Concept of Management

Concept of Management

• Management is a universal process present wherever human activity occurs.
• Effective management is essential for achieving company objectives.
• Qualified managers are crucial for utilizing labor and capital.
• The primary objective of all management is fulfilling the goals of an enterprise and ensuring they are realistic and achievable.
• Managers establish attainable objectives and orchestrate action across all levels to achieve them.
• Support from middle and lower management levels is necessary in this process.
• Efficient coordination of human and physical resources leads to maximum productivity and avoids chaos.
• Management should adapt to changes in economic, social, political, technological, or human factors through adequate training.
• Managers must understand the varying levels of sensitivity and dynamism in the individuals they work with.
• Managerial actions influence society.
• Managers should contribute to society through activities like charity, sports, and donations.
• Clear lines of command are needed, with suitable authority and responsibility delegated at all levels.
• Each individual needs to know their responsibilities and to whom they report.
• Managers must possess knowledge, training, and adhere to a code of conduct while considering their social and human obligations.
• The management process is a series of actions aimed towards a specific end.

Management as a Process

• Management as a process involves interrelated functions to realize goals.
• George R. Terry defined management as the systematic, coordinated, and cooperative process of creating, operating, and directing an organization.
• Management is a social process, concerned with developing relationships among people to make interactions productive
• It is the duty of management to make interaction between people productive and useful for obtaining organizational goals
• Management integrates human, physical, and financial resources to achieve organizational objectives.

Chapter Objectives

• Define and differentiate between management as an art and a science.
• Review the basic functions of management.
• Describe the progression of organizational management.
• Introduce the concept of the work setting as a holistic system.
• Discuss the idea of a clientele network and its application in healthcare.

Science vs. Art of Management

• Science of Management: Relies on established theories, principles, and empirical research for decision-making.
• Art of Management: Involves personal judgment, leadership, and adaptability.
• Science of Management: Focuses on measurable outcomes, data analysis, statistics, and structured methodologies.
• Art of Management: Recognizes managing people requires interpersonal skills and emotional intelligence.
• Science of Management: Bases decisions on logic and proven techniques, like scientific management.
• Art of Management: Managers must apply flexibility and experience to real-world challenges.

Basic Functions of Management

• Planning: Setting objectives, goals, and determining the current and desired future state.
• Decision Making: Choosing one alternative among several.
• Organizing: Designing roles and relationships to achieve the goal.
• Staffing: Determining personnel needs, selection, orientation, training and evaluation.
• Directing/Actuating: Providing guidance and leadership to achieve the goals.
• Controlling: Assessing accomplishments, evaluating performance relative to goals, and taking corrective actions.

Modern Organizational Management Concepts

• Includes controlling, leading, organizing, and planning to achieve objectives.
• Controlling involves monitoring and evaluating.
• Measuring of accomplishments against stated goals.
• Correcting deviations from goals and establishing feedback mechanisms.
• Leading involves motivating and guiding communication.
• Communicate objectives to members.
• Leading members to objectives.
• Training and supervising.
• Integrating individuals into the organization.
• Planning involves a decision-making strategy.
• Identify goals and objectives, state assumptions.
• Develop detailed plans.
• Organizing includes structuring the organization.
• Allocating resources and assigning tasks, breaking work into components, grouping activities, defining relationships,
• Developing an organizational chart and position descriptions.

Examples of Daily Activities

• Readjusting staffing patterns to cover employee absenteeism relates to staffing.
• Reviewing cases with staff to encourage responsibility showcases controlling and planning.
• Counseling employee lateness demonstrates leading and motivating, and controlling.
• Presenting a quality assurance plan to a leadership committee involves planning and leadership.
• Conducting research to improve treatment techniques involves planning and leadership.
• Discussing innovative services with a third-party reimbursement manager involves planning and leadership.

Planning

• Peter Drucker defined it as a continuous process of making present entrepreneurial decisions.
• This involves organizing efforts for the future and gauging the results with organized feedback.
• Effective planning considers both external factors like resource shortages, economic trends, technology, and regulations.
• It also accounts for internal factors like limited growth opportunities, changing workforce patterns, and complex organizational structures.

Organizing

• Requires a formal authority structure that defines, arranges, and coordinates work.
• These work subdivisions should relate in a united manner to attain objectives.
• Henry Fayol stated it involves providing resources for its functions.
• The function determines activities needed to reach goals, assigns them to personnel, and delegates the authority to execute in a coordinated manner.
• It involves identifying & grouping tasks, assigning tasks to personnel while defining authority/responsibility, delegating authority, establishing relationships, and coordinating activities.

