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Chapter 1

Nature of Management This chapter introduces the

concept & the elements of Management. It identifies major schools of management thought and describes how they evolved. Modern approaches are emphasized & the role of the manager is closely examined.

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Administration & Management by Brech

• Administration – that part of the management process concerned with the institution and carrying out of procedures by which the program is laid down & communicated, and the progress of activities is regulated & checked against targets & plans.

• Management – a social process entailing responsibility for the effective & economical planning & regulation of the operations of an enterprise, in fulfillment of a given purpose or task.

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Concept of ManagementManagement may be defined

as a process whereby scarce resources (human, material, & financial) are combined to achieve organizational goals. Without management, people would pursue their own objectives independently and this would lead to waste & inefficiency.

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OrganizationThe framework of the management

process as formed by the definition of:– The responsibilities by means of which the

activities of the enterprise are dispersed among the ( managerial, supervisory & specialist) personnel employed in its service.

– The formal interrelations established among the personnel by virtue of such responsibilities.

*Its purpose is to create an arrangement of positions & responsibilities through & by means of which an enterprise can carry out its work.

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Development of Management Thought

The development of management thought can be considered to comprise four main periods:

• Early influences• The scientific management

movement• The human relations

movement• Modern influences

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Early Influences

Ancient records in China & Greece indicate the importance of organization & administration, but do not give much insight into the principles of management. Outstanding scholars have referred to management activities in the running of city states & empires.

In the period 1400 to 1450, merchants in Venice, Italy, operated various types of business organization, e.g. partnerships, trusts & holding companies. Control emerged in the form of a double-entry book-keeping system & related documentation & records. Also, there was standardization of material & systems of inventory control.

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The Scientific Management Movement

In the years after 1900 conventional management practices were found to be inadequate to meet demands from the changing economic, social & technological environment. A few pioneers examined causes of inefficiency & experimented to try to find more efficient methods and procedures for control. From these basic experiments a system of management thought developed which came to be known as scientific management.

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The Human Relations Movement

Advances in the sciences of mankind, and of behaviour as an individual and in groups, e.g. psychology, sociology, etc., have revealed a number of factors which have helped in dealing with business & industrial problems.

The basis of the human relations movement was the integration of various disciplines such as industrial psychology & sociology, applied anthropology & social psychology, & was concerned with the human problems which management encountered.

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Modern InfluencesThe United Kingdom was faced with

many complex problems during World War II. Operational research teams were set up, composed of mathematicians, physicists & other scientists, who pooled their knowledge to solve problems. After the war these ideas were applied to industrial problems which could not be solved by conventional means. With the development of the electronic computer, these procedures became formalized into a

‘management science’ school.

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‘Management Science’ school.The contribution of the quantitative

school was greatest in the activities of planning & control. In the essence, ‘management science’ school, by its use of computers and quantitative analysis, has made it possible to consider the effect of a number of variables in an organization which may otherwise have been overlooked.

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Management: A SCIENCE or an ART?It is in the formulation of principles

that the science of management can be developed. A management principle distils & organizes knowledge that has been built up through experience & analysis. Management is far from being an exact science at present but, by understanding & applying accepted principles can be greatly improved. It is most probable that management will never become wholly an exact science as personal judgment will always be needed to supplement available knowledge; therefore, as a practice, management will always be an art.

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Management: a PROFESSION?The following main points seem relevant:

• There must exist a body of principles, skills & techniques and specialized knowledge.

• There must be formal methods of acquiring training & experience.

• An organization should be established which forms ethical codes for the guidance & conduct of members.

If the above standards are considered, then management cannot really be called a profession. There are no licenses for managers, nor is there an accepted code of ethics, but there are tendencies towards professionalization and these will undoubtedly increase.

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System Approach to Management

System – is an organized combination of parts which forms a complex entity, with interrelationships or interactions between the parts & between the system and the environment.

