CHAPTER 1: UNDERSTANDING MANAGER’S
JOB
• Learning Outcomes
o Define management, describe the kinds of
managers found in organizations, identify
and explain the four basic management
functions, describe the fundamental
management skills, and comment on
management as a science and art.
o Justify the importance of history and theory
to managers, and explain the evolution of
management thought through the classical,
behavioral, and quantitative perspectives.
o Identify and discuss key contemporary
management perspectives represented by the
systems and contingency perspectives, and
identify the major challenges and
opportunities faced by managers today
MANAGEMENT ACTIONS
Reed Hastings Doesn’t Like Standing Still
Don’t be afraid to change the model.
— Netflix CEO Reed Hastings
INTRODUCTION TO MANAGEMENT
Organization
- A group of people working together in a
structured and coordinated fashion to achieve
a set of goals
~ Without an organization, there is no need for a
manager.
Management
- A set of activities (including planning and
decision making, organizing, leading, and
controlling) directed at an organization’s
resources (human, financial, physical, and
information), with the aim of achieving
organizational goals in an efficient and
effective manner
What is a manager?
- Someone whose primary responsibility is to
carry out the management process.
EFFECTIVE AND EFFICIENCY
Efficient
- Using resources wisely in a cost-effective
way
~ outcomes over costs
Effective
- Making the right decisions and successfully
implementing them
~ refers to the process, on how you make
decisions and strategize procedures
~ successful organizations are both efficient and
effective
MANAGEMENT PROCESS
BASIC MANAGEMENT FUNCTIONS
• Planning and Decision Making
o help managers maintain their effectiveness
by serving as guides for their future
activities
o The organization’s goals and plans clearly
help managers know how to allocate their
time and resources.
Planning - setting organization’s goals and
deciding how best to achieve them
Decision making - part of the planning
process, involves selecting a course of action
from a set of alternatives
• Organizing
o involves determining how activities and
resources are to be grouped
• Leading
o some people consider the most important
and the most challenging of all managerial
activities
o set of processes used to get members of the
organization to work together to further the
interest of the organization
 • Controlling
o monitoring the organization’s progress
toward its goals to ensure that it is
performing in such a way as to arrive at its
“destination” at the appointed time
KINDS OF MANAGERS
LEVELS OF MANAGEMENT
KINDS OF MANAGERS BY AREA
• Top Managers
o make up the relatively small group of
executives who manage the overall
organization
o include president, vice president, and CEO
o create the organization’s goals, overall
strategy, and operating policies
o also officially represent the organization to
the external environment by meeting with
government officials, executives of other
organizations
o job is likely to be complex and varied
o In the management process, they are
assigned in the planning and decision-
making.
• Middle Managers
o largest group of managers in most
organizations
o common titles include plant manager,
operations manager, and division head
o primarily responsible for implementing the
policies and plans developed by top
managers and for supervising and
coordinating the activities of lower-level
managers
o In the management process, they are
assigned in organizing up to leading.
• First-line Managers
o supervise and coordinate the activities of
operating employees
o common titles include supervisor,
coordinator, and office manager
o often the first held by employees who enter
management from the ranks of operating
personnel.
o typically spend a large proportion of their
time supervising the work of the
subordinates
o In the management process, they are
assigned in the controlling.
• Marketing Managers
o getting consumers and clients to buy the
organization’s products or services
o include new product development,
promotion, and distribution
• Financial Managers
o deal primarily with an organization’s
financial resources
o responsible in accounting, cash
management, and investments
o in banking and insurance business, they are
found in large numbers
• Operations Managers
o concerned with creating and managing the
systems that create an organization’s
products and services
o responsible in production control, inventory
control, quality control, plant layout, and site
selection
• Human Resources Managers
o responsible for hiring and developing
employees
o involved in human resource planning,
recruiting and selecting employees, training
and development, designing compensation
 and benefit systems, formulating
performance appraisal systems, and
discharging low-performing and problem
employees
• Administrative Managers
o or general managers
o not associated with any particular
management specialty
o best example is a hospital or clinic
administrator
o tend to be generalists; have some basic
familiarity with all functional areas of
management rather than specialized training
in any one area
o ensure that the processes of finance,
marketing, operations are leveled with the
goals of the organization
o administrator or secretaries or special
assistants to the different managers
• Specialist Managers
o Public relations manager - deal with the
public and media for firms to protect and
enhance the image of their organizations
o R&D manager - coordinate the activities of
scientists and engineers working on
scientific projects in organizations to
provide specialized expert advice to
operating managers
o specialized managers coordinate
international operations in organizations like
Walmart and Halliburton
o number, nature, and importance of these
vary tremendously from one org to another
o with consultancy capability
o serve as consultants to top management
FUNDAMENTAL MANAGEMENT SKILLS
• Technical skills
o The skills necessary to accomplish or
understand the specific kind of work done in
an organization.
