Fundamental of Management

By: Mihiretu kumie (Bsc, BA, MPH)

Lecturer, Ayer Tena Health Science College
Instructor
Mihiretu Kumie
E-mail: aathsc@yahoo.com
Appointment possible , via email.

Mihiretu kumie (Ayer Tena Health Science College)

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Who I am?
Mihiretu K.
Educational background
Masters in General public health
BA in Cooperative Business Management
Bsc in Health science (Nursing)
Working Experience : more than 20 years , among this 13 years
have been in leadership position in different working environment.
E-mail: aathsc@yahoo.com
Appointment possible , via email.

Mihiretu kumie (Ayer Tena Health Science College)

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Who are you?
• Name , your work status ? Marriage status, family
size
• Major reason why you chose this field of study?
• Interest in the future?
• What You Hope to Learn from this class?
• Anything else you want to share with us?

Mihiretu kumie (Ayer Tena Health Science College)

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Rules & Expectations
- Not allowed moving place to place in any reason, no
side talki which disturbed teaching learning process
- Need off the cell phone
- Punctuality
- Attendance , presence is mandatory！
- Participation ！
- Academic integrity ！
- Team work !
- Feedback !
----together we make this course interesting and
fruitful!!! Mihiretu kumie (Ayer Tena Health Science College)

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Exams & Grades
- Attendance & Participation 10%
- Surprising test 1 5 - 10%
- Surprising test 2 5 - 10%
- Group project 10%
- Midterm exam 30%
- Final exam 30 - 40%
---------------------------------------------
Grade A B C D F
Max 85% 75% 65% 55% 45%

Mihiretu kumie (Ayer Tena Health Science College)

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This course……
• Class Duration : 3 credit hour course it takes from
Sep 15/ 2015 to December 15/2015
• Very intensive! (4 hours a week , 12 weeks in total)
• Multiple “learning vehicles” (cases, videos, role plays,
and other in-class exercises)

Mihiretu kumie (Ayer Tena Health Science College)

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Recommended Text & Reference Books:
1. FUNDAMENTALS OF MANAGEMENT
Essential Concepts & Applications
By: Robbins, Decenzo

2. MANAGEMENT
The New Competitive Landscape
By: Bateman, Snell

3. MANAGEMENT 7th Edition

By: Robbins, Coulter

4. MANAGEMENT
A global Perspective
By: Weihrich, Koontz
 Questions?
before we go to the chapters?

Mihiretu kumie (Ayer Tena Health Science College)

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Course outline overview
Chapter # 1: Introduction to Management
Chapter # 2: System & Environment
Chapter # 3: Decision Making & Planning
Chapter # 4: Organizing
Chapter # 5: HR Management & Staffing
Chapter # 6: Leading
Chapter # 7: Controlling
Learning outcome
Topic one
1. Define organization, management, and measuring
managerial performance.
2. Understand management functions and activities,
managerial levels, skills and roles.
3. Explain the history and contributions of
management theories.
 TOPIC 1:
Introduction to
Management
Definition of Management
Management Defined Cont’d
Management is the process of achieving organizational goals
and objectives effectively and efficiently by using management
functions i.e.
▫ Planning
▫ Organizing
▫ Staffing
▫ Leading
▫ Controlling
Management is a process or a set of activities and
directed at an organization's resources with the
aim of achieving organizational goals in an efficient
and effective manner.
Cont…
Managerial Concerns
• Process - represents ongoing functions or primary
activities engaged in by manager

▫ Efficiency
▫ doing things right”
▫ concerned with means (Getting the most output for the
least inputs)
▫ Achieving the objectives in time
“Effectiveness
“doing the right things”
▫ concerned with ends
▫ Achieving the objectives on time
1–14
Efficiency and Effectiveness

Means Ends
Efficiency Effectiveness

Goals

Goal Attainment
Resource Usage

Low High
Waste Attainment

FOM 1.9
Measuring managerial Performance
High
Goal attainment Effective but not Effective & efficient.
efficient. Some Goal are achieve &
resource are wasted resource are well
utilized, area of high
productivity

Neither effective nor Efficient but not

efficient, goal are not effective, no wasted
Low
achieve, resource resource but goals not
wasted in the process achieve

Poor Resource utilization Good

Why Study Management?
• The Value of Studying Management
▫ The universality of management
 Good management is needed in all organizations.
▫ The reality of work
 Employees either manage or are managed.
▫ Rewards and challenges of being a manager
 Management offers challenging, exciting and creative
opportunities for meaningful and fulfilling work.
 Successful managers receive significant monetary rewards for
their efforts.
UNIVERSALITY OF MANAGEMENT
Management: Science or Art?
Science is a collection of systematic knowledge, collection of
truths and inferences after continuous study and experiments.
It has fundamental principles discovered.

