CHAPTER ONE

FUNDAMENTALS OF MANAGEMENT
1.1 Learning objectives:

At the end of this chapter, the student will be able to:

 Define management
 Describe significance of management
 Identify managerial functions
 Identify the levels of management in lined with types of managers
 Identify managerial roles and the necessary skills
 Explain the universality of management
 Understand whether management is science or art

1.2. Definitions of Management

It is impossible to provide a single, comprehensive, universally accepted definition of management, the
different orientations about the definition of management is because:
i. Management has various aspects, that all of which cannot be represented by a single
definition
ii. The theorists who gave the definitions has different areas of interest or training, they all
defined management from their perspective (engineering, sociology, psychology,
mathematics, etc)
iii. Management as a discipline is young and there is a lack of clarity of concepts and principles

Despite all the above reasons for different definitions, the definitions are not contradictory or mutually
exclusive. Management is the synthesis of all the definitions given by different theorists. The following
are some of the different definitions given by different scholars of management.
 According to F.W. Taylor, "Management is the art of knowing what you want to do in the best
and cheapest way."
 According to H. Koontz and his co-author, "Management is the process of designing and
maintaining an environment in which individuals are working together in-group accomplish
efficiently selected aims."

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  According to Terry and Franklin, "Management is a distinct process consisting of activities of
planning, organizing, actuating, and controlling, performed to determine and accomplish stated
objectives with the use of human beings and other resources.”
 According to Henry Fayol, "To manage is to forecast and plan, to organize, to command, to
coordinate, and to control.”
 According to Merry Parker Follett; "Management is the art getting things done through the
efforts of other people."
 According to Kinard, "Management is the process of maximizing the potential of an
organization's people and coordinating their efforts to attain predetermined goals.”
 Management is defined as the process of planning, organizing, leading and controlling the efforts
of organization members and of using all other organizational resources to achieve stated
organizational goals.
From the various definitions given on management, we can derive the following important points about
the discipline:
 Management refers to the managerial functions of planning, organizing, staffing, leading and
controlling.
 Management coordinates both human and non human resources (land, labor, capital) for the
accomplishment of objectives.
 Management is applied to all types of organizations Profit or not for profit, large, medium or
small organization, manufacturing or service giving.
 Management deals with creating a comfortable internal environment, with a great consideration
of the external environment.

For the sake of convenience we can define management as a distinct process consisting of managerial
functions of planning, organizing, staffing, directing, and controlling so as to design and maintain
conducive environment in order to achieve common group goals and organizational objectives
efficiently and effectively.
.
Management - A set of activities (including planning and decision making, organizing, leading, and
controlling) directed at an organization’s resources (human, financial, physical, and information) with
the aim of achieving organizational goals in an efficient and effective manner.
Management Key Concepts
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  Organizations: A group of people working together in a structured and coordinated fashion to
achieve a set of goals.
 Goal: A desired future condition that the organization seeks to achieve.
Organizational Performance
Measures how efficiently and effectively managers use resources to satisfy customers and achieve goals.
 Efficiency: A measure of how well resources are used to achieve a goal. It is getting high output
or the same amount of output at the same amount of input or lower input, respectively.
 Maximizing the organization’s productivity by wise utilization of scarce resources.
 It is spending less & acquiring more by minimizing cost
 it is concerned with cost reduction
 it is doing things right
Usually, managers must try to minimize the input of resources to attain the same goal.
 Effectiveness: A measure of the appropriateness of the goals chosen (are these the right goals?),
and the degree to which they are achieved.
It is providing the right product for the right person or customer
 it is doing the right things at reasonable cost (efficiently)
 Determine the success of the organization b/c it is doing the right things
Organizations are more effective when managers choose the correct goals and then achieve them.
Who are managers?
Manager - someone whose primary responsibility is to carry out the management process.
 Specifically, a manager is someone who plans, makes decisions, organizes, leads, and controls
human, financial, physical, and information resources.
 Managers are those who are responsible for achieving the organizational goals in an effective
and efficient manner through proper scarce resource utilization
 A good manager is the one who feel sense of responsibility, belongingness, accountability…
 Who take initiative (innovator) for new things or discovery?
Who effectively & efficiently brings factors of production together.
1.3. Nature of Management
Management has its own basic notions or fundamentals on which the discipline based on and also it has
its own elements that identify it from other disciplines. These notions can be presented as follow:

