• Management is the attainment of
organizational goals by coordinating
and integrating activities through POLC
(Planning, Organizing, Leading and
Controlling).
• Effectiveness - doing the right things;
reaching goals
• Ef ciency - doing the things right; most
output from least inputs
Management Functions:
• Planning - Set goals & strategize plans
• Organizing - 5Ws (Who, What, When,
Why and How)
• Leading - Motivate, resolve con icts,
communication
• Controlling - Evaluation, monitoring,
analysis
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• Organization - social entity that is Goal
Oriented and Deliberately Structured.
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MM 201 - Fundamentals of Management
• Manager - responsible for the
organization and reaching the goals.
Oversees people and
Managerial Roles:
• Interpersonal - The managerial role
that involves providing information
and ideas.
• Figurehead
• Leader
• Liaison
• Informational - The managerial role
involve in processing information.
• Monitor
• Disseminator
• Spokesperson
• Decisional - The managerial role
involve using information
• Entrepreneur
• Disturbance Handler
• Resource Allocator
• Negotiator
Types of Managers:
By Scope:
• Functional
• General Manager
• Project Managers
By Hierarchy:
• Top
• Middle
• First Line
• Management Functions - Activities that
organizations perform in order to attain
ef ciency and effectiveness / POLC
• Business Functions - Activities that
business perform in order to make
business customers, clients, suppliers,
employees and investors satis ed.
• Marketing Management - analyze
opportunities, plan programs,
formulate strategies and
administrate marketing programs
• Pro d u c t i o n M a n a g e m e n t concern about activities in making a
product or providing service.
• Financial Management Acquisition, management and
nancing resources. Primarily
concerned with investments and
nancing decisions.
• Financial Decision determination of nancing mix
and sources appropriate for the
requirements of the rm.
• Investment Decision preparation of long-range
plans and budgets for major
investments
• Pe r s o n n e l M a n a g e m e n t attracting, developing and
maintaining human resource.
Management History
Classical Approach - Scienti c
• Frederick Taylor
• Father of Scienti c Management
• Time and Motion Studies - There is
one best way for a job to be done
• Frank and Lilian Gilbreth
• Eliminate unnecessary motion
• Work smarter, not harder.
• Henry Gantt
• Gantt chart - planning, scheduling and
control.
Classical Approach - General
Administration
• Max Weber
• Emphasizes the need to operate in a
rational manner / bureaucracy
(division of labor, authority, formal
rules and regulation etc.)
• Henry Fayol
• Good management practice,
principles to coordinate activities.
• Acceptance Theory of Authority states that a manager's authority over
his/her subordinates depends on the
willingness of the subordinates to
accept his/her right to give orders
and comply with them.
• Robert Owen
• Concern on working conditions /
proposed idealistic workplace
• Money spent on improving labor is a
smart investment
• Hugo Munsterberg
• Identify individual who is best suited
for the job + identify psychological
conditions for optimal ef ciency +
nd ways to in uence individual
behavior to be in line with the
management.
• Mary Parket Follet
• Management is getting things done
through other people.
• Importance in functioning in groups
Behavioral Approach - focuses on the
importance of factors that affects human
behavior. Signi cance of Org. Behavior
• Elton Mayo (Hawthorne)
• People performs best when they are
being observed.
• Chester Barnard
• Bridge the gap between classical
(authority) and behaviorist (worker
needs).
• Abraham Maslow
• Hierarchy of Needs (Physiological,
Safety, Love / Belonging, Esteem, Self
Actualization)
• Theory X and Theory Y
• Theory X assumes that people dislike
work and must be coerced,
controlled, and directed toward
organizational goals. Furthermore,
most people prefer to be treated this
way, so they can avoid responsibility.
• Theory Y—the integration of goals—
emphasizes the average person’s
intrinsic interest in his work, his desire
to be self-directing and to seek
responsibility, and his capacity to be
creative in solving business problems.
Quantitative Approach involves
applying statistics, optimization models,
information models, computer
simulations, and other quantitative
techniques to management activities.
• Management Science - techniques to
improve decision making (statistics,
models, simulation) and information
processing.
• Operations Mgmt - production and
delivery f products and services
• Mgmt Info Systems (MIS) - computer
based information systems.
Contemporary Approach
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• Douglas McGregor
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MM 201 - Fundamentals of Management
• Systems Approach - all parts are
working together; independent yet
related.
MM 201 - Fundamentals of Management
• Contingency Approach - if -> then
approach. Different situations require
different approaches.
Contributions of each viewpoints:
• Classical - needs scienti c approach,
work can be improved through study,
principles identi cation, importance of
pay as a motivation.