Art uses the known rules and principles and uses the skill,
expertise, wisdom, experience to achieve the desired result.

Management has got two faces like a coin; on one side it is art and
on the other it is science.
Management has got scientific principles which constitute the
elements of Science and Skills and talent which are attributes of Art.

Management is both art and science.

Basics of Management
 1–22

What Is An Organization?
Who will be a manager?
What manager do?
 1–23 Copyright ©
2010 Pearson
Education, Inc.
Publishing as
Prentice Hall

What Is An Organization?
• An Organization Defined
▫ A deliberate arrangement of people to accomplish
some specific purpose (that individuals independently
could not accomplish alone).
• Common Characteristics of Organizations
▫ Have a distinct purpose (goal)
▫ Composed of people
▫ Have a deliberate structure
 Definition of Organization

 A group of individual
who work together
Organization toward common goals.

 Is a social entity that is

goal directed and
deliberately structured.
Organization
Organizations are groups of people, with ideas and resources, working
toward common goals.
OR
A systematic arrangement of people brought together to accomplish some
specific purpose is called organization.

Characteristics of Organization

Deliberate
Distinct Purpose
Structure

People
Manager

A manager is someone whose primary responsibility

is to carry out the management process within an
organization to achieve the organizational goals.

Changing nature of organizations and work has

blurred the clear lines of distinction between
managers and non-managerial employees
 1–27

1. What Managers Do?

Three categorization schemes:
Management Functions
Management Roles
Management Skills
OR
• Three Approaches to Defining What Managers Do.
Functions they perform.
Roles they play.
Skills they need.
What Managers Do?
A. Functions Manager’s Perform
▫ Planning
 Defining goals, establishing strategies to achieve goals,
developing plans to integrate and coordinate activities.
▫ Organizing
 Arranging and structuring work to accomplish
organizational goals.
▫ Leading
 Working with and through people to accomplish goals.
▫ Controlling
 Monitoring, comparing, and correcting work.
Exhibit 1–4Management Functions 1–29 Copyright ©
2010 Pearson
Education, Inc.
Publishing as
Prentice Hall
What Managers Do? 1–30 Copyright ©
2010 Pearson
Education, Inc.
Publishing as
Prentice Hall

B. Roles Manager’s Play

▫ Roles are specific actions or behaviors
expected of a manager.
▫ Mintzberg identified 10 roles grouped
around interpersonal relationships, the
transfer of information, and decision
making.
Roles of manager
Role: a set of expectation for one’s behavior
In 1960, Henry Mintzberg conducted a study to understand about the managerial
roles. He identified 10 managerial roles that are common to all managers. These 10
managerial roles are grouped under: Interpersonal, decisional, and informational
roles.

Roles of Manager

Decisional Informational
Interpersonal
• Entrepreneur
• Figurehead • Monitor
• Disturbance handler
• Leader • Disseminator
• Resource allocator
• Liaison • Spokesperson
• Negotiator
Roles of manager Cont’d
A: Inter-personal Role

1.Figurehead: Represents the company on social occasions.

Attending the flag hosting ceremony, receiving visitors or
taking visitors for dinner etc.

2.Leader: In the role of a leader, the manager motivates,

encourages, and builds enthusiasm among the employees.
Training subordinates to work under pressure, forms part of
the responsibilities of a manager.

3.Liaison: Consists of relating to others outside the group or

organization. Serves as a link between people, groups or
organization. The negotiation of prices with the suppliers
regarding raw materials is an example for the role of liaison.
Roles of manager Cont’d
B: Decisional Role:

1. Entrepreneur: Act as an initiator and designer and encourage changes and

innovation, identify new ideas, delegate idea and responsibility to others.

2. Disturbance handler: Take corrective action during disputes or crises;

resolves conflicts among subordinates; adapt to environmental crisis.

3. Resource allocator: Decides distribution of resources among various

individuals and groups in the organization.

4. Negotiator: Negotiates with subordinates, groups or organizations- both

internal and external. Represents department during negotiation of union
contracts, sales, purchases, budgets; represent departmental interests
Roles of manager Cont’d

Informational role:

1. Monitor: Emerges as nerve center of internal and external

information about Information.

2. Disseminator: Transmits information received from other

employees to members of the organization.