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 Universal application: - Management is applied in any organization (large, small in size, or service
or manufacturing or for-profit or not-for-profit) and its functions are practiced in any level of
management.
Goal oriented: - Any organization is established to achieve certain objectives, and management is
important for any organization to achieve its pre-stated objectives efficiently and effectively.
Guidance: - The main task of management is guidance in the utilization of materials and human
resources in the best possible manner. Without the involvement of management, resources might be
underutilized, over utilized or wasted.
Divorced/Separated from proprietorship: - Management does not signify proprietorship or
ownership. Managers work for the attainment of organizational goals and objectives.
Management is a human activity: - Management functions are discharged by individuals not by
machines such as computers. However, it can be aided by such instruments as computers.
Management signifies authority: - Since the significance of management is to direct, to guide and to
control, it has to have authority. Authority is the power to compel others to work and behave in
particular manner.
Leadership: - The manager has to lead a team of workers. He/she must be capable of inspiring,
motivating and winning their confidence.
Management is multidisciplinary: - It has grown as a body of discipline taking the help of so many
social sciences like sociology, psychology, economics, etc.
1.3. Significance of management
 management is significant because the coordination of resources is impossible without
management
 It affects the establishment and re-establishment of many economic, social and political goals
of the country
 The success or failure of the organization mostly depends on the management system
 B/c it is the wise utilization of scarce resources for unlimited human wants.
To accomplish Objectives, while in actuality the members might be working in opposite direction, to
prevent this from occurring and to ensure coordination of work to accomplish the objectives,
management is needed. As 'a brain' of an organization therefore, management gives direction for all
other parts of organization.

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 1.4 Managerial Functions
Managers are persons who are responsible for supervising the use of organizational resources to achieve
its goals, to do this manager at all levels in any organization perform five basic functions:
 Planning
 Organizing
 Staffing
 Directing/Leading
 Controlling
1. Planning
Planning is the process used by managers to identify and select appropriate goals and courses of action
for an organization.
3 steps to good planning:
1. Which goals should be pursued?
2. How should the goal be attained?
3. How should resources be allocated?
2. Organizing
 Organizing Is the process of delegating and coordination tasks and recourses to achieve
objectives. And also In organizing, managers create the structure of working relationships
between organizational members that best allows them to work together and achieve goals.
3. Staffing
 It is the process of filling and keeping filled the positions in the organization structure. This
is done by identifying work force requirements, inventorying the people available,
recruiting, selecting, placing, promoting, compensating, training and developing both
candidates and current job holders to accomplish their tasks effectively and efficiently..
4. Directing/leading
 It is influencing, motivating and directing people so that they will contribute to organization and
group goals; it has to do predominantly with the interpersonal aspect of managing. In leading,
managers determine direction, state a clear vision for employees to follow, and help employees
understand the role they play in attaining goals.

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5. Controlling:
In controlling, managers evaluate how well the organization is achieving its goals and takes corrective
action to improve performance.
Controlling managerial functions involves:
1. Setting of standard against which work progress is measured.
2. Comparing actual performance against the standard.
3. identifying and initially examining causes of deviations between the standard and the actual
performance
4. Taking corrective actions to eliminate causes of unfavorable deviations.
Generally, these five functions of management are inseparable and often performed continuously as an
interactive process. However, the planning function is considered as primary function and the base for
other functions by setting objectives up on which other functions depend all the above functions are
performed by all types of managers but with different degree of considerations.
1.5 Levels of management and types of manager
Levels are Hierarchical arrangement of managerial positions in an organization. The extent to which
managers perform the functions of management.
The levels can be expressed by using pyramid shaped arrangement of an organizational management
structure.

