MGT 162

FUNDAMENTALS OF
MANAGEMENT
NORHUSNIYATI HUSIN
UITM MELAKA
CHAPTER 1

INTRODUCTION TO
MANAGEMENT
Learning Objectives
1. Definition of organization
and management.
2. Measuring managerial performance.
3. Managerial process functions and
activities.
4. Management levels, skills and roles.
5. Evolution of management thoughts.
 1. DEFINITION OF
ORGANISATION AND
MANAGEMENT
Why do you study management?
 understand events, challenges and skills
 help organization achieve a high level of
performance
 equip our knowledge with theories and
practices
 able to make good decision
 be a good planners
 responsible and accountable towards the
accomplishment of organizational
objectives
What is management?
 The art of getting things done through people -
FOLLET
 The process of planning, organizing, leading and
controlling the efforts of an organization members
and of using all other organizational resources to
achieve stated organizational goals - STONER
 The process of planning, organizing, leading and
controlling that encompasses human, material,
financial and informational resources in an
organizational environment- HOLT
What is an organization?
 An organization is a social unit which two or
more people interact to achieve a common goal
or set of goals- STONER
 An organization is a collection of people
working together in a division of labor to
achieve a common purpose- SCHERMERHORN
 The structure of relationships that exists when
two or more people mutually cooperates to
pursue common objectives- HOLT
Why do we need an organization?
 Accomplish objectives
 Preserve knowledge
 Serve society
 Provide careers
What are formal and informal
organization?
 Formal organizations consist of two or more
people who are involved in a mutual effort with
formal authority to achieve common objectives-
HOLT
 Informal organizations are shadow organizations
consist of two or more people involved in a mutual
effort without deliberate structures of authority or
the necessity of the common objectives
 The difference is formal organization is with formal
authority and the informal is without formal
authority.
2. MEASURING MANAGERIAL
PERFORMANCE
What is a manager?
 A manager is a person in an organization
who is responsible for the work or
performance of one or more other
persons – SCHERMERHORN
 The people who plan, organize, lead and
control the activities of an organization so
that its goals can be achieved.
 Managers are vital to determine the
success of the organization.
How do we measure a manager’s
performance?
Two main criteria - efficiency and performance
effectiveness:
 Performance efficiency is defined as ability to do
the things right. Manager who can achieve outputs
or results as expected. Able to utilize and
minimize the cost of resources such as staff,
finance, equipment as well as raw materials.
 Performance effectiveness is defined as choosing
the right goals. It is said as doing the right things.
Example; if demand for small and economical cars
but manager choose to produce big and luxury
car the manager is ineffective.
 Performance effectiveness and efficiency as
foundations for productivity and managerial success
G High Effective and efficient,
O
Effective but goals are achieved and
A
not Efficient. resources are well utilized,
L
Some resources are area of high productivity
Wasted.
A
T
T
AB
A
I
C D
Neither Effective nor Efficient but not effective,
N
efficient, goals are not no wasted resources but
M
achieved, resources goals not achieved
E
wasted in the process.
N
T Low
Poor Good
RESOURCE UTILIZATION
 3. MANAGEMENT PROCESS,
FUNCTIONS AND ACTIVITIES
The Management Process

PLANNING

ACHIEVING THE
ORGANIZING ORGANIZATION’S
STATED
COMMUNICATION PURPOSE
(GOALS/
LEADING MISSION)

CONTROLLING
Management process POLC

 Planning-includes defining goals,

establishing strategy and developing
plans to coordinate activities
 Organizing- determines what tasks are
to be done who is to do them, how the
task are to be grouped, who reports to
whom and where decisions are to be
made
cont…
 Leading – includes motivating
subordinates, directing others, selecting
the most effective communication
channels and resolving conflicts

