Understanding Management: Principles and Levels

Management

• Management involves identifying the mission, objectives, procedures, rules, and manipulation of human capital within an enterprise.
• It contributes to the overall success of the enterprise.
• It is an essential function in improving one's life and relationships, not solely for enterprise purposes.
• Management is used everywhere and has a wide range of applications.

The Importance of Management

• No enterprise can survive without it, as unmanaged companies experiences confusion.
• Guidance and controls are provided for manpower activities to maximize the utilization of company's resources.
• Stability is facilitated by changing and modifying resources.
• Management aids personality development, leading to increased efficiency and productivity.

Levels of Management

• Low-level managers, also called supervisors.
• Middle-level managers manage low-level managers with titles like department head, project leader, plant manager, or division manager.
• Top-level managers make organization-wide decisions and establish the plans and goals that affect the entire organization, such as executive vice president, president, managing director, chief operating officer, chief executive officer, or board chairman.

Four General Management Theories

• Frederick Taylor: Theory of Scientific Management
• Henri Fayol: Administrative Management Theory
• Max Weber: Bureaucratic Theory of Management
• Elton Mayo: Behavioral Theory of Management (Hawthorne effect)

Frederick Winslow Taylor's Theory of Scientific Management

• Focused on improving economic efficiency, especially labor productivity.
• People are motivated to work because of money.
• Workers should get a fair day's pay for a fair day's work, and that pay should be linked to the amount produced.
• "Differential piece rate plan": If efficiency is greater than the standard, workers should be paid 120% of the normal piece rate, but if efficiency is less than the standard, they should be paid 80% of the normal piece rate.

Four Principles of Scientific Management

• Conduct time and motion studies to find new ways to perform jobs.
• Invest in teaching, training, and developing people, codifying new methods into rules.
• Harmonize the interest of employer and employees to secure mutual understanding relations between them.
• Establish fair levels of performance and pay a premium for higher performance.

Henri Fayol’s Administrative Management Theory

• Henri Fayol was a French mining engineer, mining executive, economist and entrepreneur.
• He is also known as "The Father of Management".
• Henri Fayol created the 14 principles of management.

14 Principles of Management (Henri Fayol)

• Division of work promotes specialization, enhances efficiency, and optimizes resource utilization.
• Discipline emphasizes obedience, respect for authority, and adherence to rules.
• Authority and responsibility includes a clear delegation of authority, effective communication channels, training and development, and performance evaluation.
• Unity of Command helps each employee receive instructions from only one supervisor at a time.
• Unity of Direction is the need for a single head and cohesive planning to align activities towards common objectives, requiring clear communication of organizational goals, fostering cross-functional collaboration, and promoting leadership and accountability.
• Subordination of Individual Interest to General Interest prioritizes the goals of the organization over individual interests.
• Remuneration of personnel promotes the importance of providing fair and reasonable compensation to employees based on their contribution and effort.
• Centralization involves concentrating decision-making power at the top, promoting efficiency but limiting autonomy and decentralization distributes decision-making authority, enhancing agility but requiring effective coordination.
• Scalar Chain establishes an unbroken line of authority from the highest levels of management on down.
• Order emphasizes the importance of maintaining everything in the right place within an organization.
• Equity emphasizes fair treatment, respect, and equal opportunities for all employees, regardless of their characteristics.
• Stability of the Tenure is providing employees with job security and continuity which creates a positive work environment that values and retains experienced employees, resulting in increased productivity and long-term success.
• Initiative empowers employees to take independent action and contribute their ideas to achieve organizational goals.
• Esprit De Corps involves creating a supportive work environment, facilitating collaboration, and celebrating team achievements, all of which contribute to a strong sense of unity and a positive work atmosphere.

Max Weber’s Bureaucratic Theory of Management

• Max Weber was a German sociologist, historian, jurist, and political economist.
• He believed that power educes obedience through force or the threat of force which includes individuals to adhere to regulations.

Weber's Three Types of Authority in Organization

• Traditional Authority
• Charismatic Authority
• Bureaucratic Power or Legal-Rational Authority

Traditional Authority

• Power is legitimized by respect for long-established cultural patterns; comes from unwritten rules that are maintained over time.
• It is based on some dominant power.
• Leaders in traditional authority are people who depend on an established order or tradition.
• There is a lack of moral regularity.
• Examples are hereditary monarchies, Roman Catholic Church, Tibetan Buddhism, etc.

