BONGA UNIVERSITY, 2018
UNIT ONE
FUNDAMENTALS OF MANAGEMENT
Introduction
This unit overviews the concept of management and discusses the five managerial functions. It
provides basic definitions of management and also describes the significance of management.
The levels of management are illustrated in lined with types of managers. Focus is given for the
necessary skills and roles of management. It explains why management is the same everywhere
in the world. At the end, it answers the question whether management is science or art.
1.1 DEFINITION OF MANAGEMENT
As far as the definition of management is concerned, it is rich in definition. Hence, there is no
one universally accepted definition of management. This is because:
Management as a discipline is recent in origin and as a field of study it is too young.
Management is so broad that it is difficult to encompass all of its aspects in a single
definition.
There are different approaches to management, definitions change as the environment
changes. The environment of an organization changes because of changes in political,
economic, social, ethical, etc environment changes.
Management has been given various but mutually supportive definitions by different authors and
scholars. Some of the definitions given by these authors are given below:
According to F.W. Taylor, "Management is the art of knowing what you want to do in
the best and cheapest way."
According to H. Koontz and his co-author, "Management is the process of designing and
maintaining an environment in which individuals are working together in-group
accomplish efficiently selected aims."
According to Terry and Franklin, "Management is 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.”
1 INTRODUCTION TO MANAGEMENT COMPLIED BY: JEMBER B.
AMANUEL S.
BONGA UNIVERSITY, 2018
According to Henry Fayol, "To manage is to forecast and plan, to organize, to
command, to coordinate, and to control.”
According to Merry Parker Follett; "Management is the art getting things done through
the efforts of other people."
According to Kinard, "Management is the process of maximizing the potential of an
organization's people and coordinating their efforts to attain predetermined goals.”
Management is defined as the process of planning, organizing, leading and controlling
the efforts of organization members and of using all other organizational resources to
achieve stated organizational goals From the various definitions given on management,
we can derive the following important points about the discipline:
Management refers to the managerial functions of planning, organizing, staffing, leading
and controlling.
Management coordinates both human and non human resources (land, labor, capital) for
the accomplishment of objectives.
Management is applied to all types of organizations Profit or not for profit, large, medium
or small organization, manufacturing or service giving.
Management deals with creating a comfortable internal environment, with a great
consideration of the external environment.
For the sake of convenience we can define management as a distinct process consisting of
managerial functions of planning, organizing, staffing, directing, and controlling so as to
design and maintain conducive environment in order to achieve common group goals and
organizational objectives efficiently and effectively.
1.2 THE NATURE OF MANAGEMENT
Management has its own basic notions or fundamentals on which the discipline based on and
also it has its own elements that identify it from other disciplines. These notions can be presented
as follow:
Universal application: - Management is applied in any organization (large, small in size, or
service or manufacturing or for-profit or not-for-profit) and its functions are practiced in any
level of management.
2 INTRODUCTION TO MANAGEMENT COMPLIED BY: JEMBER B.
AMANUEL S.
BONGA UNIVERSITY, 2018
Goal oriented: - Any organization is established to achieve certain objectives, and
management is important for any organization to achieve its pre-stated objectives efficiently
and effectively.
Guidance: - The main task of management is guidance in the utilization of materials and
human resources in the best possible manner. Without the involvement of management,
resources might be underutilized, over utilized or wasted.
Divorced/Separated from proprietorship: - Management does not signify proprietorship or
ownership. Managers work for the attainment of organizational goals and objectives.
Management is a human activity: - Management functions are discharged by individuals not
by machines such as computers. However, it can be aided by such instruments as computers.
Management signifies authority: - Since the significance of management is to direct, to
guide and to control, it has to have authority. Authority is the power to compel others to work
and behave in particular manner.
Leadership: - The manager has to lead a team of workers. He/she must be capable of
inspiring, motivating and winning their confidence.
Management is multidisciplinary: - It has grown as a body of discipline taking the help of so
many social sciences like sociology, psychology, economics, etc.
