6708681 fundamentals of management

8/9/2019 6708681 Fundamentals of Management

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Management

Fundamentals

Editing By

Gio


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Index

1. Management Management A Profession

The Importance Of Management

What is Management

Definition Of management

Management & Organizational Resources

Management Functions & Process

Management Roles

Management Skills

Management , Science Of Art

The Universality Of Management


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2. Planning Definition Of Planning

Purposes Of Planning Primacy Of Planning

Steps In Planning Process

Organizational Objectives Or Goals (Planning Function)

Types Of Goals

Types Of Plans

Planning Tools & Techniques


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3. Decision - Making

Defining of Decision

Types of Decision

The Decision Making Process The Decision Making Steps

Decision Making Conditions

The Pervasiveness Of Decision Making Planning

Organizing Leading

Controlling


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4. Organizing Definition Of Organizing

Some Purposes Of Organizing

The Organizing Process

Organizational Structure

Organizational Design

Work Specialization

Departmentalization Chain Of Command

Span Of Control

Centralization & Decentralization

Formalization


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5. Influencing Definition Of Influencing

The Influencing Sub System

Leading

Motivating

Considering Groups

Communicating

Interpersonal Communication

Organizational Communication


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6. Leadership Definition Of Leadership

Leader vs. Manager

The Trait Approach to Leadership

The Situational Approach to Leadership

Determining How to Make Decision as a Leader

The (VYJ) decision style

The (OSU) decision style

The Michigan studies

Effectiveness of various Leadership Styles


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7. Motivation Definition Of Motivation

Strategies for motivating organization members

Managerial Communication

Theory X Theory Y

Job Design

Behavior Modification

Likerts Management Systems

Monetary Incentives

Non-Monetary Incentives

Considering Groups

Kinds of Group in Organizations

Formal Groups Informal Groups


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8. Controlling Definition Of Controlling

The Controlling Process

Measuring performance

Comparing measured performance to standards

Taking corrective action

Types Of Control

Pre-control of feed forward control

Concurrent control

Feedback control

Qualities of an Effective Control System


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Definition

management is a process of reaching organizational goals by working with and

through people and other organizational resources.

its also the process of coordinating work activities so that theyre completed

effectively and efficiently completing with and through people and other resources

theres three main characteristics

1. Its a process or series of continuing and related activities

2. It involves and concentrated on reaching organization goals

3. It reaches these goals by working with and through people and other

organizational resources .the process represents the ongoing functions or primary activities engaged by

mangers


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Efficiency

Do things right its getting the most output from the least amount of input .

Because managers deal with scarce inputs (people, money, equipment) theyre

concerned with the efficient use of resources and not wasting them .

Effectiveness

Do the right things the work activities help the company to reach its goals or its

completing activities so that the organizational goals are attained

efficiency is concerned with the means of getting thongs done, effectiveness is

concerned with the ends, or attainment of organizational goals .

Goal

Attainment

Resource

Usage

Efficiency (means) Effectiveness (ends)

High AttainmentLow Waste

Management strives for

Low resource waste (high efficiency)

High goal attainment (high effectiveness)


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Management Function and Process

Planning

Organizing

Leading

Controlling

management process is the set of ongoing decisions and work activities in which

managers engaged as they plan, organize, lead, and control .

Management Roles

managers perform a lot of different but high interrelated roles

1. Management rolesits the specific categories of managerial behavior

1. The interpersonal roles

are roles that involves people (subordinates and persons outside the company) and

other duties that are ceremonial and symbolic in nature

1. The informational roles

Involves receiving collection, and disseminating information.1. The decisional roles

revolve around making choices and includes roles as businessman, disturbance

handler, resource allotment, and negotiator.


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Management Skills

1. Technical Skills

include knowledge of and proficiency in a certain specialized field . These skills

are more important at lower levels of management since these managers are

dealing directly with employees doing the company work

2. Human Skills

its the ability to work well with other people. managers knows how to

communicate, motivate lead, and inspire enthusiasm and trust. These skills are

equally important at all levels of management

3. Conceptual Skills

are the skills managers must have to think and to conceptualize about abstract

and complex situation. These skills are most important at the top management

level

Top

Mana-gement

Middle

Management

Supervisory or

Operational Management

Conceptual

Skills

Human

Skills

Technical

Skills

Needs

Needs

Needs

Management

Levels

Skills

Needed


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Management Universality

management is needed in all types and sizes of organizations, at all organizational

levels, in all organizational work areas, and in all companies, no matter in what

country theyre located.

All Organizational AreasManufacturing-Marketing

Human Resources

Accounting Information

System.