2 categories:

1. Deterministic – where the behaviour can be completely determined

2. Probabilistic – where the behaviour can only be estimated within degrees of likelihood.

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System Approach to Management

Management System encourages one to consider the cutting across of traditional boundaries of responsibility between departments in order to appreciate the objectives of the whole organization. Distinct demarcation lines between purchasing, manufacturing, engineering, marketing, etc., may become less distinct & a revision of organization may be needed.

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System Approach to ManagementThe systems approach stresses the

need for more understanding in the development of sophisticated problem-solving techniques, e.g. simulation, operations research & computerized information systems. All these aim to improve the control mechanisms of organizational systems so that they can plan for and react more effectively to changes in the environment.

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Sub-system – Elements of a System:• A sensing system or mechanism, to find

out the situation & what is going on;• An information coding system, to ensure

that data are in usable from;• A physical processing system, requiring

two-way communication & feedback of results;

• A regulating & control system, based upon actual output & measurement of deviations;

• An information storage & retrieval system;

• A goal-getting or policy-making system.

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Contingency Approach to Management

The approach is to identify the conditions of a task (scientific school management), managerial job (administrative management school) and persons (human relations school) as parts of a complete management situation and attempt to integrate them all into a solution which is more appropriate for a specific circumstance.

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ELEMENTS of ELEMENTS of MANAGEMENTMANAGEMENT

• Planning – referred to forecasting future circumstances & requirements, deciding objectives, making long- and short-term plans, determining policies to be followed & the standards to be set.

• Organizing – concerned with dividing work & allocating it among groups & persons and determining their responsibilities & relations and the extent of their delegation.

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ELEMENTS of ELEMENTS of MANAGEMENTMANAGEMENT

• Directing – involves guiding & supervising subordinates. These subordinates must be oriented into the undertaking’s ways, guided towards improved performance & motivated to work effectively towards enterprise goals.

• Controlling – The activity involved checking to see that plans have been carried out & attending to any deviations.

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3 Basic types of Management Skills

1. Technical Skill – ability to use tools, procedures & techniques in a specialized area.

2. Human Skill – ability to work with, understand & motivate people as individual or groups.

3. Conceptual Skill – mental ability to coordinate & integrate all of an organization’s activities, especially in the long-term decisions affecting the organization. It is needed to see the organization as a whole & recognize how the various factors in a situation are interrelated so actions taken are in the best interests if the organization.

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Women in ManagementWomen obstacles in reaching higher levels on merits:

• There are not as many role models of career development for women as there are for men.

• Married & unmarried have to contend with the career aspirations of their partner & maybe directly involved in family responsibilities

• Male co-workers may discriminate against women.

• The policies & procedures of an organization may be very unsupportive.

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EntrepreneurshipThe process of bringing

together creative and innovative ideas & coupling these with management & organizational skills in order to combine people, money & resources to meet an identified need and thereby create wealth.

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Intrapreneurship

The term given to someone who has innovative ideas and transforms them to profitable activities within an organizational environment

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TIME MANAGEMENTIn the age of scientific

management, methods were used to quantify the relationship between the time spent and the output achieved. Managerial Time is so expensive that every organization must benefit by examining issues of time management.

Important Issues in Time Management:• Nature of job• Personal attributes of jobholder• The context of a person’s job

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Excellence in Management8 Characteristics of excellent enterprises:• Has a Bias for action• Learned about the needs of their

customers.• Promoted entrepreneurship &

management autonomy• Obtained productivity by paying close

attention to the needs of their staff• Were encouraged by the philosophy of

their organization’s leaders• Concentrated on the business they knew

best• Had an organization structure that was

simple with a ‘lean’ staff• Were organized in a centralized or

decentralized manner, whichever was appropriate

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Management for the future• An awareness of & ability to relate to the

economic, social, and political environment.

• An ability to manage in a turbulent environment.

• An ability to manage with complex organizational structures.

• An ability to be innovative & initiate change.

• An ability to manage & utilize increasingly sophisticated information systems.

• An ability to manage people with widely different & changing values and expectations.