Fundamentals of Management: Scope of Management

Fundamentals of Management and Marketing

• This module contains three courses: Introduction to Management, Principles of Marketing, and International Marketing.
• Course materials are from Arba Minch University, College of Business and Economics, Management Department.
• The document was created in Arbaminch, Ethiopia in March 2023.

The Nature and Scope of Management

• Due to human limitation, cooperation and working in groups started, leading to the need for management functions: planning, organizing, staffing, leading/directing, and controlling.
• Ancient societies demonstrated the importance of management. Management existed in the past, exists today, and will exist tomorrow.
• Management has various, mutually supportive definitions from authors and scholars, but no single, universally accepted definition.
• Management as a field of study is recent in origin Management is broad, making a single definition difficult.
• Definitions of management change due to different approaches and changing environments.
• F.W. Taylor defines management as "the art of knowing what you want to do... in the best and cheapest way.".
• H. Koontz and his co-author define management as "the process of designing and maintaining an environment in which individuals are working together in-group accomplish efficiently selected aims.".
• Terry and Franklin define management as "a distinct process consisting of activities of planning, organizing, actuating, and controlling, performed to determine and accomplish stated objectives with the use of human beings and other resources.".
• Henry Fayol states: "To manage is to forecast and plan, to organize, to command, to coordinate, and to control.".
• Mery Parker Fellott defines management as "the art of getting things done through the efforts of other people.".
• Kinard defines management as "the process of maximizing the potential of an organization's people and co-ordinating their efforts to attain predetermined goals.".
• Management involves the managerial functions of planning, organizing, staffing, leading, and controlling.
• Management coordinates both human and non-human resources for objective accomplishment.
• Management is applied to all types of organizations, profit and not-for-profit, large, medium, and small.
• Management deals with creating a comfortable internal environment, with consideration of the external environment.
• Management is a continuous process whenever there is a group endeavor.
• Management is viewed as the managerial functions a manager undertakes.
• The target of managerial processes is to achieve organizational objectives.
• Management application is universal, regardless of organization type or level.
• Any organization is established to achieve objectives, management is important for efficiently and effectively achieving pre-stated goals.
• Management involves guiding the utilization of material and human resources to ensure objectives are attained.
• Management does not signify proprietorship/ownership; managers work to attain organizational goals.
• Management is a human activity discharged by individuals, aided by instruments like computers.
• Management signifies Authority for directing, guiding, and controlling.
• Management is multidisciplinary, utilizing social sciences like sociology, psychology, and economics.

Management: Science or Art?

• Science is an organized body of knowledge with concepts, theories, and principles.
• Scientific knowledge is obtained from observation, testing, and experimentation, is universally true, and used in any country.
• Management has a systematized body of knowledge that helps decision-making rationally and objectively.
• Management is an inexact science as it deals with people/human behavior.
• Management is categorized as science because its principles are systematized, universally applicable, based on scientific inquiry, explain cause and effect, and verifiable to predict future events.
• Art involves applying know-how and skills creatively and wisely to achieve concrete results.
• Art relies on subjective judgement, personal feelings, and intuition.
• Art helps create new ideas and effective methods of managing.
• Management practices require skills and practical know-how of principles to perform a job efficiently.
• Effective management depends on personal skills, knowledge, and proficiency to achieve maximum results at minimum cost.
• Management follows a result-oriented course of action and calls for creative ability to introduce new ideas and techniques.
• Continuous practice of management theories improves performance.

Management as a Profession

• A profession requires specialized knowledge and technical proficiency, formal training/standardized education, social responsibility and a code of ethics.
• Rational and scientific decision making requires managers to specialize in a systematic body of management.
• Managing specific fields like production, marketing, finance, human resources requires technical proficiency.
• A certain field of study to be a profession requires formal training and education.
• Universities, colleges, and educational institutions specialize in formal teaching of management concepts, theories, and principles.
• An organization makes surplus or provides services to society and is responsible for leading their members.
• Businesses must serve society, adhere to moral, social and legal conduct because their existence relies on the service they provide.
• A profession requires strict standards, rules and regulations that ensures honesty, integrity, and professional morality among it's members.

