Management
Management in business and organizations
means to coordinate the efforts of people to accomplish goals and objectives using
available resources efficiently and effectively. Management comprises planning,
organizing, staffing, leading or directing, and controlling an organization or
initiative to accomplish a goal. Resourcing encompasses the deployment and
manipulation of human resources, financial resources, technological resources,
and natural resources.
Since organizations
can be viewed as systems, management can also be defined as human action,
including design, to facilitate the production of useful outcomes from a
system. This view opens the opportunity to 'manage' oneself, a prerequisite to
attempting to manage others.
Universities offer
bachelor's and advanced degrees in management, generally within their colleges
of business. At the doctoral level students specialize in areas of management,
such as human resources, international management, organizational behavior, or strategic
management.
Definitions
Views on the
definition and scope of management include:
- Management defined as the organization and
coordination of the activities of an enterprise in accordance with certain
policies and in achievement of clearly defined objectives
Theoretical scope
Management involves
the manipulation of the human capital of an enterprise to contribute to the
success of the enterprise. This implies effective communication: an enterprise
environment (as opposed to a physical or mechanical mechanism), implies human
motivation and implies some sort of successful progress or system outcome. As
such, management is not the manipulation of a mechanism (machine or automated
program), not the herding of animals, and can occur in both a legal as well as
illegal enterprise or environment. Based on this, management must have humans,
communication, and a positive enterprise endeavor. Plans, measurements,
motivational psychological tools, goals, and economic measures (profit, etc.)
may or may not be necessary components for there to be management. At first,
one views management functionally, such as measuring quantity, adjusting plans,
meeting goals. This applies even in situations where planning does not
take place. From this perspective, Henri Fayol (1841–1925)[3] considers management to consist of six functions:
- Forecasting
- Planning
- Organizing
- Commanding
- Coordinating
- Controlling
Henri Fayol was one
of the most influential contributors to modern concepts of management.[citation needed]
In another way of
thinking, Mary Parker Follett
(1868–1933), defined management as "the art of getting things done through
people". She described management as philosophy.[4]
Critics, however,
find this definition useful but far too narrow. The phrase "management is
what managers do" occurs widely, suggesting the difficulty of defining
management, the shifting nature of definitions and the connection of managerial
practices with the existence of a managerial cadre or class.
One habit of thought
regards management as equivalent to "business administration" and
thus excludes management in places outside commerce, as for example in charities and in the public sector. More broadly,every organization must manage its
work, people, processes, technology, etc. to maximize effectiveness.
Nonetheless, many people refer to university departments that teach management
as "business schools".
Some institutions (such as the Harvard Business School)
use that name while others (such as the Yale School of Management)
employ the more inclusive term "management".
English speakers may
also use the term "management" or "the management" as a
collective word describing the managers of an organization, for example of a corporation. Historically this use of the term often
contrasted with the term "Labor" -
referring to those being managed.
Nature of managerial work
In for-profit work,
management has as its primary function the satisfaction of a range of stakeholders. This
typically involves making a profit (for the shareholders), creating valued
products at a reasonable cost (for customers), and providing rewarding
employment opportunities for employees. In nonprofit management, add the
importance of keeping the faith of donors. In most models of management and governance, shareholders vote for the board of directors, and
the board then hires senior management. Some organizations have experimented
with other methods (such as employee-voting models) of selecting or reviewing
managers, but this is rare.
In the public sector of countries constituted as representative democracies,
voters elect politicians to public office. Such politicians hire many managers
and administrators, and in some countries like the United States political appointees lose their jobs on the
election of a new president/governor/mayor.
Historical development
Difficulties arise in
tracing the history of management. Some see it (by definition) as a late-modern
(in the sense of late modernity) conceptualization. On those
terms it cannot have a pre-modern history, only harbingers (such as stewards). Others,
however, detect management-like-thought back to Sumerian
traders and to the builders of the pyramids of ancient Egypt. Slave-owners through the centuries faced the
problems of exploiting/motivating a dependent but sometimes unenthusiastic or
recalcitrant workforce, but many pre-industrial enterprises, given their small scale, did not feel compelled
to face the issues of management systematically. However, innovations such as the spread of Hindu-Arabic numerals
(5th to 15th centuries) and the codification of double-entry book-keeping
(1494) provided tools
for management assessment, planning and control.
Given the scale of
most commercial operations and the lack of mechanized record-keeping and
recording before the industrial revolution, it made sense for most owners of enterprises in those times to carry out management
functions by and for themselves. But with growing size and complexity of
organizations, the split between owners (individuals, industrial dynasties or
groups of shareholders) and day-to-day managers (independent specialists
in planning and control) gradually became more common.
Topics
Basic functions
Management operates
through various functions, often classified as planning, organizing, staffing,
leading/directing, controlling/monitoring and motivation.
- Planning: Deciding what needs to happen in the future
(today, next week, next month, next year, over the next five years, etc.)
and generating plans for action.
- Organizing: (Implementation)pattern of relationships among
workers, making optimum use of the resources required to enable the
successful carrying out of plans.
- Staffing: Job analysis, recruitment and hiring for
appropriate jobs.
- Leading/directing: Determining what must be done in a situation
and getting people to do it.
- Controlling/monitoring: Checking progress against plans.
- Motivation: Motivation is also a kind of basic function of
management, because without motivation, employees cannot work effectively.
If motivation does not take place in an organization, then employees may
not contribute to the other functions (which are usually set by top-level
management).
- Communicating: is giving, receiving, or exchange information.
