Organization & Management Organization and Management follows the Market Analysis. This section should include: your company's organizational structure, details about the ownership of your company, profiles of your management team, and the qualifications of your board of directors.
Who does what in your business? What is their background and why are you bringing them into the business as board members or employees? What are they responsible for? These may seem like unnecessary questions to answer in a one- or two-person organization, but the people reading your business plan want to know who's in charge, so tell them. Give a detailed description of each division or department and its function.
This section should include who's on the board (if you have an advisory board) and how you intend to keep them there. What kind of salary and benefits package do you have for your people? What incentives are you offering? How about promotions? Reassure your reader that the people you have on staff are more than just names on a letterhead.
Organizational Structure
A simple but effective way to lay out the structure of your company is to create an organizational chart with a narrative description. This will prove that you're leaving nothing to chance, you've thought out exactly who is doing what, and there is someone in charge of every function of your company. Nothing will fall through the cracks, and nothing will be done three or four times over. To a potential investor or employee, that is very important.
Ownership Information
This section should also include the legal structure of your business along with the subsequent ownership information it relates to. Have you incorporated your business? If so, is it a C or S corporation? Or perhaps you have formed a partnership with someone. If so, is it a general or limited partnership? Or maybe you are a sole proprietor.
The following important ownership information should be incorporated into your business plan:
Names of owners Percentage ownership Extent of involvement with the company Forms of ownership (i.e., common stock, preferred stock, general partner, limited partner) Outstanding equity equivalents (i.e., options, warrants, convertible debt) Common stock (i.e., authorized or issued) Management Profiles Experts agree that one of the strongest factors for success in any growth company is the ability and track record of its owner/management team, so let your reader know about the key people in your company and their backgrounds. Provide resumes that include the following information: Name Position (include brief position description along with primary duties) Primary responsibilities and authority Education Unique experience and skills Prior employment Special skills Past track record Industry recognition Community involvement Number of years with company Compensation basis and levels (make sure these are reasonable -- not too high or too low) Be sure you quantify achievements (e.g. "Managed a sales force of ten people," "Managed a department of fifteen people," "Increased revenue by 15 percent in the first six months," "Expanded the retail outlets at the rate of two each year," "Improved the customer service as rated by our customers from a 60 percent to a 90 percent rating")
Also highlight how the people surrounding you complement your own skills. If you're just starting out, show how each person's unique experience will contribute to the success of your venture.
Board of Directors' Qualifications
The major benefit of an unpaid advisory board is that it can provide expertise that your company cannot otherwise afford. A list of well-known, successful business owners/managers can go a long way toward enhancing your company's credibility and perception of management expertise.
If you have a board of directors, be sure to gather the following information when developing the outline for your business plan:
Names Positions on the board Extent of involvement with company Background Historical and future contribution to the company's success
Next, move on to the Service or Product Line section of your plan.
Management Role in Organization
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SHARE THIS CONTENT Management takes part in every step of an organization, giving direction and aligning resources in order to achieve goals. KEY POINTS
The overall role of managers is to guide organizations toward accomplishinggoals. Good management covers six basic functions: planning, organizing, staffing, leading, controlling and motivation. All managers perform a range of functions, with the amount of time spent on each function depending on the level of management and specific organizational needs.
TERMS
organization chart a graphic display of reporting relationships in an organization, sometimes displaying position titles and position holders Levels of management The term "Levels of Management" refers to a line of demarcation between various managerial positions in an organization. Levels of management can be classified in three broad categories: top level administration, middle level management of executing organizational objectives, and first level supervision of tasks and employees. Give us feedback on this content: Edit this content directly Management is the act of getting people together to accomplish shared goals and make effective and efficient use of available resources. Since organizations can be viewed as systems, management can also be defined as human action to facilitate the production of useful outcomes from a system. This view includes how workers can "manage" themselves and how self-management can be seen as a prerequisite for effective management of other people. Management operates through functions that are often classified as planning, organizing, staffing, leading/directing, controlling/monitoring and motivation.
Management
Management operates through functions like planning, organizing, staffing, leading/directing, controlling/monitoring and motivation.