• Behavioral - OB, Multidisciplinary,
importance of org members as active
rather than passive tools.
• Quantitative - use of quantitative aids for
decision making, forecasting, handling
problems.
• Contemporary - visualizing systems, no
one best way, importance of
environment and feedback
Organizations are open systems that are
affecting and affected by forces in the
environment.
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External Environment:
• General External Environment
• Political
• Economic
• Socio-cultural / Demographics
• Technological
• Legal
• Ecological
• Industry Environment
• Forces that are closer to the
organization and has direct
in uence to basic operations and
performance.
• Customers
• Competitors - Porter’s Five
Forces (New Entrants, Rivalry,
Substitutes, Suppliers and
Buyers)
• Suppliers
• Pressure Groups
(Labor
Unions, Allies, Activist)
Internal Environment:
• Culture shared values, principles,
traditions, bene ts, understanding,
norms. Aligned with goals, widely
shared and deeply internalized
• Strong (widely shared) vs Weak
(Limited)
Learning Culture
• Symbols - object / act that conveys
meaning
• Stories - narratives carried over &
over
• Heroes - gure who embodies
• Ritual - repetitive activities sequences
• Language - way to identify and unite
• Slogans- express a key corporate
culture
Key Points:
• External environment affects culture
• Corporate culture is consistent with
the org
Characteristics of Org Environment
• Environment of Uncertainty change and dynamism in
environment
• Environmental complexity - number
of components in an org (# of
competitors, customers, suppliers
etc.)
Management of the Environment
(Strategies)
• Adaptation Approach - change the
internal to be compatible with
environment
• Favorability In uence - affect the
environment to be compatible with
the operations. (Ads, PR)
• Domain Shift - select new
environment
In uencing the Environment
• Independent Action - Strategies
used by one organization aspects in
the environment
• Cooperative Action - Strategies used
by two or more organization to
change aspects in the environment.
Planning is the process of de ning
o rg a n i z at i o n a l g o a l s , e s t a b l i s h i n g
strategies to achieve the goals and
developing outline to integrate and
coordinate work activities.
MM 201 - Fundamentals of Management
• Increasing worker ef ciency
• Social Goals
• Helping people
• Religious goals
• Environmental goals
• Giving money for charity
Why do managers plan?
• Provides direction
• Reduces uncertainty
• Minimizes waste and redundancy
• Establishes goals and standards for
controlling
Types of Plan
Goals are:
• Speci c
• Measurable
• Achievable
• Relevant
• Time-bound
• Traditional Goal Setting - Goal setting
is done by the top management
• Management by Objective (MBO) setting mutually agreed-upon goals and
using those goals to evaluate
employees performance.
4 MBO Activities:
• Goal Setting
• Participative Decision Making
• Reviewing Progress
• Appraising Overall Performance
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Type of Goals
• Business Goals
• Improving Productivity
• Betterment in services
• Increasing one’s pro t
• Improving team quality
Strategic Planning Steps and Strategies
to be discussed in the Strategic
Management Reviewer.
Decision Making:
• Identi cation of a problem
• Identi cation of Decision Criteria
• Allocation of Weights to Criteria
• Development of Alternatives
• Analysis of Alternatives
• Selection of an Alternative
• Implementation of the Alternative
• Evaluating Decision Effectiveness
Decision Making Conditions:
• Certainty - accurate decisions since
outcomes are known
• Risk - able to estimate the likelihood of
outcome; historical data
• Uncertainty - outcome and probabilities
are unknown
Organizing is the process of identifying
the activities to be done to accomplish a
goal, grouping these activities into
meaningful units / clusters and assigning
authority and responsibility to people.
Organizational Structure is the way in
which the organization’s activities are
divided, organized and coordinate. This
serves as the formal mechanism on how
the organization is managed.
Organizational Chart is the visual
representation or outline of the
organizational structure.
6 Elements of Organizational Design
• Work Specialization - The degree to
which org tasks are subdivided into
separate jobs.
MM 201 - Fundamentals of Management
• Job Design - process of
speci cation of tasks and activities
associated with a particular job.
• Departmentalization - the clustering of
individuals into units and units into
larger units to facilitate achievement of
goals ; grouping together jobs.
(Functional, Geographical, Product,
Process, Customer / Markets, Channel or
Combination)
• Chain of Control - line of authority from
top management to the lowest
management. Key words: Authority,
Responsibility and Unity of Command.
• Authority - rights inherent in a
managerial position to tell people
what to do and expect them to do
it.
• Parity of Authority and
Responsibility - a person should
be giving suf cient authority to
accomplish tasks.
