Character Formation 2 – Leadership, Decision Making, Management and Administration

By: Sir Joemar M. Zabala, RC, MSCJ, LPT

MIDTERM NOTES

Important Keys to Effective Leadership

1. Ability to delegate tasks
2. Excellent communication
3. Confidence
4. Honesty
5. Creativity
6. Innovation
7. Vision
8. Inner Values
9. Inspiration
10. Transparency
11. Decisiveness

Six Different Forms of Power for Leaders – (John French and Bertram Raven; The Bases of Social Power)
1. Coercive Power - Coercion involves forcing someone to do something against their will. This is usually achieved by being able to punish someone for non-
compliance. It also usually causes resentment and if used too much will cause people to leave.
2. Reward Power - Reward involves giving benefits to someone for doing something. This is almost the opposite of coercion.
As with coercion, reward generally only achieve compliance. Some rewards are personal, like a nice “thank you” and these can be very powerful.
(Intrinsic Reward- satisfactions one gets from the job; Extrinsic Reward - money, promotions, and benefits.)
3. Legitimate Power - Legitimate power is power derived from a position or a set of formal relationships. Leaders in a hierarchies and elected officials have
legitimate power. If someone loses their position, they often quickly lose their power.
4. Expert Power - Expert power derives from an individual’s expertise. Their level of skill, competence and experience helps make them trustworthy and able
influential to others. Expert power only lasts as long as an expert keeps getting good results and is not acting purely for personal gain.
5. Referent Power - Referent power is based on being liked and respected as an individual. It’s derived from an individuals perceived value, worth or
attractiveness. Social media influencers have referent power. It’s a highly personal type of power and generally uninfluenced by position (though it may help
individuals gain position).
6. Informational Power - Informational power is based on the ability to control the flow of information that is needed to get things done. It is often derived
from having access to confidential information that others don’t know (information asymmetry). Informational power can be very strong in our increasingly
information and data driven world. However, once a source of information is lost, so is its associated power.

Theories of Leadership
1. Self-Leadership Theories –
Social Learning Theory – emphasizes the importance of observing modeling, and imitating the behaviors, attitudes, and emotional reactions of
others. Social learning theory considers how both environmental and cognitive factors interact to influence human learning and behavior.
Social Cognitive Theory (SCT) – acknowledge the triadic interaction between our thoughts, behavior, and socio-political environment. There are
three major constructs in SCT that interact to influence behavior.
1. Personal Factors – Pertains to age, cognitions, previous experience with the behavior, etc.
2. Environmental Factors – Refers to access to resources, safety, support from family/friends, etc.
3. Aspects of the Behavior – Refers to the vigor of the behavior, outcome achieved as a result of practicing the behavior, competence
with the behavior, etc.
Self-Efficacy Theory – is another concept developed by Albert Bandura. Self-Efficacy is a person’s particular set of beliefs that determine how well
on can execute a plan of action in prospective situations (Bandura, 1977). In other words, self-efficacy is a person’s beliefs in their ability to succeed in a
particular situation.
Self-Control Theory – proposed by Michael Gottfredson and Travis Hirschi in A General Theory of Crime (1990). Self-control refers to the ability to
forgo immediate or near-term pleasures that have some negative consequences and to the ability to act in favor of longer-term interests. It serves as an
executive function necessary for individual goal attainment. It is a cognitive process for self-regulating behavior in pursuit of personal goals.
Self-Determination Theory - links personality, human motivation, and optimal functioning. It posits that type are two main types of motivation
(intrinsic and extrinsic) and that both are powerful forces in shaping who we are and how we behave.
2. Great Man Theory – The Great Man Theory was established in the 19th century by Thomas Carlyle. Under great man theory, prominent leaders
throughout the course of history were born to lead and deserved to do so as a result of their natural abilities and talents. At the heart of the theory is the
notion that there are only fer and very rare individuals in any society at any time with rare characteristics to rewrite human history. The theory was given a
masculine connotation with the use of the term “great man”, because the concept was thought of primarily as military leadership.
3. Spencer’s Leadership Theory – Introduces by the philosopher and sociologist Herbert Spencer, in his books The Study of Sociology, he opposed the
idea of the Great Men theory that leaders are born not made. Spencer claims that attributing historical successes to individual decisions was primitive and
unscientific, and that the so-called “great men” were solely products of their social environment. Before a “great man” could shape and build his society, the
same society had to shape and build him.
4. Leadership Trait Theory – Traits theory of leadership claims that certain individuals have special innate or inborn characteristics or qualities that makes
them leaders, and that it is these same qualities that differentiate them from non-leaders.
5. Blake and Mouton’s Managerial Grid; - Robert Blake & Jane Mouton have developed the Managerial Grid, also called as a leadership grid. According to
them, the leadership styles can be identified on the basis of manager’s concern for people (accommodating people’s needs and giving them priority) on y-axis
& production (keeping tight schedules) on x-axis, with each dimension ranging from low (1) to high (9), thus creating 81 different positions in which the
leader’s style may fall.
Concern for Production (Task-Oriented)
• A concern for production means that managers direct subordinates towards goals. Managers with this style typically give instructions,
spend time planning, emphasize deadlines & provide explicit schedules of work acitivities. They simply want to get the job done.
Concern for People (Relationship-Oriented)
• A concern for people means that managers are mindful of subordinates, respect their ideas & feelings, establish mutual trust. These
managers are friendly, provide open communication, develop teamwork, & are oriented toward their subordinates’ welfare.