Types of Managers

• Managers are classified by level in the organization and by the range of organizational activities they are responsible for.
• First-line managers are responsible for the work of operating employees and do not supervise other managers. Includes office managers, superintendents, foreman, chief clerks, and supervisors.
• First-level management is involved in planning day-to-day work, assigning jobs, monitoring worker performance, sending reports to superiors, and maintaining close personal contacts with workers.
• Middle-level managers direct lower-level managers and sometimes supervise operating employees.
• Typical titles of middle-level management include department heads, deputy department heads, branch managers, and work managers.
• Top managers are a comparatively small group of executives responsible for overall organizational management.
• Top managers establish operating policies and guides the organization's interactions with the environment. Typical titles include CEO, president, and senior vice president.
• Functional managers are responsible for only one organizational activity, such as production, marketing, sales, or finance.
• General managers oversee a complex unit like a company or subsidiary such as its production, marketing, sales, and finance, or an independent operating division.

Skills of Management

• Managerial skills are abilities that enable managers to perform their duties and responsibilities expertly.
• There are three types of basic managerial skills: Technical, Human and Conceptual.
• Technical skills are the abilities necessary to carry out a specific task involving specialized knowledge and expertise such as
  • Writing computer programs
  • Completing accounting statements
  • Analyzing marketing statistics
  • Drafting a building design
• Human skills are the ability to work with, motivate, and direct individuals or groups including subordinates, peers, or superiors, and to resolve conflict.
  • Human skills include effective communication, creating a positive attitude, developing cooperation among group members, and motivating subordinates.
• Conceptual skills is the ability to see the big picture of the organization from a broad perspective, recognize interrelationships, and make decisions in the organization's best interests.
• Conceptual skills are most important in strategic (long range) planning, and therefore, to top level managers/executives.

Managerial Roles

• Managerial functions are general administrative duties carried out in all organizations.
• Managerial roles are specific behavior categories.
• Roles are the means, while functions are the ends of the manager's job.
• Henry Mintzberg identified ten different but interrelated sets of behaviors, which are divided into three categories.
• Interpersonal roles are enacted when managers engage in interpersonal relationships
  • Figurehead role involves ceremonial and symbolic duties signing documents, receiving visitors,
  • Leader role involves hiring, training, motivating, and disciplining employees.
  • Liaison role involves contacting people outside the group serving as a communication link.
• Informational roles involve receiving and collecting information from organizations and institutions.
  • Monitor/Nerve Center Role involves managers keeping informed about what is happening internal/external to organization.
  • Disseminator role involves managers sharing information with organization members.
  • Spokesperson role involves managers transmitting selected information to outsiders like government agencies, customers, and trade organizations.
• Decisional roles relates to interpersonal and informational roles and involves decision-making.
  • Entrepreneur role involves managers initiating and overseeing new projects.
  • Disturbance handler role involves managers taking corrective action in non-routine situations, resolving conflicts, and managing unexpected events.
  • Resource allocator role involves managers deciding who gets what resources.
  • Negotiator role involves managers participating in session with other parties to represent their organizations best interests.

Functions of Management

• Regardless of type, size and objective of business, all have planning, organizing, staffing, leading/directing, and controlling.
• Planning is a decision-making process that involves selecting missions and objectives and best course of action.
  • Planning determines what to do, how, when, why and by whom.
  • The first step in planning is determination of the organizational objective.
  • Top-level managers set plans for the company, while lower-level managers prepare plans for their area.
  • Planning is integrates future activities, requiring the ability to foresee, visualize, and look ahead. Organizing is a managerial activity that involves establishing a structure of roles for people to fill in an organization which involves various aspects.
  • Identification of activities to achieve the predetermined objective.
  • Grouping these activities into working units.
  • Assigning responsibility to each unit with corresponding authority.
  • The creation of intentional organizational relationship so as to enhance coordination.
• Staffing is the process of filling and keeping filled the positions in the organization structure.
  • This is done by identifying work force needs, inventorying people available, recruiting, selecting, placing, promoting, compensating, training and developing candidates and job holders.
• Leading is influencing, motivating, and directing people towards organizational and group goals.
  • Effective leaders understand individual and group behavior, motivation techniques, and leadership styles.
  • Leading involves communication, managing personal conflict, helping employees, and sometimes discipline.
  • The elements of leading: Motivation, Leadership styles, and Communication.
• Controlling is used to measure and correct activities of subordinates to ensure events conform to plans.
  • The controlling function involves establishing performance standards, measuring actual performance against standards and taking corrective actions.