Planning: Mapping out exactly how to achieve particular goals, generatingplans for actions, and deciding what needs to happen in the future (today, next week, next month, next year, or over the next five years). Organizing: Implementing patterns of relationships among workers and making optimum use of resources to carry out plans. Resourcing encompasses the deployment and manipulation of human resources, financial resources, technological resources and natural resources. Staffing: Job analysis, recruitment and hiring for appropriate jobs. A human resources department is essential to accomplishing this goal. Leading/directing: Determining what needs to be done and getting people to do it. Controlling/monitoring: Checking progress against plans and taking any corrective actions necessary to make sure that plans remain on track. Motivation: Motivation is a basic function of management because employees cannot work effectively without motivation. Without motivation, employees may not contribute to other organizational functions and priorities. All levels of management perform these functions, but the amount of time amanager spends on each function depends on the level of management and the needs of the organization. Top level managers consists of the board of directors, president, vice-president, CEOs and others. They are responsible for controlling and overseeing the entire organization. They develop goals, strategic plans, company policies and makedecisions on the direction of the business. In addition, top-level managers play a significant role in the mobilization of outside resources and are accountable toshareholders and the general public. Middle level managers consist of general managers, branch managers and department managers. They are accountable to the top management for the functions of their departments. They devote more time to organizational and directional concerns. Their roles can be emphasized as executing organizational plans in conformance with the company's policies and objectives. This includes being able to define and discuss information and top management policies with lower management and, most importantly, provide lower level managers with guidance and inspiration for high performance. First level managers consist of supervisors, section leads, foremen, and the like. They focus on controlling and directing. They usually have the responsibility of assigning employees tasks, guiding and supervising employees on day-to-day activities, ensuring quality and quantity production, making recommendations, and solving employee problems.
MANAGEMENT FUNCTIONS
Photo by: George Muresan
The functions of management uniquely describe managers' jobs. The most commonly cited functions of management are planning, organizing, leading, and controlling, although some identify additional functions. The functions of management define the process of management as distinct from accounting, finance, marketing, and other business functions. These functions provide a useful way of classifying information about management, and most basic management texts since the 1950s have been organized around a functional framework.
DEVELOPMENT OF THE FUNCTIONAL APPROACH TO MANAGEMENT
Henri Fayol was the first person to identify elements or functions of management in his classic 1916 book Administration Industrielle et Generale. Fayol was the managing director of a large French coal-mining firm and based his book largely on his experiences as a practitioner of management. Fayol defined five functions, or elements of management: planning, organizing, commanding, coordinating, and controlling. Fayol argued that these functions were universal, in the sense that all managers performed them in the course of their jobs, whether the managers worked in business, military, government, religious, or philanthropic undertakings.
Fayol defined planning in terms of forecasting future conditions, setting objectives, and developing means to attain objectives. Fayol recognized that effective planning must also take into account unexpected contingencies that might arise and did not advocate rigid and inflexible plans. Fayol defined organizing as making provision for the structuring of activities and relationships within the firm and also the recruiting, evaluation, and training of personnel.
According to Fayol, commanding as a managerial function concerned the personal supervision of subordinates and involved inspiring them to put forth unified effort to achieve objectives. Fayol emphasized the importance of managers understanding the people who worked for them, setting a good example, treating subordinates in a manner consistent with firm policy, delegating, and communicating through meetings and conferences.
Fayol saw the function of coordination as harmonizing all of the various activities of the firm. Most later experts did not retain Fayol's coordination function as a separate function of management but regarded it as a necessary component of all the other management functions. Fayol defined the control function in terms of ensuring that everything occurs within the parameters of the plan and accompanying principles. The purpose of control was to identify deviations from objectives and plans and to take corrective action.
Fayol's work was not widely known outside Europe until 1949, when a translation of his work appeared in the United States. Nevertheless, his discussion of the practice of management as a process consisting of specific functions had a tremendous influence on early management texts that appeared in the 1950s.
Management pioneers such as George Terry, Harold Koontz, Cyril O'Donnell, and Ralph Davis all published management texts in the 1950s that defined management as a process consisting of a set of interdependent functions. Collectively, these and several other management experts became identified with what came to be known as the process school of management.
According to the process school, management is a distinct intellectual activity consisting of several functions. The process theorists believe that all managers, regardless of their industry, organization, or level of management, engage in the functions of management. The process school of management became a dominant paradigm for studying management and the functions of management became the most common way of describing the nature of managerial work.
CRITICISM OF THE FUNCTIONAL APPROACH TO MANAGEMENT
By the early 1970s, some experts suggested that the functions of management as described by Fayol and others of the process school of management were not an accurate description of the reality of managers' jobs. Chief among the critics of the functional approach was Henry Mintzberg.
Mintzberg argued that the functional or process school of management was "folklore" and that functions of management such as planning, organizing, leading, and controlling did not accurately depict the chaotic nature of managerial work. He felt that the functional approach to the managerial job falsely conveyed a sense that managers carefully and deliberately evaluated information before making management decisions.
