Management: Principles & Techniques

By Luke Ike

This book produces a clear and concise introduction to principles and techniques of management, as required by practicing managers and those in colleges and universities who are aspiring to be managers.

• Language: English
• Publisher: Xlibris UK
• Release date: Feb 29, 2016
• ISBN: 9781514465172

Luke Ike

Dr Luke Ike is a lecturer and management consultant. He obtained his MSc degree in Business Administration from the University of Innsbruck, Austria Europe, and PhD degree in Business Administration from the University of Economics and Business Administration Vienna, Austria Europe. He completed post graduate studies in Ethnic and Minority Small Business Management at the London Guildhall University, United Kingdom, (now London Metropolitan University). He also obtained Post Graduate Certificate in Education (PGCE) from University of Greenwich, London, United Kingdom. Dr Luke Ike is the founder and CEO of COLNNECT Ltd Centre for Education, Management Studies and Consultancy, London, United Kingdom. He is also the author of many classic business textbooks such as - Management (Principles & Practices), Risk Management & Captive Insurance, International Management (Principles & Practices), Strategic Management (Concepts & Practices), International Business (Environments & Operations), Business Strategy (An Introduction), Entrepreneurship (Initiating and Developing a New Venture), Marketing (Traditional, Digital and Integrated). ContactE-mail:[e-mail]

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Copyright © 2016 by Luke Ike.

ISBN:      Softcover      978-1-5144-6516-5

                eBook          978-1-5144-6517-2

All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the copyright owner.