o especially important for first-line managers
as they spend much of their time training
their subordinates and answering questions
about work-related problems
o operations manager
• Interpersonal skills
o The ability to communicate with,
understand, and motivate both individuals
and groups
o Human resources manager, middle
managers
• Conceptual skills
o The manager’s ability to think in the
abstract, as this allows them to think
strategically, to see the “big picture”, and to
make broad-based decisions that serve the
overall organization
o top management
• Diagnostic skills
o The manager’s ability to visualize the most
appropriate response to a situation
o specialist managers
• Communication skills
o The manager’s abilities both to effectively
convey ideas and information to others and
to effectively receive ideas and information
from others
o administrators or administrative managers
• Decision-making skills
o The manager’s ability to correctly recognize
and define problems and opportunities and
to then select an appropriate course of action
to solve problems and capitalize on
opportunities
o enable a manager to transmit ideas to
subordinates so that they know what is
expected, to coordinate work with peers and
colleagues so that they work well together,
and to keep higher-level managers informed
about what is going on
o top managers, and middle managers when
they see data from first-line managers
• Time management skills
o The manager’s ability to prioritize work, to
work efficiently, and to delegate
appropriately
o first-line managers regardless of what unit
they are supervising
THE SCIENCE AND THE ART OF
MANAGEMENT
Is management a science or an art?
Effective management is a blend of both science
and art.
The Science of Management
Many management problems and issues can be
approached in ways that are rational, logical,
objective, and systematic. Managers can gather data,
facts, and objective information. They can use
quantitative models and decision-making
techniques to arrive at “correct” decisions. And they
need to take such a scientific approach to solving
problems whenever possible, especially when they
are dealing with relatively routine and
straightforward issues.
• Technical, diagnostic, and decision-making
skills are especially important when
approaching a management task or problem
from a scientific perspective.
The Art of Management
Even though managers may try to be scientific as
often as possible, they must frequently make
decisions and solve problems on the basis of
intuition, experience, instinct, and personal insights.
Relying heavily on conceptual, communication,
interpersonal, and time management skills, for
example, a manager may have to decide among
multiple courses of action that look equally
attractive. And even “objective facts” may prove to
be wrong.
• Thus, managers must blend an element of
intuition and personal insight with hard data
and objective facts.
~ management becomes an art when they have to
evaluate culture, understand people, staff, the values
of consumers, the preferences of consumers
Charles Babbage (1792–1871)
- Focused on creating production efficiencies
through division of labor, and application of
mathematics to management problems.
The Classical Management Perspectives
Scientific Management
- Concerned with improving the performance
of individual workers.
~ all about production; it is how production of
good or services in the organization would be
enhanced, improved, produced, and mass
production
Earliest advocates of scientific management
Frederick W. Taylor (1856-1915)
Frank Gilbreth (1868-1924)
Lillian Gilbreth (1878-1972)
• Steps
1. Develop a science for each element of the
job to replace old rule-of-thumb methods
2. Scientifically select employees and then
train them to do the job as described in step
1
3. Supervise employees to make sure they
follow the prescribed methods for
performing their jobs
4. Continue to plan the work, but use workers
to get the work done

EVOLUTION OF MANAGEMENT ~ Taylorism - studied and promulgated mass

production through specialization
The Importance of Theory and History
Theory - is simply a conceptual framework for
organizing knowledge and providing a blueprint for Administrative Management
action. Although some theories seem abstract and - focuses on managing the total organization.
irrelevant, others appear very simple and practical.
Management theories, which are used to build Primary contributors to administrative
organizations and guide them toward their goals, are management:
grounded in reality. Henri Fayol (1841-1925) - quality control
History - Awareness and understanding of important Lyndall Urwick (1891-1983)
historical developments are also important to
contemporary managers. Understanding the Max Weber (1864-1920) - top to bottom
historical context of management provides a sense of organization
heritage and can help managers avoid the mistakes of
others.
The Behavior Management Perspective
• Emphasizes individual attitudes and behaviors
Early Management Pioneers
and group processes.
Robert Owen (1771–1858)
~ focus on the employees
- Recognized the importance of human
Contributors to behavior management
resources and the welfare of workers.
perspective
Hugo Munsterberg (1863-1916)
Mary Parker Follett (1868-1933)
The Hawthorne Studies
Elton Mayo and associates
~ Managers who tend to focus on the well-being of
their employees will eventually produce more.
Managers who tend to focus on the production alone
without consideration on employees, their employees
will produce less.
The Human Relations Movement
• Argued that workers respond primarily to the
social context of the workplace.
