CHAPTER 1

Nature and Concept of

Management
WHAT IS MANAGEMENT?
Management is a multifaceted discipline that encompasses the process of planning, organizing,
staffing, leading, and controlling an organization's resources to achieve specific goals. It is both
an art and a science, involving the coordination and integration of human, financial, physical,
and informational resources.
FUNCTIONS OF MANAGEMENT
Management is often defined through its core functions, which provide a comprehensive
framework for managing an organization's activities. These functions are typically categorized
into five key areas:
1. Planning
Planning involves setting objectives and determining the best course of action to achieve them.
This function is about forecasting future conditions, analyzing the environment, and making
decisions on what needs to be done, how it will be done, and who will do it. Planning is
foundational to all other management functions, as it provides the roadmap for achieving
organizational goals.
2. Organizing
Organizing is the process of systematically arranging tasks, people, and resources to achieve
organizational objectives. This function includes defining roles, responsibilities, and
relationships within the organization. It also involves the allocation of resources, such as capital,
human resources, and materials, to ensure that everything is in place to execute the plan
effectively.
3. Staffing
Staffing is concerned with recruiting, selecting, training, and developing the people necessary to
fill the roles within the organization. This function ensures that the organization has the right
people in the right positions, equipped with the skills and knowledge needed to perform their
tasks effectively.
4. Leading
Leading is the function of guiding and motivating employees to meet the organization's
objectives. It involves directing and influencing the behavior of team members, fostering
communication, resolving conflicts, and creating an environment where employees are motivated
to contribute to the organization's success.
5. Controlling
Controlling involves monitoring the organization's performance and making adjustments as
necessary to ensure that goals are being met. This function includes setting performance
standards, measuring actual performance, comparing it with the standards, and taking corrective
action if necessary. Controlling ensures that the organization remains on track to achieve its
objectives.

WHAT IS A MANAGER?
An individual engaged in management activities is called a manager. A manager is one of the
most important persons who influences the productivity and success of any business
organization. Managers supervise, sustain, uphold, and assume responsibility for the work of
others in his or her workgroup, team, department, or the organization, in general. Therefore, it is
safe to assume that organizational success depends upon managers who practice optimal
utilization of their human and material resources, and who encourage high levels of performance,
effectiveness, and efficiency among the individuals under their care.
ROLES OF A MANAGER

Managerial roles identified by Mintzberg

According to Henry Mintzberg, a professor at McGill University who researched about what real
managers do, the roles played by a manager can be categorized into three main areas:
interpersonal, informational, and decisional.
1. Interpersonal
 Figurehead
As head of a department or an organization, a manager is expected to carry out ceremonial and/or
symbolic duties. A manager represents the company both internally and externally in all matters
of formality.

 Leader
In this role, the manager motivates his/her workers. Managers communicate with them, guide
and support them to develop a positive work environment.

 Liaison
A manager serves as an intermediary and a linking pin between the high and low levels. In
addition, he develops and maintains an external network. As a networker, he has external
contacts and he brings the right parties together. This will ultimately result in a positive
contribution to the organization.

2. Informational
 Monitor
As a monitor, the manager gathers all internal and external information that is relevant to the
organization. He is also responsible for arranging, analyzing, and assessing this information so
that he can easily identify problems and opportunities and identify changes.

 Disseminator
As a disseminator, the manager transmits factual information to his subordinates and to other
people within the organization. Memorandums and other important information are well
disseminated from top-level up to the managerial lower levels and vice versa.

 Spokesperson
In this role, managers represent and speak for their organization, as he or she communicates and
transmit relevant information about their organization to external parties.
3. Decisional
 Entrepreneur
As an entrepreneur, the manager designs and initiates change and strategies to enhance
productivity and generate more income.

 Disturbance handler
In this role, the manager always responds to employees’ disputes, operational breakdowns, and
other issues whether internal or external and uses solutions to resolve the problems.

 Resource allocator
This role of the manager describes his control and the allocation of organizational resources
which will be put in use in all organization’s operations.

 Negotiator
As a negotiator, the manager participates in negotiations with other organizations and individuals
and he represents the interests of the organization.
SKILLS OF A MANAGER
Managerial skills are what a manager must possess. They may be classified into three:
conceptual skills, human skills, and technical skills.
1. Conceptual Skills
 Conceptual skills enable managers to think of possible solutions to complex problems.
Through their ability to visualize abstract situations, they develop a holistic view of their
organization and its relation to the wider external environment surrounding it. Top-level
managers must have these conceptual skills to be successful in their work. These skills allow
them to see how different parts of the business connect, analyze potential outcomes, and
make strategic decisions that guide the organization toward long-term success.
Managers with strong conceptual skills are able to anticipate challenges, identify
opportunities, and align their teams and resources toward a clear direction. This is especially
important when making decisions that will affect the entire organization in the future.