3. Spokesperson: Transmits information to the people who are

external to the organization, i.e., government, media etc. For
instance, a manager addresses a press conference announcing
a new product launch or other major deal.
 1–35 Copyright ©
2010 Pearson
Education, Inc.
Publishing as
Prentice Hall

What Managers Do (Mintzberg)

• Actions
▫ thoughtful thinking
▫ practical doing
What Managers Do?
C. Skills Managers Need
▫ Technical skills
 Knowledge and proficiency in a specific field
▫ Human skills
 The ability to work well with other people
▫ Conceptual skills
 The ability to think and conceptualize about abstract and
complex situations concerning the organization
Managerial skills

Managerial Skills

Primary Skills Secondary Skills

• Conceptual Skill • Design Skill
• Technical Skill • Communication Skill
• Human Skill • Leadership Skill
Managerial primary skills Cont’d
Conceptual skills:
• This refers to the ability to think and conceptualize abstract situations.
These abilities are required for making complex decisions.
In short it is:
• The mental capacity to develop plans, strategies and vision

Human or interpersonal skills:

• This includes the ability to understand other people and interact
effectively with them. The human skills are also important in creation
of an environment in which people feel secure and free to express
their opinions.
In short it is:
• The ability to work with other people in teams
Managerial primary skills Cont’d
Technical skills:
• These skills include the knowledge, abilities of and proficiency in
activities involving methods, processes and procedures in the relevant
fields as accounting, engineering, manufacturing etc.
Or in short:
• The ability to use the knowledge or techniques of a particular
discipline to attain ends
Managerial skills Cont’d
Design skills:
• These skills enable a manager to handle and solve any kind
of unforeseen or actual problems, that may crop up in the
organization. Such problems could arise due to internal
factors or external factors and/or both.
In short it is:
• The problem solving skill
Communication skills:
• The abilities of exchanging ideas and information
effectively. To understand others and let others understand
comprehensively.
Leadership skills
• The abilities to influence other people to achieve the
common goal.
D. Levels of management
1. Top Level:
• Top management sets the mission and goals, develops policies, evaluates the overall performance of
various departments, responsible for the business as a whole and is concerned mainly with long-
term planning

2. Middle Level:
• Middle level management develops departmental goals, executes the policies, plans and strategies
determined by top management , develops medium- term plans and supervises and coordinate
lower-level managers’ activities

2. Lower (Supervisory, frontline) Level:

• Lower level management takes charge of day-to-day operations, is involved in preparing detailed
short-range plans, is responsible for smaller segments of the business, executes plans of middle
management , guides staff in their own subsections and keep close control over their activities
Levels of management

Top
Management
President, CEO,
Executive
Vice Presidents

Middle Management
Plant Managers, Division Managers,
Department Managers

First-Line Management
Foreman, Supervisors, Office Managers

Non- Managerial Employees

 Most

Least
Important

Important
Planning

Organizing

Top
Staffing

Managers
Directing
Controlling

Planning
Organizing
Staffing
Middle
Managers
Directing
Controlling

Planning
Organizing
Staffing
Managers
First-Line

Directing
Importance of management functions to managers in each level

Controlling
E. Skills Needed at Different Management Levels
Skills Needed at Different Levels of Management
 What Makes a Good/Not-so-good Manager?
Management Skills
46

Good Manager Not-so-good Manager

Technical
• Lack of Knowledge
 Professional,
 Goodwill, willing to share his • Not Organized
knowledge • Difficult to find, always
Human not in the office
 Good coordinator • Talking but not working
 Gain People’s support • Highly paid
 Charming • Not presentable
 Friendly • Careless
 Nice • Not communicate with
Conceptual Team members
 Ability to think • Not care about group
 Logical members
 Fast mover
 Chance/ Risk Taker
Exhibit 1–11 Rewards and Challenges of
Being A Manager
 Terms to Know
• manager • management roles
• first-line managers • interpersonal roles
• middle managers • informational roles
• top managers • decisional roles
• management • technical skills
• efficiency • human skills
• effectiveness • conceptual skills
• planning • organization
• organizing • universality of management
• leading
• controlling
End of lecture 1
 50

Mihiretu kumie (Ayer Tena Health september 15 /

Science College) 2015

Chronological Development of
Management Perspectives
Figure 2.1 Chronological Development of Management
Perspectives
Comprehensive Analysis of Management
1) Classical approach to management resulted from the
first significant, concentrated effort to develop a body
of management thought. Management writers who
participated in this efforts are considered the pioneer
of management study.
 Subfields of the Classical Perspective on
Management
Focuses on the
individual worker’s
productivity Focuses on
the overall
organizational
system

