CHAPTER 1

CHAPTER 1

Managers

and

Development

The progress of a country depends on how well it utilizes its capital,

natural resources, technology and human resources.

In modern societies, these resources are increasingly utilized by specialized organizations &

institutions, both public & private,

which produce a large share of the goods and services

needed by the society.

These organizations do not run by themselves. They are managed by people.

It therefore follows that these organizations must be run by qualified managers if the resources which they

command are to be utilized effectively.

30 years ago, Harbison and Myers wrote:

“A country’s economic development may be limited by a relative shortage of this critical resources. In many

countries, management is an even more critical factor in industrialization than capital, and it is always more vital to development than either labor or natural resources.”

Quality instead of Quantity

They emphasized the quantitative limitations on the supply of trained

managers in newly developing country which have to be improved.

As we shall see, the quality of management in the current environment is a function not

solely of the efficiency with which it utilizes organizational resources but also of the

creativity and innovativeness of such management in adapting the organization to its

environment.

Why is high Quality Management needed in the developing countries today?

One reason is that the poorer nations have more limited supplies of capital and other critical natural resources

needed for development .

The managers in such countries therefore must use the available resources more creatively and efficiently compared to

their counterparts in the more developed countries.

Therefore. . .

What is Management?

Management is to design and maintain an internal environment in which people working together in groups that can perform effectively

and efficiently towards the attainment of group goals. This definition needs to be

expanded:

1. As managers, people carry out the managerial functions of

Planning, Organizing, Staffing, Leading, and Controlling.

2. Management applies to any kind of organization.

3. It applies to managers at all organization levels.

4. The aim of all managers is the same: to

create a surplus

5. Managing is concerned with productivity; this implies

effectiveness and efficiency.

Through this definition captures a central aspect of all management activity, the

definition tends to portray the activity of managers as being inwardly oriented, that is,

directed towards optimizing the internal functioning of an organization

Management is viewed more broadly as the direction and coordination of the human and

nonhuman resources of an organization to achieve outputs which meet the needs of

external users.

In this view of management, the basic tasks of manager at the different

levels in the organization are essentially similar.

Managers at the top have the responsibility of relating the entire organization to its external

clientele. Managers of sections or subunits of the organization relates the activities of their units either to external clientele or to other units of

the organization which utilize the outputs of their units.

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Who are Managers?

The term “MANAGER” is another widely used term. We limit the use of the word Manager to refer to

those persons responsible for directing the activities of other people. While it is true that

people also “manage”; materials, machines, and other physical processes,

Now who are MANAGERS?

Manager

-is a person who has responsibility forthe activities of other people in anorganization.

The Tasks of a ManagerOr Managerial Functions

It involves identifying, subdividing, grouping, and coordinating the

various activities required to achieve the objectives of the institution.

It involves the recruitment, selection, assignment, and development of the

various kinds of human resources required by the organization.

This is the process of communicating with and influencing subordinates

towards the achievement of organizational goals.

This is the function of monitoring performance and undertaking corrective

actions to ensure the attainment of predetermined goals and objectives of the

organization.

Identified by MINTZBERG

Henry Mintzberg lists these roles as follows:

• Interpersonal Roles• Informational Roles• Decisional Roles

I. Interpersonal Roles

Interpersonal Roles is subdivided into three (3) types

A. The Figurehead Role

Role which is assumed by managers when they represent their respective

units in the outside world in ceremonial and civic activities.

B. Leadership Role

Is the role played by managers when they initiate and coordinate activities

in their units.

C. Liaison Role

Is needed by unit heads when they interact with persons in other units within and outside the organization.

II. Informational Roles

Informational Roles is subdivided into three (3) types

A. Monitor Role

People in managerial positions are centrally located in the flow of information since information from

various parts of the organization, both in the upper and the lower levels, converge in a managers office

and allow him to monitor activities occurring outside his office.

B. Disseminator Role

Since information flowing various sources converge in managerial positions,

managers tend to have a key role in transmitting and disseminating such

information to other parts of the organization.

C. Spokesperson Role

The managers leadership positions in the organization require them to represent

and speak for their units vis-à-vis (Face to face) other units of the organization and

outsiders.

III. Decisional Roles

Decisional Roles is subdivided into four (4) types

A. Entrepreneurial Role

Managers play a key role in the identification of new opportunities and

the development of these into new products, services, methods of activities

within their organizations

B. Problem Solver

Managers are called upon to identify solutions and to take action to overcome to continuous stream of problems which

crop up in the day to day operation of the institution.

C. Resources Allocator

Managers exercise key role in the distribution of funds, personnel, materials and other organizational resources among

competing uses in the organization.

D. Negotiator

Since managers are often dependent on other persons, both within and outside the

organization, over whom they exercise no authority. Managers are frequently involved in negotiation activities which have a key impact

on the performance of their units.

Given the varied nature of the activities which managers direct, it is to be expected that

managers would need equally varied capabilities and skills. It is however, possible to

classify the range of capabilities and skills required of managers into three board types:

I. Interpersonal/ Human Skills

Since directing the activities of people in organizations is a central aspect of the job of managers, they

need to be skilled in human relations.

II. Technical Skills

Managers need to have the tools, methods, and techniques of the body of knowledge appropriate to the activities which they

manage. Thus, financial managers, production managers, personnel managers, etc., all need the tools and skills relevant to their respective

fields.

III. Conceptual Skills

Organizations frequently perform many different types of activities and functions which are interrelated in

different ways. Managers in such organizations need the ability to abstract from the concrete to be able to picture the larger systems to which smaller activity units belong,

and the many different ways in which the subsystems are or could be related to each other.

