Management - Lecture Notes PDF

Chapter 1 MANAGING IN TODAY’S WORLD Learning Outcomes: 1. Define management from multiple perspectives. 2. Understand the meaning of management. 3. Explain the areas of management. 4. Understand the functions of management. 5. Discuss the types and levels of m...

Chapter 1 MANAGING IN TODAY’S WORLD Learning Outcomes: 1. Define management from multiple perspectives. 2. Understand the meaning of management. 3. Explain the areas of management. 4. Understand the functions of management. 5. Discuss the types and levels of managers in organizations. 6. Describe the roles of managers in organization. 7. Discuss the skills required by managers in organizations. Definition of Management Productivity-Oriented Definitions Productivity-or efficiency-oriented definitions of management emphasize that management is the art of achieving maximum productivity in the best and cheapest way. These definitions ignore the “human” aspect of management, and thus invite criticism by many management practitioners and academicians. A prime example of this definition is that of F.W. Taylor, who put in this way: “Management is the art of knowing what you want to do and then seeing that it is done in the vest and the cheapest manner.”1 People-Oriented Definitions Students of management routinely address the “human” aspect of management, where management is all about working in and through human relationships. Consider these quotes: Lawrence A. Appley: “Management is the development of people and not the direction of things.”2 Stoner, Freeman and Gilbert: “Management is a specialty in dealing with matters of time and human relationships as they arise in organizations.” 3 Goal-Oriented Definitions These definitions focus on management as an activity centered on completing goals with and through other people. Notice, as with the following two quotes, the emphasis on action rather than thoughtfulness or philosophy or intent. Harold Koontz: “Management is the art of getting things done through others and with formally organized groups.” 4Th Mary P. Follet: “Management is the art of getting things done through people.” 5 1 Process-Oriented Definitions Throughout the literature and classroom, process-based definitions are the most widely accepted. They lay out the functions that effective managers perform in their jobs. E. Peterson and E.G. Plowman: “Management may be defined as the process by means of which the purpose and objectives of a particular human group are determined, clarified and effectuated.” 6 George R. Terry: “Management is a distinct process consisting of planning, organizing, actuating and controlling; utilizing in each both science and art, and followed in order to accomplish pre-determined objectives.”7 Henri Fayol: “Management is to forecast, to plan, to organize, to command, to coordinate and control activities of others.” 8 Leadership-Oriented Definitions Many authors think of management as a function of decision-making and leadership. Consider these quotes: Stanley Vance: “Management is simple the process of decision-making and control over the actions of human beings for the purpose of attaining predetermined goals.”9 Donald J. Clough: “Management is the art and science of decision making and leadership.”10 Other Definitions include these: Theo Haimann and William Scott: “Management is a social and technical process which utilizes resources, influences human action and facilitates changes in order to accomplish organizational goals.” 11 Peter Drucker: “Management is a multipurpose organ that manages a business and manages managers and manages workers and work.” 12 Mary Cushing Niles: “Good management achieves a social objective with the best use of human and material energy and time, and with satisfaction for the participants and the public.”13 So in conclusion to this opening management may be regarded as: The development of plans, procedures, and objectives; Acquiring people, materials, equipment, capital, and methods to achieve them; Leading and encouraging employees; Overseeing and evaluating their operations; and Ensuring the satisfaction of all stakeholders. 2 The Meaning of Management Just like the definitions of management, the meaning of management can vary. Individuals, groups, and organizations may interpret management differently depending on their perspectives and objectives in understanding it. Some meanings of management that are relevant to today’s business environment are: 14 A Noun When understood as a noun, management points to the personnel performing managerial tasks. These people are given a certain measure of responsibility to execute policies and authority to delegate duties within their organizations. The job of business management is supervisory and executory in nature. A Process In this sense, management refers to the scope of functions carried out by the managers. These functions generally include planning, organizing, leading and controlling. Such activities are performed to accomplish goals through and with other employees in an effective manner. This is why management is said to be the coordination and integration of functions and people performing these functions towards an established goal. A Discipline When called a discipline or subject, management is a branch of academic and practical knowledge. It refers to the concepts, theories and practices developed in this field of study for managers across all organizations. Management also represents a code of conduct for managers that guides the techniques they use to manage in the workplace. An Economic Resource Like land, labor, and capital, management is an important factor