ITM SUMMARY
Table Of Contents
CHAPTER 1 ................................................................................................................................................. 3
THE DEFINITION OF MANAGEMENT ............................................................................................................................... 3
THE FOUR MANAGEMENT FUNCTIONS ........................................................................................................................... 3
MANAGEMENT SKILLS ................................................................................................................................................ 4
CHAPTER 2 ................................................................................................................................................. 5
MANAGEMENT AND ORGANISATION ............................................................................................................................. 5
CLASSICAL PERSPECTIVE.............................................................................................................................................. 5
Scientific management.................................................................................................................................... 5
BUREAUCRATIC ORGANISATIONS .................................................................................................................................. 5
HUMANISTIC PERSPECTIVE .......................................................................................................................................... 6
Human relations management ....................................................................................................................... 6
RECENT HISTORICAL TRENDS........................................................................................................................................ 6
CHAPTER 3 ................................................................................................................................................. 7
EXTERNAL ENVIRONMENT ........................................................................................................................................... 7
General environment ...................................................................................................................................... 7
Task environment............................................................................................................................................ 7
ORGANISATION-ENVIRONMENT RELATIONSHIPS .............................................................................................................. 7
Environment uncertainty................................................................................................................................. 7
Adapting to the environment .......................................................................................................................... 7
CHAPTER 4 ................................................................................................................................................. 8
ORGANIZING THE VERTICAL STRUCTURE ......................................................................................................................... 8
WORK SPECIALISATION............................................................................................................................................... 8
Chain of command .......................................................................................................................................... 8
Span of management ...................................................................................................................................... 9
CENTRALIZATION AND DECENTRALIZATION ................................................................................................................... 10
DEPARTMENTALIZATION ........................................................................................................................................... 10
ORGANIZING FOR HORIZONTAL COORDINATION ............................................................................................................ 12
The need for coordination ............................................................................................................................. 12
FACTORS SHAPING STRUCTURE .................................................................................................................................. 12
Structure follows strategy and environment ................................................................................................ 12
CHAPTER 7 ............................................................................................................................................... 14
GOAL SETTING AND PLANNING OVERVIEW.................................................................................................................... 14
Levels of goals and plans............................................................................................................................... 14
GOAL SETTING IN ORGANISATIONS.............................................................................................................................. 14
Organisational mission ................................................................................................................................. 14
Goals and plans ............................................................................................................................................. 15
OPERATIONAL PLANNING.......................................................................................................................................... 15
BENEFITS AND LIMITATIONS OF PLANNING ................................................................................................................... 15
Criteria for effective goals ............................................................................................................................. 15
PLANNING FOR A TURBULENT ENVIRONMENT ............................................................................................................... 16
Contingency planning, building scenarios and crisis planning...................................................................... 16
CHAPTER 8 ............................................................................................................................................... 17
WHAT IS STRATEGIC MANAGEMENT? .......................................................................................................................... 17
Purpose of strategy ....................................................................................................................................... 17
Levels of strategy .......................................................................................................................................... 17
, STRATEGIC MANAGEMENT PROCESS............................................................................................................................ 17
Strategy formulation versus execution ......................................................................................................... 17
SWOT analysis ............................................................................................................................................... 17
FORMULATING CORPORATE-LEVEL STRATEGY................................................................................................................ 18
Portfolio strategy .......................................................................................................................................... 18
The BCG matrix.............................................................................................................................................. 18
Diversification strategy ................................................................................................................................. 18
FORMULATING BUSINESS-LEVEL STRATEGY ................................................................................................................... 18
The competitive environment ....................................................................................................................... 18
Porter’s competitive strategies ..................................................................................................................... 19