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 1. Top level management (top Managers)
Top level management consists of highest rank managers of an organization with different titles such as
CEO, president, vice president; Top managers are responsible for managing the entire organization or
major parts of it.
 They develop and define the organization's purpose, objectives, strategies and long term plans.
 They deal with external bodies such as government.
 Responsible for the performance of all departments and have cross-departmental responsibility.
 They establish organizational goals and monitor middle managers.
2. Middle level management (middle Managers)
Middle level management consists of managers below rank of vice president but above supervisory
managers. Supervise first-line managers and they are also responsible to find the best way to use
departmental resources to achieve goals. Most common example is Branch managers.
The major functions of middle level management are:
 Acting as intermediary between top management and operating level management.
 Translating long term plans to top management into medium range plans.
 Developing specific targets in their areas of responsibility
 Coordinating inputs, productivity and outputs of operating level managements.
 Achieving objectives set by top level management.
3. Operating(first level)management (first line Managers)
These are types of managers whose subordinates are non management workers or operating employees.
They are responsible for day-to-day operation. They supervise the people performing the activities
required to make the good or service the typical titles in this level are: office manager, crew leaders'
supervisor etc...
The major functions of operating level management are:
 Planning daily and weekly activities and accomplishment based on the monthly, quarterly, and
yearly plans.
 Assigning operating employees to specific tasks.
 Issuing instructions at the work place, following up, motivating and evaluating workers and
reporting to their superiors.
 To sum up, Supervisors are managers whose major functions emphasize directing and controlling
the work of employees in order to achieve the team goals. They are the only level of management

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 managing non-managers. Thus, most of the supervisor's time is allocated to the functions of
directing and controlling. In contrast, top managers spend most of their time on the functions of
planning and organizing. The top manager determines the mission and sets the goals for the
organization. His or her primary function is long-range planning. Top management is accountable
for the overall management of the organization. Middle management implements top management
goals. Supervisors direct the actual work of the organization at the operating level
1.6 Managerial Roles and skills.
A. Managerial Roles
Role is an organized set of behaviors.
There are about 10 roles identified that managers undertake to accomplish management functions
(planning, Organizing, leading, and controlling). These ten roles are classified in to three major
categories:
I. Interpersonal role
II. Informational role
III. Decisional role
To meet the many demands of performing their functions, managers assume multiple roles.
Henry Mintzberg has identified ten roles common to the work of all managers. The ten roles are
divided into three groups: interpersonal, informational, and decisional.
 The informational roles link all managerial work together.
 The interpersonal roles ensure that information is provided.
 The decisional roles make significant use of the information.
The performance of managerial roles and the requirements of these roles can be played at different times
by the same manager and to different degrees depending on the level and function of management. The
ten roles are described individually, but they form an integrated whole.
I. Interpersonal role
When managers play interpersonal roles, they use their human and communication management skills as
they perform the necessary management function.
It includes:
1. Figure head role
2. leader role
3. liaison role

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1. Figure head role Managers represent the organization or department in ceremonial and symbolic
activities. In the figurehead role, the manager represents the organization in all matters of formality. The
top level manager represents the company legally and socially to those outside of the organization.
It is the most basic and the simplest of all managerial roles
2. Leader role_ Managers are assumed as leaders when they influence, initiate and motivate the
subordinates so that the subordinates achieve organizational goals. This is at the heart of the
manager-subordinate relationship and managerial power and pervasive where subordinates are
involved even where perhaps the relationship is not directly interpersonal. The manager

 Defines the structures and environments within which sub-ordinates work and are
motivated.

 Oversees and questions activities to keep them alert.

 Selects, encourages, promotes and disciplines.

 Tries to balance subordinate and organizational needs for efficient operations.

3. Liaison role- the liaison role refers to dealing with people outside the organization, such as clients,
government officials, customers, and suppliers, it also refers to dealing with mangers in other
departments, staff specialists, and other departments' employees in liaison role manager seeks
support from people who can affect the department's and organization's success.

II. Informational role

When managers play informational roles they build net works of contacts for sharing information
with others. It includes:
1. Monitor role
2. Disseminator role
3. Spokesperson role
1. Monitor/Nerve Center Role: - as a monitor /nerve center, the manager tries to keep informed
about what is happening in the organization or group. Managers serve as a focal point for non-
routine information; they receive all types of information from news reports, trade publications,
magazines, clients, etc.

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 2. Disseminator role: - the information a manager gathers as a monitor must be gleaned and
transmitted to appropriate members of the organization. As a disseminator, a manager sends out
side information into the organization and internal information from one subordinate to another.
Transmitting selected information to subordinates.
3. Spokes person role: - it is the role of a manager in transmitting selected information to outsiders.
It is played by a manager whenever he/she represents the organization or its position to other
groups, including the government agencies, customer, and trade organizations.