Correspondingly, the 5 leadership styles are:

Impoverished Management (1,1)
• Managers that score low on concern for production & low on concern for people are labelled as having an Impoverished Management style
or Indifferent Management style. They exert minimum effort to get required work done & to maintain interpersonal relationships.
Task management (9,1)
• This managerial style is also called Authority-Compliance Management or Produce-or-Perish style. Here, leaders are more concerned about
production & have less concern for people. These type of managers usually believe that subordinates’ needs are relatively unimportant.
Middle-of-the-Road Management (5,5)
• Managers that score medium on concern for production & medium on concern for people have a Middle-of-the-Road Management style. They
attempt to balance between an organization’s performance targets & the needs of employees.
Country Club Management (1,9)
• Managers that score low on concern for production & high on concern for people are considered to have a Country Club Management style.
• This is a collegial style characterized by low task & high people orientation. Here, the manager gives thoughtful attention to the needs of people
thus providing them with a friendly & comfortable environment.

Compilation of Notes by Sir Joemar M. Zabala, RC, MSCJ, LPT

Team Management (9,9)
• If managers score high on concern for production & high on concern for people, they can be labelled as having a Team Management style.
Characterized by high people & task focus, the style is based on the theory Y of McGregor & has been termed as most effective style according to
Blake & Mouton. The leader feels that empowerment, commitment, trust, & respect are the key elements in creating a team atmosphere which will
automatically result in high employee satisfaction & production. This style is often considered to be the most effective & is recommended for
managers because organization members work together to accomplish tasks & maintain good relationships.

6. House’s Path Goal Theory –

In 1971, Robert House introduced his version of a contingent theory of leadership known as the Path-Goal theory. According to House’s
theory, leaders’ behavior is contingent upon the satisfaction, motivation, and performance of their subordinates. House argued that the goal of the leader is to
help followers identify their personal goals as well understand the organization‘s goals and find the path that will best help them achieve both. Because
individual motivations and goals differ, leaders must modify their approach to fit the situation.

Leadership Styles
House defined four different leadership styles and noted that good leaders switch fluidly between them as the situation demands. He believed that
leadership styles do not define types of leaders as much as they do types of behaviors. House’s leadership styles include:
• Directive: Here the leader provides guidelines, lets subordinates know what is expected of them, sets performance standards for them, and
controls behavior when performance standards are not met. He makes judicious use of rewards and disciplinary action. The style is the same as
task-oriented one.
• Supportive: The leader is friendly towards subordinates and displays personal concern for their needs, welfare, and well-being. This style is the
same as people-oriented leadership.
• Participative: The leader believes in group decision-making and shares information with subordinates. He consults his subordinates on important
decisions related to work, task goals, and paths to resolve goals.
• Achievement-oriented: The leader sets challenging goals and encourages employees to reach their peak performance. The leader believes that
employees are responsible enough to accomplish challenging goals. This is the same as goal-setting theory.

7. LMX Theory - The leader-member exchange theory—also known as the LMX or vertical dyad linkage theory—alludes to how leader-member relationships
(i.e., supervisor-employee relationships) can either empower or detract from the work of an organization as a whole.

Core Elements of LMX Theory

LMX theory might sound complex at first, but it’s relatively simple to grasp when you break it down. Consider these three core elements of the leadership
theory:
• Leader: LMX theorists focus on dyadic relationships (i.e., two-way relationships) between a supervisor and each of their employees. When the
leader has mutual respect for their in-group team members, they’re more likely to all perform more effective work together. The opposite is true for
out-group team members—leaders might take a more detached, disinterested leadership style for these employees if they feel they don’t work as
hard as the in-group. In reaction, out-group members feel less and less of an urge to do high-performing work for the leader.
• In-group: An in-group leader-member exchange relationship features high-quality exchanges between both the leader and the employee. This
might exhibit itself through greater organizational citizenship behavior (OCB) from the team member as well as in increased focus and interest from
the supervisor. In-groups are high-performing and desire to perform even more exceptionally due to the favor the leader has bestowed on them.
• Out-group: If an employee has a lack of mutual trust with their supervisor, it’s likely they’re one of the out-group members in their supervisor’s
mind. This might lead to a greater turnover intention among these members, as well as lower job satisfaction and less interest in performing to the
best of their abilities.
3 Key Phases of LMX Theory in Practice
When you encounter the LMX theory of leadership in real life, it manifests in predictable phases. Here are three key phases to observe:
• Role-taking: As an antecedent to anything else, new members of any team start their tenure under a leader’s watchful eye with a blank slate.
During this period, both parties start to define the leader-follower relationship. If the new team member struggles with motivation early on, it might
cause the leader to preemptively shuffle them into an out-group.
• Role-making: As the development of leader-member exchange relationships proceeds, supervisors will begin to carve out new responsibilities and
roles for team members with whom they have positive relationships. In contrast, leaders will also leave those in the out-group with fewer tasks and
opportunities due to their lack of connection.
• Routinization: Early work behavior predicts future work relationships—by this phase, leaders and team members have fallen into their routines.
Even if early success or failure might not correlate to future success, leaders often will sidestep taking on a moderating role and instead continually
focus on fostering in-group employees’ career paths and ignore out-group employees. It’s at this point a leader can step in and do their best to
rectify the situation by making the playing field more level for everyone.
8. Behavior Theory – the behavioral theory states that individuals can learn to become effective leaders through training and observation. The theory
focuses on the actions of leaders rather than on their personal qualities.
9. Situational Leadership Theory – Paul Hersey and Ken Blanchard developed the situational leadership model in 1969 while working on Management of
Organizational Behavior. The situation theory proposes that leaders choose the best course of action based upon situational factors; different situations
require different leadership style.
Situational Leadership Styles
Hersey and Blanchard suggested that there are four primary leadership styles.
1. Telling (S1) – In this leadership style, the leader tells people what to do and how to do it.
2. Selling (S2) – This style involves more back-and -forth between leaders and followers. Leaders “sell” their ideas and message to get
group members to buy into the process.
3. Participating (S3) – In this approach, the leader offers less direction and allows members of the group to take a more active role in
coming up with ideas and making decisions.
4. Delegating (S4) – This style is characterized by a less involved, hands-off approach to leadership. Group members tend to make most of
the decisions and take most of the responsibility for what happens.

