UNIT I - THE
WORLD OF
MANAGEMENT
THE MANAGER’S JOB
WHO IS A MANAGER?
A manager is a person responsible for the work performance of group membe rs.
Approximately 10 percent of the U.S. workforce holds a managerial position of one type or
anothe r. A manager holds the formal authority to commit organizational resources, even if
the approval of others is required. For example, the manager of a J ackson-Hewitt income tax
and fi nancial service outlet has the authority to order the repainting of the reception area.
The income tax and fi nancial services specialists reporting to that manager, however, do
not have that authority.
The concepts of manager and managing are intertwined. The term management in this book
refers to the process of using organizational resources to achieve organizational objectives
through the functions of planning, organizing and staffi ng, leading, and controlling. These
functions represent the broad framework for this book and will be described later. I n
addition to being a process, the term management is also used as a label for a specifi c
LEVELS OF MANAGEMENT
Another way of understanding the natuare of a
manager’s job is to examine the three levels of
management shown in Exhibit 1-1. The pyramid in
this fi gure illustrates progressively fewer
employees at each higher managerial level. The
largest number of people is at the bottom
organiz ational level. (Note that the term
organiz ational level is sometimes are precise than
the managerial level, particularly at the bottom
organiz ational level, which has no managers.)
TOP-LEVEL MANAGERS
Most people w h o en t er t h e fi eld of m anagem ent aspire to becom e t op-level m an ager s-
m anagers at th e t op on e or t w o levels in an organization. C-level m an ager is a recen t t erm
used to described a t op-l evel m anager; these m anager s usually h ave t h e w ord chi ef i n
their tit le, such as ch i ef oper ating offi cer. Top-level m anagers are em pow ered t o m ake
m ajor decision s aff ect in g t h e present and future of the fi rm . Only a t op-level m anager , for
exam ple, would h ave t h e au t hority to purchase another com pany, in i t iat e a n ew produ ct
line, or hire h u n dreds of em ployees. Top-level m anager are th e peopl e w ho gi ve t h e
organization it s gen er al di rect i on; they decide where it is going an d h ow i t wi ll get t here.
The term s execut i ve, t op-l evel m anager, and c-level m anager can be u sed i nt erch an geabl y.
Because m anagem en t i s an evolving fi eld, new job titles for c-level m an ager s con t in u e t o
surface. Often t h ese t i t les refl ect a new em phasis on what m ust be accom pli sh ed for an
organization to fu n successfu ll y. Here are a few of t he recent c-level posit ion s oft en fou n d
in large organi zat ion s:
CHIEF OF STAFF
Chi ef of s ta ff . H i gh- level executives i n poli ti cs
a nd the mi l i ta r y ha ve long rel ied on the
s er vi ces of a chi ef of the s ta ff ; this role ha s
recentl y become pa rt of the executive suite in
bus i nes s . The chi ef of sta ff i s a top level
a dv i s or who s er ves a s a confi da nt, ga tekeeper,
a nd a l l -a round s tra tegic cons ulta nt. Three
fi na nci a l s er vi ces fi rms with a chief of s ta ff in
the executi ve s ui te a re Gol dma n Sa chs, Afl a c,
a nd the gl oba l i ns ur a nce bus ines s ING.
Chi ef commerci a l offi cer. A growing number of
l a rge bus i nes s fi rms a re designa ting a chief
commerci a l
CHIEF COMMERCIAL
OFFICER
A growi ng number of la rge bus iness fi rms a re
des i gna ti ng a chi ef commercia l offi cer who
over s ea s growth a nd commercia l success . The
per s on i n thi s pos i ti on ha s ma j or responsi bili ty
for cus tomer rel a ti onshi ps a nd ma na ging the
compa ny i nter fa ce with the cus tomer. The chief
commerci a l offi cer posi ti on ha s been crea ted
beca us e the ma ny diff erent s a les cha nnels,
es peci a l l y di gi ta l s a les , ha s forced compa nies
to thi nk di ff erentl y a bout their customers a nd
how they i nter a ct wi th them.
CHIEF PRIVACY
OFFICER
As i l l u s tra te d in th e ac c o m pa n y i n g
M a n age m e n t i n Ac ti o n , th e c h i e f pri v a c y
o ffi c e r w o rk s on such pro bl e m s as
s af e gu a rdi n g c u s to m e r i n f o rm a ti o n i n th e
di gi ta l w o rl d.