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Rev. date: 02/27/2016

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CONTENTS

ACKNOWLEDGEMENTS

Introduction to the book

PART 1 AN INTRODUCTION TO MANAGEMENT

Introduction

Chapter 1 THE NATURE OF MANAGEMENT

1.1 The Meaning of Management

1.2 Management Roles

1.3 Management as Universal and Specialist Activity

1.4 Management Area Specialisation and Hierarchy

1.5 Management Skills and Learning

CASE STUDY

Chapter 2 FOUNDATIONS OF MANAGEMENT UNDERSTANDING

2.1 Introduction- Management Theories and Models

2.2 The Classical Theory

2.3 The Bureaucracy Theory

2.4 The Human Relations Theory

2.5 The Systems Theory

2.6 The Contingency Theory

2.7 The Theory Z

2.8 Other Classifications

PART 2 THE ENVIRONMENT OF MANAGEMENT

Introduction

Chapter 3 THE BUSINESS ENVIRONMENT

3.1 The Meaning and Study of Business Environment

3.2 The Internal Business Environment

3.3 The External Business Environment

3.4 Business Stakeholders

3.5 Understanding Business External Environment

3.6 Business Response to Environment

3.7 Business Ethics and Social Responsibility

CASE STUDY

PART 3 THE MANAGEMENT TASKS

Introduction

Chapter 4 PLANNING, STRATEGY, AND DECISION MAKING

4.1 Planning

4.1.1 Introduction

4.1.2 Purposes of Planning in Organisations

4.1.3 The Planning Premise

4.1.4 Gathering Planning Information

4.1.5 Corporate Planning

4.1.6 Business Planning

4.1.7 Organisational Design for Planning

4.1.8 Planning Barriers

4.2 Strategy

4.2.1 Introduction

4.2.2 Corporate Strategy

4.2.3 Business Strategy

4.2.4 Functional Strategy

4.2.5 Operational Strategy

4.2.6 The Strategic Process

4.3 Decision Making

4.3.1 Introduction

4.3.2 Levels of Management Decisions

4.3.3 Categories of Management Decisions

4.3.4 Decision Making Conditions

4.3.5 Decision Making Models

4.3.6 The Decision Making Process

4.3.7 Group Decision Making

4.3.8 Improving Decision Making in Organisations

CASE STUDY

Chapter 5 ORGANISING

5.1 Introduction

5.2 Basic Principles of Organising

5.3 Theories of Organisation Structure

5.4 Structure Designs

CASE STUDY

Chapter 6 LEADING

6.1 Leadership in Organisations

6.1.1 Introduction

6.1.2 Leadership and Power

6.1.3 Theories of Leadership

6.2 Groups in Organisations

6.2.2 Group Development

6.2.3 Group Cohesiveness

6.2.4 Group Effectiveness

6.2.5 Group Interaction and Improvement

6.2.6 Group Cooperation

6.3 Motivation in Organisations

6.3.1 Introduction

6.3.2 Motivation Theories

6.4 Culture in Organisations

6.4.1 Introduction

6.4.2 Analysing Corporate Culture

6.4.3 Types of Corporate Culture

6.4.4 Managing Corporate Culture

CASE STUDY

Chapter 7 CONTROLLING

7.1 Introduction

7.2 Control Focus

7.3 Control Methods

7.4 Choosing Control Method

7.5 Management Control Systems

7.6 The Use of Total Quality Control

7.7 Information Systems for Management Control

7.8 Management Control Techniques

7.9 Management Control Barriers and Solutions

Chapter 8 COMMUNICATION IN ORGANISATION

8.1 Communication

8.2 Types of Communication

8.3 Communication Channels

8.4 Communication in Groups

8.5 Information and Communication Technology (ICT)

8.6 Communication Barriers

REFERENCES

ACKNOWLEDGEMENTS

I am highly indebted to Almighty God for the wisdom behind this book, and dedicate this book to the glory of God in Jesus name --Amen.

Special thanks to my wife and children for provinding a supportive and caring environment for this undertaking.

Luke Ike

Introduction to the book

Successful organisations don't just happen -- they must be managed.

An essential factor that distinguishes successful organisations from those that are unsuccessful is management -i.e. the managers and how they use resources to attain organisational goals and objectives efficiently and effectively. Business resources and activities have to be managed -planned, organised, led and controlled, so that business goals and objectives could be achieved - as such businesses need skilled and experienced managers. Since organisations now operate in fast changing environments with varied threats and opportunities, the need for skilled and effective management cannot be overemphasised.

Successful managers make the difference amongst businesses. They help businesses solve difficult problems, turn organisations around, and achieve astonishing performance and deliver dividends of management to business and stakeholders. Management skills and experiences of managers can be learned from management theories and practices respectively, in line with the principles and techniques of management.

The purpose of this book is to introduce, define and explain the processes and underlying principles of management as well as practical applications that will enable the reader learn the fundamentals of management and its applications in various organisations. It will do so by introducing the reader to the basic principles of management, including related examples and detailed analyses of experiences of successful and not-so successful organisations, as a good base for practical application of management understanding. This will help provide the knowledge, skills and practical experiences that enable the reader meet business management challenges and expectations, and so build up a satisfying and rewarding management knowledge and career.

PART 1

AN INTRODUCTION TO MANAGEMENT

Introduction

This part considers the nature and fundamentals of management, including the theories or models of management, as foundation for management understanding.

Chapter 1 introduces the concepts, tasks, and processes of management exploring the different meanings of management, various management roles, and the complex nature of management. It also describes the various functions of management, and various management skills required for effective management of a business.

Chapter 2 sets out the many models or theoretical foundations and perspectives of management, and shows how these can complement each other despite differing perspectives on the nature and values of management tasks.

Chapter 1

THE NATURE OF MANAGEMENT

Aim

To introduce the concepts, tasks and processes of management.

Objectives

After studying this chapter you should be able to:

• Understand the meaning of management and explain what managers do.

• Outline various management roles and their significance to management activities.

• Describe how management is both a universal activity and a distinct occupational role.

• Distinguish between different levels of management.

• Outline various management skills and how to acquire them.

WHAT MANAGERS DO

1.1 The Meaning of Management

This area of the book presents a model of what managers do as they manage the transformation of resources into more valuable outputs.

