MNG2601
EXAM NOTES
, lOMoARcPSD|21997160
MANAGEMENT PRINCIPLES
CHAPTER 1
INTRODUCTION TO MANAGEMENT
1.2 ORGANISATIONS AND MANAGERS
All the products and services required to satisfy the consumer’s and, ultimately, society’s needs are
produced and provided by specialised organisations such as hypermarkets, sports clubs, universities, car
manufacturers, banks, guest houses, bicycle shops, hospitals, and airlines to mention but a few.
People’s lives are influenced in some way or another by the managers of these numerous business
organisations.
The following resources are used:
• Human resources
• Capital or financial resources
• Physical resources
• Information resources.
1.3 THE NATURE OF MANAGEMENT
Managers therefore combine, allocate, coordinate, and deploy resources or inputs in such a way that the
organisation’s goals are achieved as productively as possible. In doing so, management follows a
specific process. A process is a systematic way of doing things.
The entails 4 fundamental management functions: -
Planning
Organizing
Leading
Controlling
Organising
Resources Performance
Human Planning Leading Achieve goals
Financial Products
Physical Services
Controlling
Information Productivity
Profit
THE MANAGEMENT PROCESS COMPRISES PLANNING, ORGANISING, LEADING AND
CONTROLLING.
A model is a simplification of the real world in order to explain complex relationships in easy-to-
understand terms.
1|Page
, lOMoARcPSD|21997160
The fundamental functions of a manager link up in a specific sequence to form a process. Figure 1.2
illustrates the process as a logical sequence of actions.
Planning (Part II)
Managers determine the organisations
vision, mission and goal and decide on a
Planning (Part II)
strategy to achieve them
Controlling (Part V) Organising (Part III)
Managers monitor progressive and take Managers group activities together,
corrective steps to reach mission and establish authority, allocate resources and
goals. delegate.
Leading (Part IV)
Managers direct and motivate members
of the organisation to achieve the mission
and goals
1.4 A DEFINITION OF MANAGEMENT
Management can be defined as the process of planning, organizing, leading, and controlling the
resources of the organisation to predetermined stated organisational goals as productively as possible.
Planning is the management function that determines the organisation’s vision, mission and goals. It
involves identifying ways of reaching the goals and finding the resources needed for the task. Tactical
plans are made by functional managers (such as financial, human resources, research and development,
marketing, and operations managers) to support the organisation’s long-term plans. Operational plans
are made by lower management (often called “first line” or “supervisory management”) to plan ahead
for short periods such as weekly and monthly schedules.
Organising is the second step in the management process. Tasks, roles, and responsibilities have to be
defined and policies and procedures established to achieve the goals. Organising involves developing a
framework or organisational structure to indicate how and where people and other resources should be
deployed to achieve the goals.
Leading refers to directing the human resources of the organisation and motivating them in such a way
that their actions are aligned with predetermined goals and plans. Leading the organisations means
making use of influence and power to motivate employees to achieve organisational goals. Leading can
also mean change, which may be necessary to keep the organisation on track.
Controlling means that managers should constantly make sure that the organisations is on the right
course to attain its goals. To monitor performance and action, ensuring that they conform to plans to
attain the predetermined goals. Control also includes the measurement of performance to determine
how well the goals have been achieved. Feeding back results is an important aspect of control.
1.5 DIFFERENT LEVELS AND KINDS OF MANAGEMENT IN THE ORGANISATION.
Managers are usually classified into two categories; -
2|Page
, lOMoARcPSD|21997160
1. According to their level in the organisation (the top, middle, and lower or first-line managers)
and
2. By the functional or specialist area of management for which they are responsible (the functional
managers)
Figure 1.4 indicates how managers within an organisation can be differentiated according to level and
functional area.
1.5.1 TOP MANAGEMENT
Top management represents the relatively small group of managers who lead the organisation. Top
management is usually responsible for the organisation as a whole, as well as for determining its vision,
mission, goals, and overall strategies of the entire organisation. Top management is concerned mainly
with long-term planning, designing the organisation’s broad organisational structure, leading the
organisation (through the top executive), and controlling it. It also influences the corporate culture.
1.5.2 MIDDLE MANAGEMENT
Middle management is responsible for specific departments of the organisation and is primarily
concerned with implementing the policies, plans, and strategies formulated by top management. It is
responsible for medium-term and short-term planning, organizing functional areas. Middle managers
also continually monitor environmental influences that may affect their own departments.
1.5.3 LOWER/FIRST-LINE MANAGEMENT
Lower or first-line management is responsible for even smaller segments of the organisation, namely
the different sub-sections. First-line managers are centered on the daily activities of their
departments or sections, on short-term planning, and on implementing the plans of middle management.
Their primary concern is to apply policies, procedures, and rules to achieve a high level of productivity.
These managers hold the power to increase or decrease the productivity of most organisations. They
also maintain the crucial interface between management and the major body of employees in the
organisations.
Figure 1.5 illustrates how the four functions of planning, organizing, leading, and controlling differ for
the three management levels at a specific organisation.
Planning Organising Leading Controlling
Top managers 28% 36% 22% 14%
Middle managers 18% 33% 36% 13%
Lower Managers 15% 24% 51% 10%
1.6 AREAS OF MANAGEMENT
The general management function includes an examination of the management process as a whole.
The marketing function entails the marketing of the products or services of the organisation.
The financial function includes the acquisition, utilization, and control of the money the
organisation need to finance its activities.
The production or operations management function includes that group of activities concerned
with the physical production of products, namely the establishment and layout of the production
unit.
The purchasing function entails the acquisition of all products and materials required by the
business to function profitably, namely raw materials, components, tools, equipment and the
inventory.