Universality of Management

• Management is universal as organizational applications are the same across organization types.
• The universality of management applies to all levels of management within an organization.
• Managers can be transferred between organizations.

The Environment of Management

• Stephan defines Environment as the institutions or forces outside the organization that affect it's performance.
• In management, the term environment includes influences/forces inside or outside the organization.
• The management environment is divided into two key types, Internal and External.

The Internal Environment

• Includes all activities performed within the organization.
• Internal factors are controlled by management with in the organization.
• Internal factors to be considered are activities of different divisions and departments, organizations' physical, financial and human resources, along with value systems of the controlling managers.

The External Environment

• Organizations exchange resources with the environments and depend on it for survival.
• External forces include:
  • Political and Legal: Consists of the political environment and the legal one.
    • Government affects organizations; these bodies either promote/constrain depending on political direction.
    • Governments promote business by subsidizing industries, reducing taxes, supporting research, and increasing capital availability.
    • Laws are social with managers expected to know all legal restrictions and requirements to their actions in the decision making process.
  • Economic: Availability of resource inputs, trends in GNP, disposable income, consumer power, price levels, government tax and fiscal policies, nature of competition, demands of goods and services.
  • Social: National traditions, values, customs, consumer psychology, attitudes, desires, expectations, intelligence/education and beliefs.
    • Varying values make it difficult for managers to design environements conducive to performance and satisfaction since attitudes, beliefs, and values vary..
  • Technological: Breakthroughs in products, services, procedures, as well as reflection on way of doing things
    • Technology has advantages such as productivity, standards, leisure time.
    • Technology has disadvantages such as pollution, unemployment, and managers must weigh/address impact of technology.
  • Ethical: Discipline dealing with what is good/bad with moral duty and obligation.
    • Consists of sets of practiced standards of personal conduct.
    • Ethics is beyond legal responsibilities, management should see good/bad as it depends on custom, religion, belief,and intuition.

The Development of Management Thought

• The development of management thought seeks to give general understanding for all types of concepts and the theorists behind them.

Early Influences

• Management functions have existed for thousands of years since people began to work in groups/organized endeavor, to achieve organizational goals.
• Principles from back then can be shown in the ancient literature in Egyptian and Chinese writings.
• Religion played a huge part in ancient writings.

Classical Management Theory Assumptions

• People are most responsive to economic incentives, doing whatever it takes to achieve economic gain.
• Classical management consists of
  • The scientific management of Fredric W. Taylor, concerned with productivity and management of work/workers.
  • Classical administrative management, concerned w/administration as well as discussing universally applicable principles of management and nature/management of the total organization.
    • Identified with the Frenchman, Henry Fayol.
  • Bureaucratic Theory
    • Concerned w/Bureaucratic organization and identifying the German author Max Weber.
    • Author Max Weber believed in one best organizational structure: a highly formal and goal oriented-structure in which human emotions, personal bias and charismatic leadership are subordinated to rational thinking and impersonal decision making.

Limitations of Scientific Management Theory and Modern Adoption

• Many argue that the proponents of the theory believed that workers are primarily motivated by financial incentives.
• Workers have social needs that working conditions and job satisfaction are equally important.
• Repetitive jobs breed boredom and workers may become alienated

Modern Efficiency Focus

• Scientific theory was aimed to improve efficiency/productivity at the worker level with little guidance at the higher level of the supervisory.
• Recognizing operations must be efficient at all levels, theorists began to focus on the importance of focusing operations at the organizational level.