Based upon an observational study of five executives, Mintzberg concluded that the work managers actually performed could best be represented by three sets of roles, or activities: interpersonal roles, informational roles, and decision-making roles. He described the interpersonal roles as consisting of figurehead, leader, and liaison. He identified three informational roles: monitor, disseminator, and spokesperson. Finally, he described four decision-making roles that included entrepreneur, disturbance handler, resource allocator, and negotiator. Mintzberg's challenge to the usefulness of the functions of management and the process school attracted a tremendous amount of attention and generated several empirical studies designed to determine whether his or Fayol's description of the managerial job was most accurate. While this research did indicate that managers performed at least some of the roles Mintzberg identified, there was little in the findings that suggested that the functions of management were not a useful way of describing managerial work.
Scholars continue to debate this question. Research by David Lamond suggests that both approaches had some validity, with Fayol's approach describing the ideal management job and Mintzberg describing the day-to-day activities of managers. Thus, the general conclusion seems to be that while Mintzberg offered a genuine insight into the daily activities of practicing managers, the functions of management still provides a very useful way of classifying the activities managers engage in as they attempt to achieve organizational goals.
PLANNING
Planning is the function of management that involves setting objectives and determining a course of action for achieving these objectives. Planning requires that managers be aware of environmental conditions facing their organization and forecast future conditions. It also requires that managers be good decision-makers.
Planning is a process consisting of several steps. The process begins with environmental scanning, which simply means that planners must be aware of the critical contingencies facing their organization in terms of economic conditions, their competitors, and their customers. Planners must then attempt to forecast future conditions. These forecasts form the basis for planning.
Planners must establish objectives, which are statements of what needs to be achieved and when. Planners must then identify alternative courses of action for achieving objectives. After evaluating the various alternatives, planners must make decisions about the best courses of action for achieving objectives. They must then formulate necessary steps and ensure effective implementation of plans. Finally, planners must constantly evaluate the success of their plans and take corrective action when necessary. There are many different types of plans and planning.
STRATEGIC PLANNING.
Strategic planning involves analyzing competitive opportunities and threats, as well as the strengths and weaknesses of the organization, and then determining how to position the organization to compete effectively in their environment. Strategic planning has a long time frame, often three years or more. Strategic planning generally includes the entire organization and includes formulation of objectives. Strategic planning is often based on the organization's mission, which is its fundamental reason for existence. An organization's top management most often conducts strategic planning.
TACTICAL PLANNING.
Tactical planning is intermediate-range planning that is designed to develop relatively concrete and specific means to implement the strategic plan. Middle-level managers often engage in tactical planning. Tactical planning often has a one- to three-year time horizon.
OPERATIONAL PLANNING.
Operational planning generally assumes the existence of objectives and specifies ways to achieve them. Operational planning is short-range planning that is designed to develop specific action steps that support the strategic and tactical plans. Operational planning usually has a very short time horizon, from one week to one year.
ORGANIZING
Organizing is the function of management that involves developing an organizational structure and allocating human resources to ensure the accomplishment of objectives. The structure of the organization is the framework within which effort is coordinated. The structure is usually represented by an organization chart, which provides a graphic representation of the chain of command within an organization. Decisions made about the structure of an organization are generally referred to as "organizational design" decisions. Organizing also involves the design of individual jobs within the organization. Decisions must be made about the duties and responsibilities of individual jobs as well as the manner in which the duties should be carried out. Decisions made about the nature of jobs within the organization are generally called "job design" decisions.
Organizing at the level of the organization involves deciding how best to departmentalize, or cluster jobs into departments to effectively coordinate effort. There are many different ways to departmentalize, including organizing by function, product, geography, or customer. Many larger organizations utilize multiple methods of departmentalization. Organizing at the level of job involves how best to design individual jobs to most effectively use human resources.
Traditionally, job design was based on principles of division of labor and specialization, which assumed that the more narrow the job content, the more proficient the individual performing the job could become. However, experience has shown that it is possible for jobs to become too narrow and specialized. When this happens, negative outcomes result, including decreased job satisfaction and organizational commitment and increased absenteeism and turnover.
Recently many organizations have attempted to strike a balance between the need for worker specialization and the need for workers to have jobs that entail variety and autonomy. Many jobs are now designed based on such principles as job enrichment and teamwork.
LEADING
Leading involves influencing others toward the attainment of organizational objectives. Effective leading requires the manager to motivate subordinates, communicate effectively, and effectively use power. If managers are effective leaders, their subordinates will be enthusiastic about exerting effort toward the attainment of organizational objectives.
To become effective at leading, managers must first understand their subordinates' personalities, values, attitudes, and emotions. Therefore, the behavioral sciences have made many contributions to the understanding of this function of management. Personality research and studies of job attitudes provide important information as to how managers can most effectively lead subordinates.