in production. Management acts as a catalyst that transforms various resource inputs such as materials and labor, into a productive entity. Thus, it is management that coordinates various factors of production and is a central productive resource. As a key economic resource, management can be made efficient through the training and development of managers. INTRODUCTION TO MANAGEMENT Areas of Management 3 Functional management and general management represent two different responsibility sets within an organization.15 General management is more common in smaller, more versatile environments, where the general manager can actively engage every facet of the business. Functional managers are most common in larger organizations with many moving parts, where different business functions are led by managers within those respective fields. Exhibits 1.1 illustrates the areas of Management General Management General management views the business as a whole. The duties and responsibilities of general management include managing day-to-day operations, formulating policies, and devising the efficient use of resources. A general manager is more commonly an executive who holds overall responsibility for an organizations, planning, organizing delegating, and decision-making functions, in order to achieve desirable profits for the organization. As such, a general manager usually supervises most or all of a company’s sales and marketing operations as well as its daily operations. Functional Management A functional manager is an executive who is responsible for an organizational unit within an organization. Functional managers have continuous responsibilities and ensure that their units’ strategies and goals are aligned with the organization’s long term vision and objectives. Generally, there are four functional areas of management: 4 production, finance, marketing and personnel. Each functional area has sub-activities that take place within it. Production This is commonly under the direction of a production manager, who is responsible for all production related activities, including the following: Purchasing, where materials are acquired at the right quantity, quality, price, and time from good suppliers. Materials management, where materials are stored and issued to other units within the organization. Research and Development, where the improvement of existing products and development of new products takes place. Marketing The marketing manager focuses on the distribution of the firm’s products to consumers, and oversees activities such as: Advertising, where information about products is disseminated to consumers. Marketing research, where data on the marketing of products and services of the organization is systematically collected and analyzed. Sales management, where products and services are moved from producers to buyers. Finance and accounting This unit manager deals with the efficient distribution of financial resources and record- keeping of the organization’s transactions, which is performed through activities such as: Financial Accounting, where record-keeping is done for all transactions related to the firm. Management Accounting, where financial records are analyzed and interpreted to guide management decisions. Costing, where costs are recorded, classified, and analyzed for cost control. Investment Management, where financial resources are invested in several ways to maximize organization returns. Taxation, where the direct and indirect taxes of the organization are handled. 5 Personnel Managers in this unit handled matters related to human resources through the following activities: Recruitment, where the attraction, recruitment, and selection of employees is conducted. Training and Development, where employees undergo various forms of training to increase their skills and efficiency. Wage and Salary Administration, where activities related to salaries, job evaluations, incentives, benefits, and promotions are performed. Industrial Relations, where good employee relations are maintained. Managers for Profit, Non-Profit, and Mutual Benefit Organizations An organization may be classified one of three ways, based of how it was formed - for profit, non-profit, or mutual benefit. For Profit Organizations As its name suggests, for-profit organizations are formed to generate monetary revenue in exchange for goods and services. Most people think of management in terms of these for-profit organizations, where managerial goals are driven by bottom- line results. Non-Profit Organizations Managers in Non-Profit organizations are called “administrators”. Nonprofit organizations may be formed in the public or private sector with the primary purpose of providing services to their clientele without making profits. Some examples of these organizations prioritize service goals instead of financial goals, and so may behave very differently from managers in business organizations. Mutual-Benefit Organizations Mutual-benefit organizations are also known as voluntary organizations. Their key purpose is to protect their members and help members further their interests. Political parties, labor unions, and trade associations are examples of mutual-benefit organizations. Managers of such organizations often focus on their members’ needs and agendas instead of other managerial goals. Management Functions Scholar’s Thoughts While there is no single line of thought concerning the basic functions of managers, a few scholars have contributed valuable insights for students of management. First, 6 Henri Fayol noted five management functions: Forecasting and Planning; Organizing; Commanding; Coordinating; and