The earliest attempt to define and explain what management is and what managers do could be traced back to early management theories or models, especially the classical theorist Henri Fayol. (Fayol 1949), Fayol introduced his understanding of what managers do, by stating what he considered to be the key activities of any industrial undertaken. He outlined six such key activities as follows:

1. Security activities e.g. safeguarding property.

2. Accounting activities e.g. providing financial information.

3. Technical activities e.g. production.

4. Commercial activities e.g. buying and selling.

5. Financial activities e.g. securing capital.

6. Management activities e.g. planning and organising.

According to Fayol, the sixth group of activities in the list required further explanation as the first five activities were already well known. He suggested that while the other activities were all interdependent to some extent, there was no single one which was concerned with the last group of activities-planning and organising. He therefore isolated the last group of activities which he latter developed and gave the name management.

Fayol defined management as:-To forecast and plan, to organise, to command and to control. It is interesting to note that his definition of management still remain valid today after many years. Other writers have followed his basic principles with changes of emphases in choices of words rather than principles. For examples, Brech (1957), defined management as --...consisting of planning, control, coordination, motivation. According to Koontz (1984), management is an operational process best dissected by analysing the managerial function: the five essential managerial functions are planning, organising, staffing, directing and leading and controlling.

As much as Fayol's definition has provided the basis for a number of management thoughts, it began to lose touch with the modern society and management as society and business develop and business environment changes rapidly. Many new management theories or models have began to emerge exposing some of the short coming in Fayol's approach or definition of management. His critics have focused on the fact that his definition and some of definitions adapted after him, pay more attention to actions (inputs) of managers, rather than on results (outputs), of managers, and therefore. Only represent the classical approach to management, with less attention to system or contingency approach that considers the business environment as a vital factor. In this regard, Fayol's approach is regarded as being more concerned with efficiency than effectiveness, portraying essentially a leader centred approach to management. This criticism has led to many other writers presenting a more generally acceptable definition of management, examples include Rosemary (1967), who presented a general definition of management, describing a manager as someone who gets things done through the aid of other people, and Peter Drucker (1999) definition- management is about getting things done through people and other resources and providing direction and leadership.

In this book management is described as:-the attainment of organisational goals efficiently, and affectively, through management activities (tasks) of planning, organising, leading and controlling of organisational resources.

This definition pays attention to action (inputs) of managers as well as (outputs) results, by exposing two important areas that is worthy of recognition:

1. The four functions of management i.e. planning, organising, leading and controlling.

2. The attainment of organisational goals efficiently and effectively.

The four functions of management as described above are those activities managers have to carry out. These are the main tasks carried out by managers in the process of achieving goals and objectives of the organisation. At whatever their level, people who perform these tasks in organisations are managing. The amount of each task varies with the job and the person, and managers do not perform them in any particular sequence. They do so more or less simultaneously, switching rapidly between them as the situation requires- but these tasks make up the content of management work.

Efficiency and effectiveness are also important themes associated with the management activity because successful organisations are ones which attain organisational goals effectively and efficiently. An Organisation is usually described as a system (open system as described in detail in chapter 3), which is a set of interrelated elements that transform inputs into outputs within an environment. Management responsibility is to coordinate this system such that resources will be used efficiently and effectively to accomplish organisation goals. Organisations efficiency also pertains to an organisation's ability to attain its goals by using resources efficiently and effectively. Efficiency therefore, refers to the amount of resources used to achieve an organisation's goals. It is usually based on how much raw materials, money and people necessary for an organisation to produce a given volume of output. This can be calculated as the amount of resources used to produce a unit of output usually at the lowest cost- expressing the ability of an organisation to do things right.