Studies of motivation and motivation theory provide important information about the ways in which workers can be energized to put forth productive effort. Studies of communication provide direction as to how managers can effectively and persuasively communicate. Studies of leadership and leadership style provide information regarding questions such as, "What makes a manager a good leader?" and "In what situations are certain leadership styles most appropriate and effective?"
CONTROLLING
Controlling involves ensuring that performance does not deviate from standards. Controlling consists of three steps, which include establishing performance standards, comparing actual performance against standards, and taking corrective action when necessary. Performance standards are often stated in monetary terms such as revenue, costs, or profits, but may also be stated in other terms, such as units produced, number of defective products, or levels of customer service.
The measurement of performance can be done in several ways, depending on the performance standards, including financial statements, sales reports, production results, customer satisfaction, and formal performance appraisals. Managers at all levels engage in the managerial function of controlling to some degree.
The managerial function of controlling should not be confused with control in the behavioral or manipulative sense. This function does not imply that managers should attempt to control or manipulate the personalities, values, attitudes, or emotions of their subordinates. Instead, this function of management concerns the manager's role in taking necessary actions to ensure that the work-related activities of subordinates are consistent with and contributing toward the accomplishment of organizational and departmental objectives. Effective controlling requires the existence of plans, since planning provides the necessary performance standards or objectives. Controlling also requires a clear understanding of where responsibility for deviations from standards lies. Two traditional control techniques are the budget and the performance audit. Although controlling is often thought of in terms of financial criteria, managers must also control production/operations processes, procedures for delivery of services, compliance with company policies, and many other activities within the organization.
The management functions of planning, organizing, leading, and controlling are widely considered to be the best means of describing the manager's job as well as the best way to classify accumulated knowledge about the study of management. Although there have been tremendous changes in the environment faced by managers and the tools used by managers to perform their roles, managers still perform these essential functions.
SEE ALSO: Management Control ; Management Styles ; Organizing ; Planning
Tim Barnett
FURTHER READING:
Anderson, P., and M. Pulich. "Managerial Competencies Necessary in Today's Dynamic Health Care Environment." Health Care Manager 21, no. 2 (2002): 1–11.
Carroll, Stephen J., and Dennis J. Gillen. "Are the Classical Management Functions Useful in Describing Managerial Work?" Academy of Management Review 12, no. 1 (1980): 38–51.
Fayol, Henri. General and Industrial Administration. London: Sir Issac Pitman & Sons, Ltd., 1949.
Koontz, Harold, and Cyril O'Donnell. Principles of Management: An Analysis of Managerial Functions. New York: McGraw-Hill Book Co., 1955.
Lamond, David. "A Matter of Style: Reconciling Henri and Henry." Management Decision 42, no. 2 (2004): 330–356. Mintzberg, Henry. The Nature of Managerial Work. New York: Harper & Row, 1973.
Robbins, Stephen P. and Mary Coulter. Management. Upper Saddle River, NJ: Prentice Hall, 1999.
Read more: http://www.referenceforbusiness.com/management/Log-Mar/Management- Functions.html#ixzz3AvLDiUzs
DEFINE MANAGEMENT & ITS FUNCTIONSWednesday, Dec 3 2008
All sectors and Education and For Entrepreneurs and For Large Corporates and Government & Not for Profit and SME Sector and Uncategorized controlling, definition, influencing, MANAGEMENT,modern management, organizing, planning managementinnovations 3:45 pm Management is the process of reaching organizational goals by working with and through people and other organizational resources.
Management has the following 3 characteristics:
1. It is a process or series of continuing and related activities. 2. It involves and concentrates on reaching organizational goals. 3. It reaches these goals by working with and through people and other organizational resources.
MANAGEMENT FUNCTIONS:
The 4 basic management functions that make up the management process are described in the following sections:
1. PLANNING 2. ORGANIZING 3. INFLUENCING 4. CONTROLLING. PLANNING: Planning involves choosing tasks that must be performed to attain organizational goals, outlining how the tasks must be performed, and indicating when they should be performed. Planning activity focuses on attaining goals. Managers outline exactly what organizations should do to be successful. Planning is concerned with the success of the organization in the short term as well as in the long term.
ORGANIZING:
Organizing can be thought of as assigning the tasks developed in the planning stages, to various individuals or groups within the organization. Organizing is to create a mechanism to put plans into action.
People within the organization are given work assignments that contribute to the company’s goals. Tasks are organized so that the output of each individual contributes to the success of departments, which, in turn, contributes to the success of divisions, which ultimately contributes to the success of the organization.
