Management Basics

Management (or managing) is the administration of an organization, whether it is a business, a not-for-profit organization, or government body. Management includes the activities of setting the strategy of an organization and coordinating the efforts of its employees (or of volunteers) to accomplish its objectives through the application of available resources, such as financial, natural, technological, and human resources. The term “management” may also refer to those people who manage an organization.

Larger organizations generally have three levels of managers, which are typically organized by in a hierarchical, pyramid structure:

• Senior managers, such as members of a Board of Directors and a Chief Executive Officer (CEO) or a President of an organization. They set the strategic goals of the organization and make decisions on how the overall organization will operate. Senior managers are generally executive-level professionals, and provide direction to middle management who directly or indirectly report to them.
• Middle managers, examples of which would include branch managers, regional managers, department managers and section managers, provide direction to front-line managers. Middle managers communicate the strategic goals of senior management to the front-line managers.
• Lower managers, such as supervisors and front-line team leaders, oversee the work of regular employees (or volunteers, in some voluntary organizations) and provide direction on their work.

In smaller organizations, an individual manager may have a much wider scope. A single manager may perform several roles or even all of the roles commonly observed in a large organization.

Management is essential for organized life and necessary to run all types of management. Good management is the backbone of successful organizations.

Managing life means getting things done to achieve life’s objectives and managing an organization means getting things done with and through other people to achieve its objectives.

Whether management is an art or science will continue to be a subject of debate. However, most management thinkers agree that some form of formal academic management background helps in managing successfully. Practically, all CEO’s are university graduates. Hence, the reason for including business degree programs in all academic institutions.

Management is a set of principles relating to the functions of planning, organizing, directing and controlling, and the application of these principles in harnessing physical, financial, human and informational resources efficiently and effectively to achieve organizational goals.

Definition of Management

• According to Henri Fayol, “to manage is to forecast and to plan, to organise, to command, to co-ordinate and to control.”
• Fredmund Malik defines it as “the transformation of resources into utility.”
• Management included as one of the factors of production – along with machines, materials and money.
• Ghislain Deslandes defines it as “a vulnerable force, under pressure to achieve results and endowed with the triple power of constraint, imitation and imagination, operating on subjective, interpersonal, institutional and environmental levels”.
• Peter Drucker (1909–2005) saw the basic task of management as twofold: marketing and innovation. Nevertheless, innovation is also linked to marketing (product innovation is a central strategic marketing issue). Peter Drucker identifies marketing as a key essence for business success, but management and marketing are generally understood as two different branches of business administration knowledge.

Evolution of Management

A study of various people around the world shows good examples of organizational structures and organizational evolution over the years. A village open market in a tribe and a large department store in a modern city serve the same needs in a similar fashion, which is putting things together that people need. While the tribal organization was simple in nature, the modern organization is much more sophisticated and complex with many technological innovations. However, the basic form of management and organizational structure seem to have existed since the beginning of organized human activity.

Even the recorded history shows the application of some current management techniques as far back as 5000 BC., when the ancient Sumerians used written records in assisting governmental operations. The Egyptian pyramids, built as early as 3000 BC., required the organized efforts of over 1,00,000 workers. It would be natural to assume that all functions of modern management, namely, planning, organizing, directing and controlling played a significant role in the construction of these monuments. Similarly, the early civilization of India bears witness to organized living.

Management, as a system, is not only an essential element of an organized society, but also an integral part of life when we talk about managing our lives. Managing life is not much different from managing an organization and this ‘art’ of management has been with us from time immemorial. Just as a well managed life is much better organized, goal oriented and successful, ‘good’ management of an organization makes the difference between the success and the failure of the organization.

Perhaps, the importance of management was highlighted by the late President of United States, John F. Kennedy when he said that, the role of management in our society is critical in human progress. It serves to identify a great need of our time: to improve standards of living for all people through effective utilization of human and material sources.

It’s time to rethink Management. But before we do that, let’s take a look in the rear-view mirror and see how we got to where we are today:

1910s-1940s: Management as Science

Management as Science was developed in the early 20th century and focused on increasing productivity and efficiency through standardisation, division of labour, centralisation and hierarchy. A very ‘top down’ management with strict control over people and processes dominated across industries.

1950s-1960s: Functional Organisations

Due to growing and more complex organisations, the 1950’s and 1960’s saw the emergence of functional organisations and the Human Resource (HR) movement.

Managers began to understand the human factor in production and productivity and tools such as goal setting, performance reviews and job descriptions were born.

1970s: Strategic Planning

In the 1970’s we changed our focus from measuring function to resource allocation and tools like Strategic Planning (GE), Growth Share Matrix (BCG) and SWOT were used to formalise strategic planning processes. After several decades of ‘best practice’ and ‘one size fits all’ solutions, academics began to developing contingency theories.

1980s: Competitive Advantage

As the business environment grew increasingly competitive and connected, and with a blooming management consultancy industry, Competitive Advantage became a priority for organisations in the 1980’s. Tools like Total Quality Management (TQM), Six Sigma and Lean were used to measure processes and improve productivity. Employees were more involved by collecting data, but decisions were still made at the top, and goals were used to manage people and maintain control.

1990s: Process Optimisation

Benchmarking and business process reengineering became popular in the 1990’s, and by the middle of the decade, 60% of Fortune 500 companies claimed to have plans for or have already initiated such projects. TQM, Six Sigma and Lean remained popular and a more holistic, organisation-wide approach and strategy implementation took the stage with tools such as Strategy Maps and Balance Scorecards.

2000s: Big Data

Largely driven by the consulting industry under the banner of Big Data, organisations in the 2000’s started to focus on using technology for growth and value creation. Meanwhile, oversaturation of existing market space drove to concepts such as Blue Ocean Strategy and Value Innovation.

It’s 2013. Globalisation, advances in technology and increased diversity have put organisational challenges into hyper drive.

What managers do?

No two organisations are the same. No two management jobs are identical. No two situations are ever precisely the same. This explains why there is no one ‘best way’ of managing. What is appropriate in one organisation, at one time, in one situation and for one manager may not be appropriate in another. Understanding how your organisation, situation and practices are different from others provides you with valuable insights and learning that few textbooks can provide.

What do we mean by management? Most writers on management in this part of the twenty-first century would agree that it is the planning, organising, leading and controlling of human and other resources to achieve organisational goals efficiently and effectively. If you can relate your activities to this description then you are a manager – even if the word manager is not part of your job title. You may have only one or two people for whom you are responsible, but if you work through them to achieve organisational goals, you are managing them together with the other resources you use. To manage requires certain aptitudes and skills. Often, however, the task of managing – especially if you are new to the role – may leave you with little opportunity to consider or analyse what you are doing. You may feel that you are responding to a range of demands without being in as much control of your work as you would like. Many new managers feel like this. At some stage, most managers feel ill-prepared for their role and wonder whether they are doing the ‘right’ things.

This confusing world has been the subject of much analysis by management writers who have tried to make sense of the contradictions and time pressures that characterise most management jobs. One of the most well-known definitions of what management is and what managers do was given by Henri Fayol, a French mining engineer who, in 1916, published a book on management. In it he defined management as a process involving forecasting and planning, organising, commanding, coordinating and controlling.

The simple division of a manager’s job into these separate elements remains a powerful idea, although now we would refer to ‘commanding’ as leading.