Examples of Conceptual Skills:

 A CEO sees that consumer behavior is shifting toward online shopping and decides to
invest in e-commerce before competitors do.
 A school principal observes rising student stress levels and introduces a school-wide
wellness program to improve learning outcomes in the long term.
 A business owner anticipates an economic downturn and restructures operations to reduce
risk while maintaining productivity.
 A hospital administrator plans to integrate digital health technologies after analyzing
trends in patient preferences and healthcare innovations.

2. Human Skills
Human skills enable managers at all levels to relate well with people. Communicating, leading,
inspiring, and motivating others become easier with the help of these skills. Since dealing with
people — both in the organization’s internal and external environment — is inevitable, managers
must continuously develop strong interpersonal abilities. These skills are crucial for creating a
positive work environment, resolving conflicts, building teamwork, and encouraging employee
engagement across all levels of the organization.

Examples of Human Skills:

 Resolving conflict between two employees through open dialogue.
 Motivating a team during a challenging project.
 Actively listening to employee feedback during meetings.
 Building strong professional relationships with clients and partners.

3. Technical Skills
Technical skills are also important for managers, allowing them to perform their tasks with
proficiency by using their specific knowledge or expertise. These skills are particularly essential
for lower-level managers, as they are the ones who directly oversee non-management workers
who use various techniques and tools to produce high-quality goods and services. Managers with
strong technical skills can effectively guide employees, ensure quality control, and maintain
productivity in operational tasks.
Examples of Technical Skills:
 Operating and troubleshooting manufacturing equipment.
 Using accounting software to prepare financial reports.
 Monitoring inventory using warehouse management systems.
 Designing marketing content using digital tools like Canva or Photoshop.

MANAGERIAL LEVELS
Organizations typically have three levels of management in which they are classified according
to their respective functions. These are top-level managers, middle-level managers, and frontline
or lower-level managers.

1. Top-level Managers
Top-level managers are the general or strategic managers who focus on long-term organizational
concerns and emphasize the organization’s stability, development, progress, and overall
efficiency and effectiveness. They are also concerned with the organization’s inter-relationships
with their external environment. Chief executive officers (CEOs), chief operating officers
(COOS), presidents, and vice presidents are examples of top-level managers in big corporations;
they have authority over all other human resources of their organization. Traditionally, top-level
executives set the company’s general direction by designing strategies and by controlling various
resources.
At present, however, they, too, must act as organizational guides who must elaborate on the
wider purpose of their organizational existence, so that their subordinates could identify and be
committed to its success in the three levels of management.
2. Middle-level Managers
Middle-level managers are the tactical managers in charge of the organization’s middle levels or
departments. They formulate specific objectives and activities based on the strategic or general
goals and objectives developed by top-level managers. Their traditional role is to act as go-
betweens between higher and lower levels of the organization; they announce and interpret top
management priorities to human resources in the middle hierarchical level of the company. It has
been observed that middle-level managers are more aware of the company’s problems compared
to managers in the higher level because of their closer contacts with customers, frontline
managers, and other subordinates. To be an ideal middle-level manager, one must be creative so
that they could provide sound ideas regarding operational skills as well as problem-solving skills
that will help keep the organization afloat.
3. Frontline or Lower-level Managers
Lower-level managers are also known as operational managers and are responsible for
supervising the organization’s day-to-day activities; they are the bridges between management
and non-management employees.
Traditionally, they are controlled and instructed by top and middle-level managers to follow their
orders in support of the organization’s major strategy. Lately, however, their role has been
expanded in some large companies, as they are now encouraged to be more creative and intuitive
in the exercise of their functions, so that they, too, could contribute to their company’s progress.
MANAGEMENT STYLES
Management styles can vary significantly depending on the organization's culture, the nature of
the work, and the personalities of the managers and employees. The three most commonly
recognized types of management are:
1. Autocratic Management:
In an autocratic management style, the manager makes decisions unilaterally, with little or no
input from team members. This hands-on approach is characterized by a high degree of control,
where the manager dictates tasks, methods, and processes. The primary advantage of this style is
the speed with which decisions can be made. Because the manager does not need to consult
others, decisions can be implemented quickly, which is particularly beneficial in crisis situations
or when time is of the essence. Additionally, the clear direction provided by the manager reduces
ambiguity for employees, as they know exactly what is expected of them.
However, the autocratic style can have significant drawbacks. The lack of employee involvement
often leads to low morale, as team members may feel undervalued and disempowered. This can
result in high turnover rates and a lack of loyalty to the organization. Furthermore, the absence of
diverse perspectives in decision-making can stifle creativity and innovation, leading to solutions
that may not be as effective as those developed through a more collaborative process. Lastly,
employees under autocratic management may become overly dependent on the manager for
direction, reducing their initiative and problem-solving abilities.
2. Democratic Management:
Democratic management, also known as participative management, encourages participation and
input from team members. The manager seeks the opinions and suggestions of employees before
making decisions, fostering a collaborative environment. This style has several advantages, the
most notable being increased employee satisfaction. When employees feel that their opinions are
valued and respected, they are more likely to be engaged and motivated in their work. This
involvement also fosters a sense of ownership and commitment to the outcomes, as employees
feel directly responsible for the success of the decisions made. Additionally, the democratic style
encourages creativity and innovation, as team members contribute diverse ideas and
perspectives, leading to more innovative solutions.
However, the democratic approach also has its challenges. The process of consulting with team
members can slow down decision-making, which may be detrimental in fast-paced environments
where quick action is required. Furthermore, differences in opinion among team members can
lead to conflicts, which need to be managed carefully to avoid disruption. Reaching a consensus
can be particularly challenging in large teams or when opinions are deeply divided, potentially
leading to delays in implementation.
3. Laissez-Faire Management:
The laissez-faire management style is characterized by a hands-off approach, where the manager
allows team members to make decisions and solve problems on their own. The manager provides
minimal direction and only intervenes when necessary. One of the main benefits of this style is
the empowerment it gives to employees. With the freedom to take ownership of their work,
employees often feel more motivated and are more likely to take personal accountability for their
tasks. This autonomy can lead to innovative ideas and solutions, as individuals have the space to
experiment and explore new approaches without the constraints of rigid oversight. Additionally,
laissez-faire management can help develop leadership skills within the team, as employees are
encouraged to take initiative and make decisions independently.
However, this style is not without its drawbacks. Without sufficient guidance, employees may
struggle to understand their roles and responsibilities, leading to confusion and inefficiency. The
lack of oversight can also result in inconsistent performance across the team, as different
members may interpret tasks and goals differently. Moreover, in the absence of clear
expectations and controls, accountability may diminish, making it harder to track progress and
measure success.