FORMULATION FUNCTIONAL-LEVEL STRATEGIES ............................................................................................................ 19
GLOBAL STRATEGY .................................................................................................................................................. 19
STRATEGY EXECUTION .............................................................................................................................................. 19
CHAPTER 9 ............................................................................................................................................... 21
TYPES OF DECISIONS AND PROBLEMS........................................................................................................................... 21
Programmed and non-programmed decisions ............................................................................................. 21
Facing certainty and uncertainty .................................................................................................................. 21
DECISION-MAKING MODELS ...................................................................................................................................... 22
The ideal, rational model .............................................................................................................................. 22
How manager actually make decisions......................................................................................................... 22
The political model ........................................................................................................................................ 22
DECISION-MAKING STEPS.......................................................................................................................................... 23
Recognition of decision requirement ............................................................................................................ 23
Diagnosis and analysis of causes .................................................................................................................. 23
Development of alternatives ......................................................................................................................... 23
Selection of the desired alternative .............................................................................................................. 24
Implementation of the chosen alternative.................................................................................................... 24
Evaluation and feedback ............................................................................................................................... 24
WHY DO MANAGERS TAKE POOR DECISIONS? ............................................................................................................... 24
CHAPTER 13 ............................................................................................................................................. 25
CONTEMPORARY LEADERSHIP .................................................................................................................................... 25
Servant leadership......................................................................................................................................... 25
Authentic leadership ..................................................................................................................................... 25
FROM MANAGEMENT TO LEADERSHIP ......................................................................................................................... 25
BEHAVIOURAL APPROACHES ...................................................................................................................................... 25
Task versus people bias ................................................................................................................................. 25
The leadership grid ........................................................................................................................................ 26
CONTINGENCY APPROACHES ..................................................................................................................................... 26
CHARISMATIC AND TRANSFORMATIONAL LEADERSHIP .................................................................................................... 26
Transformational versus transactional leadership ....................................................................................... 26
POWER AND INFLUENCE ........................................................................................................................................... 27
Position power............................................................................................................................................... 27
Personal power.............................................................................................................................................. 27
CHAPTER 14 ............................................................................................................................................. 28
THE STRATEGIC ROLE OF HUMAN RESOURCE MANAGEMENT ............................................................................................ 28
THE INFLUENCE OF GLOBALIZATION ON HRM............................................................................................................... 28
MAINTAINING AN EFFECTIVE WORKFORCE.................................................................................................................... 28
Motivation ..................................................................................................................................................... 29
CONTENT PERSPECTIVES ON MOTIVATION .................................................................................................................... 29
Two-factor theory ......................................................................................................................................... 29
PROCESS PERSPECTIVES ON MOTIVATION ..................................................................................................................... 29
Equity theory ................................................................................................................................................. 29
Goal-setting theory ....................................................................................................................................... 30
REINFORCEMENT PERSPECTIVE ON MOTIVATION ........................................................................................................... 30
Reinforcement ............................................................................................................................................... 30
2
, Chapter 1
Introduction to management
The definition of management
Management = the attainment of organisational goals in an effective and efficient manner through
planning, organizing, leading, and controlling organisational resources.
Effectiveness = the degree to which organisation achieves a stated goal.
Efficiency = the use of minimal resources (raw materials, money, and people) to produce the desired
volume of output.
Higher effectiveness comes with lower efficiency; higher efficiency comes with lower effectiveness.
So, companies must make a choice for higher effectiveness at the cost of efficiency or higher efficiency
at the cost of the effectiveness; a so called “trade off”.
The four management functions
Planning = identifying goals for future organisational performance and deciding on the tasks and use
of resources needed to attain them. In other words, managerial planning defines where the
organisation wants to be in the future and how to get there.
Organizing = following the planning and reflecting how the organisation tries to accomplish the plan.
This involves assigning tasks, grouping tasks into departments, delegating authority, and allocating
resources across the organisation.
Leading = the use of influence to motivate employees to achieve organisational goals. This means
creating a shared culture and values, communicating goals to people throughout the organisation and
infusing employees with the desire to perform at a high level.
Controlling = monitoring employees’ activities, determining whether the organisation is moving towards
its goals and making corrections as necessary.