INFLUENCING:
Influencing is also referred to as motivating, leading or directing. Influencing can be defined as guiding the activities of organization members in he direction that helps the organization move towards the fulfillment of the goals.
The purpose of influencing is to increase productivity. Human-oriented work situations usually generate higher levels of production over the long term than do task oriented work situations because people find the latter type distasteful.
CONTROLLING:
Controlling is the following roles played by the manager:
1. Gather information that measures performance 2. Compare present performance to pre established performance norms. 3. Determine the next action plan and modifications for meeting the desired performance parameters. Controlling is an ongoing process.
Management From Wikipedia, the free encyclopedia
For other uses, see Management (disambiguation). Management in business and organizations is the function that coordinates the efforts of people to accomplish goals andobjectives using available resources efficiently and effectively. Management comprises planning, organizing, staffing, leadingor directing, and controlling an organization or initiative to accomplish a goal. Resourcing encompasses the deployment and manipulation of human resources, financial resources, technological resources, and natural resources. Management is also an academic discipline, a social science whose object of study is the social organization.
Contents [hide]
1 Etymology 2 Definitions o 2.1 Theoretical scope 3 Nature of managerial work 4 Historical development o 4.1 Early writing o 4.2 19th century o 4.3 20th century o 4.4 21st century 5 Topics o 5.1 Basic functions o 5.2 Basic roles o 5.3 Skills o 5.4 Formation of the business policy . 5.4.1 Implementation of policies and strategies . 5.4.2 Policies and strategies in the planning process o 5.5 Levels . 5.5.1 Top-level management . 5.5.2 Middle-level managers . 5.5.3 First-level managers o 5.6 Training . 5.6.1 USA 6 See also 7 References 8 External links
Etymology[edit] The verb 'manage' comes from the Italian maneggiare (to handle, especially tools), which derives from the Latin word manus(hand). The French word mesnagement (later ménagement) influenced the development in meaning of the English wordmanagement in the 17th and 18th centuries.[1]
Definitions[edit] Views on the definition and scope of management include:
Management is defined as the organization and coordination of the activities of an enterprise in accordance with certain policies and in achievement of clearly defined objectives Fredmund Malik defines as Management is the transformation of resources into utility. Management included as one of the factors of production - along with machines, materials and money Peter Drucker (1909–2005) sees the basic task of a 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[by whom?]as two different branches of business administration knowledge. Andreas Kaplan specifically defines European Management as a cross-cultural, societal management approach based on interdisciplinary principles.[2] Directors and managers should have the authority and responsibility to make decisions to direct an enterprise when given the authority[citation needed] As a discipline, management comprises the interlocking functions of formulating corporate policy and organizing, planning, controlling, and directing a firm's resources to achieve a policy's objectives The size of management can range from one person in a small firm to hundreds or thousands of managers in multinational companies. In large firms, the board of directors formulates the policy that the chief executive officer implements.[3] Theoretical scope[edit] Management involves the manipulation of the human capital of an enterprise to contribute to the success of the enterprise. This implies effective communication: an enterprise environment (as opposed to a physical or mechanical mechanism), implies human motivation and implies some sort of successful progress or system outcome. As such, management is not the manipulation of a mechanism (machine or automated program), not the herding of animals, and can occur in both a legal as well as illegal enterprise or environment. Based on this, management must have humans, communication, and a positive enterprise endeavor. Plans, measurements, motivational psychological tools, goals, and economic measures (profit, etc.) may or may not be necessary components for there to be management. At first, one views management functionally, such as measuring quantity, adjusting plans, meeting goals. This applies even in situations where planning does not take place. From this perspective, Henri Fayol (1841–1925)[4] considers management to consist of six functions:
1. Forecasting 2. Planning 3. Organizing 4. Commanding 5. Coordinating 6. Controlling Henri Fayol was one of the most influential contributors to modern concepts of management.[citation needed] In another way of thinking, Mary Parker Follett (1868–1933), defined management as "the art of getting things done through people". She described management as philosophy.[5] Critics, however, find this definition useful but far too narrow. The phrase "management is what managers do" occurs widely, suggesting the difficulty of defining management, the shifting nature of definitions and the connection of managerial practices with the existence of a managerial cadre or class. One habit of thought regards management as equivalent to "business administration" and thus excludes management in places outside commerce, as for example in charities and in the public sector. More broadly,every organization must manage its work, people, processes, technology, etc. to maximize effectiveness. Nonetheless, many people refer to university departments that teach management as "business schools". Some institutions (such as the Harvard Business School) use that name while others (such as the Yale School of Management) employ the more inclusive term "management". English speakers may also use the term "management" or "the management" as a collective word describing the managers of an organization, for example of a corporation. Historically this use of the term often contrasted with the term "Labor" - referring to those being managed.
