LESSON I

THE NATURE AND CONCEPT OF MANAGEMENT

DEFINITION AND CONCEPT OF MANAGEMENT

Management has always been attributed to the activities of an organization,
specifically its day-to-day operations. It consists of administrative job functions that
require critical thinking and decision making. It also entails responsibilities concerned
not only with the people, resources, and processes within the organization but also with
outside factors such as the environment where the organization operates.
Nature of Management
Management is a science as well as an art. It is a body of knowledge whose
ideas and principles have become basis of organizational frameworks employed by
many businesses and organizations. It is considered a science because it evolved from
a number of theories that involved extensive studies and experiments.
However, many management experts point out that management is not an exact
science like mathematics. Despite the accuracy of data from statistics, the use of
mathematical tools is only one aspect of management. A good manager must be able to
look at a situations and use creativity of imagination in coming up with solutions to
problems. It is an aspect that one can consider that management is an art.

Meaning and Importance of Management

 It is the process of planning, organizing, leading, and controlling the activities of

an organization effectively and efficiently to achieve its goals.
 Management also provides the means to maintain a firms competitive advantage.
It lays out the foundation of successful operations that lead to eff iciency and
profitability, and establishes the link between the development of strategies and
their implementation and control.
 The effective application of plans requires skilled manager who are able to
combine resources and capital executing strategies and sustaining the
operations of their organizations.

Efficiency and Effectiveness

Efficiency and effectiveness are closely related concepts that managers apply to
render excellent performance. A skillful balance between the two defines the
success and failure of a manager. Some people interchange the concepts of

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 efficiency and effectiveness, believing that they have the same meaning. However,
these two concepts are different.
Efficiency – is the ability to maximize output with minimum input. It is often
referred to as “doing things right”, and seeks to limit the wasted input which is costly
for a business.
Effectiveness – is the capacity to attain an intended objective or result. It is often
called as “doing the right thing.” The intention is to meet the desired goal regardless
of the amount of input required.

Factors Influencing Management

There are five factors that influence today’s business environment. Effective
managers should determine the extent that these factors affect their respective
business organizations and make plans to address the challenges they pose.
Globalization
It refers to the phenomenon of growing interconnectivity and
interdependent relations between nations. This growth has been greatly influenced
by advancements in technology, transportation, communication, and education as
well as the gradual deregulation of trade.
Technology
It is the main driving force of business. Advancement in this field have
immensely improved business trends. New technology have rendered business
functions and related tasks easier to accomplish, bringing about increased levels of
productivity.
Sustainability and Corporate Social Responsibility
Sustainability in business means that companies should plan and conduct
long-term business operations to ensure minimal negative impact on the social,
cultural, and economic aspects of their external environment or community.
Corporate Social Responsibility, meanwhile, is defined as the willingness of
companies to run their business operations in a sustainable and responsible
manner.
An example of sustainability in business is the implementation of cost-saving
mechanisms such as recycling, reduction of energy consumption in the workplace,
and the use and production of environmentally friendly products. Corporate social
responsibility, on the other hand, is expressed through social outreach programs,
support of significant causes, and other forms of philanthropic activities.
Psychology

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 Psychology can help managers foster closer relations and better
communication with employees. Improved communication, in turn, enables
managers to better assess their employees, determine their strengths and
weaknesses, and guide them toward personal and professional development.
Psychology also aids managers in gauging and analyzing customer satisfaction and
external business environment, enabling them to carry out decisions.
Ecosystems
Business ecosystem consists of a group of firms that provide related
products and services. The emergence of business ecosystems has resulted in
improvements and innovations in industries. A good example is the collaboration
between telecommunication firms, media, and technology to disseminate information
to the public.

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