1.3 SIGNIFICANCE OF MANAGEMENT
Management is one of the most important human activities. Ever since people began forming
groups to accomplish activities they couldn’t achieve as individuals, management has been
essential to ensure the coordination of individual efforts. As society has come to rely
increasingly on group efforts, and as many organized groups have become large, the task of
managers has been rising in importance. Basically, an organization is a group of two or more
persons that exists and operates to achieve clearly stated, commonly held objectives. In an
organization, it is quite possible that each member might do parts of jobs that each thought
important to meet the objectives, while in actuality the members might working in opposite
direction. To prevent from occurring and to ensure coordination of work to accomplish the
objectives, management is needed.
Management is, therefore, essential whenever and wherever human efforts are to be under taken
collectively to achieve specific goals. No group activity can succeed without management.
3 INTRODUCTION TO MANAGEMENT COMPLIED BY: JEMBER B.
AMANUEL S.
BONGA UNIVERSITY, 2018
Modern enterprises succeed only when there is a competent leadership in the form of
management. A competent manager would turn a losing concern while incompetent manager
could only hasten its closure. According to Peter Drucker management is the organ of the
society that is charged with responsibility of making resources productive.
1.4 AN OVERVIEW OF MANAGERIAL FUNCTIONS
Regardless of the type, size and objective of the firm, all managers have certain basic functions.
These are planning, organizing, staffing, leading, and controlling. The nature and scope of these
functions differ from manager to manager and from firm to firm.
1) Planning:
It is a decision making process which involves selection of missions, objectives and choose the
best course of action to achieve them from among alternatives. It is an intellectual task, which
bridges the gap between the present and future conditions of the organization (From where we
are to where we want to be in a desired future).
Planning is a decision making process that determines what to be done, how it is to be
done, why it has to be done, when it is to be done, and by whom it is to be done.
The first step in planning is determination of the objective of an organization. And then
objectives are established for the sub units of the organization such as departments and
divisions. Once the objectives are determined, programs are established for achieving
them in a systematic manner.
Top level managers set plans for the entire company; while lower level managers prepare
plans for their immediate areas of responsibility. Planning doesn't occur in a vacuum. It is
done in light of budgetary constraints, personnel requirements, competition, and other
factors.
Planning, as a managerial function, is the process of integrating the future activities of an
organization, and requires the ability to foresee, visualize, and look ahead purposefully.
2) Organizing:
It is a managerial activity that involves establishing an intentional structure of roles for people in
an organization. In other words, it is the process of creating an environment for human
performance depending on the objectives set. In short, organizing is the process of determining
4 INTRODUCTION TO MANAGEMENT COMPLIED BY: JEMBER B.
AMANUEL S.
BONGA UNIVERSITY, 2018
the role by which an individual plays and the individual roles are related and integrated to
achieve the common organizational goals. Organizing, thus involves:
Identifying activities to achieve the predetermined objective.
Grouping these activities into working units.
Assignment of responsibility to each unit with corresponding authority.
The creation of organizational relationship so as to enhance coordination.
3) Staffing:
It is the process of filling and keeping filled the positions in the organization structure. This is
done by identifying work force requirements, inventorying the people available, recruiting,
selecting, placing, promoting, compensating, training and developing both candidates and current
job holders to accomplish their tasks effectively and efficiently.
4) Leading:
It is influencing, motivating and directing people so that they will contribute to organization and
group goals; it has to do predominantly with the interpersonal aspect of managing. To be
effective leaders/managers need to understand individual and group behavior, techniques of
motivation, and effective styles of leadership. Mangers must develop relationships that ensure
adequate communication with their subordinates. Leading also includes managing personal
conflict, helping employees, deal with changing conditions, and in some cases disciplining
employees. Leadership requires good interpersonal skills.
5) Controlling:
It is the process of measuring and correcting of activities of subordinates, to ensure that events
conform to plans. It also involves taking corrective measures (actions) if negative deviations
exist. The controlling function involves the following steps:
Establishing standards of performance.
Measuring actual performance and comparing it against the plan the goal /the established
standard.
Taking corrective measures if there are devotions.
Actual results may differ from desired results in any area, but the three important aspects that
require the most attention are product quality, worker performance, and cost control.
5 INTRODUCTION TO MANAGEMENT COMPLIED BY: JEMBER B.
AMANUEL S.