Top Level Managers

Middle- Level Managers

Lower Level Managers or the First

Level Supervisors

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Org

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Lead

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The central characteristics of managing business enterprises is that the resources of the organization or

firm are used to generate a surplus or profit.

In capitalist societies, private enterprises are expected to produce the bulk of the goods and services needed by

society in return for the possibility of earning profits. In capitalist systems, therefore, maximization of stockholder

or owner wealth through profitable enterprise operations is regarded as a major responsibility of the

managers of enterprise.

Thus, in addition to stockholders, enterprise managers are thought to have responsibilities to the following

parties as well:

• The firm’s customers• The firm’s employees & laborers• The firm’s suppliers

Businessmen shall recognize in their decision making the interest

of the general public and shall:

1. Take regular stock of their response to the basic needs of society and thus ensure that these needs are taken into account in

all policy-making decisions;

2. Do their best to ensure that the way they deploy their resources benefits society in

general and does not conflict with the reasonable needs and aspirations of the

communities in which they operate;

3. Pay proper regard to the environmental and social consequences of their business activity, with special attention to the duty of renewing resources where possible and minimizing waste and pollution and not sacrifice safety or efficiency in the interest

of short term profitability.

4. As corporate citizens make such contributions as their resources will allow,

to research, development, and application of indigenous technology, and

to the financing of social development.

5. Consider the human and social costs of

mechanization technology

6. Establish a policy allowing employees, within reasonable

limits, to contribute to the public and community service during the

work time;

7. Establish a policy regarding conflicts of interest based on the principle that decisions

should be made in the best interest of the business enterprise, and decision makers should be on their guard against allowing

personal considerations to distort their judgement; and

8. Not tolerate any form of illegal data gathering or any form of

inducement that tends to distort normal commercial judgement.

Entrepreneurs and Development

Definitions of Entrepreneurs

-The entrepreneur as the founder of an

enterprise

-The entrepreneur as a risk taker

-The entrepreneur as an innovator

Entrepreneurship as

Enterprise Founder

The earliest conception of the entrepreneur in

classical economics is that he assembled the three

factors of production (LAND, LABOR and CAPITAL)

to form a business enterprise. The entrepreneur is

thus simply the founder of a new enterprise, and

he (Entrepreneur) was considered the fourth factor

of production.

Entrepreneurship

as Risk Taker

The definition of the entrepreneur as a risk taker implies that

he must not only found the business but must assume the risk

in the venture by contributing something; (Capital), to it.

Under this second definition the entrepreneur is a risk taker

because he puts his capital into a business whose success is

never certain. Moreover, the CAPITAL which he invest need not

be seen only in terms of financial capital or other physical

assets but also in terms of the time and effort he devotes to

establish and manage the new venture.

Entrepreneurship

As Innovator

The entrepreneur creates economic progress

essentially by innovating. These innovations,

which he called (New Combinations), disrupted

the existing market equilibrium and create new

industries or businesses.

The above three functions of founding, risk taking, and innovating provide us a more adequate way of thinking about entrepreneurship. In particular, the function of

innovation is an important aspect of entrepreneurship in our time. One does not contribute much to society if one simply duplicates other businesses which already exist.

The entrepreneurs who are awarded with the

greatest financial returns are those whose

businesses represent successful innovations- either

they market a new product or service not

previously available, or they provide old products

or services to the market in new and better ways.

Business Managers

and Entrepreneurship

With entrepreneurship as above defined, a

distinction is often made between the economic

function of entrepreneurs as against that of

business managers. In contemporary business

organizations however, the need for innovation as a

way of increasing the profitability of the firm

appears to be well recognized.

The End.

Quiz # 1 in Principles of Management

1. is to design and maintain an internal

environment in which people working together in

groups that can perform effectively and efficiently

towards the attainment of group goals. (1 pt)

2. 5 Managerial Functions

(5pts.)

3. A person who has

responsibility for the activities of

other people in an organization.

(1pt)

4. This is the function of monitoring

performance and undertaking corrective actions

to ensure the attainment of predetermined

goals and objectives of the organization. (1pt)

5. It involves the recruitment, selection,

assignment, and development of the various

kinds of human resources required by the

organization. (1pt)

6. It involves the choice of the objectives to be

pursued, the means to achieve them, and

allocating the resources of the organization.

(1pt)

7. It involves identifying, subdividing, grouping,

and coordinating the various activities required

to achieve the objectives of the institution. (1pt)

8. This is the process of communicating with

and influencing subordinates towards the

achievement of organizational goals. (1pt)

9. In your own opinion, Why is high Quality

Management needed in the developing

countries today?

(4pts.)

10. 3categories of Managers Roles (3pts)

11. Three (3) subdivided types of Interpersonal Roles(3pts)

12. Three (3) subdividedtypes of Informational Roles(3pts)

13. Four (4) subdividedtypes of Decisional Roles(4pts)

Answer

1.Management

2.Planning

Organizing

Staffing

Directing

Controlling

3. Manager/s

4. Controlling

5. Staffing

6. Planning

7. Organizing

8. Directing

9. Essay

10.

Interpersonal Roles

Informational Roles

Decisional Roles

11.

The Figurehead Role

Leadership Role

Liaison Role

12.

Monitor Role

Disseminator Role

Spokesperson Role

13.

Entrepreneurial Role

Problem Solver

Resources Allocator

Negotiator

How's your Score?

Assignment

• Entrepreneurs and Development• Business Managers and

Entrepreneurs