Organisational effectiveness on the other hand, is the degree to which an organisation achieves stated goals/objectives. It patterns to a successful relationship of an organisation with external environment- the ability of an organisation to do the right thing. One particularly influential writer on the subject of managerial effectiveness is Prof Hill of the University of New Brunswick who considers it essential for the job of management to be judged on output rather than by input, and by achievement rather than by activities. In his book Management effectiveness (1970), he argues that the differences between efficient managers and effective managers are that efficient managers seek to solve problems and reduce costs whereas effective managers usually seek to produce creative alternative and increase profits. Here we argue that management needs both. Acquiring excellent resources and managing them in a superior fashion is how a firm attains performance. Successful firms are efficient and effective because they know how to acquire and use resources and how to manage them efficiently and effectively, in a superior fashion. On the whole, the work of management is to build organisations that work, in the sense that they use resources to create value, wealth or human well being by proving goods and services that people value. Organisational performances depend on those who work within it. Although Luck plays a part, but most of the time, it is the quality of management which makes the difference, between an organisations that fail, and those that succeed.

HOW MANAGERS WORK

1.2 Management Roles

Management activities or tasks described earlier make up the management work-what managers do. However, it is also important to understand how managers work- the process of management.

Several researchers (Rosemary 1960, Lufthansa et al 2003, Mossberg 1973) have carried out work to gain insight into how managers carry out the process of accomplishing management functions of planning, organising, leading and control efficiently and effectively.

Rosemary steward (1960) carried out one of the best known studies on how managers spend their time. She persuaded 160 senior and middle managers from large and small organisations to keep a diary for four weeks in a way that allowed researchers to establish how the managers spent their work. The result showed that managers worked in a fragmented and interrupted fashion, showing that a manager's job do not resemble an orderly methodological process, but a constant rush from one problem to another. She concluded that while some managers find the fragmented pattern of work stressful, others accept it as the only way to keep in touch with events.

Fred Luthans and Asiani (2003) with other groups also produced a research that studied the link between the time managers spent in a specific role, and their performance. The conclusion was that performing managers spent considerable more time in communication and human resource activities than non performing managers.

Mintzberg (1973), developed the most widely quoted study in this area of how managers work, building on earlier empirical studies by Carlson (1951), and Steward (1967). In reporting his research on managerial work, Mintzberg highlighted key roles that seem to appear regularly in such work. He describes these roles as organised set of behaviour identified within a position, expressing this, as the sum of expectation other people have of a person occupying a position. These he categorized into many roles, each representing activities that managers undertake to ultimately accomplish the functions of planning, organising, leading and controlling. They include:

✓ Interpersonal role.

✓ Information role.

✓ Decision role.

Mintzberg proposed that every manager's job combines these roles, with their relative importance varying between the manager's level and their type of business. The essence is for managers to identify with these roles and see them as complementing rather than contradicting, but describing how they perform their tasks of management.

Interpersonal Roles

Interpersonal roles pertain to roles managers play in relationship with others in and out of the organisation. They are usually associated with human relation skills managers need to have in order to carry out their management activities efficiently and effectively, reflecting a manager's formal authority and status.

They include:

➢ Figure head role.

➢ Leader role.

➢ Liaison role.

Figure head roles are those roles of a manager that is associated with the handling of ceremonial and symbolic activities for a single department, or the whole organisation, as may be required. In line with carrying out management activities, the manager constantly represents a department in his or her formal managerial capacity, as the head of the unit in legal and ceremonial duties, such as greeting a visitor, signing legal documents, presenting retirement gifts or receiving a quality reward etc.

In addition, the manager also performs leader role. This is to do with the management activity of leading the unit or department in line with goals of the organisation. The leader role defines the manger's relationship with other people, not just subordinates, but encompasses activities outside the organisational that are necessary to be considered - such as motivating, communicating, and developing skills and confidence of employees required for the unit and organisational performance etc.

The liaison role focuses on a manager's contacts with people outside the immediate organisational unit. It is important that managers work in collaboration and liaison with different departments including people outside their units and the organisation. For some managers, particularly, chief executives and sales managers, the liaison role is paramount for strategic reasons, taking a high proportion of their time and energy. There is therefore the need for managers to maintain a network that favours mutual benefits of different departmental units and business stakeholders- clients, government officials, customers and suppliers etc.

Information Roles

Information roles describe the activities used by managers to maintain and develop an information network links in and beyond the organisation because, managing depends on obtaining the right information (about internal and external events), and should pass them to various areas as required.