Nature of managerial work[edit] In for-profit work, management has as its primary function the satisfaction of a range of stakeholders. This typically involves making a profit (for the shareholders), creating valued products at a reasonable cost (for customers), and providing rewarding employment opportunities for employees. In nonprofit management, add the importance of keeping the faith of donors. In most models of management and governance, shareholders vote for the board of directors, and the board then hires senior management. Some organizations have experimented with other methods (such as employee-voting models) of selecting or reviewing managers, but this is rare. In the public sector of countries constituted as representative democracies, voters elect politicians to public office. Such politicians hire many managers and administrators, and in some countries like the United States political appointees lose their jobs on the election of a new president/governor/mayor.
Historical development[edit] Some see management (by definition) as late-modern (in the sense of late modernity) conceptualization. On those terms it cannot have a pre-modern history, only harbingers (such as stewards). Others, however, detect management-like-thought back to Sumerian traders and to the builders of the pyramids of ancient Egypt. Slave-owners through the centuries faced the problems of exploiting/motivating a dependent but sometimes unenthusiastic or recalcitrant workforce, but many pre-industrial enterprises, given their small scale, did not feel compelled to face the issues of management systematically. However, innovations such as the spread of Hindu-Arabic numerals (5th to 15th centuries) and the codification of double-entry book-keeping (1494) provided tools for management assessment, planning and control. With the changing workplaces of industrial revolutions in the 18th and 19th centuries, military theory and practice contributed approaches to managing the newly-popular factories.[6] Given the scale of most commercial operations and the lack of mechanized record-keeping and recording before the industrial revolution, it made sense for most owners of enterprises in those times to carry out management functions by and for themselves. But with growing size and complexity of organizations, the split between owners (individuals, industrial dynasties or groups of shareholders) and day-to-day managers (independent specialists in planning and control) gradually became more common. Early writing[edit] While management (according to some definitions) has existed for millennia, several writers have created a background of works that assisted in modern management theories.[7] Some ancient military texts have been cited for lessons that civilian managers can gather. For example, Chinese generalSun Tzu in the 6th century BC, The Art of War, recommends being aware of and acting on strengths and weaknesses of both a manager's organization and a foe's.[7] Various ancient and medieval civilizations have produced "mirrors for princes" books, which aim to advise new monarchs on how to govern. Examples include the Indian Arthashastra by Chanakya (written around 300BC), and The Prince by Italian author Niccolò Machiavelli (c. 1515).[8] Further information: Mirrors for princes
Written in 1776 by Adam Smith, a Scottish moral philosopher, The Wealth of Nations discussed efficient organization of work through division of labour.[8] Smith described how changes in processes could boost productivity in the manufacture of pins. While individuals could produce 200 pins per day, Smith analyzed the steps involved in manufacture and, with 10 specialists, enabled production of 48,000 pins per day.[8] 19th century[edit] Classical economists such as Adam Smith (1723–1790) and John Stuart Mill (1806–1873) provided a theoretical background to resource-allocation, production, and pricing issues. About the same time, innovators like Eli Whitney (1765–1825), James Watt (1736–1819), and Matthew Boulton (1728–1809) developed elements of technical production such as standardization,quality- control procedures, cost-accounting, interchangeability of parts, and work-planning. Many of these aspects of management existed in the pre-1861 slave-based sector of the US economy. That environment saw 4 million people, as the contemporary usages had it, "managed" in profitable quasi- mass production. Salaried managers as an identifiable group first became prominent in the late 19th century.[9] 20th century[edit] By about 1900 one finds managers trying to place their theories on what they regarded as a thoroughly scientific basis (seescientism for perceived limitations of this belief). Examples include Henry R. Towne's Science of management in the 1890s,Frederick Winslow Taylor's The Principles of Scientific Management (1911), Frank and Lillian Gilbreth's Applied motion study(1917), and Henry L. Gantt's charts (1910s). J. Duncan wrote the first college management-textbook in 1911. In 1912 Yoichi Ueno introduced Taylorism to Japan and became first management consultant of the "Japanese-management style". His son Ichiro Ueno pioneered Japanese quality assurance. The first comprehensive theories of management appeared around 1920. The Harvard Business School offered the firstMaster of Business Administration degree (MBA) in 1921. People like Henri Fayol (1841–1925) and Alexander Churchdescribed the various branches of management and their inter-relationships. In the early 20th century, people like Ordway Tead (1891–1973), Walter Scott and J. Mooney applied the principles of psychology to management. Other writers, such asElton Mayo (1880–1949), Mary Parker Follett (1868–1933), Chester Barnard (1886–1961), Max Weber (1864–1920, who saw what he called the "administrator" as bureaucrat[10]), Rensis Likert (1903–1981), and Chris Argyris (* 1923) approached the phenomenon of management from a sociological perspective. Peter Drucker (1909–2005) wrote one of the earliest books on applied management: Concept of the Corporation (published in 1946). It resulted from Alfred Sloan (chairman of General Motors until 1956) commissioning a study of the organisation. Drucker went on to write 39 books, many in the same vein. H. Dodge, Ronald Fisher (1890–1962), and Thornton C. Fry introduced statistical techniques into management-studies. In the 1940s, Patrick Blackett worked in the development of the applied- mathematics science of operations