10. Contingency Theory of Leadership – Fred E. Fiedler, and Austrian-American psychologist, introduced the contingency theory of leadership. The theory
assumes that no single leadership style is appropriate for all situations, and that the best style is contingent on the context faced by the leader. Effective
leadership is dependent on the extent of fit between the leadership qualities, the leadership style and the specific situation faced by the leader.

Management is the art of work done through people with the satisfaction of the public, employer and the employees.
Concept of Management:
✓ Management is considered both art and Science.
✓ Management is an executive act.
✓ The main objective of the management is to apply the knowledge and analytical approaches developed by several other disciplines.
✓ Management only implements the politics laid down by the administrator.
✓ Management is the follower of the administration.
✓ Managing is forecasting and preparing

Importance of Management
✓ There is no enterprise which can survive without management. Without management the business will be all confusion, nobody will know what to
do.
✓ Management controls and guides the activities of the manpower for maximum utilization.

Compilation of Notes by Sir Joemar M. Zabala, RC, MSCJ, LPT

 ✓ It provides new ideas and vision.
✓ Managers provide stability to the company.
✓ Management helps to develop the personality.

Note:
Manager
• The noun “manager” comes from the verb “to manage”, which came to the UK around 1560.
• It came from Italian “maneggiare” which means “to handle” or to “to control a horse”.
• The Italian word came from the Latin noun “manus” or hand. The English word was also influenced by French “manѐge” or “horsemanship”.
• Is a professional who takes a leadership role in an organization and manages a team of employees.
• One that undertakes management activities
• Oversees of others to achieve objectives

Leadership vs Management
What is the major difference between leadership and management? While many of you may think that manager is also a leader so, these two
terms mean the same, but actually not. The terms “management” and “leadership” are often used interchangeably. Maybe there is some overlap between
the work that managers and leaders do, but these two terms have different meaning and they shouldn’t be used interchangeably. Both imply a unique set
of skills, characteristics and functions that share a few similarities. They also show some strong differences in some circumstances. For example, some
people lead without a managerial role, while some managers do not practice leadership.

Leadership Management
Focuses on people Focuses on things
Articulates a Vision Executes plans
Based on principles, trust and guidelines Based on policies, procedures and control
Trust and Develops Directs and Coordinates
Creates Change Manage to change
Uses influence Uses authority
Authority comes from personal relationships Authority stems position in the organization
Thinks strategically Determines long-term objectives and strategies
Delegates responsibility Acts decisively
Appropriate risk taking and innovation Decides how to use personnel and other resources
Set the Goal Follow it
Form the Culture Form the Culture
Inspire People Push Them to Their success
Peek into the future Take Action in the Present
Strategy is to be proactive on the other hand Strategy is to be reactive

The Overlapping Areas of Leadership and Management

• Communication of both leadership and management is important for an organization’s success.
• While leadership communication inspires people, management communication empowers people to do their best.
• Effective problem-solving and decision making is the responsibility of both leader’s and managers.
• They both play a crucial role in making a decision and solving problems.
• Like problem-solving and decision-making, leaders and the managers should work together collaboratively during the time of crisis. It will help the
organization to recover quickly.

Are the Leadership and the Management Same?

Basically, leadership and management are two whole different chapters of a book but is some organizations management and leadership are often
considered the same. These are two complementary qualities that are linked to each other.
• Leaders Set the Goal and managers plan, organize, and coordinate to execute the vision or goal.
• From the military point of view, a leader is a commander-in-chief while a manager is a field general.
• But if you want to be a good leader, you must have some managerial skills and a good manager must have the leadership skills.

Which Comes First Leadership or Management?

• Without a leader, there is no organization and if there is no organization, there is no need for a manager.
• So, the leaders and the managers are compliments to each other.

Which is Better Leader or Manager?

