manner

2. Communicate ethical standards to employees

3. Monitor employee conduct in accordance with ethical standards and

4. Take appropriate disciplinary action when an employee violates ethical

standards.

Social Responsibilities of Management

The term social responsibilities can be defined as the obligation of management

towards the society and others concerned.

Increasing concern for the social responsibility of management, it is now recognized

that besides taking care of the financial interest of owners, managers of business
firms must also take into account the interest of various other groups such as
employees, consumers, the government and the community as a whole. These
interested groups are directly or indirectly affected by the pursuit of business
activities and they are the stake-holders of the business enterprise.

Responsibility towards owners: The primary responsibilities of management is to

assure a fair and reasonable rate of return on capital and fair return on investment
can be determined on the basis of difference in the risks of business in different
fields of activity. With the growth of business the shareholders can also expect
appreciation in the value of their capital.

1. Responsibility towards employees:

Management responsibility towards employees relate to the fair wages and salaries,
satisfactory work environment, labour management relations and employee
welfare. Fair wages should be fixed in the light of labor productivity, the prevailing
wage rates in the same or neighbouring areas and relative importance of jobs.
Managers’ salaries and allowances are expected to be linked with their
responsibility, initiative and skill. But the spread between minimum wages and
highest salaries should be reasonable. Employees are expected to build up and
maintain harmonious relationships between superior and subordinates. Another
aspect of responsibility towards employees is the provision of welfare amenities like
safety and security of working conditions, medical facilities, housing, canteen, leave
and retirement benefits.

2. Responsibility towards consumers:

In a competitive market, serving consumers is supposed to be a prime concern of

management. But in reality perfect competition does not prevail in all product
markets. In the event of shortage of supply there is no automatic correction.
Besides consumers are often victims of unfair trade practices and unethical conduct
of business. Consumer interests are thus protected to some extent with laws and
pressure of organized consumer groups. Management should anticipate these
developments, satisfy consumer needs and protect consumer interests. Goods must
be of appropriate standard and quality and be available in adequate quantities at
reasonable prices. Management should avoid resorting to hoarding or creating
artificial scarcity as well as false and misleading advertisements.

3. Responsibility towards the Governments:

As a part of their social responsibility, management must conduct business affair in
lawful manner, honestly pay all the taxes and dues, and should not corrupt public
officials for selfish ends. Business activities must also confirm to the economic and
social policies of the government.

4. Responsibility towards the community and society:

The socially responsible role of management in relation to the community are

expected to be revealed by its policies with respect to the employment of
handicapped persons, and weaker sections of the community, environmental
protection, pollution control, setting up industries in backward areas, and providing
relief to the victims of natural calamities etc.