MIDDLE-LEVEL MANAGERS
Middle-level managers are managers who are neither executives not fi rst-
level supervisors, but who serve as a link between the two groups. Middle-
level managers conduct most of the coordination activities within the fi rm,
and they are responsible for implementing programs and policies
formulated by top-level management. The jobs of middle-level managers
vary substantially in terms of responsibility income. A branch manager in a
large fi rm might be responsible for more than 100 workers. In contrast, a
general supervisor in a small manufacturing fi rm might have 20 people
reporting to him or her. Other important tasks for many middle-level
managers include helping the company undertake profi table new ventures
and fi nding creative ways to reach goals. A major part of a middle-level
managers operating an organization, and therefore continue to be in
demand.
FIRST-LEVEL MANAGERS
Managers who supervise operatives are referred to as fi rst-level managers,
fi rst line managers, or supervisors. Historically, fi rst-level managers were
promoted from production or clerical (now called staff support) positions
into supervisory positions. Rarely did they have formal education beyond
high school. A dramatic shift has taken place in recent years, however.
Many of today’s fi rst-level managers are career school graduates and
fourth year college graduates who are familiar with modern management
techniques. The current emphasis on productivity and cost control have
elevated the status of many supervisors.
TYPES OF MANAGER
Functional Managers supervise the work of employees engaged in
specialized activities such as accounting, engineering, information
systems, food preparation, marketing, and sales. A functional manager is a
manager of specialists and of their support team, such as offi ce assistance.
General Managers are responsible for the work of several diff erent groups
that perform a variety of functions. The job title “plant general manager ”
off ers insight into the meaning of general management. Reporting to the
plant general manager are various departments engaged in both
specialized and generalize work such as manufacturing, engineering, labor
relations, quality control, safety, and information systems.
ADMINISTRATOR
An administrator is typically a manager who works in a public
(government) or nonprofi t organization, including educational institutions,
rather than in a business fi rm. Among these managerial positions are
hospital administrator and housing administrator. Managers in all types of
educational institutions are referred to as administrators. The fact that
individual contributors in nonprofi t organizations are sometimes referred to
a administrators often causes confusion. An employee is not an
administrator in the managerial sense unless he or she supervises others.
ENTREPRENEURS AND SMALL-BUSINESS
OWNERS
By strict defi nition, an entrepreneur is a person who founds and operates
an innovative business. After the entrepreneur develops the business into
something bigger than he or she can handle alone or with the help of only
a few people, that person becomes a general manager.
Similar to an entrepreneur, the owner and operator of a small-business
becomes a manager when the fi rm grows to include several employees.
Small-business owners typically invest considerable emotional and physical
energy into their fi rms. Note that entrepreneurs are (or start as) small-
business owners, but that the reverse is not necessarily true.
TEAM LEADERS
A major development in types of managerial positions during the last 25
years is the emergence of the team leader . A manager in such a position
coordinates the work of a small group of people while acting as a facilitator
or catalyst. Team leaders are found at several organizational levels and are
sometimes referred to as project managers, program managers, process
managers, and task force leaders. Note that the term team could also refer
to an executive team, yet a top executive almost never carriers the title
team leader .
THE PROCESS OF MANAGEMENT
A helpful approach to understanding what managers do is to regard their
work as a process. A process is a series of actions that achieves something-
making a profi t or providing a service, for example. To achieve an
objective, the manager uses resources and carriers put for major
managerial functions. The functions are planning, organizing, and staffi ng,
leading, and controlling.
RESOURCES USED BY MANAGERS
Managers use resources to accomplish their purposes, just as
a carpenter uses resources to build a terrace. A manager’s
resources can be divided into four types: human, fi nancial,
physical, and informational.
RESOURCES USED BY MANAGERS
Human resources Financial resources
are the people needed to get the job uare the money the manager and the
done. Manager’s goals infl uence organization use to reach
which employ ees they choose. A organizational goals. The fi nancial
manager might set the goal of resources of a business organization
delivering automotiv e supplies and are profi ts and investments from
tools to auto and truc k stoc kholders. A business must
manufacturers. Among the human occ asionally borrow cash to meet
resources he or she chooses are pay roll or to pay for supplies. The
manufacturing technic ians, sales fi nanc ial resources of community
representativ es, information agencies come from tax revenues,
technology spec ialists, and a c haritable c ontributions, and
network of dealers. gov ernment grants.