• Leaders transfer the company’s mission, goal and vision to the entire organization and managers are responsible for keeping employees aligned
with the core company goals and values.
• Without a leader, there is no vision in an organization and without a manager, the visions of the company cannot be fulfilled.
• Therefore, leaders and managers both are very important to run an organization.

Is a Manager a Leader?
• Of course, managers are the leaders of their subordinates.
• They have also the ability to lead a team. Without leadership quality, you can’t be a good manager.
• In some situations like decision-making, problem-solving and crisis management, managers also collaborate with the leaders.

Other Views on the Definition and Scope of Management

1. Management as a Process
• Management refers to a series of inter-related functions.
• Management creates, operates and directs purposive organization through systematic, coordinated and co-operated human efforts.
• Management as a process began with the sole purpose of attaining an objective.
The purpose are:
1. Rise clients’ satisfaction with the services the company provides
2. Develop personnel experience, abilities and capacity or
3. Accomplish a particular goal or goals.

According to George R. Terry, “Management is a distinct process consisting of planning, organizing, actuating and controlling, performed to
determine and accomplish stated objective by the use of human beings and other resources”. As a process, management consists of three aspects:
1. Management is a social process - Since human factor is most important among the other factors, therefore management is concerned with
developing relationship among people. It is the duty of management to make interaction between people - productive and useful for obtaining
organizational goals.
2. Management is an integrating process - Management undertakes the job of bringing together human physical and financial resources so as to
achieve organizational purpose. Therefore, is an important function to bring harmony between various factors.

Compilation of Notes by Sir Joemar M. Zabala, RC, MSCJ, LPT

 3. Management is a continuous process - It is a never-ending process. It is concerned with constantly identifying the problem and solving them by
taking adequate steps. It is an on-going process.

2. Management as an Activity
• Management is also an activity because a manager is one who accomplishes the objectives by directing the efforts of others.
• “Management is what a manager does” (Koontz).

Management as an activity includes:

1. Informational activities - In the functioning of business enterprise, the manager constantly has to receive and give information orally or in written.
A communication link has to be maintained with subordinates as well as superiors for effective functioning of an enterprise.
2. Decisional activities - Practically all types of managerial activities are based on one or the other types of decisions. Therefore, managers are
continuously involved in decisions of different kinds since the decision made by one manager becomes the basis of action to be taken by other
managers. (E.g. Sales Manager is deciding the media & content of advertising).
3. Inter-personal activities - Management involves achieving goals through people. Therefore, managers have to interact with superiors as well as
the sub-ordinates. They must maintain good relations with them. The inter-personal activities include with the sub-ordinates and taking care of the
problem. (E.g. Bonuses to be given to the sub-ordinates).

3. Management as a Discipline
• Management as a discipline refers to that branch of knowledge which is connected to study of principles & practices of basic administration. It
specifies certain code of conduct to be followed by the manager & also various methods for managing resources efficiently.

4. Management as a Group
• Management as a group refers to all those persons who perform the task of managing an enterprise. When we say that management of ABC & Co.
is good, we are referring to a group of people those who are managing.

Management as a group may be looked upon in 2 different ways:

1. All managers taken together (Lower-level Managers)
2. Only the top management - i.e. Chief Executive, Chairman, General Manager, Board of Directors etc.

Note:
The Levels of Management:
1. Top-Level Managers – These include the board of directors, president, vice-president, and chief executive officer (CEO). These managers are
responsible for controlling and overseeing the entire organization. They develop goals, strategic plans, accompany policies, and make decisions on the
direction of the business.
2. Middle-level Managers – these include general managers, branch managers, and department managers are all examples of middle-level managers.
They are accountable to the top management for their department’s function. Middle-level managers devote more time to organizational and directional
functions than top-level managers.
3. Low-level Managers - These include supervisors, section leads, and foremen are examples of low-level management titles. These managers focus
on controlling and directing.

Three Types of Managers

1. Patrimonial/Family Manager: Those who have become managers by virtue of their being owners or relatives of the owners of company.
2. Professional Managers: Those who have been appointed on account of their specialized knowledge and degree.
3. Political Managers/Civil Servants: Those who manage public sector undertakings.

5. Management as a Science
• Management is also a science, because everything used to classify a field as science is involved.
• Since for example, establishes the relation of cause and effect between variables.
• Science is characterized by following main features:
1. Universally acceptance principles - Scientific principles represents basic truth about a particular field of enquiry. These principles may be applied in
all situations, at all time & at all places. E.g. - Management also contains some fundamental principles which can be applied universally like the Principle
of Unity of Command i.e. one man, one boss. This principle is applicable to all type of organization - business or non-business.
2. Experimentation & Observation - Scientific principles are derived through scientific investigation & researching i.e. they are based on logic. E.g.
Management principles are also based on scientific enquiry & observation and not only on the opinion of Henry Fayol. They have been developed
through experiments & practical experiences of large no. of managers. E.g. it is observed that fair remuneration to personal helps in creating a satisfied
work force.
3. Cause & Effect Relationship - Principles of science lay down cause and effect relationship between various variables. E.g. The same is true for
management, therefore it also establishes cause and effect relationship. E.g. lack of parity (balance) between authority & responsibility will lead to
ineffectiveness. If you know the cause i.e. lack of balance, the effect can be ascertained easily i.e. in effectiveness. Similarly if workers are given
bonuses, fair wages they will work hard but when not treated in fair and just manner, reduces productivity of organization.
4. Test of Validity & Predictability - Validity of scientific principles can be tested at any time or any number of times i.e. they stand the test of time.
Each time these tests will give same result. Principles of management can also be tested for validity. E.g. principle of unity of command can be tested by
comparing two persons - one having single boss and one having 2 bosses. The performance of 1st person will be better than 2nd.

