Meaning and principle of management

The nature of management is to motivate and coordinate others to cope with diverse and far-
reaching challenges.

Every day, managers solve difficult problem, turn organization around achieve astonishing
performances, to be successful, every organization needs good manager. What characteristics do
all good managers have in common? They get things done through their organizations. Managers
are the executive function of the organization, responsible for building and coordinating an entire
system rather than performing specific task. Rather than doing all the work themselves, good
managers create the systems and conditions that enable others to perform those tasks. By
creating the right systems and environment, managers ensure that the department or organization
will survive, and thrive beyond the tenure of any specific superior or manager.

Management is the attainment of organizational goals in an effective and efficient manner

through planning, organizing, leading, and controlling organizational resources. This definition
holds two important ideas: (1) the four functions of planning, organizing, leading, and
controlling, and (2) the attainment of organizational goals in an effective and efficient manner.
Let's first take a look at the four primary management functions. Later in the chapter, we'll
discuss organizational effectiveness and efficiency, as well as the multitude of skills managers
use to successfully perform their jobs.

The Four Management Functions

Managers use resources to attain organizational goals through the functions of planning,
organizing, leading, and controlling. Although some management theorists identify additional
management functions, such as staffing, communicating, or decision making, those additional
functions.

Planning

Planning means identifying goals for future organizational performance and deciding on the
tasks and use of resources needed to attain them. In other words, managerial planning defines
where the organization wants to be in the future and how to get there.

Organizing
Organizing typically follows planning and reflects how the organization tries to accomplish the
plan Organizing involves assigning tasks, grouping tasks into departments ting authority, and
allocating resources across the organization.

Leading

Leading is the use of influence to motivate employees to achieve organizational goals. Leading
means creating a shared culture and values, communicating goals to employees throughout the
organization, and infusing employees with the desire to perform at a high level. Leading involves
motivating the entire departments and divisions as well as those individuals working
immediately with the manager. In an era of uncertainty, global competition and growing
diversity of the workforce, the ability to shape culture, communicate goals, and motivate
employees is critical to business success.

Controlling

Controlling is the fourth function in the management process. Controlling means monitoring
employees' activities, determining whether the organization is on tar- get toward its goals, and
making corrections as necessary. Managers must ensure that the organization is moving toward
its goals. Trends toward empowerment and trust of employees have led many companies to place
less emphasis on topdown control and more emphasis on training employees to monitor and
correct themselves.

Organisational performance

The other part of our definition of management is the attainment of organizational goals in an
efficient and effective manner. Management is so important because organizations are so
important. In an industrialized society' where complex technologies dominate, organizations
bring together knowledge, people, and raw materials to perform tasks no individual could do
alone. Without organizations, how could technology be provided that enables us to share
information around the world in an instant; electricity be produced from huge dams and nuclear
power plants; and thousands of videogames, compact discs, and DVDs be made available for our
entertainment? Organizations pervade our society, and managers are responsible for seeing that
resources are used wisely to attain organizational goals. Our formal definition of an organization
is a social entity that is goal directed and deliberately structured. Social entity means being made
up of two or more people. Goal directed means designed to achieve some outcome, such as make
a profit (Just rite), win pay increases for members (APL-CIO), meet spiritual needs (Methodist
Church), or provide social satisfaction (college sorority). Deliberately structured means that tasks
are divided and responsibility for their performance is assigned to organization members. This
definition applies to all organizations, including both profit and nonprofit. Small, offbeat, and
nonprofit organizations are more numerous than large, visible corporations—and just as
important to society. Based on our definition of management, the manager's responsibility is to
coordinate resources in an effective and efficient manner to accomplish the organization's goals.
Organizational effectiveness is the degree to which the organization achieves a stated goal, or
succeeds in accomplishing what it tries to do. Organizational effectiveness means providing a
product or service that customers value. Organizational efficiency refers to the amount of
resources used to achieve an organizational goal. It is based on how much raw materials, money,
and people are necessary for producing a given volume of output. Efficiency can be calculated as
the amount of resources used to produce a product or service. Efficiency and effectiveness can
both be high in the same organization. Managers at retailer Target, for instance, continually look
for ways to increase efficiency while also meeting the company's quality and customer
satisfaction goals.

All managers have to pay attention b but severe cost cutting to improve efficiency can sometimes
hurt organizational effectiveness. The ultimate responsibility of managers is to achieve high
performance, which is the attainment of high performance which is the attainment of
organizational goals by using resources in an efficient and effective manner.