RESOURCES USED BY MANAGERS
Physical resources Information resources
are the data that the manager and the
uare a fi rm’s tangible goods and organization use to get the job done. For
example, to supply leads to the fi rms
real estate, including raw
sales representatives, the sales manager
materials, offi ce space, of an offi ce-supply company reads local
production facilities, offi ce business newspapers and Internet
equipment, and vehicles. Vendors postings to learn about new fi rms in
supply many of the physical town. These newspapers and Web sites
are information resources. Jeff rey R.
resources needed to achieve
Immelt, the chairman and CEO of General
organizational goals. Electric Corp., surfs the Internet regularly
to learn about developments in the
industry, thus using the Internet as an
information resource.
CONCEPT IN BUSINESS
THE FOUR MANAGERIAL FUNCTIONS
Exhibit 1-2 shows the four major resources in the context
of the management process. To accomplish goals, the
manager performs four managerial functions. These
functions are planning, organizing and staffi ng, leading
and controlling.
Planning involves setting goals and fi guring out ways of reaching them.
Planni ng considered the central function of management, pervades
everything a manager does. In planning, a manager looks to the future,
saying, “Here is what we want to achieve, and here is how we are goi ng
to do i t.” Deci sion making is usually a component of planning , because
choices must be made in the process of fi nalizing plans. The importance
of pl anning expands as it contributes heavily to performing the other
management functions. For example, managers must make plans to do an
eff ecti ve job of staffi ng the organization. Planning is also part of
marketi ng. For example, cereal maker Kellogg Corp. established plans to
diversi fy further into the snack-food business to reach its goal of
expandi ng market share.
CONCEPT IN BUSINESS
Organizing i s the process of making sure the necessary human
and physical resources are available to carry out a plan and
achieve organi zational goals. Organizing also involves assigning
activities, dividing work i nto specifi c job and tasks, and specifying
who has the authori ty to accomplish certain task. Another maj or
aspect of organi zi ng i s grouping activities into departments or
some other l ogical subdi vision.The staffi ng function ensures the
availability of necessary human resources to achieve
organizational goals. Hiri ng people for jobs is a typical staffi ng
activity. Staffi ng is such a major activity that it is sometimes
classifi ed as a function separate from organizing.
CONCEPT IN BUSINESS
Leading means i nfl uenci ng others to achieve organizational
objectives. As a consequence, it involves energizing, directi ng,
persuading others, and creating a vision. Leadership involves
dozens of interpersonal processes: motivating, communicati ng,
coaching, and showing group members how they can reach thei r
goals. Leadership i s such a key component of managerial work
that management i s sometimes seen as accomplishing results
through people. The l eadership aspect of management focuses on
inspiring people and bringing about change, whereas the other
three functions focus more on maintaining a stable system.
According to management guru Henry Mintzberg, eff ective leaders
develop the sense of community or shared purpose that is
essential for cooperative eff ort in all organization.
CONCEPT IN BUSINESS
Controlling generally involves comparing actual
performance to a predetermined standard. Any signifi cant
diff erence between actual and desired performance would
prompt a manager to take corrective action. He or she
might, for example, increase advertising to boost lower-
than anticipated sales.
THE EVOLUTION OF MANAGEMENT
THOUGHT
Manag ement as a practice has an almost unlimited
his tory. Visualize a g roup of prehistoric people
attempting to develop a d evice that would help
transport heavy objects. Given a mod ern lab el, the
c aveperson sugg esting this d evelopment is the head
of p roduct research and develop ment. The p roject off
b uild ing the curious new circular device was turned
over to a group of p eople who had hands- on access to
raw material. Because the developers of the wheel d id
not constitute a b usiness enterp rise, they handed over
the technolog y of the wheel to all interested p arties
(in prehistoric times, p atents were not available).
THE EVOLUTION OF MANAGEMEN
THOUGHT
Management as s a formal s t udy , in c omparis on to a practice,
began in 1700s as part of the Indus trial Revolution. Here we
take a brief look at management , covering both his torical
development s and v arious approac hes to unders tanding it.