Focuses on the
functions of
management
1a) Scientific Management: Taylor
• Frederick W. Taylor (1856-1915)
- Father of “Scientific Management.
• attempted to define “the one best way” to perform
every task through systematic study and other scientific
methods.
• believed that improved management practices lead to
improved productivity.
- Three areas of focus:
• Task Performance
• Supervision
• Motivation
Task Performance
• Scientific management incorporates basic
expectations of management, including:
• Development of work standards
• Selection of workers
• Training of workers
• Support of workers
Supervision
• Taylor felt that a single supervisor could not be an
expert at all tasks.
• As a result, each first-level supervisor should be
responsible only workers who perform a common
function familiar to the supervisor.
• This became known as “Functional Foremanship.”
 Motivation
• Taylor believed money was the way to motivate
workers to their fullest capabilities.
- He advocated a piecework system in which worker’s pay
was tied to their output.
• Workers who met a standard level of production
were paid a standard wage rate.
• Workers whose production exceeded the standard
were paid at a higher rate for all of their
production output.
1b) Administrative Management: Fayol
• Henri Fayol (1841–1925)
• First recognized that successful managers had to
understand the basic managerial functions.
• Developed a set of 14 general principles of
management.
• Fayol’s managerial functions of planning, leading,
organizing and controlling are routinely used in
modern organizations.
Table 2.1 Fayol’s General Principles of Management

1. Division of work 8. Centralization

2. Authority and responsibility 9. Scalar chain
3. Discipline 10. Order
4. Unity of command 11. Equity
5. Unity of direction 12. Stability
6. Subordination of individual 13. Initiative
interest to the common 14. Esprit de corps
good
7. Remuneration of personnel

Source: Based on Henri Fayol, General and Industrial

Management, trans. Constana Storrs (London: Pittman &
Sons, 1949).
Fayol’s Principles of Management

Henri Fayol (1841-1925)

He has proposed that there are six primary functions

of management and 14 principles of management,
Forecasting, Planning, Organizing, Commanding,
Coordinating, controlling
There are 14 Principles of Management described by
Henri Fayol.
14 Principles of Henri Fayol

1. Division of Labor
Work of all kinds must be divided & subdivided and allotted to various persons according to their
expertise in a particular area.

2. Authority & Responsibility

Authority refers to the right of superiors to get exactness from their sub-ordinates.

Responsibility means obligation for the performance of the job assigned.

Note that responsibility arises wherever authority is exercised

14 Principles of Henri Fayol Cont’d

3. Unity of Command
A sub-ordinate should receive orders and be accountable to one and only one boss at a time.

He should not receive instructions from more than one person

4. Unity of Direction
People engaged in the same kind of business or same kind of activities must have the same objectives in a
single plan.

Without unity of direction, unity of action cannot be achieved.

14 Principles of Henri Fayol Cont’d

5. Equity
Equity means combination of fairness, kindness & justice.

The employees should be treated with kindness & equity if devotion is expected of them.

6. Order
This principle is concerned with proper & systematic arrangement of things and people.

Arrangement of things is called material order and placement of people is called social order.
14 Principles of Henri Fayol Cont’d

7. Discipline
Discipline means sincerity, obedience, respect of authority & observance of rules and regulations of
the enterprise.

Subordinate should respect their superiors and obey their order.

8. Initiative
Initiative means eagerness to initiate actions without being asked to do so.

Management should provide opportunity to its employees to suggest ideas, experiences& new
method of work.
14 Principles of Henri Fayol Cont’d
9. Remuneration
Remuneration to be paid to the workers should be fair, reasonable, satisfactory & rewarding of the
efforts.
It should accord satisfaction to both employer and the employees.

10. Stability of Tenure

Employees should not be moved frequently from one job position to another i.e. the period of
service in a job should be fixed.
14 Principles of Henri Fayol Cont’d

11. Scalar Chain

Scalar chain is the chain of superiors ranging from the ultimate authority to the lowest.

Communications should follow this chain. However, if following the chain creates delays,
cross-communications can be allowed if agreed to by all parties and superiors are kept
informed.

12. Sub-ordination of Individual Interest to common goal

An organization is much bigger than the individual it constitutes therefore interest of the
undertaking should prevail in all circumstances.