Controlling.16 G.R. Terry has a similar classification scheme, with four managerial functions: Planning Organizing, Actuating, and Controlling.17 Koontz and O’Donnell noted that, “the most useful method of classifying managerial functions is to group them around the activities of Planning, Organizing, Staffing, Directing, and Contrlling.”18 These scholars also state that in reality it is difficult “to place all managerial activities neatly into these categories, since the functions tend to coalesce.” Finally, Brech stated that management functions include Planning, Organizing, Motivating, Coordinating, and Controlling.19 The management functions were drawn out by management expert Luther King Gullick. Who described the following functions under the catchphrase ‘PODSCORB’: Planning, Organizing, Directing, Staffing, Coordinating, Reporting, and Budgeting.20 Another view was offered by Louis Allen’s P-O-L-C model, which explains the functions of management as: Planning, Organizing, Leading, and Controlling.21 In addition to these functions of management, Earnest Dale pointed out that Innovation and Representation - are two significant managerial functions.22 These multiple functions of management often overlap, so some functions can be combined under one key function. For instance, directing, coordinating, motivating, commanding, and communicating may be merged into a single function – leading while reporting and budgeting can be summarized as controlling. 7 Primary Management Functions Planning Consider some options about the role of planning in organizations, from a range of viewpoints. First according to Allen, “Management planning involves the development of forecasts, objectives, policies, programs, procedures, schedules and budgets.” 23 According to Haimann, “Planning is deciding in advance what is to be done. When a manager plans, he projects a course of action for the future, attempting to achieve a consistent, coordinated structure of operations aimed at the desired results.” 24 Planning requires administration in order to assess appropriate courses of action to attain the company’s goals and objectives. Good planning is necessary to ensure the efficient use of human and material resources in achieving desired goals. As such, planning entails manager’s awareness of current and future environmental conditions as well as good decision making skills. Plans are necessary in organization to provide objectives and methods to achieve them. Plans also guide the procurement of resources, the activities of employees, and the progress evaluation of operations so that they are all consistent with the chosen objectives. There are three types of planning in organizations: Strategic Planning refers to the process of analyzing the strengths, weaknesses, opportunities, and threats of an organization, and consequently creating a competitive position for the organization based on that analysis. Generally, strategic planning has a lengthy time frame of over three years and includes the overall goals of the whole business in its plans. The organization’s mission and vision guide the strategic planning process. Top management executives are usually responsible for strategic planning. Tactical Planning is mid-range planning that spans from one to three years. This planning is conducted to design specific and tangible means to achieve the strategic plan developed by top management. Therefore, tactical planning is often the responsibility of middle-level managers. Operational Planning supports the strategic and tactical plans by further specifying how they can be achieved through daily operational activities. As such, this planning has a short time frame of less than a year and involves specific action steps that employees have to perform to achieve organizational goals. Organizing According to Fayol, “To organize a business is to provide it with everything useful to its functioning.”25 And to Koontz and O’Donnell, “Organizing consists of conscious coordination of people towards a desired goal.” 26 In other words, organizing refers to the development of a rule-based structure that identifies the activities necessary to 8 achieve organizational goals, classifies and assigns these activities to a manager, and delegates authority and relationships in the organization. The organizing function is vital in realizing a firm’s objectives. After managers establish objectives and design plans to achieve them, they must then coordinate the material and human resources in the organization in order for the plans to be carried out successfully. Thus, organizing involves providing personnel, physical facilities, and capital to the organization. It also focuses on establishing relationships between employees, their jobs, and their functions. Developing a structure is a key function of organizing. A structure acts as a framework which outlines the division of tasks, the deployment of resources, and the coordination of departments. This framework assigns formal tasks to members and departments of the organization, thereby creating formal reporting relationships for effective coordination of employees. These relationships inform employees on the lines of authority, hierarchical levels, decision responsibility, and manager’s span of control. Organizing also concerns the function of job design, which is the design and delegation of individual jobs within an organization. It specifies the duties and responsibilities of each job position, and how these duties are to be carried out. Therefore, organizing is essential for efficient performance of the firm and to avoid duplication of effort, conflict among employees, delays in decisions, and insufficient attention to important activities. Leading The leading function is also known as directing. According to Terry, “Directing means moving to action and supplying simulative power to a group of persons.” 