Management Skills

A manager's job is complex and multidimensional and requires a range of skills. Although some
management theorists proposed a list of skills, the necessary skills tor managing a department or
an organization can be summarized in three categories. Conceptual, human, and technical. The
application of these skills changes as managers move up in the organization Although the degree
of each skill necessary at different levels of an organization may vary, all managers must possess
skills in each of these important areas to perform effectively.
Conceptual Skills

Conceptual skill is the cognitive ability to see the organization as a whole system and the
relationships among its parts. Conceptual skill involves the manager's thinking, information
processing, and planning abilities. It involves knowing where one's department fits into the total
organization and how the organization fits into the industry the community, and the broader
business and social environment. It means the ability to think strategically—to take the broad,
long-term view—and to identify, evaluate, and solve complex problem.

Conceptual skills are needed by all managers but are especially important for managers at the
top. Many of the responsibilities of top managers, such as decision making, resource allocation,
and innovation, require a broad view.

Human Skills

Human skill is the manager's ability to work with and through other people and to work
effectively as a group member. Human skill is demonstrated in the way a manager relates to
other people, including the ability to motivate, facilitate, coordinate, lead, communicate, and
resolve conflicts. A manager with human skills allows subordinates to express themselves
without fear of ridicule, encourages participation, and shows appreciation for employees' efforts.
Human skills are essential for managers who work with employees directly on a daily basis.
Organizations frequently lose good people because of front-line bosses who fail to show respect
and concern for employees.

Technical Skills

Technical skill is the understanding of and proficiency in the performance of specific tasks.
Technical skill includes mastery of the methods, techniques, and equipment involved in specific
functions such as engineering, manufacturing, or finance. Technical skill also includes
specialized knowledge, analytical ability, and the competent use of tools and techniques to solve
problems in that specific discipline. Technical skills are particularly important at lower
organizational levels. Many managers get promoted to their first management jobs by having
excellent technical skills. However, technical skills become less important than human and
conceptual skills as managers move up the hierarchy.

Types of Management

Managers uses conceptual, human, and technical skills to perform the four management
functions of planning, organizing, leading, and controlling in all organizations. Large and small,
manufacturing and service, profit and nonprofit, traditional and Internet-based, but not all
managers jobs are the same. Managers are responsible for different departments, work at
different levels in the hierarchy, and meet different requirements for achieving high performance.

For first-level managers, the main concern is facilitating individual employee performance.
Middle managers, though, are concerned less with individual performance and more with linking
groups of people, such as allocating resources, coordinating teams, or putting top management
plans into action across the organization. For top-level managers, the primary focus is
monitoring the external environment and determining the best strategy to be competitive.

Top managers are at the top of the hierarchy and are responsible for the entire organization.
They have such titles as president, chairperson, executive director, chief executive officer (CEO),
and executive vice president. Top managers are responsible for setting organizational goals,
defining strategies for achieving them, monitoring and interpreting the external environment, and
making decisions that affect the entire organization. They look to the long-term future and
concern themselves with general environmental trends and the organization's overall success.
Top managers are also responsible for communicating a shared vision for the organization,
shaping corporate culture, and nurturing an entrepreneurial spirit that can help the company
innovate and keep pace with rapid change.

Middle managers

Middle managers work at the middle level of the organization and are responsible for business
unit and major department. Examples of middle managers are department head, division head,
and manager of quality control and director of research. They are responsible for implementing
the overall policy and strategies defined by top managers. Middle managers are generally
concerned with near future rather than with long term planning.

Operational/Lower managers

Operational managers are directly responsible for the production of goods and services. They are
the first or second levels of management and have such titles as supervisor, line manager section
chief, and office manager. They are responsible for groups of non-management employees.
Their primary concern is the application of rules and procedures to achieve efficient production,
provide technical assistance, and motivate subordinates. The time horizon at this level is short,
with the emphasis on accomplishing day-to-day goals.

Manager Roles

Mintzberg's observations and subsequent research indicate that diverse manager activities can be
organized into 10 roles. A role is a set of expectations for a managers behavior. These roles are
divided into three conceptual categories: Informational (managing by information); Interpersonal
(managing through people); and decisional (managing through action). Each roles represents
activities that managers undertake to ultimately accomplish the functions of planning,
organizing, leading and controlling. As Mintzeberg says, “The manager who only communicates
or only conceives never get anything done, while the manager who only ‘does’ ends up doing it
all alone”

Informational Roles: Informational roles describes the activities used to maintain and develop
an information network.

Monitor roles involves seeking current information from many sources. The manager acquires
information from others and scans written materials to stay well informed.

Disseminator and spokesperson roles are just the opposite. The manager transmits current
information to others, both inside and outside the organization, who can use it.
Interpersonal Roles: Interpersonal roles pertains to relationships with others and are related o
the humans skills described earlier.