 Controlling – monitoring activities to

ensure that they are being accomplished
as planned and correcting any significant
deviations.
Types of Managers
Classified by two ways :
 by their levels – first line,
middle and top managers
 by the range of
organizational activities
for which they are
responsible – functional
and general managers
4.MANAGERIAL LEVEL, SKILLS
AND ROLES
Managerial Level
Managerial levels (1)
Top managers - establish objectives, policies and
strategies, make long term decision and guide the
organization’s interactions with its environment.
Their main tasks include:
 Formulating strategies, vision and purpose
 Guide to achieve organizational vision
 Making complex decisions
 Evaluating the organizational overall function, progress
and development
 Monitor business environment and use opportunities
for success
Managerial levels (2)
Middle managers – to direct the activities and implement
their organizations’ policies and to balance the demand of
their superiors with the capacity of their subordinates.
Their main tasks include:
 Receive and translate strategies and policies from top
management into programs to be implemented by lower
managers
 supervise and coordinate activities of first line managers
 Mange group dynamics, encourage cooperation among
employees and resolve conflict whenever necessary
 Create environment of good communication
 Define areas of responsibility for managerial personnel,
monitor the performance of group members
 Analyze and prepare reports and present them to the top
management
Managerial levels (3)
First-line Managers/Lower Level Manager –
responsible for putting into plans of higher and middle
management and they do not supervise other
managers but they are responsible for the work of
others.
Their main tasks include:
 Plan and schedule employees’ work on daily, weekly
and monthly basis
 Instruct and provide training for employees to certain
task
 Communicate with employees and keep them aware
of organizational needs, expectations and goals
 Inform higher level managers of subordinates work
needs and feedback of task
 Evaluate performance and give recommendation
Managerial Range
 Functional Manager - responsible for a
single area of activity. Example are
Finance Manager, Marketing Manager
 General Manager – responsible for more
complex units that include many
functional areas of activity. Example :
Plant Manager
Management Skills
 Technical skill – the ability to use the procedures,
techniques and knowledge of specialized field.
These skills are developed through experience and
education.
 Human skill – ability to work effectively with
other people. It is the ability to motivate,
understand, lead and communicate.
 Conceptual skill – mental capabilities that help
managers see the whole enterprise as well as the
relationships that exist between the various parts
in the organization. It includes intelligence and
verbal ability
Management skills used in
different level of management

Top Middle First Line

managers managers managers
Conceptual
Conceptual
Conceptual
Human

Human

Human
Technical

Technical
Technical
Managerial Roles (1)
A. Interpersonal roles – helps the manager in
managing the organizational smoothly.

Figurehead – a department head performing

ceremonial duties like greeting visitors, signing legal
documents
Leader – a person who is responsible to hiring,
training and motivating subordinates in the
organization
Liaison – a person who performs and interacts with
other people outside the organization
Managerial Roles (2)
B. Informational roles – assists the manager in
receiving and communicating information to make the
right decision.

Monitor – manager continuously seeks information

that can be used to advantage
Disseminator – information received internally or
externally will be transmitted to the subordinates
Spokesperson – information will be transmitted to
people outside the organization or unit
Managerial Roles (3)
C. Decisional roles – assist managers I making
decisions that solve problems or analyze and take
advantage of opportunities.
Entrepreneur- manager try to improve the unit and
initiate changes
Disturbance – manager is responsible for corrective
actions when the organizations faces important,
unexpected conflicts
Resource allocator – manager is responsible in
allocating the resources of the organization
Negotiator - manager is responsible for representing
the organization at major negotiations.
 5. EVOLVEMENT OF
MANAGEMENT THOUGHTS
Chronological Development of
Management Perspectives
*TQM

*LEARNING
ORGANIZATIO
N

*TECHNOLOG
Y-DRIVEN
WORKPLACE
Classical Viewpoint: Scientific &
Administrative Management

Scientific management (1)

 emphasized the scientific study of work methods to
improve the productivity of individual workers
 Frederick W. Taylor, Frank and Lillian Gilbreth
 Principles of Scientific Management
1. Scientifically study each part of the task
2. Carefully select workers with the right abilities
3. Give workers the training and incentives to do
the task
4. Use scientific principles to plan the work
methods
The Scientific Management Theory (2)
Henry L. Gantt (1861-1919)
 Reconsidered Taylor’s incentive system for both
supervisors and workers
 Introduced the famous “Gant Chart”