MANAGEMENT THEORIES
Management theories have evolved significantly over time, offering various strategies for
improving organizational efficiency, employee satisfaction, and overall productivity.
Understanding these theories is crucial for modern managers as they provide insights into
effective management practices and help navigate the complexities of running an organization.
This discussion covers five prominent management theories, highlighting their core principles
and real-world applications in contemporary businesses.
1. Scientific Management Theory
Scientific Management Theory, developed by Frederick W. Taylor in the early 1900s, focuses on
enhancing work efficiency through systematic analysis. Taylor’s theory introduced a scientific
approach to management, emphasizing the importance of studying work tasks to determine the
most efficient methods. Key principles include finding the best way to perform each task,
standardizing procedures across the workforce, specializing tasks based on individual skills, and
measuring time to assess and improve efficiency. This methodical approach was aimed at
increasing productivity and consistency.
2. Fordism
Fordism, pioneered by Henry Ford in the early 1900s, revolutionized manufacturing with the
introduction of mass production techniques and assembly lines. Ford’s approach aimed to
produce goods more efficiently and cost-effectively by dividing the production process into
repetitive tasks performed by specialized workers. This system not only streamlined production
but also lowered costs through standardization of products and economies of scale. Fordism is
exemplified by Toyota Motor Philippines, which utilizes assembly lines to manufacture vehicles.
By breaking down the car production process into specific tasks and standardizing these tasks,
Toyota achieves high production efficiency and maintains consistent quality. This method is
essential for meeting high demand and keeping production costs in check.
3. Henri Fayol's Theory of Management
Henri Fayol's Theory of Management, articulated in the early 1900s, outlines fundamental
principles for effective management. Fayol's theory emphasizes the importance of planning,
organizing, leading, and controlling within an organization. Planning involves setting goals and
devising strategies to achieve them, while organizing entails arranging resources and tasks
efficiently. Leading focuses on motivating and guiding employees, and controlling involves
monitoring performance and making necessary adjustments. Fayol also introduced the principle
of unity of command, which asserts that each employee should report to only one supervisor to
prevent confusion.
4. The Hawthorne Studies
The Hawthorne Studies, conducted in the late 1920s by Elton Mayo and colleagues, revealed the
significant impact of social factors on worker productivity. The studies demonstrated that
employees' productivity improved when they felt noticed and valued, highlighting the
importance of social interaction and attention in the workplace. Key findings include the positive
influence of social interactions on motivation and performance, as well as the role of supportive
group dynamics in enhancing work output.
5. Theory X and Theory Y
Theory X and Theory Y, proposed by Douglas McGregor in the 1960s, presents two contrasting
views on managing people. Theory X assumes that employees are inherently lazy and require
close supervision to be productive, while Theory Y suggests that employees are motivated and
capable of working independently if given the opportunity.

Understanding the nature and concept of management is essential for any leader aiming to
drive organizational success. From mastering fundamental functions and styles to applying
appropriate theories and cultivating key skills, effective management plays a pivotal role in
achieving organizational goals. The modern manager must not only control processes but also
inspire people, adapt to change, and think strategically in a fast-paced, competitive environment.