27 So while planning specifies what to do and organizing specifies how to do it. In other words, any managerial decision taken in the planning and organizing process must be converted to action through effective execution, and effective execution of a decision is realized by leadership. Under the leading function, managers continuously guide and direct their subordinates. They provide instructions, rules, and decisions to employees in performing their jobs. They also motivate, supervise, and inspire them towards better performance. The leading function encompasses these sub-functions: Communication An effective manager establishes a communication system with his subordinates to issue instructions, receive feedback, and provide guidance. Good communication allows a manager to create a sense of belonginess and commitment in his subordinates. Motivation 9  Motivation involves indoctrinating employees with unity and harmony in their purpose and relationships. Research has proven that motivation is a key factor in employee performance levels. One of the most important tasks for managers, therefore, is motivating employees so that they focus on accomplishing organizational goals. Decision-making and Supervision Managers constantly make decisions, so compliance with these decisions is necessary to assure the right actions are taken in achieving them. As such, decision making and supervision are needed to guide employees and ensure their cooperation. The goal for managers is to get maximum returns from their subordinates through proper direction and supervision. Controlling In the words of Fayol, “Control consists of verifying whether everything occurs in conformity with the plan adopted, the instructions issued, and the principles issued.” 28 Brech defined control as “The process of checking actual performance against the agreed standards or plans, with a view to ensuring adequate progress or satisfactory performance and also recording such experience gained as a contribution to possible future needs.”29 Simply put, ensuring that the objectives and plans of the organization are accomplished satisfactorily is called the “controlling” function. Through this function, the manager can make sure the firm on the right track. Managers use it as a measuring and corrective device to ensure that performance does not deviate from standards. The controlling process concerns (i) the establishment of performance standards; (ii) measurement of current performance levels; (iii) comparison of current performance against established standards; and (iv) corrective action on performance that fails to meet set standards. Performance standards usually use monetary measures such as costs and profits, but may also adopt other measures such as units of production, defective products, or customer service quality. Consequently, the measurement of performance depends on the standards used. For monetary standards, performance can bed measured using financial statements or sales reports whereas for non-monetary standards, measurements through customer satisfaction reports and production reports may be used. Managers at every level typically engage in the controlling function to some degree to ensure that their subordinates’ work activities are consistent with the organization’s objectives. Other Management Functions Staffing Staffing is a managerial function which concerns the recruitment, selection, development, promotion and compensation of personnel within an organization. The key goal of staffing is to get the right person for the right job. 10 Though it is not typically thought of as a manager’s main duty, Koontz regards staffing as an important managerial function because: i. It prioritizes the “human” element and the role of people within organizations. ii. The area of staffing encompasses a large body of academic and practical knowledge. iii. Managers often neglect to realize that staffing is their responsibility. Representation Representation involves representing one’s organization and its purpose to the public.31 As leaders of organizations, managers hold the significant responsibility of being their firms’ ambassadors to stakeholders groups such as customers, media, suppliers, and the public. In the current era of growing corporate social responsibilities, environmental awareness, and social media influence, this function is increasingly important for managers. Innovation Peter Drucker states that “Managing a business must be a creative rather than an adaptive task.”32 Managers must thus strive to innovate their firm’s products, services, ideas, or methods based on future needs in the market. The function of innovation keeps the organization and its employees up-to-date and prepared to face challenges. Managers who are not innovative tend to lull their organizations into static and irrelevant positions. Types and Levels of Managers Management can be classified into 3 levels: top level, middle/intermediate level, and lover/supervisory level as shown in Exhibit 1.3.33 11 Top Management Top Management of a typical organization consists of the chairman, president, vice president, chief executive officers, board of directors, and managing directors. These are the individuals responsible for the policies and performance of an organization. They are the highest sources of authority, and establish the main goals, strategies, operating policies, and guidelines for