All Sizes of

Organizations

Small Large

Management isNeeded in..

All Types of

Organizational

Profit not-for Profit

All Organizational

Levels

Bottom Top


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PlanningPlanningPlanningPlanning

Definition

Planning is establishing an overall strategy for achieving the organizations goals

and developing a comprehensive set of plan to integrate and coordinate

organizational work .Its concerned with both ends (whats to be done) and means

(how its to be done) .

Planning Purposes1. Planning gives direction .

2. Reduces the impact of change .

3. Minimizes waste and redundancy .

4. Sets the standards used in controlling .

Planning Process Steps

1. State the organizational objectives .2. List alternative ways of reaching objectives .

3. Develop premises how and which alternative to be based .

4. Choose the best alternative for reaching objective .

5. Develop plans to pursue the chosen alternative .


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Goals Types

1. Stated Goals

are official statements of what the company says, and what it wants its

stakeholders to believe about the goals. They can be found in an organizationscharter, annual reports, or managers public statements.

2. Real Goals

are goals that a company actually pursues-closely show what organizational

members are doing .

Compare between Financial and Strategic Objectives

Financial Objectives Strategic Objectives

Faster revenue growth

Faster earning growth

Higher profit margins

Higher return on invested capital

Stronger bond and credit

Bigger cash flows Arising stock price

A more diversified revenue base

Stable earnings during recessionaryperiods

A bigger market share

A higher more secure industry rank

Higher product quality

Lower costs relative to key competitors

More attractive product line

A stronger reputation with customers Superior customer service

Recognition as leader to complete in

international markets


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Plans Types

A. Types Plans according to their Breadth

2. Strategic Plans

are plans that apply to the whole company ,establish the overall goals and seek toposition the company in its environment terms

2. Operational Plans

are plans that specify the details of how to achieve the overall goals

Compare between two Types

Strategic plans covers the a longtime frame and broader of the company , and also

include the formulation of goals because operational plans define ways to achievethe goals . Operational plans covers the short time periods (monthly, weekly, andday to-day)

B. Plans Types according to Timeframe

1. Long-term Plans

plans with a time frame three years and more

2. Short-term Plans

one year or less

3. Intermediate Plans

is any time in between


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C. Plans Types according to Specificity1. Specific Plans

are clearly defined . They have specifically stated objectives . Theres no uncertainand no problem with misunderstanding .

2. Directional Plansare flexible plans that set out general guidelines .

D. Plans Types according to Use Frequency1. A single-use Plans

is a one-time plan specifically designed to meet the needs of a unique situation .

2. Standing Plansare plans provide direction for activities performed repeatedly, and includepolicies, rules ,and procedure .

Planning Tools and Techniques1) Environment Assessing TechniquesB. Environmental Scanning

is the screening a large amounts of information to anticipate andinterpret changesin the environment .


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B. Forecasting

this can used by managers to assess the environment is forecasting. Forecasting

is an important part of organizational planning. Environment scanning creates the

foundation for forecasts, which are predication of outcomes

Forecasting Techniques

Quantitative Forecasting

applies a set of mathematical rules to a series of past data to predict outcomes.

These techniques are preferred when managers have sufficient hard data that

can be used .

Qualitative Forecasting

it uses the judgment and opinion of knowledgeable individuals to predict

outcomes. its used when precise data are limited or hard to obtain.

Benchmarking

this is the search for the best practices between competitors or non competitors

that lead to their superior performance . The basic idea behind benchmarking isthat managers can improve quality by analyzing and then copying the methods of

the leaders in various fields .


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2) Resources Allocating Techniques

resources are the assets of the company and include

Financial (debt, equity, retained, earning, and other financial holdings ).

Physical (equipment, building, raw materials, or other real assets ).

Human (experiences, skills, knowledge, and qualification of people ).

Immaterial (brand name, patents, reputation, trade marks, copy right, registered

designs, and databases, structural ).

Cultural (history, culture, work system, working, relationships, levels of trust,

policies, and structure ).and there is four techniques

Budgeting

is a numerical plan for allocating resources to specific activities . Managers

typically prepare budget for revenues, expenses, and large capital expenditures.

Scheduling

is detailing what activities have to be done, and which theyre to be completed,

whos to be each, and when . Some useful scheduling devices are Gantt, Load

charts, and PERT network analysis .


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Variable Budget

Takes into account the costs that vary withvolume

Fixed Budget

Assumes fixed level of sales or production

Cash Budget

Forecasts cash on band

and how much will be

needed

Revenue Budget

Project future sales

Expense Budget

Lists primary activities and allocate

monetary amount to each

Profit Budget

Combines revenue and expense budget of various units

to determine each units profit contribution


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Break-even Analysis

is a technique for identifying if only the total revenue is just sufficient to cover total

cost . It points out the relationship between revenues, costs, and profits .