BONGA UNIVERSITY, 2018
Planning Organizing Staffing Leading Controlling
Corrective action
Figure 1.1: The process of managerial functions
1.5 LEVELS OF MANAGEMENT AND TYPE OF MANAGERS
Managers can be classified into two ways;
A) By their level in the organization – the so called first line, middle and top level managers:
1) First line Managers- Managers who are responsible for the work of operating employees
only and do not supervise other managers; they are the first or lowest levels of managers in the
organizational hierarchy. These pest people are managers at the firing line where most concrete
organizational tasks are performed. It includes office managers, superintendents, foreman, chief
clerks, supervisors, etc. First level management is often called "supervisors". They are mainly
concerned with:
Planning of day to day work.
Assignment of jobs.
Keeping a watch on workers performance.
Sending reports and statements to superiors
Maintaining close contacts with workers and evaluation of their work.
2) Middle level Managers: These are managers who direct the activities of lower level
managers and sometimes extend to supervision of operating employees. Their principal
responsibilities are to direct the activities that implement their organization's policies and to
balance the demands of their superiors with the capacities of their subordinates. The titles
include department heads, deputy department heads, branch managers, work managers, etc. The
major functions of middle level manages are:
Acting as intermediary between top and operating level management.
Translating long- term plans of top level managers in to medium range plans.
Developing specific targets in their areas of responsibility.
Develop specific schedules to guide actions of operating level management.
6 INTRODUCTION TO MANAGEMENT COMPLIED BY: JEMBER B.
AMANUEL S.
BONGA UNIVERSITY, 2018
3) Top Level Managers: Composed of a comparatively small group of executives and they are
responsible for the overall management an organization. They establish operating policies and
guide the organization's interactions with environment. Typical titles include CEO, president,
senior vice president, etc. Common functions of top level management includes:
Establishing broad objectives.
Designing major strategies.
Out lining principal policies.
Providing effective organizational structure that insures integration.
Providing overall control of the organization.
Dealing with external parties by representing the organization.
Analyzing the changes in the external environment and respond to it.
B) By the range of organizational activities for which they are responsible – so called
Functional and general managers.
1. Functional Managers: - these are managers who are responsible for only one organizational
activity, such as production, marketing, sales, or finance. The people and activities headed by a
functional manager are engaged in a common set of activities.
2. General Managers: - these managers, on the other hand, oversee a complex unit, such as a
company, a subsidiary, or an independent operating division. He/she is responsible for all the
activities of that unit, such as its production, marketing, sales, and finance. They are managers
who are responsible for managing the entire operations of a more complex unit or division which
may have two or more functional units.
1.6 MANAGERIAL ROLES AND SKILLS
1.6.1 Managerial Roles:
Managerial functions are general administrative duties that need to be carried out in all
productive organizations. Managerial roles are specific categories of behavior/managerial
behavior. Managerial functions involve desired out comes. These outcomes are achieved through
the performance of managerial roles (actual behavior). In other words, Roles are the means and
functions are the ends of the manager's job. Henry Mintzberg identified ten different but
7 INTRODUCTION TO MANAGEMENT COMPLIED BY: JEMBER B.
AMANUEL S.
BONGA UNIVERSITY, 2018
interrelated organized sets of behavior, or roles. These ten roles can be separated into three
categories.
1. Interpersonal roles: three managerial roles are enacted when the manager engages in
interpersonal relationship. They are:
Figure head role: - this role is played by managers who are required to perform duties of
ceremonial and symbolic in nature such as signing documents, receiving visitors, etc.
Leader role: - managers play this role through hiring, training, motivating and disciplining
employees to get the job done properly.
Liaison role: - managers play this role by contacting people outside the group, by serving as a
link in a horizontal (as well as vertical) chain of communication.
2. Informational roles: - All managers, to some degree, will receive and collect information
from organizations and institutions outside his or her own. It includes:
Monitor/Nerve Center Role: - as a monitor /nerve center, the manager tries to keep informed
about what is happening in the organization or group. Managers serve as a focal point for non-
routine information; they receive all types of information from news reports, trade publications,
magazines, clients, etc.