III. Decisional role

When managers play decisional role they use their conceptual and decision-making management skills.It
consists;
1. Entrepreneur role
2. Disturbance handler role
3. Resource allocator role
4. Negotiator role.
1. Entrepreneur Role: - Is the role of managers which focuses on innovation and initiation of
improvements by managers. It may include such activities as initiating new projects, launch survey,
test new markets etc..
2. Disturbance handler role: - managers play this role when dealing with problems and changes
beyond their immediate control and when they take corrective actions during disputes or crisis
situation. And it Is a generalist role i.e. taking charge when the organization hits an iceberg
unexpectedly and where there is no clear programmed response. Disturbances may arise from
staff, resources, threats or because others make mistakes or innovation has unexpected
consequences. The role involves stepping in to calm matters, evaluate, re-allocate, support -
removing the thorn -buying time.

3. Resource allocator role: - managers play recourse allocator role when they schedule, request
authorization and perform budgeting and programming activities. A manager determines who in the
work unit gets what recourses money, facilities, equipment and access to manager. The manager
oversees allocation of all resources (£, staff, reputation). This involves:

 Scheduling own time

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  Programming work
 Authorizing actions

4. Negotiator role- is role in which managers’ work with suppliers, distributor, and labor unions to
reach on agreements about the quality and price of inputs, technical and human resource, work with
other organizations to establish agreements to pool recourses to work on joint projects.
N.B: Negotiations are an integral part of managers' job. It takes charge over important negotiating
activities with other organizations. The spokesman, figurehead and resource allocator roles demand this.
B. Managerial Skills.
Skill is ability to do something expertly and well.
Managerial skills are enhanced through formal training, reading, and practice.
There are three principal skills that managers get through experience an education.
These are:
1. Conceptual skills
2. Human skills
3. Technical skills.
1. Conceptual skills
 Conceptual skill involves:
 The ability to view the organization as a whole and recognize its relationships to large
environment or business world.
 Are ability (or mental capacity) to conceive and manipulate ideas and abstract relation-
ships.
 the ability to analyze and diagnose a situation and find the cause and effect
 are more needed by top-level managers
2. Human skills
 Human skills include:
 the ability to understand, alter, lead, and control the behavior of other individuals
or/and groups. Human skills focus on working with people.
 The ability to understand, alter, lead, and control people’s behavior
 Are needed uniformly at three levels of management. That is the need for human
skills at three levels of management remains fairly constant.

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 3. Technical skills
 The job-specific knowledge required to perform a task. Common examples include
marketing, accounting, and manufacturing.
 Are greatly needed by first line managers.
A manager's level in the organization determines the relative importance of possessing technical,
human, and conceptual skills. Top level managers need conceptual skills in order to view the
organization as a whole. Conceptual skills are used in planning and dealing with ideas and abstractions.
Supervisors need technical skills to manage their area of specialty. All levels of management need
human skills in order to interact and communicate with other people successfully. All managers need
technical, human and conceptual skills. However, the need for these skills varies with the level of
management. Thus, technical skill deals with things, human skill concerns people, and conceptual
skill has to do with ideas.

Universality of management
Although the problems, other organizational constraints and nature of different organizations vary
widely, the functions performed by each manager are nearly the functions performed by each manager
are nearly the same. This means to successfully attain the objectives of any organization, managers
must plan, organize, staff, lead and control. These are the basic managerial functions. Management is
said to have universal application because:
 Management is important for any organization or entity regardless of objective(s) for which
it is established to reach the stated goals or objectives.

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  Any person who holds managerial position in an organization performs the five functions
of management. That is first level, middle level, and top level managers perform the
functions.

Is Management an art, a science or a profession?

Basically management is an art, a science as well as a profession.
Management is an art as it requires the use of behavioral and judgmental skills that cannot the
quantified
the way scientific information in field of chemistry, biology and physics can be. Issues can be resolved u
sing instinct and experience. Requires use of: Conceptual, Communication, Interpersonal, and Time-
Management skills.
Management is science, in that it requires the use of Technical, Diagnostic, Decision-Making skills,
logics and analyses. And In addition it uses computers and quantitative formulas to problems on hand.
Problems can be solved using systematic methods.
Management is a profession because to say a given field is a profession it must fulfill the following
criteria.
 Specialized knowledge
 Competent application
 Community application
 Social responsibility
 Self control
So, management is a profession because it fulfills the above criteria.

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