an organization. Essentially, their duty is to protect their organization, their stakeholders, society, and the economy through their decisions. Top management carries out all the primary functions of management – planning, organizing, directing and controlling. Compared to middle – or – lower level – level management, top management spends more of its time on the first management functions, planning and organizing, to devise appropriate strategies for the firm. Therefore, managers at this level must be acutely aware of their organization’s external and interval environment to detect long-run opportunities and threats. They are required to be future-oriented and adaptable to highly uncertain and competitive conditions. Koontz and O’Donnell offer these functions of Boards of Directors: 34 Trusteeship; Determination of objectives; 12  Selection of Chief Executives; Checking of plans and results; Approval of budgets; Securing of long-range business stability; and Distribution of earnings. Brech noted that the functions of chief executives are to link the Board and the members of the organization, and to operationalize the policies and decisions of the Board.35They also ensure that employees have a clear understanding of the organization’s policy and its key implications. Thus, the main functions of top management are: To determine the objectives, policies, and strategic plans of the organization. To provide guidance and direction for department activities, budgets, procedures, and schedules. To appoint middle level and functional area executives. To coordinate and integrate all departmental activities. To act as contact points with society and the public. To hold responsibility to the shareholders and stakeholders. Middle/Intermediate Management Middle level managers act for and with top management to achieve the objectives of the organization. The functions of middle management are: 36 To run key organizational functions for top management while top management spends more time on strategies. To ensure smooth operations of the organization. To understand the interconnectivity of all departments and ensure they operate harmoniously. To develop efficient personnel and encourage merit-based rewards. To develop capable leaders via training and development. To foster strong organizational spirit and culture. In small organization, there may be only a single level of middle management. In bigger organizations, however, middle management is often divided into upper and lower level middle management. The distinctions between these may be described as follows: Upper Middle Management This level comprises departmental and functional heads such as the production manager, personnel manager, and marketing manager. These managers are liable for the efficient performance of their respective units in line with the framework goals and objectives laid down by top management. As buffers between top management and lover level managers, they are responsible for translating executive instructions into operational actions, implementing plans, and supervising subordinate managers. At 13 this level, managers are mostly concerned with achieving short-term goals in daily operations. For that, they generally set day-to-day targets and goals to reach specific results. Lower Level Management This level of management is made up of plant managers, office managers, branch managers, and area managers. These managers regularly observe and oversee daily operations to ensure that the tasks allocated to them by functional managers are performed accurately. As such, they issue specific and detailed instructions to their subordinates and first line managers, and also communicate issues and suggestions to upper managers. Lower Level/Supervisory/first Line Management Management at this level consist of clerical or lab supervisors, plant superintendents, or senior foremen. This is the lowest level at which employees are accountable for the work of others in the organization. The central attribute of these lower level managers is that they are the direct contact points for operative employees. As links between middle management and workers, they are responsible for fostering harmonious working relationships among these groups and acting as the voice of the workers. While lower level managers primarily work under the direction of middle management, they mainly focus on the supervision and control of the most specific and detailed organizational tasks. The specificity of their jobs also makes them experts in their area of management, as they are required to provide technical guidance and expert decisions in solving daily inconveniences and doubts of employees. The main functions of a lower level manager can therefore be summarized as the following: To plan day-to-day activities and targets within goals set by upper management. To assign specific tasks to employees. To oversee hour-to-hour results. To report on daily feedback and information. To take immediate corrective action at the activity site. To train, motivate and evaluate employees. In essence, all managers – top, middle, and lower – carry out similar managerial functions in their area of jurisdiction. However, the difference between their management functions lies in the emphasis managers at each level place on these functions. Top management focuses more on planning and organizing, while middle management is more concerned with directing and controlling. Lower level managers, too, spend more time directing workers. Nevertheless, most managers will perform all managerial functions in varying degrees in different situations. 