Management as an Art
• Art implies application of knowledge & skill to trying about desired results. An art may be defined as personalized application of general theoretical
principles for achieving best possible results. Art has the following characters -
1. Practical Knowledge: Every art requires practical knowledge therefore learning of theory is not sufficient. It is very important to know practical
application of theoretical principles. E.g. A manager can never be successful just by obtaining degree or diploma in management; he must have
also know how to apply various principles in real situations by functioning in capacity of manager.
2. Personal Skill: Although theoretical base may be same for every artist, but each one has his own style and approach towards his job. That is why
the level of success and quality of performance differs from one person to another. E.g. Every manager has his own way of managing things based
on his knowledge, experience and personality, that is why some managers are known as good managers whereas others as bad.
3. Creativity: Every artist has an element of creativity in line. That is why he aims at producing something that has never existed before which
requires combination of intelligence & imagination. Management is also creative in nature like any other art. It combines human and non-human
resources in useful way so as to achieve desired results. It tries to produce sweet music by combining chords in an efficient manner.
4. Perfection through practice: Practice makes a man perfect. Every artist becomes more and more proficient through constant practice. Similarly
managers learn through an art of trial and error initially but application of management principles over the years makes them perfect in the job of
managing.
5. Goal-Oriented: Every art is result oriented as it seeks to achieve concrete results. In the same manner, management is also directed towards
accomplishment of pre-determined goals. Managers use various resources like men, money, material, machinery & methods to promote growth of
an organization.

Management as a Profession
• Over a large few decades, factors such as growing size of business unit, separation of ownership from management, growing competition etc have
led to an increased demand for professionally qualified managers. The task of manager has been quite specialized.
• As a result of these developments the management has reached a stage where everything is to be managed professionally.
• A profession may be defined as an occupation that requires specialized knowledge and intensive academic preparations to which entry is
regulated by a representative body.

Compilation of Notes by Sir Joemar M. Zabala, RC, MSCJ, LPT

 The essentials of a profession are:
1. Specialized Knowledge - A profession must have a systematic body of knowledge that can be used for development of professionals. Every
professional must make deliberate efforts to acquire expertise in the principles and techniques. Similarly a manager must have devotion and
involvement to acquire expertise in the science of management.
2. Formal Education & Training - There are no. of institutes and universities to impart education & training for a profession. No one can practice a
profession without going through a prescribed course. Many institutes of management have been set up for imparting education and training. For
example, MBA may be preferred but not necessary.
3. Social Obligations - Profession is a source of livelihood but professionals are primarily motivated by the desire to serve the society. Their actions
are influenced by social norms and values. Similarly a manager is responsible not only to its owners but also to the society and therefore he is
expected to provide quality goods at reasonable prices to the society.
4. Code of Conduct - Members of a profession have to abide by a code of conduct which contains certain rules and regulations, norms of honesty,
integrity and special ethics. A code of conduct is enforced by a representative association to ensure self discipline among its members. Any
member violating the code of conduct can be punished and his membership can be withdrawn.
5. Representative Association - For the regulation of profession, existence of a representative body is a must.

Qualities of Manager
1. Educational Competence
2. intellectual quality
3. Leadership Ability
4. Training
5. Technical Knowledge and skills
6. Mental Maturity
7. Positive Attitude
8. Self-Confidence
9. Foresight

Management Skills:
o People management skills: managing people with emotional intelligence is called people management skills. It is one of the most important
management skills. If you can’t manage people, then you can’t manage a business.
o Communication skills: A manager is a person who inspires positive, incremental change by empowering their team members to work toward
common objectives, and the most powerful tool for doing so is communication. As a manager, you have to deal with various types of people, from
heads of the business to employees.
o Technical Skills: Technical skills are the much-required skills of a manager. These skills are developed through your work experience and during
formal education.
o Conceptual Skills: One of the most important management skills is the conceptual skill. It is the ability to analyze complex situations. The
managers, who are answerable for deciding what is good for the organization, relay on conceptual skills.
o Leadership Skill: Good managers are basically effective and inspirational leaders. Great leaders want input from all stakeholders and appreciate
the contribution of their team members. You can develop your leadership skills by leading some projects during your educational period.