The figure head role involves handling ceremonial and symbolic activities for the department or
organization. The manager represents the organization in his or her formal managerial capacity
as the head of the unit.

The leader role encompasses the relationships with subordinate, including motivation,
communication, and influence.

The liaison role pertains to the development of information sources both inside and outside the
organization.

Decisional Roles: Decisional roles pertain to those events about which the manager must make a
choice and taken action. These roles often require conceptual as well as human skills.

The entrepreneur role involves the initiation of change. Managers are constantly thinking about
the future and how to get there. Managers becomes aware of problem and search for innovation
that will correct them.

The disturbance handler role involves resolving conflicts among subordinates or between the
manger’s department and other departments.

The resource allocator role pertains to decisions about how to allocate people, time, equipment,
money, and other resources to attain desired outcomes. The managers must decide which project
receives budget allocation, which of several customer complaints receives priority and even how
to spend his or her own time.

The negotiator role involves formal negotiations and bargaining to attain outcomes for the
manager’s unit of responsibility. The manager meet and formally negotiates with others - a
supplier about a late delivery, the controller about the need for additional budget resources, or
the union about a worker grievance.

The relative emphasis a manager put on these 10 roles depends on a number of factors, such as
the manager’s position in the hierarchy, natural skills and ability, types of organization, or
departmental goals to be achieved
Other factors, such as changing environmental conditions, may also determine which roles are
more important for a manager at any given time. A top manager may regularly put more
emphasis on the roles of spokesperson, figurehead, and negotiator. However, the emergence of
new competitors may require more attention to the monitor role, or a severe decline in employee
morale and direction may mean that the CEO has to put more emphasis on the leader role. A
marketing manager may focus on interpersonal roles because of the importance of personal
contacts in the marketing process, whereas a financial manager may be more likely to emphasize
decisional roles such as resource allocator and negotiator. Despite these differences, all managers
carry out informational, interpersonal, and decisional roles to meet the needs of the organization.
Managers stay alert to needs both within and outside the organization to determine what roles are
most critical at various times.

INFORMATION TECHNOLOGY HAS TRANSFORMED BUSINESS

Advanced information technology makes just-in-time inventory management work seamlessly,

but it has also transformed management in many other ways. An organization’s information
technology (IT) consist of hardware, software, telecommunication, database management, and
other technologies it uses to store data and make them available in form of information for
organizational decision making. In general, information technology has positive implications for
the practice of management.

Knowledge management

Information technology plays a key role in managers’ efforts to systematically gather knowledge,
organize it, make it widely available throughout the organization, and foster a culture of
continuous learning and knowledge sharing.

Knowledge is not the same thing as data or information, although it uses both.

Data are simple, absolute facts and figure that, in and of themselves, may be of little use. A
company might have data that show 30 percent of a particular product is sold to customers. To be
useful to the organization, the data are processed into finished information by connecting them
with other data – for example, nine out of ten of the products sold are bought by people over the
age of sixty. Information is data that have been linked to other data and converted into a useful
context for specific use. Knowledge goes a step further; it is a conclusion drawn from the
information after it is linked to other information and compared to what is already known.
Knowledge, as opposed to information and data, always has a human factor. Books can contain
information, but the information becomes knowledge only when a person absorbs it and puts it to
use.

IT systems facilitate knowledge management by enabling organizations to collect and store

tremendous amounts of data, analyze that data so it can be transformed into information and
knowledge, and share knowledge all across the enterprise. The most common organizational
approach to knowledge management is sharing knowledge via information technology. A variety
of new software tools support collaboration and knowledge sharing through services such as web
conferencing, knowledge portals, contents management and the use of wikis. A knowledge
management portal is a single, personalized point of access for employees to multiple sources of
information on the corporate intranet. A wiki uses software to create a website that allows
anyone with access to create, share, and edit contents through a simple browser-based user
interface. Organizations typically use a variety of IT systems to facilitate the collection, analysis,
and sharing of information and knowledge.

Another IT application for knowledge management is the use of business intelligence software
that analyzes data and extracts useful insights, patterns, and relationships that might be
significant.

Management information systems

A management information system (MIS) is a computer-based system that provides information

and support for effective managerial decision making. MIS typically support strategic decision
making needs of middle level and top management. However, as technology becomes more
widely accessible , more employees are wired into networks and organizations push decision
making downward in the hierarchy, these kinds of systems are seeing use at all levels of the
organization. For example, when a production supervisor needs to make a decision about a
production scheduling, he or she may need data on the anticipated number of orders in the
coming month, inventory levels, and availability of computers and personnel. The MIS can
provide this data at veterans administration (VA) hospitals around the countries a sophisticated
country MIS called VISTA enables people across the organization to access complete patient
information and provide better care. The VA, once considered subpar, has been transformed by
technology into one of the highest quality, must cause effective medical providers in the United
State.

