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Principles of Management Unit 1: Management Functions, Roles and History

Management is getting work done efficiently and effectively through other people by planning, organizing, leading and controlling. This unit introduces what managers do and the century of theories that shaped how organizations are run.

Covers: The four functions of management, Efficiency and effectiveness, Levels of management and managerial skills, Mintzberg's managerial roles, Classical management theory, Behavioral and human relations approaches, Quantitative, systems, contingency and quality approaches

Study guide

Management is the process of coordinating people and resources so an organization reaches its goals. Two standards judge a manager. Efficiency means getting the most output from the fewest inputs (doing things right), while effectiveness means reaching the right goals (doing the right things). A team can be efficient at producing a product nobody wants, so good managers aim for both. Most textbooks describe four functions of management: planning (setting goals and deciding how to reach them), organizing (arranging tasks, people and resources), leading (motivating and directing people) and controlling (measuring performance and correcting it). Henri Fayol originally listed five functions, which modern books condensed into these four.

Managers work at three broad levels. Top managers (CEO, vice presidents) set long-term direction and strategy. Middle managers (regional or division heads) turn strategy into plans for their units and manage other managers. First-line managers (supervisors, team leaders) direct the employees who make the product or serve the customer. Robert Katz argued that managers need three skills in different mixes. Technical skills (job-specific know-how) matter most at the first-line level, conceptual skills (seeing the whole organization and abstract relationships) matter most at the top, and human skills (working with people) matter about equally at every level.

Henry Mintzberg watched real executives and found that their work is fast, fragmented and full of interruptions, not calm and reflective. He grouped what managers do into ten roles in three categories. Interpersonal roles are figurehead, leader and liaison. Informational roles are monitor, disseminator and spokesperson. Decisional roles are entrepreneur, disturbance handler, resource allocator and negotiator. For example, a manager cutting a ribbon at a new store is a figurehead, one sharing a memo from headquarters with staff is a disseminator, and one settling a strike or a sudden supplier failure is a disturbance handler.

Classical management theory emerged around 1900. Frederick Taylor's scientific management used time studies to find the 'one best way' to do each job, selected and trained workers scientifically, and paid by the piece. Frank and Lillian Gilbreth studied motions to remove wasted movement. Max Weber described bureaucracy: a hierarchy with clear rules, a division of labor, impersonal treatment and selection based on merit. Henri Fayol, a French executive, wrote 14 principles of administration such as unity of command, scalar chain and division of work. Classical ideas raised productivity but often treated workers like parts of a machine.

The behavioral approach focused on people. Mary Parker Follett stressed shared power and cooperation. The Hawthorne studies at Western Electric (1920s-1930s), led by Elton Mayo, found that social factors and attention from researchers affected output more than lighting or pay, which launched the human relations movement. Douglas McGregor's Theory X assumes people dislike work and need control; Theory Y assumes people seek responsibility. Later views added quantitative management (math models, operations research), systems theory (organizations as open systems taking inputs, transforming them and producing outputs), contingency theory (the best approach depends on the situation) and total quality management, associated with W. Edwards Deming.

Key ideas

• Efficiency is about using few resources; effectiveness is about reaching the right goals.
• The four functions are planning, organizing, leading and controlling, and they form a continuous cycle.
• Top managers need the most conceptual skill, first-line managers the most technical skill, and all managers need human skill.
• Mintzberg showed that managerial work is hectic and grouped it into interpersonal, informational and decisional roles.
• Classical theory (Taylor, the Gilbreths, Weber, Fayol) sought efficiency through standard methods, rules and structure.
• The Hawthorne studies shifted attention to social and psychological factors at work, starting the human relations movement.
• Contingency theory says there is no one best way to manage; the right approach depends on the situation.

Formulas and rules

Common mistakes

• Mixing up efficiency and effectiveness: hitting the goal while wasting resources is effective but not efficient.
• Saying human skills matter most at the top; Katz said they are about equally important at every level.
• Confusing the monitor role (gathering information) with the disseminator role (passing information inside the organization) or the spokesperson role (speaking to outsiders).
• Crediting Weber with time-and-motion study or Taylor with bureaucracy; Taylor is scientific management and Weber is bureaucracy.
• Treating contingency theory as 'anything goes'; it says the best approach depends on identifiable situational factors.

Before the test, make sure you can

• Define the four functions of management and classify an activity under the right one.
• Distinguish efficiency from effectiveness in a scenario.
• Identify the three levels of management and which Katz skill matters most at each.
• Match a manager's behavior to the correct Mintzberg role and category.
• Explain the main contributions of Taylor, the Gilbreths, Weber and Fayol.
• Explain what the Hawthorne studies found and why they mattered.
• Contrast Theory X and Theory Y assumptions.
• Describe systems, contingency and quality approaches and apply them to an example.

Words to know

Management

The process of getting things done efficiently and effectively with and through other people.

Efficiency

Getting the most output from the least amount of input; doing things right.

Effectiveness

Completing activities so the organization reaches its goals; doing the right things.

Planning

Defining goals, setting strategy and developing plans to coordinate activities.

Organizing

Deciding what tasks must be done, who does them, how they are grouped and who reports to whom.

Leading

Motivating, directing and influencing people to work toward goals.

Controlling

Monitoring performance, comparing it with goals and correcting significant deviations.

Conceptual skills

The ability to think about abstract situations and see the organization as a whole; most important for top managers.

Technical skills

Job-specific knowledge and techniques; most important for first-line managers.

Mintzberg's managerial roles

Ten roles grouped as interpersonal, informational and decisional that describe what managers actually do.

Scientific management

Frederick Taylor's approach of using scientific methods to find the one best way to do a job.

Bureaucracy

Max Weber's ideal organization: division of labor, clear hierarchy, formal rules, impersonality and merit-based careers.

Fayol's principles

Henri Fayol's 14 principles of management, such as unity of command, scalar chain and division of work.

Hawthorne studies

Western Electric experiments showing that social norms and attention influence productivity, launching the human relations movement.

Theory X and Theory Y

McGregor's contrasting assumptions that workers avoid work and need control (X) or seek responsibility (Y).

Systems approach

Viewing an organization as interrelated parts that take inputs from the environment, transform them and produce outputs.

Contingency approach

The view that the best management practice depends on the situation, such as size, technology or environment.

Total quality management (TQM)

A philosophy of continuous improvement and responding to customer needs, associated with W. Edwards Deming.

Sample practice questions

30 more questions like these, from level 1 to 5, are in the practice set.