The other important managerial skills are:

✓ Problem-solving
✓ Time management
✓ Directing skill
✓ Oversight
✓ Domain knowledge
✓ Diagnostic skill
✓ Analytical skill
✓ Decision-making skill

A brief historical review about the development of management concepts

• Historically, studies related to management have passed through three eras.
• The first era was before the industrial revolution, between 1820 and 1840, where management activities were restricted to the owners who had
rigorous control over all the resources. However, this primitive management practice contained some similarities with today’s management roles
such as coordinating, planning, and controlling.
• The second period started within the industrial revolution where the comprehensive theories and functions of management such as planning,
organizing, commanding, coordinating, and controlling appeared especially with Henri Fayol (1916).
• Afterwards, and once the industrial revolution era had ended, the second industrial revolution started.
• This new epoch is also known as the technological revolution as it was a stage of fast standardization and automation reaching the early 20th
century.
• Out of many researchers in this period, Professor Henry Mintzberg piloted a thorough experiential research about managers’ regular activities
through a large variety of organisations and positions.
• Mintzberg (1973) recommended managers to play a selection of ten roles divided into three main categories based on situational needs.

The different manager’s roles as per Mintzberg (1973):

• Mintzberg’s managerial theory is founded on the idea that managers are involved in ten roles, divided into three main clusters: interpersonal,
informational, and decisional. Furthermore, Henry Mintzberg defines the operating effort of managers in each role. The behaviours of those
managers are crucial components for their success. Of course, the ten roles are inspired by personal and situational considerations.

A) Interpersonal Roles of Manager: is all about interacting with people inside and outside the organization.
1. Figurehead role, where a manager plays officially the role of a professional representing his organization in social activities and events.
2. The second role is leadership. This role is related to people’s motivation and inspiration. As a leader, a manager must coach, support, and guide his/her
subordinates.
3. The last role requested from a manager in the interpersonal cluster is to be a liaison and to build contacts with all stakeholders. Managers should oversee
networking even beyond their organization boundary. In the Liaison role, the manager act as a mediator between the organization and the outsider.

B) Informational Roles of Manager - is like serving as a focal point for the exchange of information. It includes communication, giving, and receiving
information, both within and outside the organization. Information is required at every level in an organization to make decisions effective.
4. Monitor: managers should ask for information inside and outside the workplace. This will help them to evaluate their department from internal and external
viewpoints, discover related problems, and address them in due time.
5. Disseminator: managers must delegate more when it is appropriate and convey important information especially to their employees.
6. Spokesperson: as a manager one ought to transmit information outside the workplace taking the role of a brand ambassador.

C) Decisional Roles of Manager - involve choosing the most appropriate and best alternative out of the available ones so that the organization achieves its
objectives when the chosen alternative is put into action.
7. Entrepreneur: behaving as an entrepreneur, managers should encourage change and creativity by leading the implementation of new ideas.
8. Disturbance-handler: managers are responsible for avoiding any disruptions that can prevent achieving the needed outcomes.
9. Resource -allocator: managers need to assign and administer a variety of financial, technological, and human resources activities.
Compilation of Notes by Sir Joemar M. Zabala, RC, MSCJ, LPT
10. Negotiator: surely a manager is responsible to carry out important negotiations within his department and organization.

Fundamental Functions of Management:

• According to George & Jerry, “There are four fundamental functions of management i.e. planning, organizing, actuating and controlling”.
• According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to control”.
• Whereas Luther Gullick has given a keyword ’POSDCORB’ where P stands for Planning, O for Organizing, S for Staffing, D for Directing, Co
for Co-ordination, R for reporting & B for Budgeting.
• But the most widely accepted are functions of management given by KOONTZ and O’DONNEL i.e. Planning, Organizing, Staffing, Directing and
Controlling.

1. Planning
• It is the basic function of management. It deals with chalking out a future course of action & deciding in advance the most appropriate course of
actions for achievement of pre-determined goals.
• According to KOONTZ, “Planning is deciding in advance - what to do, when to do & how to do. It bridges the gap from where we are & where we
want to be”. A plan is a future course of actions. It is an exercise in problem solving & decision making. It is rightly said “Well plan is half done”.
1. Planning is goal-oriented.
a. Planning is made to achieve desired objective of business.
b. The goals established should general acceptance otherwise individual efforts & energies will go misguided and misdirected.
c. Planning identifies the action that would lead to desired goals quickly & economically.
d. It provides sense of direction to various activities. E.g. Maruti Udhyog is trying to capture once again Indian Car Market by launching
diesel models.
2. Planning is looking ahead.
a. Planning is done for future.
b. It requires peeping in future, analyzing it and predicting it.
c. Thus planning is based on forecasting.
d. A plan is a synthesis of forecast.
e. It is a mental predisposition for things to happen in future.
3. Planning is an intellectual process.
a. Planning is a mental exercise involving creative thinking, sound judgement and imagination.
b. It is not a mere guesswork but a rotational thinking.
c. A manager can prepare sound plans only if he has sound judgement, foresight and imagination.
d. Planning is always based on goals, facts and considered estimates.
4. Planning involves choice & decision making.
a. Planning essentially involves choice among various alternatives.
b. Therefore, if there is only one possible course of action, there is no need planning because there is no choice.
c. Thus, decision making is an integral part of planning.
d. A manager is surrounded by no. of alternatives. He has to pick the best depending upon requirements & resources of the enterprises.
5. Planning is the primary function of management / Primacy of Planning.
a. Planning lays foundation for other functions of management.
b. It serves as a guide for organizing, staffing, directing and controlling.
c. All the functions of management are performed within the framework of plans laid out.
d. Therefore planning is the basic or fundamental function of management.
6. Planning is a Continuous Process.
a. Planning is a never ending function due to the dynamic business environment.
b. Plans are also prepared for specific period f time and at the end of that period, plans are subjected to revaluation and review in the light
of new requirements and changing conditions.
c. Planning never comes into end till the enterprise exists issues, problems may keep cropping up and they have to be tackled by planning
effectively.
7. Planning is all Pervasive.
a. It is required at all levels of management and in all departments of enterprise.
b. Of course, the scope of planning may differ from one level to another.
c. The top level may be more concerned about planning the organization as a whole whereas the middle level may be more specific in
departmental plans and the lower level plans implementation of the same.
8. Planning is designed for efficiency.
a. Planning leads to accompishment of objectives at the minimum possible cost.
b. It avoids wastage of resources and ensures adequate and optimum utilization of resources.
c. A plan is worthless or useless if it does not value the cost incurred on it.
d. Therefore planning must lead to saving of time, effort and money.
e. Planning leads to proper utilization of men, money, materials, methods and machines.
9. Planning is Flexible.
a. Planning is done for the future.
b. Since future is unpredictable, planning must provide enough room to cope with the changes in customer’s demand, competition, govt.
policies etc.
c. Under changed circumstances, the original plan of action must be revised and updated to male it more practical.