Linear Programming

is a mathematical technique solves resource allocation problems .


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Decision-MakingDecision-Making

Definition

Decisionis choice made between two or more available alternatives .Decision-Making is process of choosing the best alternative to reach objectives.

Decisions Types :

1. Programmed Decisionare routine and repetitive, and the company develops specific ways to handle them

. Procedure

Its a series of interrelated sequential steps that manager can use for respondingto a structured problem .

Rule

Its clear statement that tells manger what he can do . Rules used for facing a well-structured problem because they are simple to follow and ensure consistency

stability . ex. Rules about lateness and absenteeism . Policy

put guidelines to limit managers thinking in specific direction . Different from rule,policy establish parameters for decision maker rather than specifically stating whatshould or should not to be done


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Technological factors (the level of company technology may be not fit for certain

alternatives ) .

Economic factors (certain alternatives may be too costly for the company ) .

3. Selecting the most beneficial alternative

the evaluation should consist of three steps

first :decision maker should list the potential effects of each alternatives Second : they should assign a probability factor to each potential effects to show

how probable the effect occurrence would be if the alternative were carried out .

Third : keeping company goals in mind, decision maker should compare eachalternatives expected effects and the respective probabilities of those effects .

after completed this steps. Manager the most advantageous of alternative to thecompany .

4. Implementing the chosen alternative

put the chosen alternative into action . Decision must be supported by appropriateaction to have a chance of success .

5. Evaluating decision effectiveness

decision makers must gather feedback to determine the implementing alternativeeffect on the identified problem . If the identified problem is not being solved,managers need to search out and implement some other alternative .


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Decision-Making Conditions

* Complete Certainty Condition

Its the decision-making situation in which the decision maker knows exactly what

the results of a carried out alternative will be .

* Complete Uncertainty Condition

Used if the decision maker has no idea about the results of carried out alternative .

* Risk Condition

It means the decision maker has only enough information to estimate about the

implemented alternatives outcome .

The Decision-Making Pervasiveness Plan

Organize

Lead

Control


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OrganizingOrganizing

Definition

Organizing is the process of establishing orderly uses for all companys resources.

Its also the process of creating a companys structure . The challenge for

managers is to design an organizational structure that allows employees to

effectively and efficiently do their work .

Some Organizing Purposes Divides work into specific jobs and department .

Assign tasks and responsibilities associated with individual jobs .

Coordinate diverse organizational tasks .

Cluster jobs into units .

Establish relationships among individuals, groups, departments .

Establish formal lines of authority

Allocates and deploys company all resources .


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The Organizing Process

1. Reflect the companys plan and objectives .

2. Establish major tasks .

3. Divides major tasks into subtasks .

4. Allocate resources and directives for subtasks .

5. Evaluate the result of implemented organizing strategy .

Step 2:

Establish major tasks .

Step 1:

Reflect on plans

and objectives .

Step 3:

Divides major tasks

Into sub tasks .

Step 4 :

Allocate resources and

Directives for subtasks .

Step 5:

Evaluate results of

Organizing strategy.


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Organizational Structure

Is the formal framework about job tasks dividing, grouping, and coordinating .

When managers develop or change an organizations structure, they are engaged

in organizational design .

Organizational Design

Is a process involves decisions about six key elements

1. Work Specialization

Describes the degree to which tasks in an company are divided into separate jobs.

Its also meaning not done by one individual . But is broken down into steps and

each one is completed by different person . Individual employees specialize indoing part of an activity rather than entire activity .

2. Departmentalization

Is the basis by which job are grouped together .

There are five common forms of departmentalization

Functional departmentalization

Product departmentalization

Geographical departmentalization

Process departmentalization

Customer departmentalization


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5. Centralization and Decentralization

Centralization

Describes the degree to which decision-making concentrated at a single point in

the company . If top managers make the companys key decisions with little or noinputs from below then the organization is centralized

Decentralization

Allows lower-level employees provide input or actually make decision .

Centralization and Decentralization Factors

More Centralization

Environment is stable

Lower level managers are not as capable or experienced at making decisions as

upper level managers .

Lower-level managers do not want to have a say in decisions .

Decisions are significant .

Organization is facing a crisis or the risk of company failure . Company is large

Effective implementation of company strategies depends on managers retaining

say over what happens .


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InfluencingInfluencing

Definition

Influencing is the process of guiding the activities of company members in

appropriate directions .

