Understanding Management Principles

• Management principles are key to coordinating efforts to achieve specific goals in organizations
• Organizations are defined as groups of people working together in a coordinated way to achieve specific goals.
• A goal is a desired future condition that the organization seeks to achieve.
• Management involves using organizational resources to achieve goals through planning, organizing, leading, and controlling.
• Resources include people, machinery, raw materials, information, skills, and financial capital.
• Managers supervise the use of resources to meet an organization's goals.

Achieving high performance

• Organizations must provide goods or services desired by customers.
• Examples of organizations providing goods or services desired by customers include Campbell Soup providing quality food products, healthcare administrators providing healing, and McDonald's providing burgers, fries, and shakes.

Organizational Performance

• Organizational performance measures how efficiently and effectively managers use resources to satisfy customers and achieve goals.
• Efficiency measures how well resources are used to achieve a goal; managers minimize resource input to achieve goals.
• Effectiveness measures the appropriateness of chosen goals and the degree to which they're achieved; organizations are more effective when managers choose the correct goals and achieve them.

Managerial Functions

• Henri Fayol first described the four managerial functions while CEO of a large mining company in the late 1800s.
• Managers at all levels in for-profit and non-profit organizations must perform the functions of planning, organizing, leading, and controlling.

Four Functions of Management

• Planning involves choosing goals.
• Organizing involves working together.
• Leading involves coordinating.
• Controlling involves monitoring and measuring.

Planning Function

• Planning determines how effective and efficient the organization is, determining the organization's strategy.
• Planning is used to identify and select appropriate goals and courses of action for an organization
• Good planning involves asking:
  • Which goals should be pursued?
  • How should the goal be attained?
  • How should resources be allocated?

Organizing Function

• Organizing involves creating a structure of working relationships between organizational members, allowing them to work together to achieve goals,
• Managers group people into departments based on the tasks performed and also lay out authority and responsibility for members.
• An organizational structure is the result of organizing and coordinates/motivates employees to work together to achieve goals.

Leading Function

• Managers determine direction, state a clear vision for employees to follow, and help employees understand their role in attaining goals.
• Leadership involves a manager using power, influence, vision, persuasion, and communication skills.
• A high level of motivation and commitment from employees to the organization is the outcome of the leading function.

Controlling Function

• Managers evaluate how well the organization is achieving its goals and take corrective action to improve performance.
• Managers monitor individuals, departments, and the overall organization to determine if desired performance has been reached.
• Action will be taken to increase performance as required.
• The outcome is the accurate measurement of performance and regulation of efficiency and effectiveness.

Management Levels

• Organizations often have three levels of managers.
• First-line Managers are responsible for day-to-day operations, supervising people performing activities to make goods or services.
• Middle Managers supervise first-line managers and find the best way to use departmental resources to achieve goals.
• Top Managers are responsible for the performance of all departments, have cross-departmental responsibility, establish organizational goals, and monitor middle managers.

The levels of management

• The levels of management from top to bottom include;
  • Top Managers
  • Middle managers
  • First line managers
  • Non-management

Restructuring

• Top Management seeks methods to restructure organizations and save costs.
• Downsizing eliminates jobs at all management levels.
  • Downsizing can lead to higher efficiency.
  • Downsizing often results in low morale and customer complaints about service.

Management Trends

• Empowerment expands the tasks and responsibilities of workers; supervisors may be empowered to make resource allocation decisions.
• Self-managed teams give a group of employees responsibility for supervising their own actions.
  • The team can monitor its members and the quality of the work performed.

Managerial Roles

• Mintzberg described a role as a set of specific tasks a person performs because of their position.
• These roles are directed both inside and outside the organization.
• Three broad role categories exist: interpersonal, informational, and decisional.

Interpersonal Roles

• Interpersonal roles are assumed by managers to coordinate and interact with employees and provide direction to the organization.
• Figurehead role symbolizes the organization and what it is trying to achieve.
• Leader roles involve training, counseling, mentoring, and encouraging high employee performance.
• The liaison role links and coordinates people inside and outside the organization to help achieve goals.

Informational Roles

• Informational roles tasks are needed to obtain and transmit information for management of the organization.
• The monitor role analyzes information from both the internal and external environment.
• The disseminator role manager transmits information to influence employee attitudes and behavior.
• The spokesperson role uses information to positively influence how people inside and outside the organization respond.

Decisional Roles

• Decisional roles relate to the methods managers use to plan strategy and utilize resources to achieve goals.
• The entrepreneur role is to decide upon new projects or programs to initiate and invest.
• The disturbance handler role is to assume responsibility for handling an unexpected event or crisis.
• The resource allocator role assigns resources between functions and divisions and sets budgets of lower managers.
• The negotiator role seeks to negotiate solutions between other managers, unions, customers, or shareholders.

Managerial Skills

• Managers require three skill sets to perform effectively:
  • Conceptual skills include the ability to analyze, diagnose a situation, and find cause and effect.
  • Human skills include the ability to understand, alter, lead, and control people's behavior.
  • Technical skills include the job-specific knowledge required to perform a task (e.g., marketing, accounting, manufacturing).
• All three skills are enhanced through formal training, reading, and practice.

Management Challenges

• There is an increasing number of global organizations.
• Building competitive advantage through superior efficiency, quality, innovation, and responsiveness.
• Increasing performance while remaining ethical.
• Managing an increasingly diverse workforce.
• Using new technologies.