Element of Scientific Theory

• Element of this type of theory focused on efficiency. Efficiency, order, fairness, and stability are all emphasized.
• In order to make this work one must have the ability to provide managers with necessary building blocks.
• The problem w/this type of thinking focused on knowing when to apply these blocks & how to adopt them appropriately.

Features of Weber's Ideal Bureaucracy

• Division of Labor: jobs are broken down into well defined tasks
• Authority Hierarchy: offices/positions are organized in a way to ascend authority levels in an organization
• Formal Selection/Technical Competence: organizational members to be selected based on technical qualifications for training/education
• Formal Rules & Regulations: organizations need to ensure uniformity to regulate action of employee.
• Impersonality: organizations apply rules/controls uniformly, avoiding any potential issues.
• Career Orientation/Separation from Ownership: managers are professional officials rather than owners of unit.

Limitations to Early Approaches

• Many of the people writing theories of this time were based on experiences as a manager, so there was an over reliance on experience.
• There had been untested assumptions, so the organizational approach would fail due to a failure to see the informal sides.
• The human side of the organization was reduced in order to maximize profits at the cost of the organizational operation.

Planning: Nature and Purpose

• Planning is an activity performed before any action is taken to improve perfromance.
• It is the primary function of management.
• Planning involves deciding on the best course of action from alternatives to achieve the company's objectives expeditiously and economically.

Planning

• Planning has as many definitions ad management because of the various authors who cite the importance of it.
• The supportive definitions are commonly: to determine objectives and the process by which managers achieve, assess the future, cope with change by formulation.
• The general implication is deciding in advance when to things, how, and the objectives.
• The clear objectives relate to selecting bases of past expirence, circumstances, then select to realize the planning objective.

Nature/Characteristics of Planning

• Primacy of the planning process has to do with setting goals, which requires to establish objectives with all managerial functions.
• The managerial functions are inseparable and planning is the base.
• Pervasive planning is the function of managers and depends on different factors such as significance and time.
• Planning occurs in organizations of any scale.
• Managerial planning seeks to achieve operations structure centered on objectives.
• Implies a purpose and is directed toward efficiency of that goal.

Dynamic Aspects

• a manager plans on assumpitions, and he has to go back and revise and modify his plans.
• Planning isn't only the primary function, but is a function of continuity because it is always dynamic.
• Business plan to be objectivive, fufurity, flexibililty, comprehensible, and simple.

Forecasting and it's Methods

• Effective planning requires the attemtp to forecast the outcomes and how managers assess and evaluate for external and internal situations.
• To measure qualitative factors there are judgment based forecasting and also quantitaive methods to gauge relationships.
• Accurate conclusions are derived if up to date, accurate, relevant, and applicable.

Decision Making Factors

• Decision Time for a course of action relies on being able to choosing based on some level of criteria.
• Because manager are confronted w/opportunities, they must choose which to evaluate for said objective.
• Managers tend to be in need for programmed or non programmed factors to solve.
  • Programmed factors will be the tasks managers face time and and time again - can solve based on previous situations.
  • Non-Programmed requires the solving of non-recurring problems or managerial data to draw.

8 Steps to Ascertain Making Decisions

• Ascribe reason for problems then set criteria needs for decisions.
• Assign weight to what needs criteria.
• Develop how to deal w/ stated problems, evaluate how to solve them and pick out the solution.
• Enact decision then follow up to compare the expected outcome versus decided process.
• Make modifications if appropriate.

Duration or Time dimension

• important component of a plan which specifies for a certain action or period.
• Ranges from short range plans over a year to intermeidate range plans for 5 years to long range plans for longer than 5 years.
• Strategic plans need to reflect long-term and to reflect the direction of the firm and be comprehensive in scope.
• They are greatly linked to the market conditions needs, strength and other components.
• A well rounded and functioning business can exist for the production of goods, providing future benefits.