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Chain of Command (Authority)
• Line Dept - perform tasks that re ect
the organization’s primary goal and
mission
• Line Position - position with
authority and responsibility for
achieving major goals of the org
• Line Authority - formal authority
to direct or control immediate
subordinates which follows the
chain of command.
• Staff Dept - provides specialized skills
in support of line dept.
• Staff Position - position whose
primarily purpose is to provide
specialized expertise and
assistance to line positions.
• Line Authority - right to advise,
recommend, and counsel in the
area of expertise.
Chain of Command (Responsibility)
• Responsibility obligation to
perform assigned duties
• Absolute responsibility - though a
superior in an org may delegate a
portion of his authority to his
subordinates, he does not reduce his
responsibility or accountability for the
performance of the tasks under his
jurisdiction.
• Span of Control - the number of
employees a manager can effectively
and ef ciently handle.
• Downsizing - the reduction of
layers of the middle management,
expanding span of control,
shrinking size of the workforce
• Restructuring - making major
change in the org structure.
• Centralization and Decentralization
• Centralization - upper management
makes decisions.
• Decentralization - lower level are
involved, employee empowerment.
• Formalization - some formalization is
necessary for consistency and control.
Strategy and Organizational Structure
MM 201 - Fundamentals of Management
• Labor Unions
• Government Laws
• Demographic Trends
Three Major Concern of HRM
• Attracting
• HR Planning - process by which
managers ensure that they have the
right number and kinds of capable
people in the right places and at the
right times.
• Current Employee Inventory:
• Job Analysis - process of
gathering and interpreting
information about essential
duties,
tasks
and
responsibilities of the job
• Job Description - a written
statement / summary
describing the job and
responsibilities
• Job Speci cation - minimum
quali cations that a person
must possess
Human Resource Management
• Design and applications of formal
systems in an organization
• Ensure the effective and ef cient use
of human talents to accomplish
objectives
• Builds internal capabilities towards
competitive advantage
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Factors Affecting HRM
• Economy
• Recruitment - Locating, identifying
and attracting capable applicants
• Internal Recruit
• External Recruit
• Derecruitment
- reduction of
workforce during surplus
• Firing
• Layoffs
• Attrition
• Transfers
• Job Sharing
MM 201 - Fundamentals of Management
• Early Retirement
• Reduced Workweek
• Selection - screening job applicants to
determine who is best quali ed for
the job ; mutual process; evaluated
using 4Cs (Competence,
Commitment, Congruence and Cost
Effectiveness).
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• Developing
• Orientation - program to help
employees to t smoothly into an
organization; includes, org
information, policies, rules and
regulation, work routine, bene ts and
culture.
• Training and Development
• Training - designed to maintain and
improve current job performance
• Development - designed to
develop skills necessary for future
work activities
• Maintaining
• Performance Appraisal - assessing
employee performance, recording the
assessment and providing feedback
to the employee.
• Compensation and Bene ts
• Compensation - reward systems,
attract and motivate and retain
people
• J o b Ev a l u at i o n - p ro c e s s o f
determining the value or worth of
jobs through an examination of job
content.
• Compensation Systems / Structure
• Traditional - tenure
• Skill based pay - job skills and
competencies
• Variable Pay - compensation is
contingent on performance
• Incentives or Performance Based
Pay
• Individual Incentive Plans consist of an objective standard
a g a i n s t w h i c h a w o r ke r ’s
performance is compared
• Group Incentive Plan - pro t
sharing plans or gain sharing
• Employee Bene ts
• Career Development
Effective Workforce
• Labor Relations - system of relations
between workers and management
• Unionization - bargain higher wages;
mainly job and management
dissatisfaction; power group.
• Collective Bargaining Agreement - a
periodic ritual of negotiating an
agreement between over wages, hours
and working condition.
Leading
Leadership - working with and through
people to accomplish goals.
Major Concepts of Leading:
• Human Behavior
• Organizational Behavior (OB) - study
of human attitudes, behavior and
performance.
• Psychological Factors:
• Attitude - evaluative statements
concerning objects, people, or
events
• Job Related Attitudes:
• Job Satisfaction - person’s
general attitude toward his or
her job
• Job Involvement - degree to
which an employee identi es
with his job and actively
participates in in
• Org Commitment - degree to
which an employee identi es
with a particular organization.
• Personality - unique combination of
emotional, thought and behavioral
patterns that affects on how a person
reacts.