3
Table Of Contents
CHAPTER 1 ................................................................................................................................................. 3
THE DEFINITION OF MANAGEMENT ............................................................................................................................... 3
THE FOUR MANAGEMENT FUNCTIONS ........................................................................................................................... 3
MANAGEMENT SKILLS ................................................................................................................................................ 4
CHAPTER 2 ................................................................................................................................................. 5
MANAGEMENT AND ORGANISATION ............................................................................................................................. 5
CLASSICAL PERSPECTIVE.............................................................................................................................................. 5
Scientific management.................................................................................................................................... 5
BUREAUCRATIC ORGANISATIONS .................................................................................................................................. 5
HUMANISTIC PERSPECTIVE .......................................................................................................................................... 6
Human relations management ....................................................................................................................... 6
RECENT HISTORICAL TRENDS........................................................................................................................................ 6
CHAPTER 3 ................................................................................................................................................. 7
EXTERNAL ENVIRONMENT ........................................................................................................................................... 7
General environment ...................................................................................................................................... 7
Task environment............................................................................................................................................ 7
ORGANISATION-ENVIRONMENT RELATIONSHIPS .............................................................................................................. 7
Environment uncertainty................................................................................................................................. 7
Adapting to the environment .......................................................................................................................... 7
CHAPTER 4 ................................................................................................................................................. 8
ORGANIZING THE VERTICAL STRUCTURE ......................................................................................................................... 8
WORK SPECIALISATION............................................................................................................................................... 8
Chain of command .......................................................................................................................................... 8
Span of management ...................................................................................................................................... 9
CENTRALIZATION AND DECENTRALIZATION ................................................................................................................... 10
DEPARTMENTALIZATION ........................................................................................................................................... 10
ORGANIZING FOR HORIZONTAL COORDINATION ............................................................................................................ 12
The need for coordination ............................................................................................................................. 12
FACTORS SHAPING STRUCTURE .................................................................................................................................. 12
Structure follows strategy and environment ................................................................................................ 12
CHAPTER 7 ............................................................................................................................................... 14
GOAL SETTING AND PLANNING OVERVIEW.................................................................................................................... 14
Levels of goals and plans............................................................................................................................... 14
GOAL SETTING IN ORGANISATIONS.............................................................................................................................. 14
Organisational mission ................................................................................................................................. 14
Goals and plans ............................................................................................................................................. 15
OPERATIONAL PLANNING.......................................................................................................................................... 15
BENEFITS AND LIMITATIONS OF PLANNING ................................................................................................................... 15
Criteria for effective goals ............................................................................................................................. 15
PLANNING FOR A TURBULENT ENVIRONMENT ............................................................................................................... 16
Contingency planning, building scenarios and crisis planning...................................................................... 16
CHAPTER 8 ............................................................................................................................................... 17
WHAT IS STRATEGIC MANAGEMENT? .......................................................................................................................... 17
Purpose of strategy ....................................................................................................................................... 17
Levels of strategy .......................................................................................................................................... 17
, STRATEGIC MANAGEMENT PROCESS............................................................................................................................ 17
Strategy formulation versus execution ......................................................................................................... 17
SWOT analysis ............................................................................................................................................... 17
FORMULATING CORPORATE-LEVEL STRATEGY................................................................................................................ 18
Portfolio strategy .......................................................................................................................................... 18
The BCG matrix.............................................................................................................................................. 18
Diversification strategy ................................................................................................................................. 18
FORMULATING BUSINESS-LEVEL STRATEGY ................................................................................................................... 18
The competitive environment ....................................................................................................................... 18
Porter’s competitive strategies ..................................................................................................................... 19
