CHAPTER ONE

FUNDAMENTALS OF MANAGEMENT
At the end of this chapter you will be able to
Define and understand the notion of Management and its functions
Identify the importance of Management
Explain the types of Managers and their role
Understand the universality of management
1.1 Definition of Management
Management - A set of activities (including planning and decision making, organizing, staffing
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.
It is the process of setting and achieving organizational objectives (goal) by using the
five basic managerial functions by acquiring and utilizing human, financial and other
resources.
It is the process of attaining organizational goals in an effective and efficient manner
through the five basic managerial functions such as planning, organizing, staffing,
leading and controlling.
The above definitions there are three basic concepts
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.
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.

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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
1.2. 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.
1.3. Managerial Functions an Overview
Managers create and maintain an internal environment, commonly called the organization, so
that others can work efficiently in it.

A manager's job consists of planning, organizing, directing, and controlling the resources of
the organization. These resources include people, jobs or positions, technology, facilities
and equipment, materials and supplies, information, and money. Managers work in a
dynamic environment and must anticipate and adapt to challenges.
The job of every manager involves what is known as the functions of management:
planning, organizing, directing, and controlling.

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 These functions are goal-directed, interrelated and interdependent.
Planning involves devising a systematic process for attaining the goals of the
organization. It prepares the organization for the future.
Organizing involves arranging the necessary resources to carry out the plan. It is the
process of creating structure, establishing relationships, and allocating resources to
accomplish the goals of the organization.
Staffing, is the management function devoted to acquiring, training, appraising, and
compensating employees
Directing involves the guiding, leading, and overseeing of employees to achieve
organizational goals.
Controlling involves verifying that actual performance matches the plan. If
performance results do not match the plan, corrective action is taken.

1.4. Levels of Management and Types of Managers

Levels are Hierarchical arrangement of managerial positions in an organization.
The extent to which managers perform the functions of management - planning, organizing,
directing, and controlling - varies by level in the management hierarchy. The term supervisor
could be applied at all management levels of the organization to those who direct the work of
others. In common usage, however, the title tends to be used only in the first level of the
management hierarchy. If an organization were divided into top, middle, and lower managerial
levels, the term generally applies to the lower level.
The levels can be expressed by using pyramid shaped arrangement of an organizational
management structure.

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Fig1.5 Levels of Management

Levels of management
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.
Besides this they deal with external bodies such as government. And 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.

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 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
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
1.5. Managerial Roles and Skills
1.5.1 Managerial Roles
To meet the many demands of performing their functions, managers assume multiple roles. A
role is an organized set of behaviors. Henry Mintzberg has identified ten roles common to the
work of all managers. 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
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.

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Fig 1.6 Managerial Roles

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:
 Figure head role
 leader role
 liaison role
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
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.

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  Selects, encourages, promotes and disciplines.
 Tries to balance subordinate and organizational needs for efficient operations.
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 networks of contacts for sharing information with
others. It includes:
 Monitor role
 Disseminator role
 Spokesperson role
Monitor role Managers play monitor role when they read and talk to others to receive
information. It involves seeking out, receiving and screening information. It also involves
scanning of the environment.
Disseminator role: - in this role managers share information with subordinates and other
members of the organization that is managers play disseminator role when they send information
to others with in the organization. - The manager brings external views into his/her organization
and facilitates internal information flows between subordinates (factual or value-based).

Spokesperson role: - managers play spokesperson role when they provide information to people
outside the organization. - the manager informs and lobbies others (external to his/her own
organizational group). Key influencers and stakeholders are kept informed of performances,
plans & policies. For outsiders, the manager is an expert in the field in which his/her
organization operates.

III. Decisional role

When managers play decisional role they use their conceptual and decision-making management skills.
It consists;
 Entrepreneur role
 Disturbance handler role
 Resource allocator role
 Negotiator role.

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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..
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. 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.
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:
1. Scheduling own time
2. Programming work
3. Authorizing actions

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.

1.5.2 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:
Conceptual skills
Human skills
Technical skills.
1. Conceptual skills

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  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.

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.

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Fig1.5 Skill Type Needed by Management Levels
1.6. 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.
 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.
1.7. Is Management an art, Science, or 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 using instinct and experience.
Requires use of: Conceptual, Communication, Interpersonal, andTime-Management skills.

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 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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