Module 2 Nature and concept of management PDF

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Business management definition is managing the coordination and organization of business activities. ... Management is in charge of planning, organizing, directing, and controlling the business's resources so they can meet the objectives of the policy....

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MODULE 2 – NATURE AND CONCEPT OF MANAGEMENT

INTRODUCTION Have you ever imagine a business without strong foundation nor a business established without any study? Yes, you are right! Almost all businesses were established as a product of deep and thorough study with primarily focus on generating business profit by creating and innovating products or services needed to enhance our today’s living.. This module provides an overview of business management and its core principlesplanning, organizing, staffing, directing and controlling. Likewise, it will cultivate student’s potential to practice good management and promotes the opportunity of creating their own business ideas.

LEARNING OUTCOMES: After reading this module, the learner should be able to: 1. 2. 3. 4. 5.

Give comprehensive definition of management; Relate management into arts and science; Identify the different functions of management; Analyze the different levels of management in an organization; Understand principles of management by Fayol and Taylor.

TIME: The time allotted for this module is 3 hours.

LEARNER DESCRIPTION The participants in this module are BSA and BSBA students.

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MODULE CONTENTS:

LESSON 1: Definition of Management Management might be a broad topic for it encompasses different aspects that are needed to manage and run a certain business enterprise. More so, management is a distinct method of planning, organizing, staffing, directing and controlling (POSDICON), undertaken through the use of human and other business resources to evaluate and accomplish specified goals. Now, let’s take a look for some of the definition of management by the following person: According to George Terry “ Management is a distinct process consisting of planning, organizing, actuating and controlling performed to determine and accomplish the objective by the use of people and resources” For Henry Fayol, “ To manage is to forecast and to plan, to organize, to command, to co-ordinate and to control” Likewise for Peter F Drucker, “ Management is a multi-purpose organ that manages a business nd manages managers and manages worker and work”. With the above mentioned definitions of management, it cannot be denied its importance in a business and even in man’s economic existence. Business requires proper management to stay the long run. Activity 1.1: 1. Based on the given definition of management, can you now define management on your own words?

2. What do you think are the importance of studying business management : (a) For you as young business professionals? (b) Its probable impact for the economy?

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LESSON 2: Management as an ART and SCIENCE Science is a systematic body of knowledge pertaining to a specific field of study that contains general facts which explains a phenomenon. Likewise, in management it requires systematic knowledge used in gathering, collecting, and analyzing information for the formulation of the principles in business. On the other hand, management could be considered as an art since managing requires certain skills which are personal possessions of managers. To be successful in his profession, a manager must acquire the knowledge of science and the art of applying it. Management is therefore a judicious blend of science and art, because it demonstrates the principles and the way in which those principles are applied is a matter of art. Science teaches 'knowing' and art teaches 'doing.' References: Juneja, P. (2020). Management as science and art. Retrieved from: https : / / www . managementstudyguide.com/management_science.htm

LESSON 3: FUNCTIONS OF MANAGEMENT

Management has been defined as a social process involving responsibility for an enterprise's economic and productive planning and operational regulation in fulfilling the purposes set out. It's a complex process consisting of various elements and activities. Such operations vary from organizational roles such as marketing, accounting, procurement etc. Now, let’s have an overview with the different function: 1. Planning Planning is considered to be the basic function of the management. Imagine a certain activities conducted without having any plan? Perhaps result will not match FBM- FUNDAMENTALS OF BUSINESS MANGAGEMENT

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for the desired objectives. Just in every business, planning is very essential. It deals with setting out a future course of action and deciding in advance on the most appropriate course of action for the achievement of pre-determined objectives. According to KOONTZ, "Planning is deciding ahead of time-what to do, when to do and how to do. It bridges the gap between where we are and where we want to be. 2. Organizing It is a process of bringing together physical, financial and human resources and developing a productive relationship between them in order to achieve organizational objectives. According to Henry Fayol, "organizing a business means providing it with everything useful or functional, i.e. raw materials, tools, capital and personnel." Organizing as a process involves:     

Identification of activities. Classification of grouping of activities. Assignment of duties. Delegation of authority and creation of responsibility. Coordinating authority and responsibility relationships.

3. Staffing Staffing involves filling and maintaining the positions provided for in the organizational structure. It defines the labor requirements for the work to be done, which includes recruiting and selecting candidates for positions, compensation and training or otherwise developing both candidates and current job holders to carry out their tasks effectively. Further, it involves in the following tasks:      

Manpower Planning (estimating man power in terms of searching, choose the person and giving the right place). Recruitment, Selection & Placement. Training & Development. Remuneration Performance Appraisal. Promotions & Transfer.

4. Directing It is that part of the management function that operates organizational methods in order to work effectively towards the achievement of organizational objectives. It is considered the life-saving of an enterprise that sets people's actions in motion, because planning, organization and staffing are the mere preparations for doing the work. Direction is that inert-personnel aspect of management which deals directly with influencing, guiding, supervising, motivating sub-ordinate for the achievement of organizational goals. Direction has following elements: FBM- FUNDAMENTALS OF BUSINESS MANGAGEMENT

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Supervision- implies overseeing the work of subordinates by their superiors. It is the act of watching & directing work & workers. Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work. Positive, negative, monetary, non-monetary incentives may be used for this purpose. Leadership- may be defined as a process by which manager guides and influences the work of subordinates in desired direction. Communications- is the process of passing information, experience, opinion etc from one person to another. It is a bridge of understanding 5. Controlling It involves measuring the achievement against the standards and correcting the deviation, if any, to ensure the achievement of the organizational objectives. The aim of monitoring is to ensure that everything is done in accordance with the standards. An effective control system helps predict deviations before they actually occur. According to Theo Haimann, "Control is the process of checking whether or not proper progress is being made towards the objectives and objectives and, if necessary, of acting to correct any deviation." According to Koontz & O'Donell, 'Controlling' is the measurement and correction of the performance activities of the subordinates in order to ensure that the objectives and plans of the undertaking desired to achieve them are met. The following are some of the activities in controlling: a. Establishment of standard performance. b. Measurement of actual performance. c. Comparison of actual performance with the standards and finding out deviation if any. d. Corrective action