FORMULATION FUNCTIONAL-LEVEL STRATEGIES ............................................................................................................ 19
GLOBAL STRATEGY .................................................................................................................................................. 19
STRATEGY EXECUTION .............................................................................................................................................. 19
CHAPTER 9 ............................................................................................................................................... 21
TYPES OF DECISIONS AND PROBLEMS........................................................................................................................... 21
Programmed and non-programmed decisions ............................................................................................. 21
Facing certainty and uncertainty .................................................................................................................. 21
DECISION-MAKING MODELS ...................................................................................................................................... 22
The ideal, rational model .............................................................................................................................. 22
How manager actually make decisions......................................................................................................... 22
The political model ........................................................................................................................................ 22
DECISION-MAKING STEPS.......................................................................................................................................... 23
Recognition of decision requirement ............................................................................................................ 23
Diagnosis and analysis of causes .................................................................................................................. 23
Development of alternatives ......................................................................................................................... 23
Selection of the desired alternative .............................................................................................................. 24
Implementation of the chosen alternative.................................................................................................... 24
Evaluation and feedback ............................................................................................................................... 24
WHY DO MANAGERS TAKE POOR DECISIONS? ............................................................................................................... 24
CHAPTER 13 ............................................................................................................................................. 25
CONTEMPORARY LEADERSHIP .................................................................................................................................... 25
Servant leadership......................................................................................................................................... 25
Authentic leadership ..................................................................................................................................... 25
FROM MANAGEMENT TO LEADERSHIP ......................................................................................................................... 25
BEHAVIOURAL APPROACHES ...................................................................................................................................... 25
Task versus people bias ................................................................................................................................. 25
The leadership grid ........................................................................................................................................ 26
CONTINGENCY APPROACHES ..................................................................................................................................... 26
CHARISMATIC AND TRANSFORMATIONAL LEADERSHIP .................................................................................................... 26
Transformational versus transactional leadership ....................................................................................... 26
POWER AND INFLUENCE ........................................................................................................................................... 27
Position power............................................................................................................................................... 27
Personal power.............................................................................................................................................. 27
CHAPTER 14 ............................................................................................................................................. 28
THE STRATEGIC ROLE OF HUMAN RESOURCE MANAGEMENT ............................................................................................ 28
THE INFLUENCE OF GLOBALIZATION ON HRM............................................................................................................... 28
MAINTAINING AN EFFECTIVE WORKFORCE.................................................................................................................... 28
Motivation ..................................................................................................................................................... 29
CONTENT PERSPECTIVES ON MOTIVATION .................................................................................................................... 29
Two-factor theory ......................................................................................................................................... 29
PROCESS PERSPECTIVES ON MOTIVATION ..................................................................................................................... 29
Equity theory ................................................................................................................................................. 29
Goal-setting theory ....................................................................................................................................... 30
REINFORCEMENT PERSPECTIVE ON MOTIVATION ........................................................................................................... 30
Reinforcement ............................................................................................................................................... 30
2
, Chapter 1
Introduction to management
The definition of management
Management = the attainment of organisational goals in an effective and efficient manner through
planning, organizing, leading, and controlling organisational resources.
Effectiveness = the degree to which organisation achieves a stated goal.
Efficiency = the use of minimal resources (raw materials, money, and people) to produce the desired
volume of output.
Higher effectiveness comes with lower efficiency; higher efficiency comes with lower effectiveness.
So, companies must make a choice for higher effectiveness at the cost of efficiency or higher efficiency
at the cost of the effectiveness; a so called “trade off”.
The four management functions
Planning = identifying goals for future organisational performance and deciding on the tasks and use
of resources needed to attain them. In other words, managerial planning defines where the
organisation wants to be in the future and how to get there.
Organizing = following the planning and reflecting how the organisation tries to accomplish the plan.
This involves assigning tasks, grouping tasks into departments, delegating authority, and allocating
resources across the organisation.
Leading = the use of influence to motivate employees to achieve organisational goals. This means
creating a shared culture and values, communicating goals to people throughout the organisation and
infusing employees with the desire to perform at a high level.
Controlling = monitoring employees’ activities, determining whether the organisation is moving towards
its goals and making corrections as necessary.
3