14 Managerial Roles Mintzberg’s Managerial Roles Management is inherent in every part of an organization, yet managers plan various roles in these different parts. Henry Mintzberg stated that managers play ten managerial roles under three categories – interpersonal, informational, and decisional – as illustrated in Exhibit 1.4.37 Interpersonal Roles Interpersonal roles allow managers to keep the organization operating in harmony and cooperation. So while these three roles are often routine, they are significant and cannot be ignored. Figurehead Managers often are required to be figureheads and physically represent their business units. This is manifested in ceremonial duties such as greeting visitors, taking a client to lunch, or even attending an employee’s wedding. Leader Managers are leaders, and so must participate in motivating, inspiring, training, and even hiring employees. Lower level managers, who are in direct contact with employees, need to be particularly effective in this role to secure good job performance from their subordinates. 15  Liaison Managers need to play this role effectively, as they typically deal with people other than superiors and subordinates – such as clients, suppliers, and other managers. Informational Roles Mintzberg posits that obtaining and disseminating information is possibly the most vital role of a manager. Managers need information to make good decisions, and subordinates in an organization depend on information given by managers to perform their tasks. There are three informational roles managers play to collect and transmit information. Monitor Managers are always looking for information that can be advantageous to the organization. As monitors, managers solicit information from direct conversations with subordinates as well as indirect grapevine sources. Playing this role well allows managers to be the best informed members of their units and to make well-informed decisions. Disseminator As a disseminator, a manager has to distribute important information to his subordinates. Managers act as the source of information to employees who would otherwise be unable to access such information. Spokesperson Managers sometimes have to distribute information to parties outside their functional units or organizations, such as when they present at press releases or board meetings. Playing this role well is necessary to keep superiors and stakeholders satisfied and well-informed. Decisional Roles Managers are active decision makers, and are constantly acting upon external and internal changes in the organization by playing these four decisional roles. Entrepreneur Managers often attempt to improve their units by initiating changes. This role enables businesses to adapt to environment changes and threats. Disturbance Handlers Managers are required to react to sudden situations such as strikes, grievances, and shortages, and so must play this role well by responding quickly and efficiently. 16  Resource Allocators As resource allocators, managers have the responsibility to allocate physical, financial, and human resources through their decisions. Negotiators Managers play the role of mediators in internal conflicts and must make fair and just decisions in this role. They also negotiate across functional units and with other organizations for the benefit of their own unit. A manager’s role is rarely static; it is always changing with the situation and the environment. At any given moment, a manager may play some of these managerial roles to varying degrees. Management Skills Managers need certain skills to be effective at their jobs. However, with the broad range of skills present in the business world, it is not easy to determine which of these make a good manager. As such, several scholars have attempted to define specific skills unique to manager. Robert Katz’s three managerial skills are the most widely accepted in this regard. He presents three basic kills that are required of all managers.38 Technical Skill This involve the skill of using tools, techniques, and methods that are specialized to a specific field. For example, surgeons, engineers, and musicians all possess technical skill in their area of expertise. Managers need technical skill to achieve specific processes and procedures in their unit, as well as to provide precise technical guidance to their subordinates. Human Skill Managers with human skill posses the ability to understand, cooperate with, and motivate their subordinates. This skill is crucial at every management level, as managers constantly lead and direct others through personal interaction. Conceptual Skill This skill refers to the mental ability to integrate and coordinate the organization’s activities and goals. Managers with this skill are able to understand the organization as a whole along with the interdependencies of its individual parts. Managers need sufficient conceptual skill to evaluate connections and relationships among various factors in order to make decisions that are advantageous to the organization. Though all three of these skills are important for managers to have, some skills are of more relevance to managers depending on the managers’ rank. At the lower level of management, technical skill is the most crucial as it involves working closely with day- 17 to-day specific tasks. The need for this skill decreases as managers move up the managerial levels. On the other hand, the significance of conceptual skill grows as managers rise through the ranks. The higher ranked a manager is, the more he will need to make big, long- term decisions that affect the entire organization. Therefore, for top management who are responsible for overall