2. Organizing
• It is the process of bringing together physical, financial and human resources and developing productive relationship amongst them for
achievement of organizational goals.
• According to Henry Fayol, “To organize a business is to provide it with everything useful or its functioning i.e. raw material, tools, capital and
personnel’s”. To organize a business involves determining & providing human and non-human resources to the organizational structure.
.
Principles of Organizing

1. Principle of Specialization - the whole work of a concern should be divided amongst the subordinates on the basis of qualifications, abilities and
skills. It is through division of work specialization can be achieved which results in effective organization.
2. Principle of Functional Definition - functions in a concern should be completely and clearly defined to the managers and subordinates. This can
be done by clearly defining the duties, responsibilities, authority and relationships of people towards each other. Clarifications in authority-
responsibility relationships helps in achieving co-ordination and thereby organization can take place effectively. Clarification in the authority-
responsibility relationship helps in efficient organization.
3. Principles of Span of Control/Supervision - span of control is a span of supervision which depicts the number of employees that can be handled
and controlled effectively by a single manager. According to this principle, a manager should be able to handle what number of employees under
him should be decided.There are two types of span of control:-
a. Wide span of control- It is one in which a manager can supervise and control effectively a large group of persons at one time.
According to this span, one manager can effectively and efficiently handle a large number of subordinates at one time.
b. Narrow span of control- According to this span, the work and authority is divided amongst many subordinates and a manager doesn't
supervises and control a very big group of people under him. The manager according to a narrow span supervises a selected number of
employees at one time.
4. Principle of Scalar Chain - Scalar chain is a chain of command or authority which flows from top to bottom. A scalar chain of command facilitates
work flow in an organization which helps in achievement of effective results. As the authority flows from top to bottom, it clarifies the authority
positions to managers at all level and that facilitates effective organization.

Compilation of Notes by Sir Joemar M. Zabala, RC, MSCJ, LPT

 5. Principle of Unity of Command - It implies one subordinate-one superior relationship. Every subordinate is answerable and accountable to one
boss at one time. Unity of command also helps in effective combination of resources, that is, physical, financial resources which helps in easy co-
ordination and, therefore, effective organization.

3. Staffing
• It is the function of manning the organization structure and keeping it manned.
• Staffing has assumed greater importance in the recent years due to advancement of technology, increase in size of business, complexity of human
behavior etc.
• The main purpose of staffing is to put right man on right job i.e. square pegs in square holes and round pegs in round holes.
• According to Kootz & O’Donell, “Managerial function of staffing involves manning the organization structure through proper and effective selection,
appraisal & development of personnel to fill the roles designed un the structure”.

Staffing Process - Steps involved in Staffing

• Manpower requirements- The very first step in staffing is to plan the manpower inventory required by a concern in order to match them with the
job requirements and demands. Therefore, it involves forecasting and determining the future manpower needs of the concern.
• Recruitment- Once the requirements are notified, the concern invites and solicits applications according to the invitations made to the desirable
candidates.
• Selection- This is the screening step of staffing in which the solicited applications are screened out and suitable candidates are appointed as per
the requirements.
• Orientation and Placement- Once screening takes place, the appointed candidates are made familiar to the work units and work environment
through the orientation programmes. placement takes place by putting right man on the right job.
• Training and Development- Training is a part of incentives given to the workers in order to develop and grow them within the concern. Training is
generally given according to the nature of activities and scope of expansion in it.
• Remuneration- It is a kind of compensation provided monetarily to the employees for their work performances. This is given according to the
nature of job- skilled or unskilled, physical or mental, etc. Remuneration forms an important monetary incentive for the employees.
• Performance Evaluation- In order to keep a track or record of the behaviour, attitudes as well as opinions of the workers towards their jobs. For
this regular assessment is done to evaluate and supervise different work units in a concern.
• Promotion and transfer- Promotion can refer to an employee's career advancement in which the worker is shifted from a higher job demanding
bigger responsibilities as well as shifting the workers and transferring them to different work units and branches of the same organization.