research, initially for military operations. Operations research, sometimes known as "management science" (but distinct from Taylor's scientific management), attempts to take a scientific approach to solving decision-problems, and can apply directly to multiple management problems, particularly in the areas of logistics and operations. Some of the more recent developments include the Theory of Constraints, management by objectives, reengineering, Six Sigma and various information-technology-driven theories such as agile software development, as well as group-management theories such as Cog's Ladder. As the general recognition of managers as a class solidified during the 20th century and gave perceived practitioners of the art/science of management a certain amount of prestige, so the way opened for popularised systems of management ideasto peddle their wares. In this context many management fads may have had more to do with pop psychology than with scientific theories of management. Towards the end of the 20th century, business management came to consist of six separate branches,[citation needed]namely:
1. financial management 2. human resource management 3. information technology management (responsible for management information systems) 4. marketing management 5. operations management or production management 6. strategic management 21st century[edit] In the 21st century observers find it increasingly difficult to subdivide management into functional categories in this way. More and more processes simultaneously involve several categories. Instead, one tends to think in terms of the various processes, tasks, and objects subject to management.[citation needed] Branches of management theory also exist relating to nonprofits and to government: such as public administration, public management, and educational management. Further, management programs related to civil-society organizations have also spawned programs in nonprofit management and social entrepreneurship. Note that many of the assumptions made by management have come under attack from business- ethics viewpoints, critical management studies, and anti-corporate activism. As one consequence, workplace democracy (sometimes referred to as Workers' self-management) has become both more common and advocated to a greater extent, in some places distributing all management functions among workers, each of whom takes on a portion of the work. However, these models predate any current political issue, and may occur more naturally than does a command hierarchy. All management embraces to some degree a democratic principle—in that in the long term, the majority of workers must support management. Otherwise, they leave to find other work or go on strike. Despite the move toward workplace democracy, command-and-control organization structures remain commonplace as de facto organization structure. Indeed, the entrenched nature of command-and-control is evident in the way that recent layoffs have been conducted with management ranks affected far less than employees at the lower levels. In some cases, management has even rewarded itself with bonuses after laying off lower-level workers.[11] According to leadership academic Manfred F.R. Kets de Vries, a contemporary senior management team will almost inevitably have some personality disorders.[12]
Topics[edit] Basic functions[edit] Management operates through five basic functions: planning, organizing, coordinating, commanding, and controlling.[13]
Planning: Deciding what needs to happen in the future and generating plans for action. Organizing: Making sure the human and nonhuman resources are put into place Coordinating: Creating a structure through which an organization's goals can be accomplished. Commanding: Determining what must be done in a situation and getting people to do it. Controlling: Checking progress against plans. Basic roles[edit]
Interpersonal: roles that involve coordination and interaction with employees Informational: roles that involve handling, sharing, and analyzing information Decisional: roles that require decision-making Skills[edit] Political used to build a power base and establish connections Conceptual used to analyze complex situations. Interpersonal used to communicate, motivate, mentor and delegate Diagnostic ability to visualize most appropriate response to a situation Leadership ability to lead and provide guidance to a specific group Technical Expertise in one's particular functional area.[14] Formation of the business policy[edit]
The mission of the business is the most obvious purpose—which may be, for example, to make soap. The vision of the business reflects its aspirations and specifies its intended direction or future destination. The objectives of the business refers to the ends or activity that is the goal of a certain task. The business's policy is a guide that stipulates rules, regulations and objectives, and may be used in the managers' decision-making. It must be flexible and easily interpreted and understood by all employees. The business's strategy refers to the coordinated plan of action it takes and resources it uses to realize its vision and long-term objectives. It is a guideline to managers, stipulating how they ought to allocate and use the factors of production to the business's advantage. Initially, it could help the managers decide on what type of business they want to form. Implementation of policies and strategies[edit]
All policies and strategies must be discussed with all managerial personnel and staff. Managers must understand where and how they can implement their policies and strategies. A plan of action must be devised for each department. Policies and strategies must be reviewed regularly. Contingency plans must be devised in case the environment changes. Top-level managers should carry out regular progress assessments. The business requires team spirit and a good environment. The missions, objectives, strengths and weaknesses of each department must be analysed to determine their roles in achieving the business's mission. The forecasting method develops a reliable picture of the business's future environment. A planning unit must be created to ensure that all plans are consistent and that policies and strategies are aimed at achieving the same mission and objectives. All policies must be discussed with all managerial personnel and staff that is required in the execution of any departmental policy.