Information roles include:

➢ Monitor role.

➢ Disseminator role.

➢ Spokesman role.

The monitor roles of the manager involve seeking out, receiving and scanning information to understand the organisation and its environment. Monitoring may be based on information coming from office daily paperwork's, reports, chance- conversations, customers, business contacts at conferences and exhibitions, from rehearsal as well as formal meetings etc.

The disseminator role of the manager involves sharing information with subordinates and staff member. This may be through forwarding of reports, briefing subordinates and members of staff on ongoing business activities, and the use of other channels that ensures awareness of relevant events- sending memos, making phone calls etc.

Managers also perform spokes person roles. As a spokesperson, a manager transmits information to people outside the organisation. This happens when they use a platforms representing the unit to the outsiders (for example, company meetings and conferences), to give out information on organisation or department's views. A manager can also make speeches or present reports or make official statement to people outside the organisation about the company policies, actions or plans.

Decision Roles

A manager's decision role in an organisation pertains to those events about which the manager must make a choice, or that requires appropriate decision or choice. These may be grouped into:

➢ Entrepreneur role.

➢ The disturbance role.

➢ The resource role.

➢ The negotiator role.

Entrepreneur role of a manager involves the initiation of change - when a manager becomes aware of problems or opportunities and search for improvement or avenues that will help deal with them. These roles are evident when managers introduce new products, process or create a major change programme.

The disturbance handler role usually comes into effect, when managers deal with problems and changes that are unexpected. These include resolving conflicts among subordinates or between departments, or representing the department during negotiations with unions, suppliers, and other conflicting interests.

The resources allocator role pertains to decision about how managers allocate people, time, equipment, budget and other resources in an organisation to attain desired outcome. It involves choosing among competing demands for money, equipment, personnel and other demands on a manager's time. In this case, the manager must decide which project receives certain and amount of allocations, which customer complaints receive priority, and even how the mangers spends his or her own time.

Finally, the negotiator role involves roles played by managers in formal business and individual negotiations and bargaining, as well as reaching agreement with business and individuals managers may depend on to attain outcomes for the their units, and the organisation as whole.

1.3 Management as Universal and Specialist Activity

In chapter 1, the management tasks of a manager were described and understood. However, it is also important to understand who can performs those tasks and how well. This brings up the issue of whether management is a universal activity performed by many or only by a specialist few- as a distinct activity. In response to this, many literatures reviewed, show descriptions of management as both a general or universal human activity as well as a specialist activity.

Describing management as a universal human activity is more about the management activity than the title- manager. This universal management activity usually occurs whenever people take responsibility for an activity, and consciously tries to shape its progress and outcome. Generally, when people manage an infinite range of activities, they are said to be involved in a management activity. Rosemary (1967) presented management as a general human activity when she described a person involved in management as- someone who gets things done with the aid of others. So described, the activity takes place in a great variety of human circumstance- domestic, social, and political, as well as in formally established organisations. As individuals, when we run our lives and careers in this respect, we are managing -parents manage children, elderly dependants and households. This is to suggest that when we as human beings manage our various works as describes here, we take responsibility for its purpose, progress and outcome. Thus management is an expression of human capacity to shape and direct an outcome.

Apart from having a general perspective, management can also be viewed in an organisational context - as a specialist occupation. In this case we are talking of management activities as well as the title -manager. Management as a specialist occupation occurs or develops when activities previously embedded in a work and generally performed by many employees in an organisation, itself no longer become the responsibility of many people in a general sense, but of owners or their agents referred to as managers. The function or activities of management is hereby separated so that the management element becomes distinct from the work element. This separation creates managers who are in some degree separated from others, carrying out management activities of planning, organising, leading and controlling in a specialised form.

1.4 Management Area Specialisation and Hierarchy

For successful operation of the management tasks, management functions are also carried out in different area of specialisation and levels in a hierarchy, by managers or group of people, responsible for different functional areas that allow the flow of order, responsibility and accountability in the organisation.