The interests of any one employee or group of employees should not take precedence
over the interests of the organization as a whole.
14 Principles of Henri Fayol Cont’d

13. Espirit De’ Corps

It refers to team spirit i.e. harmony in the work groups and mutual understanding among the
members.

Espirit De’ Corps inspires workers to work harder.

14. Centralization
Centralization refers to the degree to which subordinates are involved in decision making.
Whether decision making is centralized (to management) or decentralized (to
subordinates) is a question of proper proportion. The task is to find the optimum degree
of centralization for each situation.
1c) Bureaucratic Management
• Focuses on the overall organizational system.
• Bureaucratic management is based upon:
• Firm rules
• Policies and procedures
• A fixed hierarchy
• A clear division of labor
Bureaucratic Management: Weber
• Max Weber (1864–1920)
- A German sociologist and historian who envisioned a
system of management that would be based upon
impersonal and rational behavior—the approach to
management now referred to as “bureaucracy.”
• Division of labor
• Hierarchy of authority
• Rules and procedures
• Impersonality
• Employee selection and promotion
Weber’s Forms of Authority
• Traditional authority
- Subordinate obedience based upon custom or tradition (e.g.,
kings, queens, chiefs).
• Charismatic authority
- Subordinates voluntarily comply with a leader because of his
or her special personal qualities or abilities (e.g., Martin
Luther King, Gandhi).
• Rational-legal authority
- Subordinate obedience based upon the position held by
superiors within the organization (e.g., police officers,
executives, supervisors).
Classical versus Behavioral Perspective
vs.

Classical Behavioral
Perspective Perspective
Focused on Acknowledged the
rational behavior importance of human
behavior
2) Behavioral Perspective
• Followed the classical perspective in the
development of management thought.
- Acknowledged the importance of human behavior in
shaping management style
- Is associated with:
• Mary Parker Follett
• Elton Mayo
• Douglas McGregor
Mary Parker Follett
• Concluded that a key to effective management was
coordination.
• Felt that managers needed to coordinate and
harmonize group effort rather than force and coerce
people.
• Believed that management is a continuous, dynamic
process.
• Felt that the best decisions would be made by
people who were closest to the situation.
Follett on Effective
• Four principles Work
of coordination Groupseffective
to promote
work groups:
1. Coordination requires that people be in direct contact
with one another.
2. Coordination is essential during the initial stages of any
endeavor.
3. Coordination must address all factors and phases of any
endeavor.
4. Coordination is a continuous, ongoing process.
Elton Mayo
• Conducted the famous Hawthorne Experiments.
- “Hawthorne Effect”
• Productivity increased because attention was paid to the
workers in the experiment.
• Phenomenon whereby individual or group performance is
influenced by human behavior factors.
• His work represents the transition from scientific
management to the early human relations
movement.
Douglas McGregor
• Proposed the Theory X and Theory Y styles of
management.
- Theory X managers perceive that their subordinates
have an inherent dislike of work and will avoid it if at
all possible.
- Theory Y managers perceive that their subordinates
enjoy work and that they will gain satisfaction from
performing their jobs.
 Table 2.3 Comparison of Theory X and Theory Y Assumptions

Factor Theory X Assumptions Theory Y Assumptions

Employee attitude Employees dislike work and Employees enjoy work and
toward work will avoid it if at all possible. will actively seek it.

Management view Employees must be directed, Employees are self-motivated

of direction coerced, controlled, or threatened and self-directed toward achieving
to get them to put forth adequate effort. organizational goals.

Employee view Employees wish to avoid responsibility; Employees seek responsibility;

of direction they prefer to be directed and told what they wish to use their creativity,
to do and how to do it. imagination, and ingenuity in
performing their jobs.
Management style Authoritarian style of management Participatory style of management
3)The Contingency Perspective
• A view that proposes that there is no one best
approach to management for all situations.
- Asserts that managers are responsible for determining
which managerial approach is likely to be most
effective in a given situation.
- This requires managers to identify the key
contingencies in a given situation.
4) The system Approach
• Views the organization as a unified, directed system
of interrelated parts.
• The systems sees each change in a part of the system
as having an impact on all others parts.
• The system helps managers to realize that every
action has consequences somewhere inside as
outside the organization.
Comprises of two systems
Open system
- characterized by interaction with external
environment

Closed system
- interaction with internal environment (do not
interact with external)
 External environment

Input Conversion Output

(the physical, (comprise the (the original
human, tech used to inputs as &
material, convert changed by
financial & inputs to transformation
info process) outputs process

Feedback
(info about a system’s
status & performance
End of Chapter 1