Summary MNG2601-notes. BEST FOR EXAM.

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 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-tounderstand terms. Organising Controlling Planning Leading Resources Human Financial Physical Information Performance Achieve goals Products Services Productivity Profit 2 | P a g e 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) 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; - Planning (Part II) Managers determine the organisations vision, mission and goal and decide on a strategy to achieve them Leading (Part IV) Managers direct and motivate members of the organisation to achieve the mission and goals Organising (Part III) Managers group activities together, establish authority, allocate resources and delegate. Controlling (Part V) Managers monitor progressive and take corrective steps to reach mission and goals. 3 | P a g e 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