MM 201 - Fundamentals of Management
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• Myers Briggs Type Indicator
• Introversion - Extroversion
• Sensing -Intuition
• Thinking - feeling
• Judging - Perceiving
• Other Personality Traits
• Locus of Control
• Machiavellianism ( acquiring
power)
• Self Esteem
• Risk Taking
• Perception - give meaning to our
environment by organizing and
interpreting sensory impressions
• Attribution Theory - we judge
people differently depending on
what meaning we attribute to a
given behavior
• Perceptual Distortions
• Stereotyping
(group
generalization)
• Halo Effect (based from one trait)
• Primacy ( rst impression lasts)
• Recency (last impression
dominates)
• Contrast effect (relative to others)
• Projection (attributes self to
others)
• Learning - any relatively permanent
change in behavior that occurs as a
result of experience
• Stress - physiological and emotional
response to stimuli that place physical
or psychological demands on an
individual
• Motivation - process by which a person’s
efforts are energized, directed and
sustained toward attaining a goal.
• Need Theories:
• Hierarchy of Needs - people
satisfying their needs in a speci ed
order from bottom to top
• ERG Theory - Existence Relatedness - Growth; almost the
same with Maslow
• Frustration-regression principle the failure to meet a higher level
need may trigger a regression to
an already ful lled lower level
need.
• Two Factor Theory
• Hygiene factors - factors that
eliminate job dissatisfaction but
do not motivate
• Motivators - factors that increase
job satisfaction
• Acquired Needed Theory
• Need for Achievement - excel
and achieve a certain set of
targets
• Need for Af liation - close
interpersonal relationship
• Need for Power - in uence,
responsibility and authority
• Cognitive Theories
• Expectancy Theory - individual
tends to act in a certain way;
based on the expectation that the
act will be followed by a given
outcome
• Goal Setting Theory - speci c
goals increase performance and
that dif cult goals, when
a c c e p t e d , re s u l t t o h i g h e r
performance
• Equity Theory - focuses on
individual’s perceptions go how
fairly they are treated as
compared to others.
• Reinforcement Theory - the
behavior is a function of its
c o n s e q u e n c e s . Fo c u s i n g o n
changing behavior through rewards
and punishments
• Positive reinforcement - pleasant
and rewarding
• Punishment - imposing
unpleasant outcomes on an
employee
• Negative reinforcement - removal
of unpleasant consequence
following a desired behavior
• Extinction - withdrawal of positive
reward
Leadership - Ability to inspire and
in uence people toward attainment of
goal
Power - potential ability to in uence the
behavior of others.
Types of Power:
• Position Power - stem from one’s
position in the organization
MM 201 - Fundamentals of Management
• Legitimate Power - comes from formal
management position
• R e w a r d Po w e r - c o m e s f r o m
manager’s authority to give rewards
• Co e rc i v e Po w e r - c o m e s f ro m
m a n a g e r ’s a u t h o r i t y t o g i v e
punishment
• Personal power - stems from one’s
special knowledge or personality
• Expert Power - comes from the
manager’s special skills or knowledge
• Referent Power - comes for leader’s
personality characteristics which
accuse the subordinates to identify
with respect and admire the leader.
• Informational Power - possession or
access to valuable information
• Relationship Power - based on
networks of interpersonal connections
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Leadership Theories:
• Trait Theories - trait associated with
leaders: drive, desire to lead, honesty
a n d i n t e g r i t y, s e l f - c o n d e n c e ,
intelligence, job-related knowledge,
extroversion
• Behavioral Theories
• University of Iowa
• D e m o c rat i c St y l e - i n v o l v i n g
subordinates, delegating authority
and encouraging participation
• Autocratic Style - dictating work
methods, centralizing decision
making and limiting participation
• Laissez-faire style - giving group
freedom to make decisions and
complete work
• Ohio State
• Consideration - being considerate
of follower’s ideas and feelings
• Initiating structure - structuring
work and work relationship to meet
job goals
** High consideration and high structure
results to high performance and
satisfaction **
• University of Michigan
• Employee Oriented - emphasize
interpersonal relationship
• Production Oriented - emphasize
task aspects to the job
• Managerial Grid - dimensions of
people and production; performs
best using team management
• Contingency Theories
• Fiedler Model - match leadership
style with the situation.
• SLT - Situational Leadership Theory Hershey and Blanchard; leadership
style is dependent on the follower’s
readiness
• Path-Goal Model - leaders assist
followers in attaining their goals
and to provide the direction and
support needed for goal
congruence
• Contemporary Theories
• Transactional Leaders - leaders that
lead primarily by using the social
exchanges and transaction;
exchanging rewards for their
productivity
• Tr a n s f o r m a t i o n a l L e a d e r s stimulates and inspires followers to
achieve extraordinary outcomes
• Charismatic leaders - enthusiastic,
self con dent leader whose
personality and actions in uence
people to behave on certain ways
• Visionary leaders - ability to create
and articulate a realistic, credible
and attractive vision of the future
t h a t i m p ro v e s u p o n p re s e n t
situation
• Te a m L e a d e r s h i p / S e r v a n t
Leadership - requires skills such as
having patience to share
information, being able to trust
others, give up authority and know
when to intervene.