Staffing

• The function of hiring and retaining a suitable workforce at managerial and non-managerial levels.
• Includes recruiting, training, developing, compensating, evaluating, and maintaining the workforce.
• Human element is vital, so it is important to recruit the right personnel.
• Kootz & O’Donnell's definition of the managerial function involves manning the organizational structure through selection, appraisal, & development.

Directing

• Concerned with leadership, communication, motivation, and supervision for employees to achieve goals.
• It involves issuing instructions and guiding subordinates on procedures/methods.
• Open communication is needed for passing information and receiving feedback.
• Motivation is very important since highly motivated people show excellent performance with less direction from superiors.
• Supervising subordinates leads to continuous progress reports and ensures proper execution.

Controlling

• Consists of activities to ensure events do not deviate from plans, establishing standards, measuring performance, and comparing it to standards to correct deviations.
• Koontz & O’Donnell defined it as measuring and correcting performance to ensure enterprise objectives are accomplished.
• Involves establishing standard performance, measuring actual performance, comparing it with standards to find deviations, and taking corrective action.

History of Management & Approaches

• Scientific Management: Focuses on workers, machines, and workplace optimization. Involves analysis of fundamental motions in management processes.
• Behaviorist Approach: Emphasizes behavioral sciences to improve worker productivity and interaction, focusing on human relations.
• Structuralism: Centers on the theory of bureaucracy or formal organization.
• Management science theory: Adds computer technology to the scientific method.

Management Process School

• Henri Fayol explored the basic processes and functions which includes the universality of these elements.
• James D. Mooney and A. C. Reiley published a classification & integrated analysis.
• Quantitative/Operations Research Approach: Uses problem-solving and decision-making, mathematical models and statistical inference.
• Six Sigma approach relies on statistical analysis to improve organizational performance.

Development of Systems Model

• The systems model is generally accepted in the area of computer technology, but at its origin it was not so restricted.
• Ludwig von Bertalanffy's terminology forms the foundation for general systems theory.
• Kenneth E. Boulding developed a system to help bridge the gap between theoretical and empirical systems knowledge

Phases of Organizational Management

• Classical Management (late 19th-early 20th century):
• Scientific Management (Taylorism) which focused on efficiency and division of labor.
• Bureaucratic Management introduced hierarchy, formal rules, and authority. -Administrative Management by Henri Fayol emphasized planning, organizing, leading and controlling.
• Human Relations Movement (1930s-1950s): Elton Mayo's studies highlighted the importance of social factors, employee motivation, and the workplace. Focus on communication.
• Behavioral Science Approach (1950s-1970s): Integration of psychology, sociology, and motivation theories. Recognition of employees as valuable organizational assets.
• Systems Approach (1950s-1980s): Organizations viewed as complex systems with interdependent parts.
• Contingency Theory (1960s-Present): Management approach dependent on situational factors.
• Modern Approaches (1980s-Present): Total Quality Management (TQM), Lean/Agile Management, Technology-Driven Management, Sustainability.

Significance of Management

• Arrangement of factors of production and resources, integrating them effectively to achieve pre-determined goals (achieving group goals)
• Maximizes the utilization of both physical and human resources, increasing managerial efficacy (optimum utilization of resources.)
• Minimizes resource input via proper planning to get maximum results and reduce costs
• Creates a defined organizational structure while establishing clear lines of command and responsibility (establishes sound organization)
• Adapts the organization to match the dynamics of the market and societal needs (establishes equilibrium)
• Better economical production which helps in turn to increase the welfare of people.
• Facilitates more efficient task execution via avoidance of scarce resource wastage, raising standards of living (essentials for prosperity of society)

Operational Aspects of Management

• Production Management: Focuses on transformation of raw materials into finished goods through scientific planning/regulation.
• Marketing Management: Manages transfer of goods/services, covering physical distribution and directing workers in the market division of a business.
• Financial Management: Focuses on managerial activities of procuring and utilizing funds for business.

Main Functions of Financial Management

• Include estimating capital requirements, ensuring fair return to investors, determining suitable sources of funds, and laying down optimum capital structure.
• Structure for the Enterprise covers the coordination of operations, preparation/analysis of financial statements, dividend policy, and outside financing.

Personnel Management

• Deals with effective control and use of manpower. The most important element is the management of human resources. It covers planning, structure, and directing.
• Managerial functions include planning, organizing, directing, and controlling.
• Operating functions include procurement, training/development, compensation, integrating employee interests, and providing welfare services.

Office Management

• Involves managing office activities to achieve business goals.
• The concept, applied to an office, is called 'office management'.
• It is the technique of coordinating and controlling office activities while helping management attain its goals.
• It functions as a service department for other departments.