Appropriate Directions

Are those that lead to the attainment of management system objectives .

The Influencing Subsystem1. Leading .

2. Motivating .

3. Considering groups .

4. Communicating .


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Inputs

1. People .

2. Money .

3. Raw materials .

4. Machines .

Output appropriate organization members behavior

Considering

groups

Leading Motivating

Processes

Influencing Process


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Communication

Its the process of sharing information with individuals . In general, communication

involves one person projecting a message to one or more other people that result

in everyones arriving at a common understanding of the message .

Interpersonal Communication

Its the process of transmitting information to others .

1) The Source / Encoder

Its the person in the interpersonal communication situation who originates and

encodes information to be shared with others .

2) The Signal

The message that has been transmitted from one person to another is called

signal (encoded information used to share constitutes a message) .

3) The Decoder / Destination

Its the person or persons who the source tries to share information with .

Decoding

Its the process of converting messages back into information .

Feedback and Interpersonal Communication

feedback is the destinations reaction to a message . Feedback can used by

source to ensure successful communication .


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Formal Organizational Communication Types

1. Downward Organizational Communication

it flows form any point on an company chart downward to another point on the

company chart .

2. Upward Organizational Communication

it flows from any point on company chart upward to another point on the chart .

3. Lateral Organizational Communication

it flows from any point on chart horizontally to another point on chart .


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LeadershipLeadership

Definition

Leadership is the process of directing the behavior of others toward the

accomplishment of some objective or objectives .

Leader Versus Manager

leading is not like managing . But some managers are leaders and some leaders

are mangers, leading and managing have not the same activities.Managing is much wider in range than leading and focuses on both

non-behavioral and behavioral issues .

Leading emphasizes mainly behavioral issues .

The Trait Approach to Leadership

leadership shows the personal characteristics of an individual as the main

determinates of how successful that individual could be as a leader.

management writer agree that leadership ability cant be explained by individual

traits or inherited characteristics, they believe that individual can be trained to be

good leaders .


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Leadership Behavior

It concerned about what good leaders do. Are they concerned on keeping task

done. Or make their followers happy and having high morale.

The Ohio state University (OSU)

Theres two main types of behavior

1. Structured Behavior

Its the activities that

(1) determinates the relationship between the leader and his followers

(2) establishes well-defined procedure that the followers should conform to in

doing their jobs.2. Consideration Behavior

It reflects friendship, mutual trust, respect, and warmth in the relationship between

leader and followers.

Leadership Style

Used by leader to establish the way of guiding the organization members inspecific direction.


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Low

Structure

High

Structure

Low

Consideration

Low

Consideration

High

Consideration

High

Consideration

Low

Structure

High

Structure

High

High

Low

Low

structure

C

ons

idera

tion


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The Michigan Studies

It says theres two basic types of leading behavior

Job-Centered Behavior

It focuses on the subordinates work and performance.

2. Employee-Centered Behavior

It focuses on subordinates humanity (as people) and cares about personal needs

and team player.

Effectiveness of various leadership styles

The desirable leadership behavior is associated with high leader emphasis on both

structure and consideration and the undesirable leadership behaviors isassociated with low leader emphasis on both dimensions. The most effective

leadership style noticed in high consideration and high structure. Results of a more

recent studies shows that high consideration is always preferred by subordinates.

Comparing Styles

one shows that any single leadership style is more effective than any other. The

successful leadership style for managers in one situation may prove ineffective inanother situation.


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MotivationMotivation

Definition

Motivation is the inner state makes everyone in company behaves in a way that

ensures the accomplishment of some jobs .

Motivating Organization Members Strategies

Theres seven strategies

1. Managerial communication .2. Theory X Theory Y .

3. Job design .

4. Behavior modification .

5. Likerts management system.

6. Monetary incentives .

7. Non monetary incentives .


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1. Managerial Communication

Managers should strive to communicate with other company members, because its basic tool

for satisfying the human needs of company members.

2. Theory X Theory Y

Theory X : involves negative assumption about people .Theory Y : involves positive assumption about people and must be used by managers.

Production might be increased by using any theory of X or Y assumption. Depending on the

situation the manager face.

3. Job Design

Job Rotation

Its the process of moving workers form between jobs rather than requiring them to performonly one simple and specialized job over the long term.

Job Enlargement is the process of increasing the number of operations an individual performs

in a job, in order to enhance the individuals situation in work.

Job Enrichment

Its the process of incorporating motivators into a job situation. And motivating factors are

items that influence the job satisfaction degree (achievement opportunity, recognition

opportunity work itself, responsibility, advancement, personal growth) Flextime

or flexible working hours programs, is a program that allows workers to complete their jobs

within a workweek of normal of hours that they arrange themselves .


