Chapter 1

4 Management Functions

- Planning means identifying goals for future organizational performance and deciding on
the tasks and use of resources needed to attain them. In other words, managerial
planning defines where the organization wants to be in the future and how to get there.
The management function concerned with defining goals for future organizational
performance and deciding on the tasks and resources needed to attain the
- Organizing typically follows planning and reflects how the organization tries to
accomplish the plan. Organizing involves assigning tasks, grouping tasks into
departments, delegating authority, and allocating resources across the organization. The
management function concerned with assigning tasks, grouping tasks into departments,
and allocating resources to department
- Leading is the use of influence to motivate employees to achieve organizational goals.
Leading means creating a shared culture and values, communicating goals to
employees throughout the organization, and infusing employees with the desire to
perform at a high level. Leading involves motivating entire departments and divisions as
well as those individuals working immediately with the manager. In an era of uncertainty,
global competition, and a growing diversity of the workforce, the ability to shape culture,
communicate goals, and motivate employees is critical to business success. The
management function that involves the use of influence to motivate employees to
achieve the organization’s goals
- Controlling means monitoring employees’ activities, determining whether the
organization is on target toward its goals, and making corrections as necessary.
Managers must ensure that the organization is moving toward its goals. Trends toward
empowerment and trust of employees have led many companies to place less emphasis
on top down control and more emphasis on training employees to monitor and correct
themselves

Additional on this

management The attainment of organizational goals in an effective and efficient manner

through planning, organizing, leading, and controlling organizational resource
Management skills

Human skill - The ability to work with and through other people and to work effectively as a
group member. Human skill is demonstrated in the way a manager relates to other people,
including the ability to motivate, facilitate, coordinate, lead, communicate, and resolve conflicts.
Technical skill -The understanding of and proficiency in the performance of specific tasks.
Technical skill includes mastery of the methods, techniques, and equipment involved in specific
functions such as engineering, manufacturing, or finance. Technical skill also includes
specialized knowledge, analytical ability, and the competent use of tools and techniques to solve
problems in that specific discipline.
Conceptual skill - The cognitive ability to see the organization as a whole and the relationships
among its parts. Conceptual skill involves the manager’s thinking, information processing, and
planning abilities. It involves knowing where one’s department fits into the total organization and
how the organization fits into the industry, the community, and the broader business and social
environment. It means the ability to think strategically—to take the broad, long-term view—and
to identify, evaluate, and solve complex problems.

Additional notes:
Performance - The organization’s ability to attain its goals by using resources in an efficient and
effective manner.
top manager - A manager who is at the top of the organizational hierarchy and is responsible
for the entire organization
middle manager - A manager who works at the middle levels of the organization and is
responsible for major departments.
project manager - A manager responsible for a temporary work project that involves the
participation of other people from various functions and levels of the organization.
first-line manager - A manager who is at the first or second management level and is directly
responsible for the production of goods and services.
functional manager - A manager who is responsible for a department that performs a single
functional task and has employees with similar training and skills
general manager - A manager who is responsible for several departments that perform
different functions

organization A social entity that is goal directed and deliberately structured.

effectiveness The degree to which the organization achieves a stated goal.
efficiency The use of minimal resources—raw materials, money, and people—to produce a
desired volume of output

Horizontal Differences (Management skills)

In management, there are key distinctions in job roles within an organization. Functional
managers oversee departments focused on a specific task with employees possessing similar
training and skills, including areas like advertising, sales, finance, human resources,
manufacturing, and accounting. Line managers, on the other hand, are responsible for the core
operational departments, like manufacturing and marketing, directly involved in producing or
selling the product or service. Staff managers oversee support departments such as finance and
human resources, which provide assistance to line departments.

Vertical Differences

Management roles differ depending on their hierarchical level within an organization. First-level
managers primarily focus on facilitating individual employee performance, ensuring efficiency,
providing technical support, and motivating non-management employees. Middle managers, in
contrast, are more concerned with coordinating teams, allocating resources, and implementing
top management strategies. Top-level managers are responsible for setting organizational
goals, monitoring the external environment, and determining competitive strategies. They also
shape the corporate culture, communicate a shared vision, and foster innovation.

While traditional middle management levels have been reduced in many organizations, middle
managers' roles have evolved to create horizontal networks, drive innovation, and enable rapid
responses to environmental shifts. The use of teams and projects has further elevated their
status, with many middle managers working on various cross-functional and cross-cultural
projects.

In summary, first-level managers focus on day-to-day operations and individual employee

performance, middle managers coordinate teams and implement strategies, and top-level
managers concentrate on long-term strategies, environmental monitoring, and shaping the
organization's vision and culture.