Frank B. and Lillian M. Gilbreth

 Introduced the three-position plan:
1. Encourage worker to do a good job,
2. perform it well, train other worker
3. Make him more efficient and experience and
this gives opportunity to prepare for promotion
The General Administrative Theory (1)
Max Weber
 Well known for “ideal-bureaucracy” that emphasizes
on:
1. A well defined hierarchy of authority
2. A comprehensive system of rules and
procedures.
3. A clear division of work
4. Impersonal employer
5. Promotion and selection criteria based on
technical competence
The General Administrative Theory (2)
Henri Fayol
 Focus on managers and the functions that they
perform
 He believed that management is based on the
function of planning, organizing, commanding,
coordinating and controlling
 He opposed the believe “managers are born not
made”.
Fayol’s 14 Principles of Management
1. Division of work – Specialization increases
output by making employees more efficient. This
is the same as Adam Smith’s “division of labor”
2. Authority – managers must be able to give
orders
3. Discipline – good discipline is the result to
effective leadership, a clear understanding
between management and workers.
4. Unity of command – every employee should
receive order from one superior
5. Unity of direction – each group of organizational
activities that have the same objectives should be
directed by one manager using one plan.
6. Subordination of individual interests to the
general interest.
Fayol’s 14 Principles of Management
7. Remuneration – workers must be paid wages
for their services
8. Centralization – the degree to which
subordinates are involved in decision making
9. Scalar Chain – the line of authority from top
management to the lowest ranks e.g.
communication
10. Order – people and materials should be at the
right place and time
11. Equity – managers should be kind and fair to
all.
Fayol’s 14 Principles of Management

12. Stability of tenure of personnel – management

should provide orderly personnel planning and
ensure that replacement are available to fill
vacancies
13. Initiatives – allowing creativity will exert high
level of efforts
14. Esprit de corps – promoting team spirit will
build harmony and unity within the organization
Behavioral Viewpoint: Behaviorism, Human
Relations, & Behavioral (1)
 Influenced by human behavior which emphasized
effective management results from understanding
human needs
 Discover and recognize the importance of the
informal aspects of organization which include
communication and work groups
 Managers need to motivate and lead subordinates
 There are two thoughts in this theory: human
resources approach and human relation approach
Behavioral Viewpoint: Behaviorism, Human
Relations, & Behavioral Science (2)
Mary Parker Follet
 Emphasized on motivation in the organization and
this could be done through coordination and
managers harmonizing group effort
 Four principles of coordination:
1. Coordination needs to reflect direct contact with
people
2. Coordination is a continuous, on going process
3. Coordination is found in the initial stages of
endeavor
4. Coordination is reciprocal process inherent in all
group situation
Behavioral Viewpoint: Behaviorism, Human
Relations, & Behavioral Science (3)

Elton Mayo – The Hawthorne Studies

 People are motivated because they perceived that
“the management group” (high status) is paying
attention to them
 Shows the informal “human” elements within
organization
Behavioral Viewpoint: Behaviorism, Human
Relations, & Behavioral Science (4)

Maslow’s hierarchy of needs

 Physiological
 Safety
 Social
 Esteem
 Self-actualization
Behavioral Viewpoint: Behaviorism, Human
Relations, & Behavioral Science (5)
Douglas McGregor – Theory X versus Theory Y
 Theory X
◦ represents a pessimistic, negative view of workers
◦ workers are irresponsible, resistant to change, lack
ambition, hate work, and want to be led

 Theory Y
◦ represents an optimistic, positive view of workers
◦ Workers are considered capable of accepting
responsibility, self-direction, self control and being
creative
Quantitative Viewpoints: Management
Science & Operations Research
Views management as a system of processes
 Decision making is a rational process then they could
construct a model to duplicate the process

 The operation research consisted of teams using

mathematical techniques for solutions of management
problems through modeling and analysis

 Management science was operation research procedure

that have been formalized. It use mathematics models
and computers to assist in future forecasting, based on
the past and present activity
The Contemporary Approach (1)
 Explains that the application of certain
managerial concepts depends on the
environment, the people in the organization and
the tasks to be accomplished
 There are two thoughts in this theory: the
system approach and the contingency approach
The Contemporary Approach –
The System Approach (2)
 Defined as a system as a set of interrelated and
interdependent parts arranged in a manner that
produces a unified whole
 There are two systems: closed and opened
systems
 Opened system recognizes that the organization
depends on the environment for essential input.
Organizations are known to be inter dependent
on other organizations.
 Closed system are not influenced by, nor interact
with their environment. It is aware and sensitive
to the sub-system.
The Contemporary Approach –
The Contingency Approach (2)

 Also known as situational approach

 Managers need to recognize and respond to a
situational variables such as firm size, employees
attitudes, differences among resources,
objectives, products output, task conducted and
firm’s strategy
 Proposes that there is no one best approach to
management to ALL situations
 Most practical because it addresses problems on
a case-by-case basis
Exercise
1. Define management.
2. How to measure the performance of
managers?
3. Explain management process
functions.
4. Explain three basic skills of managers.
5. Identify managerial decisional roles as
identified by Mintzberg.
THANK YOU