Business management 2
Introduction to management
Study unit 1
→ Society depends on businesses to improve its standard of living and to meet the ever-
changing needs of consumers. Businesses cannot do this on their own, hence, Government,
as well as non-profit organisations, must produce certain services to assist with satisfying
society’s needs. Scarce resources are used to produce products and services.
→ The resources include:
• People (Human resources)
• Money
• Raw materials
• Knowledge
→ Managers plan and implement (organise, lead and control) what has to be done to reach the
organization’s mission and goals. They are responsible for the success and sustainability of
the business and ultimately, the satisfaction of the consumers.
Business organisations and managers and the nature of management
→ Organisations serve consumers and society in a number of ways. They are responsible for
transforming scarce resources into products and services that consumers need and want.
→ Managers are needed to deploy the basic resources of an organisation at their disposal, to
help the organisation reach its mission and goals.
All managers perform four fundamental management functions:
• Planning
• Organising
• Leading
• Controlling
Management can be described as the process of planning, organizing, leading and controlling
the scarce resources of the organisation to achieve the organization’s mission and goals as
productively as possible.
, Different levels and kinds of management in the organisation
→ Managers at all levels in the organisation must carry out the four management functions.
→ Managers are classified into two categories:
o According to their level in the organisation (top, middle, lower or first-line managers).
o According to their function in the organisation.
∆ Top Management
- Top management is responsible for the organisation as a whole.
- They determine the mission, vision, goals and strategies of an organisation.
- Top management is responsible for making future decisions that affect the entire
business.
∆ Middle management
- Middle management is responsible for specific departments in the organisation.
- They are responsible for implementing the strategic plan that was formulated by top
management.
∆ Lower /first line management
- First line managers, such as supervisors, manage these smaller groups.
- They deal with monthly, weekly and daily management of a group in the business.
- First line managers deal directly with staff.
→ Management can also be classified according to the specific area they are involved with. The
following managers have been identified who manage different functions/departments in a
business organisation:
• The general manager
• Marketing manager
• Financial manager
• Operations/production manager
• Purchasing / Procurement manager
• Human resources manager
• Public relations manager
• Research and development manager
The role distribution of managers
→ Managers often need to perform certain additional roles to be able to manage effectively. The
following roles have been identified:
• Interpersonal roles
- Figure head: Manager is an aspirational figure
- Leader: managers lead people not just on work-related matters
- Liaison: managers know how to bond and establish relationships
• Information roles
- Monitor: managers analyse data and get accurate conclusions
- Disseminator: managers transmit and communicate data effectively
- Spokesperson: a manager knows how to speak on behalf of the company
• Decision roles
- Entrepreneur: managers take innovative and brave decisions
- Disturbance handler: managers solve the problems that the company has
- Resource allocator: managers are in charge of allocating resources properly
- Negotiator: managers are continually negotiating
, Managerial skills and competencies at various managerial
Levels
→ There are three main skills needed by managers in an organisation:
• Conceptual skills involve the manager’s thinking and planning abilities to ensure that the
organisation is prepared for the future
• Interpersonal skills involve a manager’s ability to work with people
• Technical skills involve the manager’s ability to apply knowledge and techniques of a
specific area to reach specific goals
The concept ‘competent’ means that a manager is able to perform specific tasks successfully.
Management competencies indicate specific skills/abilities/knowledge that enable the manager to
manage specific functions effectively.
Management and organisational performance
→ The task of management is to manage in such a way that the business makes a sustainable
profit.
→ The business must earn the highest possible income with the lowest possible cost.
→ Consider also social responsibility towards community and environment: Triple bottom up
Efficiency: performing or functioning in the best possible manner with the least waste of time
and effort
VS
Effectiveness: the degree to which something is successful in producing a desired result;
success.
The scope of management
→ The principles of business management apply to large businesses - small and medium sized
organisations - as well as non-profit organisations.
→ Large business organization: a country needs large organizations with managers to compete
in competitive environment
→ Medium businesses also play an important role
→ Non-profit organizations providing services:
o Charity organizations
o Schools
o Clinics
o Post office
, The evolution of management theory
Study unit 1 part 2
Introduction
→ There is no single best way to manage. Over time different theories have been applied, to
reflect dominant issues and cultures that relate to a specific time period and how management
dealt with these differences.
→ The evolution of management over time, shows how management is dealing with the needs
of society
→ It shows how management has been trying to find solutions on how to optimize resources, to
make a profit and survive
→ Capitalism has changed drastically over the years
• Industrial Revolution made mass production possible
• People moved from their agriculture lands to factories
• The relocation from people to cities, meant that now there was a need for:
- Housing
- Sanitation
- Transport
- Schools
- Hospitals
- Postal services
→ A need for professional managers developed
Why study management theory
• To create a management theory:
- Identify the variables in the business environment
- Rely on observation on what happens really in the workplace
- Make assumptions
- Construct a model
Understanding the different management theories
→ Environmental forces influence everything we do in an organisation. Changes in the
environment have an impact on every aspect in a business and management must adapt to
these environmental changes.
→ All management theories are based on assumptions, e.g.:
• People are merely machines
• Robots are better employees than humans
• People are emotional beings and should be treated with respect
→ Bear in mind that subjects change over time due to environmental influences
→ Society and social changes influenced management theory over time:
• Child labor
• Woman in the workplace
• Sexual harassment
• Quality of life
Reasons to understand management theories
• Empowers managers to show what has worked in the past and what has not
• Look at management theories that stood the test of time
• There is no way that can guarantee success or is a best recipe
Introduction to management
Study unit 1
→ Society depends on businesses to improve its standard of living and to meet the ever-
changing needs of consumers. Businesses cannot do this on their own, hence, Government,
as well as non-profit organisations, must produce certain services to assist with satisfying
society’s needs. Scarce resources are used to produce products and services.