Disseminator role: - the information a manager gathers as a monitor must be gleaned and
transmitted to appropriate members of the organization. As a disseminator, a manager sends out
side information into the organization and internal information from one subordinate to another.
Transmitting selected information to subordinates. Spokes person role: - it is the role of a
manager in transmitting selected information to outsiders.
Decisional Roles: - Both interpersonal and informational roles are really includes to the
decisional role. It involves decision-making. The manager plays this role as:
Entrepreneur: - managers as an entrepreneur initiate and oversee new projects that will improve
their organization's performance. This includes designing and initiating changes within the
organization.
Disturbance handler: - taking corrective actions in none routine situations/the manager deals
with situations our which he or she has little control. These may involve conflict between people
or groups or unexpected events outside the company may affect the firm's operations.
8 INTRODUCTION TO MANAGEMENT COMPLIED BY: JEMBER B.
AMANUEL S.
BONGA UNIVERSITY, 2018
Resource allocator: - managers play this role when they are in a position to decide exactly who
should get what resources. These resources include time, money, people-people, and physical
resources.
Negotiator: - participating in negotiating sessions with other parties (e.g. vendors and unions) to
make sure the organizations interests are adequately represented. Managers perform this role, in
which they discuss and bargain with other units to gain advantages for their own unit.
1.6.2 Skills of Management
A skill is a person's or an individual's ability to do or perform a certain thing expertly or
intellectually. Similarly, managerial skills are skills of a manageability of a manager to perform
his duties and responsibilities expertly. These skills help managers to perform their activity in
efficient and effective way/manner for the achievement of the objective of the organization.
These managerial skills can be classified as:
1) Technical skill: This skill is the abilities of a manager that are necessary to carry out a
specific task. It involves the ability to use specialized knowledge and expertise with work related
tools, procedures, and techniques. Technical knowledge is of great importance at lower levels
where the organization's goods and services are produced. Technical skills are usually obtained
through training programs that an organization may offer its managers, or employees, or may be
obtained by way of a college degree.
2) Human Skill: the ability to work with, motivate, direct individuals or groups in the
organization whether they are subordinates, pears, or superiors and the ability to resolve conflict.
Because, all tasks in an organization are done with people, these skills are equally important to
all levels of management. This skill includes:-
Effective communication (writing and speaking)
Creation of positive attitude toward others and the work setting
Development of co-operation among group members
Motivation of subordinates.
9 INTRODUCTION TO MANAGEMENT COMPLIED BY: JEMBER B.
AMANUEL S.
BONGA UNIVERSITY, 2018
3) Conceptual skill:- the ability of a manager to see the big picture of the organization /to view
the organization from a broad perspective. It is the ability of a manager to see the organizational
system in its totality, how its different parts are interrelated and how they affect each other. A
manager needs conceptual skills to recognize the interrelationships of various situational factors,
and; therefore, make decisions that will be in the best interests of the organization. They are most
important in strategic (long range) planning; therefore, it is top level managers/executives who
require more conceptual skill than middle level managers and supervisors.
4) Communication skill: Reflect managerial ability to send and receive information, thoughts,
feelings and abilities. Communication skill is very crucial to all managers. Success of an
organization depends on the effective communication among managers. The basic
communication skills are writing oral and non-verbal (facial expression, body language, etc).
Top level
Middle level
First level
Communication Technical Interpersonal Conceptual
Skill Skill Skill Skill
[Link] importance of managerial skills at different levels of management
1.7 UNIVERSALITY OF MANAGEMENT
Management is universal in the sense that, basic applications of management in any
organizations are the same whether it is small or complex, business or non-business. The
managerial functions exist in every organization regardless of the size and the type of the
organization. This is because any organization has an objective to be achieved and goal
achievement requires planning, organizing, staffing leading and controlling. (The army general,
the bishop of the church, the financial manager uses the same management principles to achieve
objectives.)
The concept of universality of management is also applicable to all levels of management within
an organization; it is not confined to a particular level. Although the scope of authority held,
10 INTRODUCTION TO MANAGEMENT COMPLIED BY: JEMBER B.
AMANUEL S.
BONGA UNIVERSITY, 2018
responsibility assigned and the types of problems dealt vary from one level to another, as
managers all obtain results by establishing an environment for effective group endeavor.