Management information systems typically include decision support systems, executive

information system and group ware.

Decision Support Systems (DSSs) are interactive, computer based information system that rely
on decision models and specialized data bases to support decision makers. With electronic
spreadsheet and other decision support software, users can pose a series of what-if questions to
test alternatives they are considering. Base on the assumptions used in the software or specified
by the user, managers can explore various alternatives and receive tentative information to help
them choose the alternative with the best outcome.

An enterprise resource planning system can become of the backbone of an organization's

operations. It collects, processes, and provides information about an organization's entire
enterprise, including orders, product design, production, purchasing, inventory, distribution,
human resources, receipt of payments, and forecasting of future demand.

When a salesperson takes an order, the ERP system checks to see have the order affects
inventory levels, scheduling, human resources, purchasing, and distribution. The system
replicates organizational processes in software, guides employees through the processes step by
step, and automates as many of them as possible. For example, the software can automatically
cut an accounts payable check as soon as Clerk confirms that goods have been received in
inventory, send an online purchase order immediately after a manager has authorized a purchase,
or schedule production at the most appropriate plant after an order is received. In addition,
because the system integrates data about all aspects of operations, managers and employees at all
levels can see have decisions and actions in one part of the organization affect other parts, using
this information to make better decisions. Customers and suppliers are typically linked into the
information exchange as well. When carefully implemented, ERP can costs, shorten cycle time,
enhance productivity, and improve relationships with customers and suppliers.

A NEW GENERATION OF INFORMATION TECHNOLOGY

The force that is fueling growth on the Internet today isn't a bunch of dot-com start- ups, or even
long-established companies making waves in the online world. Instead, power has shifted to the
individual, with blogs, wikis, and social networking becoming the most explosive outbreaks in
the world of information technology since the emergence of the World Wide Web. A blog is a
running Web log that allows an individual to post opinions and ideas about anything from the
weather and dating relationships to a company's products, management, or business practices. An
entire industry has sprung up to help managers navigate the world of blogs, such as monitoring
what is being said about the company, implementing damage control strategies, and tracking
what the majority of the world is thinking, minute by minute, to help the organization respond to
emerging trends and opportunities.

Companies are also tapping into the power of new IT applications as powerful collaboration
tools within organizations, using group blogs, wikis, social networking, and peer-to-peer file
sharing. The simplicity and informality of blogs make them an easy and comfortable medium for
people to communicate and share ideas, both with colleagues and outsiders. As described earlier,
a wiki is similar to a blog and uses software to create a Web site that allows people to create,
share and edit content through browser-based interface, Rather than simply sharing opinion and
ideas.

Social networking also referred to as social media or user-generated content is an extension of

blogs and wikis.

As a new manager, incorporate new If cools to extend the power of your organization’s
management information systems. Recognize that people need different tools, depending on their
work as well as how they like no process and use information.

THE INTERNET AND E-BUSINESS

In recent years, most organizations have incorporated the Internet as part of their information
technology strategy. Both business and nonprofit organizations quickly realized the potential of
the Internet for expanding their operations globally. Improving business processes, reaching new
customers and making the most of their resources. Numerous organizations today are involved in
some type of e-business. E-business can be defined as any business that takes place by digital
processes over a computer network rather than a physical space. Most communities today, it
refers to electronic linkages over the internet with customers, partners, suppliers, employees, or
other key constituents. E-commerce is more limited term that refers specifically to business
exchanges or transaction that occur electronically.

Some organizations, such as eBay, Amazon.com. Expedia, and Yahoo! would not exist without
the internet.

E-Business Strategy: Market Expansion

An internet division allows a company to establish direct links to customers and expand into new
markets. The organization can provide access around the clock to a worldwide market

E-Business Strategy: Increasing Efficiency

With this approach, the e-business initiative is seen primarily as a way to improve the bottom
line by increasing productivity and cutting costs. Automakers such as Toyota, General Motors,
and Ford, for example, use e-business to reduce the cost of ordering and tracking parts and
supplies and to implement just-in-time manufacturing.

Several studies attest to real and significant gains in productivity from e-business. Even the
smallest companies can realize gains. Rather than purchasing parts from a local supplier at
premium rates, a small firm can access a world-wide market and find the best price, or negotiate
better terms with the local supplier. Service firms and government agencies can benefit too