Communication - the process by which
information is exchanged and understood
by people, the purpose of which is to
motivate or in uence behavior.
Formal Communications:
• Downward
• Upward
• Horizontal / lateral
• Diagonal
Communication Barriers :
• Filtering
• Selective Perception
• Emotions
• Language
• Culture
• Information Overload
Control - is any process that directs the
activities of individuals toward the
achievement of organizational goals
Controlling - monitoring, comparing &
correcting; managers regulate
organizational activities to make them
consistent with the expectations
established in plans, targets and standards
of performance.
Importance of control:
• Provides the critical link to planning
• Employee empowerment
• Protection of organization to its assets
Control System - a set of mechanisms that
are designed to increase the probability of
meeting organizational standards and
goals
The Control Process
• Measuring actual performance
• Comparing actual performance with
the standard of performance
• Taking managerial action
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MM 201 - Fundamentals of Management
Productivity = Output Quantity / Inputs
Needed
Goal: Most goods & services using least
input
Organizational Effectiveness appropriateness of goals ad how well they
are met
Industry and Company Rankings - how
well they perform compared to others.
TQM - Total Quality Management - A
philosophy that stresses three principles
for achieving high levels of process
performance and quality
Q u a l i t y - t o t a l i t y o f f eat u re s a n d
characteristics of a product or service that
bear on its ability to satisfy stated or
implied needs.
Four Assumptions of TQM:
• Good quality is less costly than poor
workmanship
• Employees will naturally try to improve
given appropriate support
• Serious quality efforts require cross
functional efforts
• Quality improvement can only occur if
there is a strong commitment from top
management
Open Book Management - allows
employees to see for themselves the
nancial condition of the company
Financial Controls:
• Financial Control - use of nancial data
and indicators to serve as early warning
device for underlying problems or
deviations in a business
• Financial Statement - summary of
nancial status or an organization
• Balance Sheet
• Income Statement
• Cash Flow
• Financial Ratio Analysis - a method of
expressing the relationships between
any two accounting elements.
• Ratio Analysis:
• Liquidity Ratio
• Leverage / Debt Ratio
• Asset Management Ratio
• Pro tability Ratio
• Balanced Scorecard - approach is a way
to evaluate organizational performance
from more than just the nancial
perspective
• Financial
• Customer
• Internal Process
• People / Innovation / Growth
Managerial Approaches to Control:
• Bureaucratic Control - basis of control
are administrative hierarchical
mechanisms
MM 201 - Fundamentals of Management
• Clan Control - regulates employee
Organizational Culture - re ected what the
organization star for and what it believes
in
• Utilitarian - moral behavior produces the
greatest good for the greatest number
• Individualism - acts are moral when they
lead to an individual’s best long term
interest
• M o r a l R i g h t s A p p ro a c h - m o r a l
decisions are those that best maintain
the rights of those people affected by
them.
• Rights of Free Consent
• Right to Privacy
• Right of freedom and conscience
• Right of free speech
• Right of due process
• Right of life and safety
• Justice - moral decisions must be based
on standards of equity, fairness and
impartiality.
• Procedural - rules shall be clearly
stated, consistent and impartial
• Distributive - people should be
treated differently in proportion to
the differences among them
• Compensatory - should be
compensated for the cost of injuries
by the party responsible
Why Ethical Lapses Occur?
• Unethical Employee
• Unethical Org Culture
• Competitive Pressure
• Opportunity Pressure
• Moral Blindness
Managing Company Ethics:
• Hire ethical individuals
• Maintain ethical leaderships
• Code of ethics, training and ethics
advisor
• Have ethical audits
behaviors through shared values, norms
etc.
• Market Control - relies on market
mechanisms to regulate prices for
certain clearly speci ed goods and
services need by the organization.
Ethics - principles, values and beliefs that
de ne right and wrong decisions and
behavior
Values - basic convictions about what is
right and wrong ; developed even at a
young age
Personalty
• Ego Strength - personality measure of
the strength of person’s convictions
• Locus of control - degree to which
people believe that they control their
own fate
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Ethical Decision Making Approaches:
Social Responsibility - organizations
obligation to make choices and take
actions that will contribute to the welfare
and interests of society and organization.
Key Stakeholders:
• Environment
• Employees
• Customers
• Investors
• Community