Fundamentals of Management
Chapter 1 – Managers and Management
1.1 Who are managers and where do they work?
All managers share one common element: they work in an organizational setting.
An organization is a systematic arrangement of people brought together to accomplish some specific
purpose. Three characteristics of organizations:
• Goals – a distinct purpose
• People – who achieve those goals
• Structure – defining and limiting the behavior of its members
The difference between managers and nonmanagerial employees is that managers have the
responsibility to direct and oversee the activities of other people, whereas nonmanagerial employees
are people who work directly on a job or task and have no responsibility for overseeing the work of
others.
Managers can be classified at different levels
1) Top managers
Those at or near the top of an organization. Usually responsible for making decisions about
the direction of the organization and establishing policies and philosophies that affect all
organizational members.
(Vice president, president, chancellor, managing director, chief operating officer, chief
executive officer, chairperson of the board)
2) Middle managers
Those found between the lowest and top levels of the organization. Often manage other
managers and maybe some nonmanagerial employees and are typically responsible for
translating the goals set by top management into specific details that lower-level management
will see get done.
(Department or agency head, project leader, unit chief, district manager, division manager,
store manager)
3) First-line managers
Those individuals responsible for directing the day-to-day activities of nonmanagerial
employees.
(Supervisors, shift managers, office managers, department managers, unit coordinators)
4) Team leaders
Those individuals responsible for managing and facilitating the activities of a work team.
Usually report to a first-line manager.
1.2 What is management?
Management is the process of getting things done, effectively and efficiently, with and through other
people.
- Process – a set of ongoing and interrelated activities. The primary activities or functions that
managers perform.
- Effectiveness – doing the right things, or completing activities so that organizational goals are
attained.
- Efficiency – doing things right, or getting the most output from the least amount of inputs.
1
,1.3 Describe what managers do
3 ways to look at what managers do
1) Four functions approach
- Managers perform certain activities, tasks, or functions as they direct and oversee others’ work
- Henry Fayol claimed that managers engage in 5 management activities (POCCC)
• Plan
• Organize
• Command
• Coordinate
• Control
- Today, those management functions have been condensed to 4 (POLC)
• Planning – includes defining goals, establishing strategy, and developing plans to coordinate activities
• Organizing – includes determining what tasks are to be done, who is to do them, how the tasks are to
be grouped, who reports to whom, and who will make decisions
• Leading – includes motivating employees, directing the activities of others, selecting the most effective
communication channel, and resolving conflicts
• Controlling – includes monitoring performance, comparing it with goals, and correcting any significant
deviations
2) Management roles approach
Henry Mintzberg defined what managers do based on managerial roles
• Interpersonal roles (involving people and other duties that are ceremonial and
symbolic in nature)
o Figurehead
o Leader
o Liaison
• Informational roles (involving collecting, receiving, and disseminating information)
o Monitor
o Disseminator
o Spokesperson
• Decisional roles (entailing making decisions or choices)
o Entrepreneur
o Disturbance handler
o Resource allocator
o Negotiator
3) Skills and competencies
- Four critical management skills (suggested by Robert Katz and others)
• Conceptual skills – analyze and diagnose
• Interpersonal skills – working well with others
• Technical skills – possessing expert job knowledge
• Political skills – political adeptness
- Other critical managerial competencies: decision making, team building, decisiveness,
assertiveness, politeness, personal responsibility, trustworthiness, loyalty, professionalism,
tolerance, adaptability, creative thinking, resilience, listening, self-development.
2
,1.4 What factors are reshaping and redefining management?
• Customers
Delivering consistent high-quality customer service is essential and all employees of the
organization should contribute to this. Managers must create a customer-responsive
organization.
• Innovation
Managers should continually look for new ways to do the job better. They not only need to be
innovative personally, but encourage their employees to be innovative.
• Social media
Managers could use social media as a way to connect with customers, to manage HR and to
tap into innovation and talent.
• Sustainability
The ability to achieve business goals and increase long-term shareholder value.
The relationship between employees and their manager is the largest factor in employee engagement
– which is found when employees are connected to, satisfied with, and enthusiastic about their jobs.
3
, Chapter 3 – Integrative Managerial Issues
3.1 What is globalization and how does it affect organizations?
An important issue that managers must deal with is globalization. Major events such as catastrophic
natural disasters and the global economic meltdown of the past few years have created challenges for
managers doing business globally. Despite such challenges, globalization isn’t about to disappear.