organizational performance, conceptual skill is the most important in understanding the organization as a whole. Finally, human skill is equally necessary for managers at all levels. A key part of managing is getting work done through others, so a manager cannot be effective if he cannot communicate with and influence his subordinates. In addition to Katz’s managerial skill, Davis, Hellervick and Sheard identify the following skills managers should have.39 Interpersonal Skill Similar to human skill, this refers to being able to inspire and get along with other people. Middle level managers are especially required to have this, as they interact with both top and lower level executives. Thus, they need to foster good relationships with people at all levels to build trust, teamwork, and harmony. Communication Skill Being a good communicator, both orally and in writing, is crucial to managers at all levels. Managers must have the ability to express themselves clearly, as communication issues like rambling speeches and poor grammar reduce their credibility and influence over others. Time-Management Skill This skill is also essential for managers who face multiple demands on their time. Ironically, technologies that were designed to save time, such as instant messaging and e-mail, have actually increased workloads. Successful managers, then, should know how to prioritize tasks and focus on the most important things first. They also avoid procrastination, delegate routine tasks, start and end meetings on time, and follow an agenda. Decision-Making Skill This is expected of every manager at every managerial level. However, this skill is more crucial at higher levels of management. Managers must possess the ability to make good and fast decisions, and to implement them wisely. Ultimately, the success or failure of a manager lies in the precision of his decisions. In 2014, Zenger/Folkman, a leadership development consultancy, conducted a survey on 332,860 employees for various management levels, asking specifically “What skills have the greatest impact on a leader’s success.”40 Their findings suggest that managers at every level need to have a balance of managerial skills, as opposed to 18 one or two particular skills. The most important of these competencies were found to be the managers’ ability to inspire and motivate others, their display of integrity and honesty, and their problem-solving skills. The graphical representation of their findings is as shown in Exhibit 1.5. Organizational Performance Management only exists because organizations exist. Organizations are pervasive elements of society that bring people, resources, knowledge, and even countries together in their effort to produced goods and services for consumers. Thus, their effects on individuals and the community are extensive. Well-performing organizations can improve people’s living standards, boost national economy, create new and useful knowledge, and contribute to the society overall. The significance or organizations and society, as managers are responsible for what an organization does and how well it does it. Therefore, management – from the organizational perspective – means the efficient and effective performance of an organization in achieving its goals. In other words, being a manager means ensuring that an organization utilizes its resources as well as possible in attaining its objectives. Organizational performance, as a connotation of management, involves two factors – efficiency and effectiveness Organizational effectiveness refers to how well an organization achieves its purpose of providing its customers with valuable goods or services. Organizational efficiency , on the other hand, refers to how much an organization can maximize its production of those goods and services using its available resources. Ideally, high-performance organizations are both efficient and effective, and it is the responsibility of management to achieve this. However, some managers sacrifice effectiveness in pursuit of efficiency by cutting 19 costs and reducing quality. The ultimate job of managers, then, is to attain high performance by achieving organizational goals with a balance of both efficiency and effectiveness. This way, good management is often viewed as synonymous with organizational performance. DISCUSSION QUESTIONS 1. What are the various definitions of management? In your opinion, which definition most accurately defines management? Justify your answer. 2. What does management mean, according to Theo Haimann? What does management mean to you? 3. Explain the areas of management, with examples. 4. How do managers for non-profit, mutual-benefit, and for-profit organizations differ from each other? 5. Explain the primary functions of management. In your opinion, which management function is the most vital for organizations to succeed? What other functions will managers have to perform in the future? 6. What are the levels of managers in an organization? How do managers at each level perform the management functions of planning, organizing, leading, and controlling differently? 7. Discuss Mintzberg/ managerial roles. When do managers need to perform each role? Justify your answer with examples. 8. What management skills are most important, for managers in different industries, in order to succeed? Justify your answer with examples from at least 3 industries. REFERENCE: William G. “Bill” Borges, Lee Sai Leong, Nagiah Ramasamy, Shishi Kumar Piaralal, Mohd Nazari, Koon Vui Yee, Shahrol Aman, Ang Eng Sieng, Raja Nerina, Sreenivasan Jayashree, Risidaxshinni Kumarusamy (2015). Principles of Management. SJ Learning. 20