4. Directing
• It is that part of managerial function which actuates the organizational methods to work efficiently for achievement of organizational purposes.
• It is considered life-spark of the enterprise which sets it in motion the action of people because planning, organizing 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:

• 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
• Ensure that everything occurs in conformities with the standards.
• An efficient system of control helps to predict deviations before they actually occur.
• According to Theo Haimann, “Controlling is the process of checking whether or not proper progress is being made towards the objectives and goals
and acting if necessary, to correct any deviation”.
• According to Koontz & O’Donell “Controlling is the measurement & correction of performance activities of subordinates in order to make sure that
the enterprise objectives and plans desired to obtain them as being accomplished”.

Managing Organizational Resources

• Managing Organizational Resources is the ability to understand and effectively manage organizational resources (e.g., people, materials, assets,
budgets). This is demonstrated through measurement, planning and control of resources to maximize results. It requires an evaluation of qualitative
(e.g., client satisfaction) and quantitative (e.g., service costs) needs.

Management of three main resources

1. Human Resources - Human resource is a key resource in any organization. As such, the motivation of the employees in an organization is essential in
improving productivity hence results. Employee motivation can be achieved by giving good remuneration, medical allowances, and bonuses. It is
fundamentally established that employees embrace a company that caters to their well-being as people. A mutual and cordial relationship between the
employer and the employee translates into better performance.
2. Time Resources - Time and human resources are the most crucial resources in contemporary times. Time is an infinite resource. If not properly managed
in an organization, it can have a negative impact on both employer's and employee's productivity. Organizations should ensure that workers are well
equipped to manage their duties timely.
3. Financial Resources - An organization can also establish a proper plan to manage its financial resource. For example, budgets are established, funding
gaps identified and costs are tracked and documented. With this, the company is able to assign resources to the resilience activities and the rest can be
invested to improve the organization's revenue.

History of the 14 Principles of Management

• Henry Fayol is known as the father of modern management theory.
• He was an engineer at the Compagnie de Commentry-Fourchambault-Decazeville mining company and worked his way up to become a manager
during the peak of the Industrial Revolution in France.
• In 1916, he wrote the book, "Administration Industrielle et Générale,".
• Henri Fayol was one of the first people who highlighted the difference between technical and managerial skills.
• The Fayol theory is practised by the managers to organize and regulate the internal activities of an organization.
• He stressed the idea that “manager” is a profession in and of itself
• Pioneer the 14 principles of management to help managers understand how to effectively run an organization.

Henry Fayol’s 14 Principles of Management

1. Division of Work- Henri believed that segregating work in the workforce amongst the worker will enhance the quality of the product. Similarly, he also
concluded that the division of work improves the productivity, efficiency, accuracy and speed of the workers. This principle is appropriate for both the
managerial as well as a technical work level.

Compilation of Notes by Sir Joemar M. Zabala, RC, MSCJ, LPT

2. Authority and Responsibility- These are the two key aspects of management. Authority facilitates the management to work efficiently, and responsibility
makes them responsible for the work done under their guidance or leadership.
3. Discipline- Without discipline, nothing can be accomplished. It is the core value for any project or any management. Good performance and sensible
interrelation make the management job easy and comprehensive. Employees good behaviour also helps them smoothly build and progress in their
professional careers.
4. Unity of Command- This means an employee should have only one boss and follow his command. If an employee has to follow more than one boss,
there begins a conflict of interest and can create confusion.
5. Unity of Direction- Whoever is engaged in the same activity should have a unified goal. This means all the person working in a company should have one
goal and motive which will make the work easier and achieve the set goal easily.
6. Subordination of Individual Interest- This indicates a company should work unitedly towards the interest of a company rather than personal interest. Be
subordinate to the purposes of an organization. This refers to the whole chain of command in a company.
7. Remuneration- This plays an important role in motivating the workers of a company. Remuneration can be monetary or non-monetary. However, it should
be according to an individual’s efforts they have made.
8. Centralization- In any company, the management or any authority responsible for the decision-making process should be neutral. However, this depends
on the size of an organization. Henri Fayol stressed on the point that there should be a balance between the hierarchy and division of power.
9. Scalar Chain- Fayol on this principle highlights that the hierarchy steps should be from the top to the lowest. This is necessary so that every employee
knows their immediate senior also they should be able to contact any, if needed.
10. Order- A company should maintain a well-defined work order to have a favourable work culture. The positive atmosphere in the workplace will boost
more positive productivity.
11. Equity- All employees should be treated equally and respectfully. It’s the responsibility of a manager that no employees face discrimination.
12. Stability- An employee delivers the best if they feel secure in their job. It is the duty of the management to offer job security to their employees.
13. Initiative- The management should support and encourage the employees to take initiatives in an organization. It will help them to increase their interest
and make then worth.
14. Esprit de Corps- It is the responsibility of the management to motivate their employees and be supportive of each other regularly. Developing trust and
mutual understanding will lead to a positive outcome and work environment.

Compilation of Notes by Sir Joemar M. Zabala, RC, MSCJ, LPT