Although the world is still a global village – i.e. a boundaryless world where goods and services are
produced and marketed worldwide – how managers do business in that global village is changing. To
be effective in this world, managers need to adapt to this changed environment, as well as continue
to foster an understanding of cultures, systems, and techniques that are different from their own.
What does it mean to be global?
• Organizations are considered global if they exchange goods and services with consumers in
other countries.
• However, many companies are considered global because they use managerial and technical
employee talent from other countries. One factor that affects talent globalization is
immigration laws and regulations. Managers must be alert to changes in those laws.
• Furthermore, an organization can be considered global if it uses financial sources and
resources outside its home country, which is known as financial globalization.
How do organizations go global?
When organizations go global, they often use different approaches.
➢ At first, managers may want to get into a global market with minimal investment. At this stage,
they may start with global sourcing, which is purchasing materials or labor from around the
world wherever it is cheapest. The goal is to take advantage of lower costs in order to be more
competitive. However, after the economic crisis, many companies reconsidered their decisions
to source globally.
➢ The next step in going global may involve exporting the organization’s products to other
countries – i.e. making products domestically and selling them abroad. In addition, a company
might do importing, which involves acquiring products made abroad and selling them
domestically. Both usually entail minimal investment and risk.
➢ Finally, managers might use licensing or franchising, which are similar approaches involving
one organization giving another organization the right to use its brand name, technology, or
product specifications in return for a lump sum payment or a fee that is usually based on sales.
Difference – Licensing is primarily used by manufacturing organizations that make or sell
another company’s products, and franchising is primarily used by service organizations that
want to use another company’s name and operating methods.
➢ Once an organization has been doing business internationally for a while and has gained
experience in international markets, managers may decide to make more of a direct
investment. One way to do this is through a global strategic alliance, which is a partnership
between knowledge in developing new products or building production facilities.
o A specific type of strategic alliance in which the partners form a separate, independent
organization for some business purposes is called a joint venture.
➢ Finally, managers may choose to directly invest in foreign country by setting up a foreign
subsidiary as a separate and independent facility or office. This subsidiary can be managed as
a multidomestic organization (local control) or as a global organization (centralized control).
This arrangement involves the greatest amount of risk.
4
Chapter 1 – Managers and Management
1.1 Who are managers and where do they work?
All managers share one common element: they work in an organizational setting.
An organization is a systematic arrangement of people brought together to accomplish some specific
purpose. Three characteristics of organizations:
• Goals – a distinct purpose
• People – who achieve those goals
• Structure – defining and limiting the behavior of its members
The difference between managers and nonmanagerial employees is that managers have the
responsibility to direct and oversee the activities of other people, whereas nonmanagerial employees
are people who work directly on a job or task and have no responsibility for overseeing the work of
others.
Managers can be classified at different levels
1) Top managers
Those at or near the top of an organization. Usually responsible for making decisions about
the direction of the organization and establishing policies and philosophies that affect all
organizational members.
(Vice president, president, chancellor, managing director, chief operating officer, chief
executive officer, chairperson of the board)
2) Middle managers
Those found between the lowest and top levels of the organization. Often manage other
managers and maybe some nonmanagerial employees and are typically responsible for
translating the goals set by top management into specific details that lower-level management
will see get done.
(Department or agency head, project leader, unit chief, district manager, division manager,
store manager)
3) First-line managers
Those individuals responsible for directing the day-to-day activities of nonmanagerial
employees.
(Supervisors, shift managers, office managers, department managers, unit coordinators)
4) Team leaders
Those individuals responsible for managing and facilitating the activities of a work team.
Usually report to a first-line manager.
1.2 What is management?
Management is the process of getting things done, effectively and efficiently, with and through other
people.
- Process – a set of ongoing and interrelated activities. The primary activities or functions that
managers perform.
- Effectiveness – doing the right things, or completing activities so that organizational goals are
attained.
- Efficiency – doing things right, or getting the most output from the least amount of inputs.