Two writers who help advance the human
relations movement
Abraham Maslow (1908-1970) Hierarchy of Needs
Douglas McGregor (1906-1964) Theory X and
Theory Y
Theory X - pessimistic and negative view of
workers consistent with the views of
scientific management
Theory Y - A positive view of workers; it
represents the assumptions that human
relations advocates make
Contemporary Behavioral Science in Management
• Many of the human relationists’ assertions
were simplistic and provided inadequate
descriptions of work behavior.
Organizational Behavior - Current behavioral
perspectives on management acknowledge that
human behavior in organizations is much more
complex than the human relationists realized.
The Behavioral Management Perspective Today
• The primary contributions of this approach
relate to how it has changed managerial
thinking. Managers are now more likely to
recognize the importance of behavioral
processes and to view employees as valuable
resources instead of mere tools.
The Quantitative Management Perspective
• concerned with applying quantitative
techniques to management
Quantitative management perspective
• focuses on decision making, cost effectiveness,
mathematical models and the use of computers
Two branches of quantitative approach
1. Management Science - focuses specifically
on the development of mathematical models.
2. Operations Management - concerned with
helping the organization more efficiently
produce its products or services.
The Quantitative Management Perspective Today
• Provided managers with an abundance of
decision-making tools and techniques and has
increased understanding of overall
organizational processes
Contemporary Management Perspective
The System Perspective
- an interrelated set of elements functioning as
a whole
Concept
Open systems - interacts with its environment Closed
systems - does not interact with its environment
Subsystem - a system within another system
Synergy - Two or more subsystems working together
to produce more than the total of what they might
produce working alone
Entropy - A normal process leading to system decline
Universal perspective
- an attempt to identify the one best way to do
something.
~ classical, behavioral, and quantitative
approaches
Contingency perspective
- suggests that appropriate managerial
behavior in a given situation depends on or is
contingent on, unique elements in a given
situation.
~ suggests that universal theories cannot be
applied to organizations because each
organization is unique
CONTEMPORARY MANAGEMENT ISSUES
AND CHALLENGES
• Globalization of product and service markets
• An increasingly diverse and globalized
workforce
• Increased emphasis on ethics and social
responsibility
• The use of quality as the basis for competition
• The shift to a predominately service-based
economy
• Meeting the challenges of a recovering
economy
• Creating new organizational structures to
provide challenging, motivating, and flexible
work environments
• The effects of new information technology on
how work is done in organization
CHAPTER 2: THE ENVIRONMENT OF
ORGANIZATIONS AND MANAGERS
THE ORGANIZATION’S ENVIRONMENT
External environment
- Everything outside an organization’s
boundaries that might affect it
• General environment - The set of broad
dimensions and forces in an organization’s
surroundings that determines its overall context
• Task environment - Specific organizations or
groups that affect the organization
Internal environment
- The conditions and forces within an
organization
~ immediate environment or surroundings
THE EXTERNAL ENVIRONMENT
The General Environment
- The set of broad dimensions and forces in an
organization’s surroundings that determines
its overall context
Economic dimension
- The overall health and vitality of the
economic system in which the
organization operates
Technological dimension
- The methods available for converting
resources into products or services
Political–legal dimension
- The government regulation of business
and the relationship between business and
government
The Task Environment
- Specific organizations or groups that affect
the organization
Competitor
- An organization that competes with other
organizations for resources
Customer
- Whoever pays money to acquire an
organization’s products or services ~
customers are king
Supplier
- An organization that provides resources
for other organizations
Regulator
- A body that has the potential to control,
legislate, or otherwise influence the
organization’s policies and practices
Regulatory agency
- An agency created by the government to
regulate business activities ~ DTI, BIR
(paying of taxes), and permits and
licenses from the mayor’s office, etc.
Interest group
- A group organized by its members to
attempt to influence organizations
~ ex. Halal
Strategic partners (also called strategic ally)
- An organization working together with
one or more other organizations in a joint
venture or similar arrangement
THE INTERNAL ENVIRONMENT
The Internal Environment
- that consists of their owners, board of
directors, employees, and physical work
environment.
