CHAPTER 1 Introduction

Definition of an organization: A group of people working together in a structured and coordinated fashion to achieve a set of goals. 2

Organizational Resources: Human resources – Managerial talent and labor Financial resources – Capital investments to support ongoing and long-term operations Physical Assets – Raw materials; office and production facilities, and equipment Information – Usable data, information linkages 3

Definition of Management: A set of activities – planning and decision making, organizing, leading, and controlling directed at an organization’s resources – human, financial, physical, and information with the aim of achieving organizational goals in an efficient and effective manner. 4

Definition of Management: Management definitions include the following: Management is getting work done through others Management is setting goals and measuring progress toward them Management is identifying and solving problems Management is decision-making Management is planning and controlling against plans Management is organizing and leading 5

Management in Organizations 6 Inputs from the environment Human resources Financial resources Physical resources Information resources Planning and decision making Leading Organizing Controlling Goals attained Efficiently Effectively Figure 1.1

Basic Purpose of Management EFFECTIVELY: Making the right decisions and successfully implementing them EFFICIENTLY: Using resources wisely and in cost effective way. 7

Who is a Manager? Someone whose primary responsibility is to carry out the management process. Someone who plans and makes decisions, organizes, leads, and controls human, financial, physical, and information resources. 8

The Management Function/ Process: Planning and Decision Making – Setting an organization’s goals and selecting a course of action from a set of alternatives to achieve them. Organizing – Determining how activities and resources are to be grouped. 9

The Management Function/ Process: Leading – The set of processes used to get members of the organization to work together to advance the interests of the organization. Controlling – Monitoring the organization’s progress towards its goals. 10

The Management Function/ Process: 11 Organizing Determining how best to group activities and resources Controlling Monitoring and correcting ongoing activities to facilitate goal attainment Planning and Decision Making Setting the organiza- tion’s goals and deciding how best to achieve them Leading Motivating members of the organization to work in the best interests of the organization Figure 1.2

12 Figure 1.3: Kinds of Managers by Level and Area Copyright © Houghton Mifflin Company. All rights reserved

13 workers Top management Middle Management Supervisory management Chief executive Senior executives or division heads Superintendents General foremen First-line supervisors department

Kinds of Managers by Level Top Managers – The relatively small group of executives who manage the overall organization. They create the organization’s goals, overall strategy, and operating policies. 14

Kinds of Managers by Level Middle Managers – Largest group of managers in organizations who are primarily responsible for implementing the policies and plans of top managers. They also supervise and coordinate the activities of lower level managers. First-Line Managers – Managers who supervise and coordinate the activities of operating employees. 15

Kinds of Managers by Area Marketing Managers – Work in areas related to getting consumers and clients to buy the organization’s products or services—new product development, promotion, and distribution. Financial Managers – Deal primarily with an organization’s financial resources—accounting, cash management, and investments. 16

Kinds of Managers by Area Operations Managers – Concerned with creating and managing the systems that create organization’s products and services—production control, inventory, quality control, plant layout, site selection. 17

Kinds of Managers by Area Human Resource Managers – Involved in human resource planning, recruiting and selecting employees, training and development, designing compensation and benefit systems, formulating performance appraisal systems, and discharging low-performing employees. 18

Kinds of Managers by Area Administrative Managers – Generalists who are familiar with all functional areas of management and who are not associated with any particular management specialty. Other Kinds of Managers – Organizations have developed specialized managerial positions (e.g., public relations managers) directly related to the needs of the organization. 19

Managerial Skills: Fayol identified three basic skills- Technical skill: Technical skill is the ability to use the specialized Knowledge, procedures and techniques of a field of activities. Technical skill is specially important for first line managers. Human skill: Human skill is the ability to work with, understand, and motivate other people as individuals or in groups. Human skill,although important for managers at all levels, is specially needed by mid-level managers. 20

Conceptual Skill: Conceptual skill is the ability to co-ordinate and integrate all of an organization's interests and activities. Conceptual skill is mostly needed at the top level of manager. 21

22 Other Skills of Managers: Diagnostic Skills `Diagnostic skills enable a manager to visualize the most appropriate response to a situation

23 Other Skills of Managers: Communication Skills: A manager’s abilities both to effectively convey ideas and information to others and to effectively receive ideas and information from others

24 Other Skills of Managers: § Time-Management Skills: § The manager’s ability to prioritize work, to work efficiently, and to delegate appropriately. Copyright © Houghton Mifflin Company. All rights reserved

Purposes and Importance of Management : Management ensures efficiency Management helps achieve socio-economic and political goals Management ensures progress Management ensures utilization of other resources It is Management that makes much difference in ensuring a country’s success More important than any other resource Technology can bear no fruit without Management 25

The Nature of Managerial Work How CEOs spend a typical day— 26 Unscheduled Scheduled Meetings 59% Desk Work 22% Meetings 10% Telephone 6% Touring Facilities 3%

Management: Science or Art? Science of Management – Assumes that problems can be approached using rational, logical, objective, and systematic ways. – Requires the use of technical, diagnostic, and decision-making skills and techniques to solve problems. 27

Management: Science or Art? Art of Management – Decisions are made and problems solved using a blend of intuition, experience, instinct, and personal insights. – Requires the use of conceptual, communication, interpersonal, and time-management skills to successfully accomplish the tasks associated with managerial activities. 28

Managing in Organizations For-profit Organizations – Large businesses Industrial firms, commercial banks, insurance companies, retailers, transportation companies, utilities, communication companies, service organizations – Small businesses and start-up businesses – International management 29

Managing in Organizations Not-for-profit Organizations – Governmental organizations—local, state, and federal – Educational organizations—public and private schools, colleges, and universities – Healthcare facilities—public hospitals and HMOs – Nontraditional settings—community, social, spiritual groups 30