Chapter 1

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The nature of management

1.1: Introduction

The traditional definition of management is the process of coordinating a business's resources to achieve the goals of the organisation.

The four main resources available to a business are:

	Human resources
	Information resources
	Physical resources
	Financial resources

A manager is someone who coordinates the business's limited resources in order to achieve specific goals.

A more contemporary definition emphasises management as a process of working with and through other people to achieve the goals of the business in a rapidly changing environment. This involves:

	working with and through others
	getting the most from limited resources (efficiency)
	copying with a rapidly changing environment
	balancing efficiency and effectiveness
	achieving the goals of the business (effectiveness)

Management hierarchy is the arrangement that provides increasing authority at higher levels of management

A traditional management hierarchy has 3 levels:

Top-level, senior or executive management team (Board of directors, CEO)

	overall guidance and control
	develops vision and mission statements
	strategic planning

Middle-level management team (Department head, divisional head, plant manager, store manager)

	implements strategies and major policies
	develops tactical plane, policies and operating procedures
	supervises frontline managers

Supervisory, frontline management team (Team manager, supervisor, section head)

	day-to-day activities- planning, guiding and supervising employees
	works with & motivates employees

1.2: The importance of effective management

	Consumers now rely on a small number of large businesses rather than a large number of small businesses- this makes the task of management even more crucial.
	Effective management makes sure the joint efforts of employees are directed toward achieving business goals.
	Effective managers are proactive- they incorporate dynamic action and forward planning to achieve particular objectives.

1.3: Management roles

According to Henri Fayol management involves five main functions:

Planning - setting objectives and deciding on the methods to achieve them

Organising - arranging the resources of the business to achieve the objectives

Leading - influencing people to work toward the set objectives

Coordinating - making sure resources and activities are working harmoniously

Controlling - evaluating and modifying tasks to ensure that set objectives are being achieved

Henry Mintzberg developed 10 roles performed by managers:

Figurehead - performs ceremonial duties, symbol of legal authority

Leader - motivates employees

Liason - establishes are maintains a network of contacts, interacts with other organisations

Monitor - seeks and receives information from a wide variety of sources to gain better understanding of the business and its environment

Disseminator - shares information with selected employees within the business

Spokesperson - presents to outsiders information about plans, policies, results and structure

Entrepreneur - scans the environment for opportunities, initiates projects to improve performance, brings about change

Disturbance handler - deals with issues and crises inside and outside the business, takes corrective action

Resource allocator - decides who should get what resources, allocates the human, financial, physical and informational resources

Negotiator - participates in negotiations with other parties

	Role 1-3 are interpersonal
	Role 4-6 are informational
	Role 7-10 are decision making

1.4: Skills of management

Effective managers:

	possess a range of specific management skills
	are able to use these skills in a number of managerial roles

The ideal manager has:

	people skills - the ability to work and communicate with other people and to understand their needs
	strategic thinking skills - allows the manager to see the business as a whole: as a complex of parts that depend on and interact with each other, like the gears in a machine
	vision skills - a clear, shared sense of direction which allows people to attain a common goal
	flexibility and adaptability to change skills
	self-managing skills - adopting techniques that allow people to manage their own behaviour so that less outside control is necessary
	teamwork skills - has a good understanding of group dynamics and good communication
	complex problem-solving skills - can identify problems, generate alternative solutions, choose the most appropriate solution and can implement and evaluate the chosen solution
	decision making- is able to identify options and choose a specific course of action
	high personal standards and ethics - behaviour is consistent with society's standards

1.5: Responsibilities of management to stakeholders

Stakeholders are groups and individuals who interact with the business and thus have a vested interest in its activities

Responsibilities include:

	managing change
	social justice
	ecological sustainability
	compliance with the law
	codes of practice
	reconciling conflicts of interest

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