- Creating: ability to produce original Idea,thought
through the use of imagination
Basic roles
- Interpersonal: roles that involve coordination and interaction
with employees
- Informational: roles that involve handling, sharing, and
analyzing information
- Decisional: roles that require decision-making
Management skills
- Political: used to build a power base and establish
connections
- Conceptual: used to analyze complex situations.
- Interpersonal: used to communicate, motivate, mentor and
delegate
- Diagnostic: ability to visualize most appropriate response
to a situation
- Technical: Expertise in one's particular functional area.[11]
Formation of the business
policy
- The mission of the business is the most obvious
purpose—which may be, for example, to make soap.
- The vision of the business reflects its
aspirations and specifies its intended direction or future destination.
- The objectives of the business refers to the ends
or activity that is the goal of a certain task.
- The business's policy is a guide that stipulates
rules, regulations and objectives, and may be used in the managers'
decision-making. It must be flexible and easily interpreted and understood
by all employees.
- The business's strategy refers to the coordinated
plan of action it takes and resources it uses to realize its vision and
long-term objectives. It is a guideline to managers, stipulating how they
ought to allocate and use the factors of production to the business's
advantage. Initially, it could help the managers decide on what type of
business they want to form.
Implementation of policies
and strategies
- All policies and strategies must be discussed
with all managerial personnel and staff.
- Managers must understand where and how they can
implement their policies and strategies.
- A plan of action must be devised for each
department.
- Policies and strategies must be reviewed
regularly.
- Contingency plans must be devised in case the
environment changes.
- Top-level managers should carry out regular
progress assessments.
- The business requires team spirit and a good
environment.
- The missions, objectives, strengths and
weaknesses of each department must be analysed to determine their roles in
achieving the business's mission.
- The forecasting method develops a reliable
picture of the business's future environment.
- A planning unit must be created to ensure that
all plans are consistent and that policies and strategies are aimed at
achieving the same mission and objectives.
All policies must be
discussed with all managerial personnel and staff that is required in the
execution of any departmental policy.
- Organizational change is strategically achieved
through the implementation of the eight-step plan of action established by
John P. Kotter: Increase urgency, get the vision right,
communicate the buy-in, empower action, create short-term wins, don't let
up, and make change stick.[12]
Policies and strategies in
the planning process
- They give mid and lower-level managers a good
idea of the future plans for each department in an organization.
- A framework is created whereby plans and
decisions are made.
- Mid and lower-level management may add their own
plans to the business's strategies.
Levels of management
Most organizations
have three management levels: first-level, middle-level, and top-level
managers. These managers are classified in a hierarchy of authority, and
perform different tasks. In many organizations, the number of managers in every
level resembles a pyramid. Each level is explained below in specifications of
their different responsibilities and likely job titles.
Top-level managers
The top consists of
the board of directors
(including non-executive directors and
executive directors),
president, vice-president, CEOs and other members of the C-level executives.[14] They are responsible for controlling and overseeing
the entire organization. They set a tone at the top and develop strategic plans, company
policies, and make decisions on the direction of the business. In addition,
top-level managers play a significant role in the mobilization of outside
resources and are accountable to the shareholders and general public.
The board of
directors is typically primarily composed of non-executives which owe a fiduciary duty to shareholders and are not closely involved in
the day-to-day activities of the organization, although this varies depending
on the type (e.g., public versus private), size and culture of the
organization. These directors are theoretically liable for breaches of that
duty and typically insured under directors and
officers liability insurance. Fortune 500 directors are estimated to spend 4.4 hours per
week on board duties, and median compensation was $212,512 in 2010. The board
sets corporate strategy, makes major decisions such as major acquisitions,[15] and hires,
evaluates, and fires the top-level manager (Chief Executive Officer or
CEO) and the CEO typically hires other positions. However, board involvement in
the hiring of other positions such as the Chief Financial Officer
(CFO) has increased.[16] In 2013, a survey of over 160 CEOs and directors of
public and private companies found that the top weaknesses of CEOs were
"mentoring skills" and "board engagement", and 10% of companies
never evaluated the CEO.[17] The board may also have certain employees (e.g., internal auditors) report to them or directly hire independent
contractors; for example, the board (through the audit committee) typically selects the auditor.
Helpful skills of top
management vary by the type of organization but typically include[18] a broad understanding competition, world economies,
and politics. In addition, the CEO is responsible for executing and determining
(within the board's framework) the broad policies of the organization.
Executive management accomplishes the day-to-day details, including:
instructions for preparation of department budgets, procedures, schedules;
appointment of middle level executives such as department managers;
coordination of departments; media and governmental relations; and shareholder
communication.
Middle-level managers
Consist of general managers, branch managers and department managers.
They are accountable to the top management for their department's function.
They devote more time to organizational and directional functions. Their roles
can be emphasized as executing organizational plans in conformance with the
company's policies and the objectives of the top management, they define and
discuss information and policies from top management to lower management, and
most importantly they inspire and provide guidance to lower level managers
towards better performance. Their functions include:
- Design and implement effective group and
inter-group work and information systems.
- Define and monitor group-level performance
indicators.
- Diagnose and resolve problems within and among
work groups.
- Design and implement reward systems that support
cooperative behavior. They also make decision and share ideas with top
managers.
First-level managers
Consist of
supervisors, section leaders, foremen, etc. They focus on controlling and
directing. They usually have the responsibility of assigning employees tasks,
guiding and supervising employees on day-to-day activities, ensuring quality
and quantity production, making recommendations, suggestions, and up channeling
employee problems, etc. First-level managers are role models for employees that
provide:
- Basic supervision
- Motivation
- Career planning
- Performance feedback
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