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Activity 3.1: Direction: From the previous group activity of cultivating business ideas, make a Gantt chart of your propose activity as part of the accomplishment of business proposal. This will test the group cooperation and the art of planning. Activity

Assigned Member

Time Allotted

Target Date

Budget

References: Juneja, P. (2020). Functions of management. Management Study Guide. Retrieved from: https://www.managementstudyguide.com/management_functions.htm Functions of management (2020). Retrieved from: https://www.indeed.com/career-advice/careerdevelopment/basic-functions-of-management

LESSON 4: Levels of Management

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Segmenting the management of an organization at a level is essential in maintaining the productivity and work performance of employees. Although there would be a change in the size of the company or the workforce, there would also be a change in the number of management levels.

Top Level of Management It consists of board of directors, chief executive or managing director. The top management is the ultimate source of authority and it manages goals and policies for an enterprise. It devotes more time on planning and coordinating functions. Middle Level of Management The branch managers and departmental managers constitute middle level. They are responsible to the top management for the functioning of their department. They devote more time to organizational and directional functions. In small organization, there is only one layer of middle level of management but in big enterprises, there may be senior and junior middle level management Lower Level of Management Lower level is also known as supervisory / operative level of management. It consists of supervisors, foreman, section officers, superintendent etc. According to R.C. Davis, “Supervisory management refers to those executives whose work has to be largely with personal oversight and direction of operative employees”. In other words, they are concerned with direction and controlling function of management.

Activity 4.1: Direction: Make a research on the different role of each level of management in an FBM- FUNDAMENTALS OF BUSINESS MANGAGEMENT

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organization. Levels of Management

Functions ( at least 5 per level)

References:

Juneja, P (2020). Levels of management. Retrieved from https : / / www. management studyguide.com/management_levels.htm

LESSON 5: Principles of Management by Henri Fayol and Scientific Management of Frederick Taylor Henri Fayol was a French industrialist who was the first to issue a complete statement on a theory of general management, which is used today. Fayol's greatest FBM- FUNDAMENTALS OF BUSINESS MANGAGEMENT

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contribution was his discussion of management principles and elements. Fayol gave the following "14 Principles of Management" (He stressed flexibility in the application of these principles and the making of allowances for different and changing circumstances.) 1.

Division of work- This is the assignment of specialized jobs to various departments and/or positions. 2. Authority – the power or right entrusted to make the work possible.

Responsibility – the duty or work assigned to a particular position 3. Unity of Command- This means that employees should receive orders from one superior/manager only. 4. Subordination of Individual Interest to General Interest- The interest of one employee or group of employees should not prevail over the interest of the business. 5. Remuneration- Sometimes called compensation. This principle is based on "equal pay for equal work” 6. Centralization-It is a system of management wherein major policies are made only by the top management 7. Scalar chain- Chain of superiors from highest to lowest ranks. 8. Stability of Tenure- Management should provide orderly personnel planning and ensure that replacement are available to fill vacancies. 9. Span of Control- It refers to the specific and limited number of subordinates that a manager can effectively handle and control. 10.Esprit de Corps- It emphasizes the need for teamwork and importance of communication in obtaining it. 11. Simplicity 12.Unity of Direction- One boss and one plan for a group of activities having the same objective. 13.Order - ensures a place for everything. 14.Equity - results from kindness and justice.

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Taylor's Four Principles of Scientific Management: Frederick Taylor's Scientific Management is identified with his school of thought. Taylor put forth his ideas in a book entitled, Principles of Scientific Management.' He was also considered to be the “father of modern time study”. In his writings, Taylor presented a balanced view of scientific management. He believed that a "mental revolution" would have to take place before management and workers could see that their positions were compatible. He pointed out that as productivity rose, thesalaries of both managers and employees would also arise. At the same time, he emphasized that managers must avoid such practices as rates cutting, because they lead to employee hostility toward management. 1. Develop a science for each element of a man's work, to replace the old rule-ofthumb method. 2. Scientifically select and then train the worker. (In the past the worker had chosen his own work and trained himself as best he could). 3. Heartily cooperate with the men to ensure that all the work done is in accordance with the principles of the science develop for the work. 6. Divide the work and the responsibility equally between management and the workers. Management should take over from the workmen all work for which it is better fitted. (In the past almost all of the work and the greater part of the responsibility had been thrown upon the workers.) In essence, Taylor's scientific management stresses the need for developing the best way of performing each job; training and preparing workers to perform that job; and establishing harmonious cooperation between management and workers so that the job is performed in the desired way. Taylor's ideas have led to two managerial practices: piece- rate incentive system and time-and-motion study. The purpose of the piece-rate incentive system is to reward the worker who produced the maximum output.

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ONLINE READING MATERIALS: 

Read Chapter II of Management for Filipinos by Conrado Inigo Jr.

ONLINE VIDEO LINKS AND MATERIALS: 

Watch the online video lecture of the course instructor uploaded at NEO LMS and to the class shared Google drive (if applicable).

TEST YOUR KNOWLEDGE: “Pending”

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MODULE REFERENCES: Conrado, Inigo Jr. (2017). Management for Filipinos: Principles and Applications.

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