Objective Measurement

• Objectives can be accepted for many and with the organization being in better condition, it means easier objectives.
• An expert stated that objective should be established in at least 8 area by focusing on "determining what objectives should we needed".

Hierchy of Objectives

• Strategic objectives - describing future of the organization w/matters of profit, managerial performance of behavior, so strategic objectives are up to top level people.
• Tactical objectives are middle level that define outcome with relation and overall performance.
• Operational objectives specifies measurable and results to be made.

Aspects of Meeting Objective

• the time that has to be committed is for the most part time-frame for success so a successful program must consider reward.
• The process of setting needs must be incorporating of external forces, creating goals for internal components.

Hierarchy of Action

• The priority of action to be applied means if more can achieved or not to accomplish various different parts.
• A few different types of factors which can determine what those are.
  • Profitability and market.
  • The physical aspect that has to be considered or managed to determine how its' going. Measure for these considerations can make it easer to have set the measure. Those can be innovation which make the processes easy to attain.

Setting Objectives

• It must involve all level that allow the ability to reach goals and can be a process where superior subordinate can jointly establish objectives.
• Some goals need to be realistic.
• Actions need to be developed.
• Revies need to be given.
• Success can become part of the design with the goal of each company.
• This method should be linked w/ individual drive.

Staffing

• the process of fufilling in line of the organization through workforce and through other forms.
• There are 8 steps of
  • Human Resource planning -Recruitment
  • Selection
  • Training
  • Compensation.
  • Other methods.

Human Force Planning

• The process of determining to use what amount of resources can be used through current/future needs.
• These help one determine if their is shortages and how those various strategies that is used for management.
• Forecasting is key w/internal and external environments taken to be monitored.
• The ability to assess both of those components is important for these roles.

Recruitiing

• Recruiting must first start w/written statement of content to determine if candidate will function effectively.
• Look in house of outside for the best candidate
  • Internal will be cheaper.
  • External will have a pool of talent which can be done by referral/employment or in school to attain.

Directing/Leading: Definition and Components

• Leading can be used to motivate people to work and improve.
• Directing happens when the actual work starts which managers can use various methods w/the elements being motivation,
• To motivate is too stimulate drive, understand prompt behavior, and the rewards associated with said action.

Two Types of Rewards

a. instrinct, for personal feelings of great action b. given from pay that is given from another to feel appreciated

Motivation Theory

• It proposes how motivates all needs that have hierarchy.
• the needs can range from more basic need of having air and water to the best need of self acualization.
• This all works from 1 needing needs all can infulence, how high is the complexity and being able to what needs is felt.

Thoery X and Thoery Y

• The X theory is a mangement that deals with negagtive, and believes the employees dislikes the work - as so managers see the action,
• The Y the theory provides all with some level to complete tasks , it works best when things are going right

Leadership. Components. Styles

• the influecneing of individuals to achieve organization
• effective leader must adequately has how and understand people

Actions

• it requires influencing of people so they can have access for all the actions
• to complete objectives w/ some degree in power
• requires that people with encouragement of actions

Leadership Style

• The styles can be consistent when someone dominates or a is well mannerly.
• Authoratative and Democratic both must be consistent.
• Styles are meant for favor based on action.

Communication

• Communicate the goal through which to achieve through information sender and recievers.
• Communication with the purpose should come to managers with clear messages in mind to use
• Encoding actions :* transfer of message, what the medium is and how much noise it should contain (factors with can disturb or alter)
• Feedback*: comes last to send out or to transfer/repeat to achieve.
• It runs in both a formal( written with action and in proper structure) or informal ( grapevine based) approach.

The Controlling Process

• Planning comes first to give a way of making a decision so as to act w/ proper measure . This action is what gets to be controlled and measured.
  • Measure with the right standard

• the ability to work in tangent or to at least find the means to bring closer the correct future outcome can prevent deviation.
  

Types of Controlling

• Controlling can come before, while, or during an event and has with it's ability to be managed. .- To ensure what is in line procedures and training and to follow what has occured if those process are managed.