10 Managerial Roles

Management in small businesses and nonprofit org.

Small businesses are on the rise, with hundreds opening monthly, but they face complex
challenges in today's business environment. Inadequate management skills pose a significant
threat to small companies, as per a survey. Small business managers often prioritize roles such
as spokesperson and entrepreneur, emphasizing the need to promote their growing companies
and foster innovation. They tend to rate lower on leader and information-processing roles
compared to their counterparts in larger corporations.

Nonprofit organizations also require effective management, even though their objectives differ
from businesses. Nonprofits focus on generating a social impact and typically rely on
government funding, grants, and donations. This financial model differs from businesses that
aim to increase sales revenues. Nonprofit managers must optimize resource utilization to
demonstrate efficiency to donors and secure funding. They also grapple with measuring
success in less tangible terms, like improving public health, making a difference in the lives of
the disenfranchised, or increasing appreciation for the arts. Managing volunteers and donors
presents unique challenges, as they cannot be supervised as conventional employees.

Managers in nonprofit organizations emphasize roles like spokesperson, leader, and resource
allocator to effectively engage donors and distribute resources. In all organizations, be it large
corporations, small businesses, or nonprofits, managers adapt their roles and management
functions to address specific challenges and maintain organizational health.

New workplace characteristics

The new workplace is characterized by digital transformation, which has significantly changed
the nature of work, employees, and the work environment. Unlike the traditional workplace with
routine tasks, specialized roles, and centralized control, the new workplace is more flexible,
featuring flatter structures and empowering lower-level employees to make decisions based on
shared information and organizational values. Employees in this environment are expected to
adapt to change, share knowledge, and take calculated risks.

The new workplace is built on networks rather than strict hierarchies, and it often involves virtual
work arrangements, including telecommuting and virtual teams. Managers must adapt to
supervise and coordinate employees who may not physically come to a central office. This
workplace values adaptability and learning across various projects and jobs throughout one's
career.

Additionally, technology enables companies to outsource core functions and high-level

knowledge work to external partners, often in other countries, to reduce costs and improve
efficiency. This shift in work patterns reflects the ongoing impact of digitalization on business
and employment.
Definitions:

interim manager A manager who is not affiliated with a specific organization but works on a
project-by-project basis or provides expertise to organizations in a specific area

New Manager Competencies

Managers need to adapt to a changing work environment characterized by flexibility and

digitalization. They should shift from traditional command-and-control methods to coaching and
guidance, creating organizations that are fast, innovative, and relationship-focused.
Empowering leadership is essential when working with employees in different locations and
coordinating work with external partners.

Success in this new workplace relies on strong collaborative relationships, emphasizing

teamwork across functions and hierarchical levels, as well as with external organizations.
Team-building skills are crucial, and managers often lead temporary, diverse teams. However,
the transition is challenging for those used to traditional management.

The future holds more changes and challenges for organizations and managers, making it an
exciting time to enter the field of management. The book explores the evolving workplace, the
dynamic roles of 21st-century managers, and strategies for effectiveness in this complex,
ever-changing environment.

Chapter 1 Summary
This chapter provides an introduction to the field of management and outlines the roles and
activities of managers. Managers are responsible for achieving organizational goals efficiently
and effectively through planning, organizing, leading, and controlling. They function as the
executive force within the organization, creating conditions that enable others to perform at a
high level.

To perform their tasks, managers require three types of skills: conceptual, human, and technical.
Conceptual skills are more vital for top-level managers, while human skills are essential at all
levels, and technical skills are most crucial for first-line managers.

The role of a manager can vary depending on their level within the organization, whether they
are top, middle, or first-line managers. The responsibilities of managers may also differ across
the organization, including roles such as project managers, interim managers, functional
managers (line and staff managers), and general managers.

Becoming a manager involves a shift in mindset, with new managers facing challenges like
coordinating diverse individuals and activities, delegating and developing others, and adapting
to different relationships with former peers.

Managers' activities encompass ten roles: informational roles (monitor, disseminator,

spokesperson), interpersonal roles (figurehead, leader, liaison), and decisional roles
(entrepreneur, disturbance handler, resource allocator, negotiator).

The modern workplace has witnessed significant changes, with managers shifting from
command and control to an empowering leadership style, emphasizing vision, values, and
communication. Building relationships, both within and outside the organization, has become a
key focus for managers, including customers, partners, and suppliers.

CHAPTER 2
Management and Organization

This chapter emphasizes that studying history is not merely about arranging events
chronologically but about understanding how societal forces impact organizations. It helps
develop strategic thinking, big-picture understanding, and improves conceptual skills. The text
explores how social, political, and economic forces have influenced organizations and
management practices.