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4. Behavior Modification

Its a program that focuses on managing human activity by controlling the

consequences of performing the activity. Positive reinforcement is a reward that

consist of a desirable consequence of behavior, and negative reinforcement is

reward that consist of eliminating of an undesirable consequence of behavior.5. Likerts Management System

Includes

- System 1 -this style of management is characterized by a lack of confidence or

trust in subordinates.

- System 2 -this style is characterized by master to servant style confidence

and trust in subordinates.

- System 3 - this style is characterized by substantial, though not complete

confidence in subordinates.

- System 4 - this style is characterized by complete trust and confidence in

subordinates.

styles, systems, and productivity Likert has suggested that as management style

moves from system 1 to 4, the human needs of individuals become moreeffectively satisfied over the long-term.


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6. Monetary Incentives

Its a program or plan allows the team members receive a bonus when their team

exceeds a goal. All plans link pay closely to performance (shares of company

stock as a benefit, lump sum bonuses one time cash payment and gain

sharing) .7. Non Monetary Incentive

This plan makes employees committed and motivated by non-monetary means .

Considering Groups

A group is any number of people who interact with one another, are

psychologically aware of one another, and perceive to be group.

Why should managers study groups

1. Group exist in all kind of organizations .

2. Groups inevitably from in facets of organizational existence .

3. Groups can cause desirable or undesirable consequences within the organization .

4. An understanding of groups can used in rising probability desirable consequences

in company .


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ControllingControlling

Definition

Control is the process of monitoring activities to ensure that they are

being accomplished as planned and correcting any significant deviations.

The Controlling Process

Measuring performance .

Comparing measured performance to standards . Taking corrective action .

1. Measuring Performance

managers must measure correct organizational performance by establishing some

unit of measure that gauges performance and observe the quantity of this unit as

generated by the items whose performance is being measured.

2. Comparing Measured Performance to Standards

after managers have taken a measure of organizational performance, the next

step in controlling is to compare this measure with some standard.


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A Standard

is a level of activity established to serve as a model for evaluation organizational

performance .

3. Take Corrective Action

after actual performance has been measured and compared with established

performance standards, the next step in controlling process is to take corrective

action if necessary .

Corrective Action focuses on correcting organizational mistakes that are slowing

the organizational performance.

Control Types1. Pre-control or Feed forward Control

the control that takes place before work is performed is called per control or feed

forward control . Managers using this type of control to create policies, procedures,

and rules aimed at eliminating behavior that will cause desirable work result .

2. Concurrent Control

Is control that takes place as work is being performed . It relate not only toemployee performance, but also to such non human areas as equipment

performance and department appearance.


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3. Feedback Control

is control that takes place after some unit of work has been performed. Control that

concentrates on past organizational performance is called feedback control.

Managers use this type of control to take corrective action by looking at

organizational history over a specified time period . Theres two advantages overfeed forward and concurrent control

first feedback provides managers with meaningful information on how effective

their planning effort was.

second feedback control can enhance employee motivation.

Input Processes Output

Feed forward

Control

Anticipates

Problems

Concurrent

Control

Feedback

Control

Corrects

Problems as they

Happen

Corrects

Problems after

they Occur


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Qualities of Effective Control System

1. Accuracy

an accurate control system is reliable and produces valid data.2. Timeliness

an effective control system must provide timely information .

3. Economy

any system of control has to justify the benefits that it gives in relation to the costs

it incurs .

4. Flexibility

controls must be flexible enough to adjust to problems or to take advantage of

new opportunities .

5. Understandability

controls that cannot be understood have no value. A control system that is difficult

to understand can cause unnecessary mistakes, frustrate employees, and beignored .


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6. Reasonable Criteria

control standards must be reasonable and attainable if they are too high or

unreasonable, they no longer motivate.

7. Strategic Placement

management cant control everything that goes on in company . Even if it could the

benefits couldnt justify the costs . As a result , managers should place controls on

factors that are strategic to the organizations performance. Control should cover the

critical activities, operations, and events within the organization.

8. Emphasis on the Exception

because managers cant control all activities, they should place their strategic controldevices where those devices can call attention only to the exceptions .

9. Multiple Criteria

if management controls by using a single measure such as unit profit, effort will be

focused only on looking good on that standard. multiple measures of performance

widen this narrow focus.

10. Corrective Actionan effective control system not only indicates when a significant deviation from

standard occurs but also suggests what action should be taken to correct the

deviation .

6708681 fundamentals of management

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