Managers can be transferred from one organization to another and the higher the management
level the less will be the operating non-managerial job components and the more "pure" will be
the managerial jobs and the easier the transferability of managers.
1.8 IS MANAGEMENT SCIENCE OR ART?
Science: - It is an organized/systematized body of knowledge constituting concepts, theories and
principles concerning a particular field of study. Especially, it is knowledge obtained from
observation, test and experimentation of facts; and it is universally true; and applied in any
country, organization, etc. Besides, it exploits mathematical models. When we say it is a
systematized body of knowledge, it is in the sense that relationship between variables and their
limitation have been ascertained and underlying principles have been discovered. These facts are
again verified through continuous observation. Finally, certain relationships and principles are
developed which are fundamental truths that help to reflect or explain reality.
As science, management is a systematized body of knowledge representing a core of principles
or fundamental truths that tend to be true in most managerial situations. This systematized body
of knowledge of management helps the practicing manager to make decisions rationally and
objectively rather than rule of thumb, hunch, or institution, what they did in the part.
However, management is not considered as an exact science as chemistry, physics etc. It is an
Inexact Science. This is because; it deals with people/human behavior in which change is the
fashion rather than the exception. It is to say that human behavior is even changing and
unpredictable.
To conclude, management is categorized as science for the following reasons:
Its principles are systematized body of knowledge
Its principles are universally applicable
They are based on scientific inquiry, observation, test and experiment
They explain the cause and effect relationships among/between various variables.
Their validity can be verifiable and can serve as a reliable basis for predicting future
events.
11 INTRODUCTION TO MANAGEMENT COMPLIED BY: JEMBER B.
AMANUEL S.
BONGA UNIVERSITY, 2018
Art: - Art is a skill or know-how, which can be modified to accomplish a desired concrete result.
It is doing things in light of the prevailing realities of a situation. It is concerned with the
application of know-how and skill to the specific time, place and condition tactfully, creatively
and wisely.
Art is a personal creative power plus skill in performance
Art is based on subjective judgment, feelings, intuition, etc.
Art helps to create new ideas and effective methods to use from the underlying
knowledge and skill.
Management as an art is know-how or doing things in the realities of the situation. Art in
management has a great role in creating new idea, innovation, initiating and implementing the
skills or know-how in relation with the resources and goals of the organization. Calls for
subjective judgment, intuition where time pressures force rapid-fire decisions, often based on
incomplete and unverifiable data.
To conclude, management as a creative art:
It required a skill or a practical know-how of the principles and techniques of
management in order to perform a specific job efficiently and effectively.
It depends on the personal skill and effective use of one's knowledge and proficiency to
ensure maximum result at minimum cost.
It follows result oriented course of action or depends on specific objective to be achieved.
N.B: The science and art of management practice are not mutually exclusive but are
complementary. If science teaches one to know, art teaches one to do. So managers have to know
and do things to perform their activities efficiently and effectively to be successful.
Management as a Profession:
A profession is a vocation requiring the following:-
1) Body of specialized knowledge and Technical proficiency
If an organization needs to have rational and scientific decision making ability, managers have to
be specialized on a systematic body of management. And also management requires technical
proficiency is special fields such as production, marketing, finance, human resource
management, etc. To ensure all these, management requires intellectual preparation or graduate
study.
12 INTRODUCTION TO MANAGEMENT COMPLIED BY: JEMBER B.
AMANUEL S.
BONGA UNIVERSITY, 2018
2) Formal/standardized Education and Training:
A certain field of study to be a profession, it requires formal training and education. This holds
true for management. There are universities, colleges, and educational institutions specialized
that provide formal teaching of management concepts, theories and principles.
3) Social Responsibility:
Any organization has an objective whether to make surplus, or provide efficient services to the
society, and the like. And also a manager of an organization is responsible to lead the
organization and its members.
Code of Conduct:
Any discipline to be a profession, it is subjected to the fulfillment of strict standards, rules and
regulations providing the norm of honesty, integrity, and professional morality to be adhered by
the members.
13 INTRODUCTION TO MANAGEMENT COMPLIED BY: JEMBER B.
AMANUEL S.