→ The resources include:
• People (Human resources)
• Money
• Raw materials
• Knowledge
→ Managers plan and implement (organise, lead and control) what has to be done to reach the
organization’s mission and goals. They are responsible for the success and sustainability of
the business and ultimately, the satisfaction of the consumers.
Business organisations and managers and the nature of management
→ Organisations serve consumers and society in a number of ways. They are responsible for
transforming scarce resources into products and services that consumers need and want.
→ Managers are needed to deploy the basic resources of an organisation at their disposal, to
help the organisation reach its mission and goals.
All managers perform four fundamental management functions:
• Planning
• Organising
• Leading
• Controlling
Management can be described as the process of planning, organizing, leading and controlling
the scarce resources of the organisation to achieve the organization’s mission and goals as
productively as possible.
, Different levels and kinds of management in the organisation
→ Managers at all levels in the organisation must carry out the four management functions.
→ Managers are classified into two categories:
o According to their level in the organisation (top, middle, lower or first-line managers).
o According to their function in the organisation.
∆ Top Management
- Top management is responsible for the organisation as a whole.
- They determine the mission, vision, goals and strategies of an organisation.
- Top management is responsible for making future decisions that affect the entire
business.
∆ Middle management
- Middle management is responsible for specific departments in the organisation.
- They are responsible for implementing the strategic plan that was formulated by top
management.
∆ Lower /first line management
- First line managers, such as supervisors, manage these smaller groups.
- They deal with monthly, weekly and daily management of a group in the business.
- First line managers deal directly with staff.
→ Management can also be classified according to the specific area they are involved with. The
following managers have been identified who manage different functions/departments in a
business organisation:
• The general manager
• Marketing manager
• Financial manager
• Operations/production manager
• Purchasing / Procurement manager
• Human resources manager
• Public relations manager
• Research and development manager
The role distribution of managers
→ Managers often need to perform certain additional roles to be able to manage effectively. The
following roles have been identified:
• Interpersonal roles
- Figure head: Manager is an aspirational figure
- Leader: managers lead people not just on work-related matters
- Liaison: managers know how to bond and establish relationships
• Information roles
- Monitor: managers analyse data and get accurate conclusions
- Disseminator: managers transmit and communicate data effectively
- Spokesperson: a manager knows how to speak on behalf of the company
• Decision roles
- Entrepreneur: managers take innovative and brave decisions
- Disturbance handler: managers solve the problems that the company has
- Resource allocator: managers are in charge of allocating resources properly
- Negotiator: managers are continually negotiating
, Managerial skills and competencies at various managerial
Levels
→ There are three main skills needed by managers in an organisation:
• Conceptual skills involve the manager’s thinking and planning abilities to ensure that the
organisation is prepared for the future
• Interpersonal skills involve a manager’s ability to work with people
• Technical skills involve the manager’s ability to apply knowledge and techniques of a
specific area to reach specific goals
The concept ‘competent’ means that a manager is able to perform specific tasks successfully.
Management competencies indicate specific skills/abilities/knowledge that enable the manager to
manage specific functions effectively.
Management and organisational performance
→ The task of management is to manage in such a way that the business makes a sustainable
profit.
→ The business must earn the highest possible income with the lowest possible cost.
→ Consider also social responsibility towards community and environment: Triple bottom up
Efficiency: performing or functioning in the best possible manner with the least waste of time
and effort
VS
Effectiveness: the degree to which something is successful in producing a desired result;
success.
The scope of management
→ The principles of business management apply to large businesses - small and medium sized
organisations - as well as non-profit organisations.
→ Large business organization: a country needs large organizations with managers to compete
in competitive environment
→ Medium businesses also play an important role
→ Non-profit organizations providing services:
o Charity organizations
o Schools
o Clinics
o Post office
, The evolution of management theory
Study unit 1 part 2
Introduction
→ There is no single best way to manage. Over time different theories have been applied, to
reflect dominant issues and cultures that relate to a specific time period and how management
dealt with these differences.
→ The evolution of management over time, shows how management is dealing with the needs
of society
→ It shows how management has been trying to find solutions on how to optimize resources, to
make a profit and survive
→ Capitalism has changed drastically over the years
• Industrial Revolution made mass production possible
• People moved from their agriculture lands to factories
• The relocation from people to cities, meant that now there was a need for:
- Housing
- Sanitation
- Transport
- Schools
- Hospitals
- Postal services
→ A need for professional managers developed
Why study management theory
• To create a management theory:
- Identify the variables in the business environment
- Rely on observation on what happens really in the workplace
- Make assumptions
- Construct a model
Understanding the different management theories
→ Environmental forces influence everything we do in an organisation. Changes in the
environment have an impact on every aspect in a business and management must adapt to
these environmental changes.
→ All management theories are based on assumptions, e.g.:
• People are merely machines
• Robots are better employees than humans
• People are emotional beings and should be treated with respect
→ Bear in mind that subjects change over time due to environmental influences
→ Society and social changes influenced management theory over time:
• Child labor
• Woman in the workplace
• Sexual harassment
• Quality of life
Reasons to understand management theories
• Empowers managers to show what has worked in the past and what has not
• Look at management theories that stood the test of time
• There is no way that can guarantee success or is a best recipe