1
,1.3 Describe what managers do
3 ways to look at what managers do
1) Four functions approach
- Managers perform certain activities, tasks, or functions as they direct and oversee others’ work
- Henry Fayol claimed that managers engage in 5 management activities (POCCC)
• Plan
• Organize
• Command
• Coordinate
• Control
- Today, those management functions have been condensed to 4 (POLC)
• Planning – includes defining goals, establishing strategy, and developing plans to coordinate activities
• Organizing – includes determining what tasks are to be done, who is to do them, how the tasks are to
be grouped, who reports to whom, and who will make decisions
• Leading – includes motivating employees, directing the activities of others, selecting the most effective
communication channel, and resolving conflicts
• Controlling – includes monitoring performance, comparing it with goals, and correcting any significant
deviations
2) Management roles approach
Henry Mintzberg defined what managers do based on managerial roles
• Interpersonal roles (involving people and other duties that are ceremonial and
symbolic in nature)
o Figurehead
o Leader
o Liaison
• Informational roles (involving collecting, receiving, and disseminating information)
o Monitor
o Disseminator
o Spokesperson
• Decisional roles (entailing making decisions or choices)
o Entrepreneur
o Disturbance handler
o Resource allocator
o Negotiator
3) Skills and competencies
- Four critical management skills (suggested by Robert Katz and others)
• Conceptual skills – analyze and diagnose
• Interpersonal skills – working well with others
• Technical skills – possessing expert job knowledge
• Political skills – political adeptness
- Other critical managerial competencies: decision making, team building, decisiveness,
assertiveness, politeness, personal responsibility, trustworthiness, loyalty, professionalism,
tolerance, adaptability, creative thinking, resilience, listening, self-development.
2
,1.4 What factors are reshaping and redefining management?
• Customers
Delivering consistent high-quality customer service is essential and all employees of the
organization should contribute to this. Managers must create a customer-responsive
organization.
• Innovation
Managers should continually look for new ways to do the job better. They not only need to be
innovative personally, but encourage their employees to be innovative.
• Social media
Managers could use social media as a way to connect with customers, to manage HR and to
tap into innovation and talent.
• Sustainability
The ability to achieve business goals and increase long-term shareholder value.
The relationship between employees and their manager is the largest factor in employee engagement
– which is found when employees are connected to, satisfied with, and enthusiastic about their jobs.
3
, Chapter 3 – Integrative Managerial Issues
3.1 What is globalization and how does it affect organizations?
An important issue that managers must deal with is globalization. Major events such as catastrophic
natural disasters and the global economic meltdown of the past few years have created challenges for
managers doing business globally. Despite such challenges, globalization isn’t about to disappear.
Although the world is still a global village – i.e. a boundaryless world where goods and services are
produced and marketed worldwide – how managers do business in that global village is changing. To
be effective in this world, managers need to adapt to this changed environment, as well as continue
to foster an understanding of cultures, systems, and techniques that are different from their own.
What does it mean to be global?
• Organizations are considered global if they exchange goods and services with consumers in
other countries.
• However, many companies are considered global because they use managerial and technical
employee talent from other countries. One factor that affects talent globalization is
immigration laws and regulations. Managers must be alert to changes in those laws.
• Furthermore, an organization can be considered global if it uses financial sources and
resources outside its home country, which is known as financial globalization.
How do organizations go global?
When organizations go global, they often use different approaches.
➢ At first, managers may want to get into a global market with minimal investment. At this stage,
they may start with global sourcing, which is purchasing materials or labor from around the
world wherever it is cheapest. The goal is to take advantage of lower costs in order to be more
competitive. However, after the economic crisis, many companies reconsidered their decisions
to source globally.
➢ The next step in going global may involve exporting the organization’s products to other
countries – i.e. making products domestically and selling them abroad. In addition, a company
might do importing, which involves acquiring products made abroad and selling them
domestically. Both usually entail minimal investment and risk.
➢ Finally, managers might use licensing or franchising, which are similar approaches involving
one organization giving another organization the right to use its brand name, technology, or
product specifications in return for a lump sum payment or a fee that is usually based on sales.
Difference – Licensing is primarily used by manufacturing organizations that make or sell
another company’s products, and franchising is primarily used by service organizations that
want to use another company’s name and operating methods.
➢ Once an organization has been doing business internationally for a while and has gained
experience in international markets, managers may decide to make more of a direct
investment. One way to do this is through a global strategic alliance, which is a partnership
between knowledge in developing new products or building production facilities.
o A specific type of strategic alliance in which the partners form a separate, independent
organization for some business purposes is called a joint venture.
➢ Finally, managers may choose to directly invest in foreign country by setting up a foreign
subsidiary as a separate and independent facility or office. This subsidiary can be managed as
a multidomestic organization (local control) or as a global organization (centralized control).
This arrangement involves the greatest amount of risk.
4