Social forces shape relationships among people, reflecting values, needs, and standards of
behavior. Notably, the changing attitudes and values of Generation Y employees are a
significant social force. They are highly educated, technologically adept, and value a
challenging, supportive work environment with opportunities for growth and work-life balance.

Political forces refer to the influence of political and legal institutions on people and
organizations. Political forces include basic assumptions underlying the political system, such as
the desirability of self-government, property rights, contract rights, the definition of justice, and
the determination of innocence or guilt of a crime. The spread of capitalism throughout the world
has dramatically altered the business landscape. The dominance of the free-market system and
growing interdependencies among the world’s countries require organizations to operate
differently and managers to think in new ways. At the same time, strong anti-American
sentiments in many parts of the world create challenges for U.S. companies and managers.

Economic forces pertain to the availability, production, and distribution of resources in a

society. Governments, military agencies, churches, schools, and business organizations in
every society require resources to achieve their goals, and economic forces influence the
allocation of scarce resources to the economic power of less-developed countries. The rapid
growth of China and India and their rise in the global marketplace dominated the 2007 World
Bank-International Monetary Fund annual meetings, for example. Another force is the shifting of
the economy of the United States and other developed countries, with the sources of wealth, the
fundamentals of distribution, and the nature of economic decision making undergoing significant
changes. Today’s economy is based as much on ideas, information, and knowledge as it is on
material resources. Supply chains and distribution of resources have been revolutionized by
digital technology. Surplus inventories, which once could trigger recessions, are declining or
completely disappearing.

Three Major Perspective on Management

(Blue)

Classical perspective - A management perspective that emerged during the nineteenth

and early twentieth centuries that emphasized a rational, scientific approach to the study of
management and sought to make organizations efficient operating machines.

The practice of management has ancient roots dating back to 3000 B.C., with the first
government organizations created by the Sumerians and Egyptians. However, the formal study
of management is a relatively recent development. The formal study of management began with
the classical perspective.

The classical perspective on management emerged during the 19th and early 20th centuries, as
the factory system introduced new challenges related to organizing large, complex
organizations. These challenges included tooling plants, structuring managerial roles, training a
diverse, often non-English-speaking immigrant workforce, scheduling complex manufacturing
operations, and addressing growing labor dissatisfaction and strikes.

To address these challenges, a new approach to coordination and control was needed, leading
to the emergence of the classical perspective. This perspective involved a rational, scientific
approach to management, aiming to make organizations operate more efficiently, often referred
to as "the new subspecies of economic man—the salaried manager." The late 19th and early
20th centuries saw a significant growth in professional managers in the United States, who
began developing and testing solutions to the challenges of organizing, coordinating, and
controlling large workforces and improving worker productivity. This period marked the evolution
of modern management within the classical perspective.

The classical perspective encompasses three subfields, each with a slightly different focus:
scientific management, bureaucratic organizations, and administrative principles.

● Scientific Management - A subfield of the classical management perspective that

emphasized scientifically determined changes in management practices as the solution
to improving labor productivity

- Scientific management, pioneered by Frederick Winslow Taylor, emphasizes using

scientifically determined methods and management practices to enhance efficiency and
labor productivity. Taylor proposed that workers could be "retooled like machines," and
he insisted that improving productivity required a scientific approach. This approach
involved replacing rule-of-thumb decisions with precise procedures derived from a
careful study of individual situations.

- Taylor's philosophy prioritized the system over individual workers, encapsulated in his
statement, "In the past, the man has been first. In the future, the system must be first."
His work led to significant productivity improvements, as demonstrated in the Bethlehem
Steel plant example, where he calculated precise movements and tools to increase
loading from 12.5 tons to 47.5 tons per day, accompanied by an incentive system.

- Taylor, known as the father of scientific management, was not alone in this field. Henry
Gantt developed the Gantt chart, a tool for measuring planned and completed work at
different stages of production. Frank B. Gilbreth pioneered time and motion studies,
 emphasizing efficiency and searching for the best way to do work. His work had a
significant impact on medical surgery. Lillian M. Gilbreth focused on the human aspect of
work and made contributions to industrial psychology and human resource management.

- The principles of scientific management, as depicted in Exhibit 2.2, involve developing

standard methods for each job, selecting workers with the appropriate abilities, training
them, providing support, eliminating interruptions, and offering wage incentives. These
ideas dramatically increased productivity across industries and remain relevant today.

- However, scientific management's failure to consider the social context and workers'
needs led to increased conflict and sometimes violent clashes between managers and
employees. Workers often felt exploited under this system, contrasting with the harmony
and cooperation Taylor and his followers had envisioned.