3|Page
EXAM NOTES
, lOMoARcPSD|21997160
MANAGEMENT PRINCIPLES
CHAPTER 1
INTRODUCTION TO MANAGEMENT
1.2 ORGANISATIONS AND MANAGERS
All the products and services required to satisfy the consumer’s and, ultimately, society’s needs are
produced and provided by specialised organisations such as hypermarkets, sports clubs, universities, car
manufacturers, banks, guest houses, bicycle shops, hospitals, and airlines to mention but a few.
People’s lives are influenced in some way or another by the managers of these numerous business
organisations.
The following resources are used:
• Human resources
• Capital or financial resources
• Physical resources
• Information resources.
1.3 THE NATURE OF MANAGEMENT
Managers therefore combine, allocate, coordinate, and deploy resources or inputs in such a way that the
organisation’s goals are achieved as productively as possible. In doing so, management follows a
specific process. A process is a systematic way of doing things.
The entails 4 fundamental management functions: -
Planning
Organizing
Leading
Controlling
Organising
Resources Performance
Human Planning Leading Achieve goals
Financial Products
Physical Services
Controlling
Information Productivity
Profit
THE MANAGEMENT PROCESS COMPRISES PLANNING, ORGANISING, LEADING AND
CONTROLLING.
A model is a simplification of the real world in order to explain complex relationships in easy-to-
understand terms.
1|Page
, lOMoARcPSD|21997160
The fundamental functions of a manager link up in a specific sequence to form a process. Figure 1.2
illustrates the process as a logical sequence of actions.
Planning (Part II)
Managers determine the organisations
vision, mission and goal and decide on a
Planning (Part II)
strategy to achieve them
Controlling (Part V) Organising (Part III)
Managers monitor progressive and take Managers group activities together,
corrective steps to reach mission and establish authority, allocate resources and
goals. delegate.
Leading (Part IV)
Managers direct and motivate members
of the organisation to achieve the mission
and goals
1.4 A DEFINITION OF MANAGEMENT
Management can be defined as the process of planning, organizing, leading, and controlling the
resources of the organisation to predetermined stated organisational goals as productively as possible.
Planning is the management function that determines the organisation’s vision, mission and goals. It
involves identifying ways of reaching the goals and finding the resources needed for the task. Tactical
plans are made by functional managers (such as financial, human resources, research and development,
marketing, and operations managers) to support the organisation’s long-term plans. Operational plans
are made by lower management (often called “first line” or “supervisory management”) to plan ahead
for short periods such as weekly and monthly schedules.
Organising is the second step in the management process. Tasks, roles, and responsibilities have to be
defined and policies and procedures established to achieve the goals. Organising involves developing a
framework or organisational structure to indicate how and where people and other resources should be
deployed to achieve the goals.
Leading refers to directing the human resources of the organisation and motivating them in such a way
that their actions are aligned with predetermined goals and plans. Leading the organisations means
making use of influence and power to motivate employees to achieve organisational goals. Leading can
also mean change, which may be necessary to keep the organisation on track.
Controlling means that managers should constantly make sure that the organisations is on the right
course to attain its goals. To monitor performance and action, ensuring that they conform to plans to
attain the predetermined goals. Control also includes the measurement of performance to determine
how well the goals have been achieved. Feeding back results is an important aspect of control.
1.5 DIFFERENT LEVELS AND KINDS OF MANAGEMENT IN THE ORGANISATION.
Managers are usually classified into two categories; -
2|Page
, lOMoARcPSD|21997160
1. According to their level in the organisation (the top, middle, and lower or first-line managers)
and
2. By the functional or specialist area of management for which they are responsible (the functional
managers)
Figure 1.4 indicates how managers within an organisation can be differentiated according to level and
functional area.
1.5.1 TOP MANAGEMENT
Top management represents the relatively small group of managers who lead the organisation. Top
management is usually responsible for the organisation as a whole, as well as for determining its vision,
mission, goals, and overall strategies of the entire organisation. Top management is concerned mainly
with long-term planning, designing the organisation’s broad organisational structure, leading the
organisation (through the top executive), and controlling it. It also influences the corporate culture.
1.5.2 MIDDLE MANAGEMENT
Middle management is responsible for specific departments of the organisation and is primarily
concerned with implementing the policies, plans, and strategies formulated by top management. It is
responsible for medium-term and short-term planning, organizing functional areas. Middle managers
also continually monitor environmental influences that may affect their own departments.
1.5.3 LOWER/FIRST-LINE MANAGEMENT
Lower or first-line management is responsible for even smaller segments of the organisation, namely
the different sub-sections. First-line managers are centered on the daily activities of their
departments or sections, on short-term planning, and on implementing the plans of middle management.
Their primary concern is to apply policies, procedures, and rules to achieve a high level of productivity.
These managers hold the power to increase or decrease the productivity of most organisations. They
also maintain the crucial interface between management and the major body of employees in the
organisations.
Figure 1.5 illustrates how the four functions of planning, organizing, leading, and controlling differ for
the three management levels at a specific organisation.
Planning Organising Leading Controlling
Top managers 28% 36% 22% 14%
Middle managers 18% 33% 36% 13%
Lower Managers 15% 24% 51% 10%
1.6 AREAS OF MANAGEMENT
The general management function includes an examination of the management process as a whole.
The marketing function entails the marketing of the products or services of the organisation.
The financial function includes the acquisition, utilization, and control of the money the
organisation need to finance its activities.
The production or operations management function includes that group of activities concerned
with the physical production of products, namely the establishment and layout of the production
unit.
The purchasing function entails the acquisition of all products and materials required by the
business to function profitably, namely raw materials, components, tools, equipment and the
inventory.
3|Page