• Top managers

Top managers are at the top of the hierarchy and are responsible for the entire organisation. They may have such titles as president, chairman or chairperson, executive director, chief executive director, and executive vice president. They are usually members of the board of directors elected by the shareholders in a limited liability company.

• Board of directors

Managing the business is the work of a relatively small group of people, usually called the board of directors, who are responsible for the overall direction and performance of the organisation. They establish policy and have a particular responsibility for managing relations with people and institutions in the world outside the organisation, such as shareholders, media or elected representatives. Members of the board are expected to understand internal details of the organisation, but spend most of their time looking for the future or dealing with external affairs. The board usually include several non-executive directors- senior managers from other companies who are intended to bring a wider more independent view to the discussions, supplementing the internal views of the executive directors.

• General managers

A general manager is responsible for several departments that perform different functions. A general manager could also be seen as one responsible for a self- contained division. It can therefore be concluded that project managers also have general management responsibility because they coordinate people across several departments to accomplish a specific project.

• Middle managers/functional managers

Middle managers sometimes called managing managers, work at the middle levels of the organisation and are responsible for major departments.

Middle managers are responsible for implementing the overall corporate or business strategies and policies by top managers. They tell first line managers what they expect, and brief senior management about events deep down in the business. They make decisions for their departments and coordinate activities across departments. They are concerned with the near future, expected to have good relationship with peers around the organisation, organise their department encourage team work and resolve conflicts. They are expected to ensure that supervisors work in line with broader company policies and meeting performance targets, monitor what they are doing and provide support or pressure. They also provide a communication link, ensuring that information flows up and down the organisation.

• First line managers

They are sometimes called supervisors or first line managers. They ensure that employees under them perform the daily operations of the organisation. They also help to overcome any difficulties that arise at the operational level. First line managers are directly responsible for production of goods and services.

• Staff managers

Staff managers are in charge of support functions such as finance, personnel, purchasing or legal affairs. These functions are not performed directly for the organisation but perform supporting functions. Their customers are the line departments of their own organisation, so their impact on outside customers is indirect.

• Project managers

Project managers are managers who coordinate people across several departments to accomplish a specific project. They are usually responsible for a temporary team that has been created to plan and implement a change. - A new product or system. Large companies with diverse portfolio usual engage project managers to coordinate across functional business areas like marketing, finance, human resource management, production and when a new product is developed or is to be developed.

• Operators

These are people who perform direct operations, do the manual and mental work to produce and deliver products and services. They include low --skilled ancillary activities, skilled or technical work and daily paid professional work at the operational level.

1.5 Management Skills and Learning

To be a manager and a successful one requires general and special skills as well as experiences. This is essential because managers are confronted with a job that is diverse and complex, and require a range of skills and experiences. The necessary management skills for planning, organising, leading and controlling can be placed into three categories that are essential if managers are to perform their functions adequately. These include:

➢ Conceptual skills.

➢ Human skills.

➢ Technical skills.

Conceptual skills relate to the cognitive ability of a manager to see the organisation as a whole, as well as the relationship among various parts that make up the organisation. It demands a manager's thinking and planning abilities that involve knowing where the manager's department fits into the total organisation, how the organisation fits into the business environment. It requires a manager to develop the ability to think strategically and take a broad view to see the big picture. Conceptual skills influence a manager's ability to make difficult decision. They are essentials for managers at the top management levels, as they provide the manager the cognitive ability to perceive significant elements in a business situation and make right decisions, relevant to the business activities to achieve performance.

When we speak about a manager's human relations skills, we refer to the manager's ability to work with, and through other people. This includes the manager's ability to motivate, coordinate, lead, communicate, and get along with others and the ability to resolve conflicts etc. Human relation skills allow managers to recognise the importance of relationship with their subordinates as well as their colleagues that helps them develop the right rapport with them in their various units and the whole organisation, as well as improve productivity and organisational performance. This demands both individual as well group human relation skills that enables managers to release subordinates energy, and help them grow as people within the organisation, and as future managers in the organisation.