The anchor point s t o our dis c us s ion are as follow s :
1.The c las s ic al approac h (s cient ifi c management and
adminis t rativ e management )
2.The behav ioral approac h
3.Quant it at iv e approach
4.The s y s tems pers pec t iv e
5.The c ontingenc y approac h
The informat ion t echnology approac h and beyond
CLASSICAL APPROACH TO MANAGEMENT
The study of management became more systematized and formal as a by-
product of the Industrial Revolution that took lace from the 1700s through
the 1900s. It was necessary to develop approaches to managing work and
people in order to manage all the new factories that were a central part of
the Industrial Revolution. The classical approach to management.
The focus of scientifi c management was the application of scientifi c
methods to increase individual workers productivity. An example would be
assembling a washing machine with the least number of wasted motions
and steps Frederick W. Taylor, considered the father of scientifi c
management, was an engineer by background. He used scientifi c analysis
and experiments to increase worker output. Other key contributors to
scientifi c management were Henry Gantt and Frank and Lillian Gilbreth.
(Gantt charts for scheduling activities are still used today.)
CLASSICAL APPROACH TO MANAGEMENT
Administrative management was concerned primarily with
how organizations should be managed and structured. The
French businessman Henri Fayol and the German scholar Max
Weber were main contributors to administrative management.
THE BEHAVIORAL APPROACH
The behavioral approach to management emph asi zes i mproving management
thro ugh the psychological makeu p of peopl e. In co ntrast to the largely technical
emphasis of scientifi c management, a common theme of the behavioral
appro ach focuses on the need to u nderstan d peo pl e. Th e behavioral approach is
so meti mes referred to as the h uman reso urces approach because of the focus
on maki ng optimum use of wo rkers i n a positive way, such as making jobs
moti vati on al. One hope of the behavi oral approach was to reduce some of the
l abor-management confl ict to preval en t un der th e classical approach to
man agement. The behavioral approach has profou ndly i nfl uenced management,
an d a portion of this book is based on behavi oral theory. Typical behavior and
hu man resource topics i ncl ude leadersh ip, mo ti vation, communication,
teamwork, and confl ict.
THREE CORNERSTONES OF THE BEHAVIORAL
APPROACH
The Hawthorne Studies
Th e pu rpose off t h e stu dy conducted at the Hawthorne plant of Western
El ect ri c (a n AT&T su bsi diary located in Ci cero, Il linois) was to determine
th e eff ec ts of ch a n ges i n l ighting on productivity. In thi s study, workers
were di v i ded i n t o a n experimental group and a control group. Lighting
con di t i on s for t h e c on t rol group varied i n i ntensity from 24 to 46 to 70
foot-ca n dl es. Th e l i gh t i ng for the control group remained constant.
THREE CORNERSTONES OF THE BEHAVIORAL
APPROACH
Theory X and Theory Y of Douglas McGregor
A widely quoted development of the behavioral approach is Douglas McGregor’s
analys is o f the assumptions managers make about human nature. Theo ry X is a s et
of traditional assumptions about people. Managers who hold thes e as s umptio ns are
pess imis tic about workers capabilities. They believe that workers dis like work, s eek
to avoid responsibility, are not ambitious, and must be s upervis ed clos ely.
McGrego r urged managers to challenge these assumptions abo ut human nature
becaus e they are untrue in most circumstances. Theory Y, the alternative, pos es an
optimistic s et of assumptions. These assumptions include the idea that peo ple do
accept res ponsibility, can exercise self-control, posses the capacity to inno vate,
and co ns ider work to be as natural as rest or play. McGregor argued that thes e
assumptions accurately describe human nature in far more s ituations than mos t
managers believe. He therefore proposed that these assumptions s ho uld guide
managerial practice.
THREE CORNERSTONES OF THE BEHAVIORAL
APPROACH
Maslow’s Need History
Most readers are already familiar with the need hierarchy develo ped by
psycholo gist Abraham Maslow. Maslow suggested that humans are motivated by
eff orts to s atisfy a hierarchy of needs ranging from basic needs to thos e fo r s elf-
actualization, or reaching one’s potential. The need hierarchy pro mpted managers
to think about ways of satisfying a wide range of worker needs to keep them
motivated.
The primary strength of the behavioral (or human resources ) approach is that it
enco urages managers to take into account the human element. Many valuable
methods o motivating employees are based on behavioral res earch. The primary
weakness of the behavioral approach is that sometimes leads to an overs implifi ed
view o f managing people. Managers sometimes adopt one behavioral theo ry and
igno re other relevant information. For example, several theories of motivation pay
too little attention to the importance of money in people’s thinking.