● Bureaucratic Organization - A subfield of the classical management perspective that

emphasized management on an impersonal,rational basis through such elements as
clearly defined authority and responsibility, formal recordkeeping, and separation of
management and ownership

- The bureaucratic organizations approach, a subfield within the classical perspective,

developed in Europe, viewing the organization as a whole. Max Weber, a German
theorist, introduced most of the concepts related to bureaucratic organizations.
 - During the late 1800s, many European organizations were managed on a personal,
family-like basis, where employees were loyal to specific individuals rather than the
organization's mission. Weber aimed to address the dysfunctional aspects of this
practice by introducing the concept of bureaucratic organizations. He envisioned
organizations that would be managed on an impersonal, rational basis, emphasizing
efficiency and adaptability to change.

- Weber's bureaucracy is characterized by six key features, summarized in Exhibit 2.3.

These include rational authority, selection and advancement based on competence,
reliance on rules and written records, impersonal and uniform application of rules and
procedures, a clear division of labor, and a hierarchical structure with each position
under the authority of a higher one. This system emphasizes the authority invested in
managerial positions rather than the individual's personality.

- While the term "bureaucracy" has acquired negative connotations in contemporary

organizations due to its association with endless rules and red tape, it provides a
standardized way of dealing with employees, ensuring equal treatment and clear rules
for everyone. This foundation allows many organizations to achieve high levels of
efficiency, as exemplified by companies like United Parcel Service (UPS).

● Administrative Principles - A subfield of the classical management perspective that

focuses on the total organization rather than the individual worker, delineating the
management functions of planning, organizing, commanding, coordinating, and
controlling

The administrative principles approach, a major subfield within the classical perspective,
focused on the organization as a whole, in contrast to scientific management, which
emphasized individual worker productivity. Key contributors to this approach included Henri
Fayol, Mary Parker Follett, and Chester I. Barnard.

Henri Fayol, a French mining engineer and former head of the Comambault mining group, wrote
about his administrative concepts, which continue to influence management philosophy. He
outlined 14 general principles of management, including unity of command, division of work,
unity of direction, and scalar chain. Fayol also identified five basic functions of management:
planning, organizing, commanding, coordinating, and controlling, which remain fundamental to
modern management theory.

Mary Parker Follett, trained in philosophy and political science, emphasized the importance of
common superordinate goals in reducing conflicts within organizations. Her ideas, although
often overlooked by management scholars, offer valuable insights for modern managers dealing
with global change. Follett advocated a people-centric approach to leadership, focusing on
empowerment, facilitating rather than controlling employees, and allowing employees to act
based on the authority of the situation.
Chester I. Barnard, who worked in the statistical department of AT&T and later became the
president of New Jersey Bell, introduced the concept of the informal organization. He
recognized that informal relationships and social groupings within formal organizations play a
powerful role that can be harnessed for organizational benefit. Barnard also proposed the
acceptance theory of authority, asserting that people have free will and choose whether to follow
management orders based on perceived benefits. Proper treatment of employees is crucial, as
their acceptance of authority can significantly impact organizational success.

The classical perspective, with its focus on efficiency and effective treatment of employees,
empowered companies with fundamental skills for achieving high productivity. The United States
led the world in management techniques, and other countries, notably Japan, drew heavily from
American ideas in this regard.

Humanistic Perspective - A management perspective that emerged near the late

nineteenth century and emphasized understanding human behavior, needs, and attitudes in the
workplace

Chapter 2 Summary

▪ An understanding of the evolution of management helps current and future managers

appreciate where we are now and continue to progress toward better management. Elements of
various historical approaches go into the mix that makes up modern management.
▪ Three major perspectives on management evolved since the late 1800s: the classical
perspective, the humanistic perspective, and the management science perspective. Each
perspective encompasses several specialized subfields that provide important ideas still
relevant in organizations today.
▪ Recent extensions of those perspectives include systems theory, the contingency view, and
total quality management. Systemic thinking, which means looking not just at discrete parts of a
situation but also at the continually changing interactions among the parts, is a powerful tool for
managing in a complex environment.
▪ The most recent thinking about organizations was brought about by today’s turbulent times
and the shift to a new workplace described in Chapter 1. Many managers are redesigning their
companies toward the learning organization, which fully engages all employees in identifying
and solving problems.
▪ The shift to a learning organization goes hand-in-hand with the transition to a
technology-driven workplace. Important new management approaches include supply chain
management, customer relationship management, and outsourcing. These approaches require
managers to think in new ways about the role of employees, customers, and partners. Today’s
best managers value employees for their ability to think, build relationships, and share
knowledge, which is quite different from the scientific management perspective of a century ago