Organizational change is strategically achieved through the implementation of the eight-step plan of action established by John P. Kotter: Increase urgency, get the vision right, communicate the buy-in, empower action, create short-term wins, don't let up, and make change stick.[15] Policies and strategies in the planning process[edit]
They give mid and lower-level managers a good idea of the future plans for each department in an organization. A framework is created whereby plans and decisions are made. Mid and lower-level management may add their own plans to the business's strategies. Levels[edit] Most organizations have three management levels: first-level, middle-level, and top-level managers.[citation needed] These managers are classified in a hierarchy of authority, and perform different tasks. In many organizations, the number of managers in every level resembles a pyramid. Each level is explained below in specifications of their different responsibilities and likely job titles.[16] Top-level management[edit] The top consists of the board of directors (including non-executive directors and executive directors), president, vice-president, CEOs and other members of the C-level executives. They are responsible for controlling and overseeing the entire organization. They set a tone at the top and develop strategic plans, company policies, and make decisions on the direction of the business. In addition, top-level managers play a significant role in the mobilization of outside resources and are accountable to the shareholders and general public. The board of directors is typically primarily composed of non-executives which owe a fiduciary duty to shareholders and are not closely involved in the day-to-day activities of the organization, although this varies depending on the type (e.g., public versus private), size and culture of the organization. These directors are theoretically liable for breaches of that duty and typically insured under directors and officers liability insurance. Fortune 500 directors are estimated to spend 4.4 hours per week on board duties, and median compensation was $212,512 in 2010. The board sets corporate strategy, makes major decisions such as major acquisitions,[17] and hires, evaluates, and fires the top-level manager (Chief Executive Officer or CEO) and the CEO typically hires other positions. However, board involvement in the hiring of other positions such as theChief Financial Officer (CFO) has increased.[18] In 2013, a survey of over 160 CEOs and directors of public and private companies found that the top weaknesses of CEOs were "mentoring skills" and "board engagement", and 10% of companies never evaluated the CEO.[19] The board may also have certain employees (e.g., internal auditors) report to them or directly hire independent contractors; for example, the board (through the audit committee) typically selects the auditor. Helpful skills of top management vary by the type of organization but typically include[20] a broad understanding competition, world economies, and politics. In addition, the CEO is responsible for executing and determining (within the board's framework) the broad policies of the organization. Executive management accomplishes the day-to-day details, including: instructions for preparation of department budgets, procedures, schedules; appointment of middle level executives such as department managers; coordination of departments; media and governmental relations; and shareholder communication. Middle-level managers[edit] Consist of general managers, branch managers and department managers. They are accountable to the top management for their department's function. They devote more time to organizational and directional functions. Their roles can be emphasized as executing organizational plans in conformance with the company's policies and the objectives of the top management, they define and discuss information and policies from top management to lower management, and most importantly they inspire and provide guidance to lower level managers towards better performance. Their functions include:
Design and implement effective group and inter-group work and information systems. Define and monitor group-level performance indicators. Diagnose and resolve problems within and among work groups. Design and implement reward systems that support cooperative behavior. They also make decision and share ideas with top managers. First-level managers[edit] Consist of supervisors, section leaders, foremen, etc. They focus on controlling and directing. They usually have the responsibility of assigning employees tasks, guiding and supervising employees on day-to-day activities, ensuring quality and quantity production, making recommendations, suggestions, and up channeling employee problems, etc. First-level managers are role models for employees that provide:
Basic supervision Motivation Career planning Performance feedback Training[edit] Universities around the world, offer bachelor's and advanced degrees, diplomas and certificates in management, generally within their colleges of business and business schools but also in other related departments. There is also an increase in online management education and training in the form of E-learning. USA[edit] At the graduate level students may choose to specialize in major subareas of management such as entrepreneurship,human resources, international business, organizational behavior, organizational theory, strategic management.[21]accounting, corporate finance, entertainment, global management, healthcare management, investment management, Leaders in Sustainability and real estate[22]