QUANTITATIVE APPROACHES TO
MANAGEMENT
The quantitativ e ap p ro ach to management is a perspectiv e on
management that e mp hasizes the use of a group of methods in
managerial d e cisio n making, based on the scientifi c method. Today , the
q uantitativ e ap p ro ach is often referred to as management science or
o p e rations re se arch (OR). Frequently used quantitativ e tools and
te chniques includ e statistics, linear programming , network analy sis,
d e cision tre e s, and computer simulations. Theses tools and techniq ues
can be used whe n making decisions regarding inventory control, plant-
site locatio ns, q uality control, and a range of other decisions where
o b je ctive informatio n is important.
QUANTITATIVE APPROACHES TO
MANAGEMENT
Frederick Taylor’s work provided the foundation for the quantitative
approach to management. However, the impetus for the modern-day
quantitative approach was the formation of OR teams to solve range of
problems faced by Allied forces during World War II.
The primary strength of the quantitative approach to management is
that it enables managers to solve complex problems that cannot be
solved by common sense alone. For example, management science
techniques are used to make forecasts that take into account hundreds
of factors simultaneously. A weakness of management science is that
the answers it produces are often less precise than they appear.
Although quantitative approaches use precise methods, much of the
data is based on human estimates, which can be unreliable.
THE SYSTEMS PERSPECTIVE
The systems p e rsp e ctiv e is a way of v iewing problems more than it is a
sp e cifi c app roach to management. It is based on the concept that an
o rg anization is a sy ste m, or an entity off interrelated parts. If you adjust
o ne part of the sy ste m, other parts will be aff ected automatically. For
ex ample, sup p o se y o u off er low compensation to job candidates.
According to the sy ste ms approach, your action will infl uence y our
p ro duct quality. The “lo w-quality” employees who are willing to accept
low wages will p rod uce low-quality goods.
THE SYSTEMS PERSPECTIVE
Two other infl uential concepts from the systems perspective are entropy
and synergy. Entropy is the tendency o a system to run down and die if
does not receive fresh inputs from its environment. As indicate in, the
organization must continually receive inputs from the outside world to
make sure it says in tune with, or ahead of the environment. Synergy
means that the whole is greater than the sum of the parts. When the
various parts of an organization work together, they can produce much
more than they could by working independently.
THE CONTINGENCY APPROACH
The continge ncy ap p ro ach to management emphasizes that there is no
sing le best way to manag e people or work in every situation. A method
that leads to hig h p ro d uctivity or morale under one set of circumstances
may not achie v e the same results in another. The contingency approach
is d eriv ed fro m the stud y of leadership and organization structures. With
resp e ct to le ad e rship , p sy chologists developed detailed explanations of
which sty le o f le ad ership would work best in which situation.
THE CONTINGENCY APPROACH
The streng th o f the contingency ap proach is that it encourages
managers to ex amine indiv idual and situational diff erences before
d e ciding on a co urse o f action. Its major problem is that is it often used
as an excuse fo r no t acq uiring formal knowledge about management.
THE INFORMATION TECHNOLOGY ERA AND
BEYOND
The informatio n te chno logy era had relatively modest beginnings in the
1950s with the use o f electronic data processing to take ov er the
manual proce ssing of large batches of data and numbers. By the late
1980s, the imp act o f information technology and the Internet began to
infl uence ho w manag e rs manage work and people. A report b y two
e conomists conclud e d that the impact of the Internet on business is
similar to the imp act o f electricity at the beginning of the twentieth
ce ntury.
THE INFORMATION TECHNOLOGY ERA AND
BEYOND
Information technol ogy modifi ed managerial work in the fol l ow i ng w a ys:
• M anagers often communicate w ith people, even sending l ayoff noti ces, by
e-mail rather than by telephone or in person. Managers send a nd recei ve
messages more frequently than i n the past because they are i n frequent
contact w ith the offi ce through a Bl ackBerry or some other bra nd of
personal digital assistant or smart phone.
• M any managers organize their sales and marketing eff orts di ff erentl y by
using the Internet to conduct most transactions. Similarl y, much purcha si ng
of supplies and materials is conducted through the Internet. Al most every
consumer- oriented business today has been drawn i nto usi ng soci a l
networki ng sites such as Twitter and Facebook to market i ts products.
• M anagers run their organizations more democratically because they recei ve
i nput from so many workers at diff erent levels in the orga ni za ti on through
e-mail and intranets.
THANK YOU