Charismatic Authority

• Power is legitimized by exceptional, unusual, and extraordinary personal abilities which inspire devotion and obedience.
• Charismatic leaders are seen as people who are inspired by God or by lofty unsocial principles.
• They hold a mission to unite people amidst differences and adversities to attain an insurmountable goal.
• There are no rules or traditions to guide or monitor conduct; as it is based on the unique characteristics of an individual.
• Examples include: leaders like Jesus Christ, Mahatma Gandhi, Napoleon, Hitler, Mao, Julius Caesar, Alexander the Great, and Winston Churchill.

Bureaucratic Power or Legal-Rational Authority

• Power is legitimized by legally enacted rules and regulations such as governments.
• It is grounded and clearly defined by laws with explicit procedures that define the obligations and rights.
• Leaders with this type of style may not be able to completely address the concerns or problems of everyone.
• Examples include Elected Governments, Police, Courts, etc.

Elton Mayo's Behavioral Theory of Management (Hawthorne Effect)

• George Elton Mayo was an Australian-born psychologist, industrial researcher, and organizational theorist.
• Mayo's experiments showed that the increase in worker productivity was produced by the psychological stimulus of being singled out, involved, and made to feel important.
• The effect suggests that workers tend to change their behavior at work in response to the attention they receive from their supervisor.
• He showed the existence of informal employee attitudes, the value of a sympathetic and understanding supervisor, and the need to treat people as people and not simply as human capital.

Concepts of Management

• Include planning, organizing, commanding, staffing and controlling.

Planning

• Identifying goals (where to go, what to do, what the company want to achieve)
• Ideal plans and goals must combine: Purposefulness, continuity, flexibility, and accuracy.

Organizing

• Follows the planning and reflects how the organization tries to accomplish the plan.
• Includes assigning tasks, grouping tasks into departments, delegating authority, and allocating resources across the organization.

Commanding

• Concerned with providing clear guidance, instructions and leadership to teams.
• Being aware of all the details of the contracts concluded between the company and the employees, Giving a good personal example, Try to get to know your subordinates better, Fighting incompetence, Holding meetings with leading associates to give directions for action and emphasize the main priorities of the company

Staffing

• Coordinating and Motivating aims to ensure optimal harmony between the various activities of the organization and motivates and influence the employees to achieve organizational goals.

Controlling

• Evaluating or monitoring the employees' activities, determining whether the organization is moving toward its goals, and making corrections as necessary.

Levels of Management

• Top-level management: Planning and coordinating with stakeholders and general public.
• Middle-level management: Directional and managerial function and implementation of policies and plans, and Top-level management.
• Supervisor or Operative-level: Distributing jobs and responsibilities to a variety of workers ,being responsible for the quality and amount of products

Important Management Skills

• Management
• Communication
• Technical
• Conceptual
• Leadership
• Problem Solving
• Time Management
• Directing and Oversight
• Domain Knowledge
• Diagnostic, Analytical and Decision-Making

Management Skills

• Concepts or abilities that an administrator should possess to fulfill specific tasks in an organization, devloped by practical experience as a manager and/or from learning. Focus on your team (manage your people with emotional intelligence), knowing about your team members on both the person and professional level, and adapting your people's management skills and its best to give feedback.

Communication skills

• Effective leaders must have good communication skills with verbal, written and listening skills
• Being crucial for the leader to communicate to bridge between frontline staff and the management
• Using an open and positive attitude to create a healthy and work-friendly environment for a happy and motivated employee

Technical Skills

• Necessary for a manager in handling methods, processes properly
• It is essential for a manager to know which technical skill should be employed in a particular work.

Conceptual Skills

• Analyzing complex situations requires the recognition inter-relationship among different functions of the business and external force and to guide effectively the organizational efforts.
• Includes decision-making skills and organizational skills

Leadership Skills

• Effective leaders used to "lead by example as much as by "direction”, motivating team members to increase productivity, accepting contributions and giving credit where credit is due

Problem Solving Skills

• Tackle every situation and solve every problem that can come upon a typical work day by identifying the problem, finding the best way to manage the problem that separates him from the rest of the team and gives subordinates confidence in his managerial skills.

Time Management Skills

• Managers may face multiple demands or orders during their work time, and it fills their days with a lot of interruptions, so managers should be able to handle their time, focusing on the most important task first, not procrastinating and delegate routine tasks, prioritizing tasks, fixing a specific time for attending phone calls and answer e-mails, and eliminating unnecessary paper work.

Directing and Oversight

• Includes taking charge and telling people what to do, making important decisions, giving orders to team members, reviewing business models, checking projects are on time and that the project is in budget.

Domain Knowledge

• A manger should know the process the he is managing and the type of tasks that the members are performing, and how they are working on them.

Diagnostic, Analytical and Decision-Making Skills

• Diagnostic and analytical skills help a manager to identify the best possible approaches to the situation and visualize the outcomes of these approaches.