Owners
- Whoever can claim property rights to an
organization
Board of Directors
- Governing body that is elected by a
corporation’s stockholders and charged
with overseeing the general management
of the firm to ensure that it is being run in
a way that best serves the stockholders’
interests
Employees
- Are also a major element of its internal
environment. Of particular interest to
managers today is the changing nature of
the workforce, which is becoming
increasingly more diverse in terms of
gender, ethnicity, age, and other
dimensions
~ talents of the organization; workforce
Physical Work Environment
- A final part of the internal environment is
the organization’s actual physical
environment and the work that people do
THE ETHICAL AND SOCIAL ENVIRONMENT
OF MANAGEMENT
Individual Ethics in Organizations
Ethics
- An individual’s personal beliefs about
whether a behavior, action, or decision is
right or wrong
• Ethical behavior - that conforms to generally
accepted social norms
• Unethical behavior - that does not conform to MANAGING SOCIAL RESPONSIBILITY
generally accepted social norms Formal Organizational Dimensions
• Managerial ethics - Standards of behavior that • Legal compliance
guide individual managers in their work - The extent to which an organization complies
• Codes of Ethics - A formal, written statement with local, state, federal, and international
of the values and ethical standards that guide a laws
firm’s action • Ethical compliance
- The extent to which an organization and its
members follow basic ethical standards of
behavior
EMERGING ETHICAL ISSUES
• Philanthropic giving
Ethical Issues - Awarding funds or gifts to charities or other
worthy causes
Sarbanes–Oxley Act of 2002
Informal Organizational Dimensions
A law that requires CEOs and CFOs to vouch
personally for the truthfulness and fairness of their • Whistle-blowing
firms’ financial disclosures and imposes tough new - The disclosure, by an employee, of illegal or
measures to deter and punish corporate and unethical conduct on the part of others within
accounting fraud and corruption the organization
Corporate Governance
A related area of emerging concern is ethical THE INTERNATIONAL ENVIRONMENT OF
issues in corporate governance. The board of ORGANIZATIONS
directors of a public corporation is expected to ensure
~ external in context
that the business is being properly managed and that
the decisions made by its senior management are in ~ globalized corporations or multinational
the best interests of shareholders and other corporations
stakeholders.
Ethics and Information Technology
A final set of issues that has emerged in
recent times involves information technology.
Among the specific focal points in this area are
individual rights to privacy and individuals’ potential
abuse of information technology.

SOCIAL RESPONSIBILITY IN
ORGANIZATIONS
Social Responsibility
The set of obligations that an organization
has to protect and enhance the societal context in
which it functions
Exporting
Arguments for/against Social Responsibility
- Making a product in the firm’s domestic
marketplace and selling it in another country
Importing
- Bringing a good, service, or capital into the
home country from abroad
Licensing
- An arrangement whereby one company
allows another company to use its brand
name, trademark, technology, patent,
copyright, or other assets in exchange for a
royalty based on sales
LEVELS OF INTERNATIONAL BUSINESS
ACTIVITY
Strategic alliance
- A cooperative arrangement between two or
more firms for mutual gain
Joint venture
- A special type of strategic alliance in which
the partners share in the ownership of an
operation on an equity basis
Direct investment
- When a firm builds or purchases operating
facilities or subsidiaries in a different country
from the one where it has its headquarters
THE CONTEXT OF INTERNATIONAL
BUSINESS
The Cultural Environment
One significant contextual challenge for the
international manager is the cultural environment
and how it affects business.
A country’s culture includes all the values, symbols,
beliefs, and language that guide behavior. Cultural
values and beliefs are often unspoken; they may even
be taken for granted by those who live in a particular
country.
Controls on International Trade
• Tariff
- A tax collected on goods shipped across
national boundaries
• Quota
- A limit on the number or value of goods that
can be traded
• Export restraint agreements
- Accords reached by governments in which
countries voluntarily limit the volume or
value of goods they export to or import from
one another
Economic Community
- A set of countries that agree to markedly
reduce or eliminate trade barriers among
member nations (a formalized market
system)
European Union (EU) - The first and most
important international market system
North American Free Trade Agreement
(NAFTA) - An agreement among the United States,
Canada, and Mexico to promote trade with one
another
The Role of the GATT and WTO
General Agreement on Tariffs and Trade (GATT)
- A trade agreement intended to promote
international trade by reducing trade barriers and
making it easier for all nations to compete in
international markets
World Trade Organization (WTO) - An
organization, which currently includes 140 member
nations and 32 observer countries, that requires
members to open their markets to international trade
and to follow WTO rules
THE ORGANIZATION’S CULTURE
Organizational Culture
- The set of values, beliefs, behaviors, customs,
and attitudes that helps the organization’s
members understand what it stands for, how
it does things, and what it considers important
The Importance of Organization Culture
• Culture determines the overall “feel” of the
organization, although it may vary across
different segments of the organization.
• Culture is a powerful force that can shape the
organization’s overall effectiveness and long-
term success
DETERMINANTS OF ORGANIZATION
CULTURE
• Organization’s founder (personal values and
beliefs).
• Symbols, stories, heroes, slogans, and
ceremonies that embody and personify the
spirit of the organization.
• Corporate success that strengthens the culture.
• Shared experiences that bond organizational
members together.
MANAGING ORGANIZATION CULTURE
• Understand the current culture to understand
whether to maintain or change it.
• Articulate the culture through slogans,
ceremonies, and shared experiences.
 • Reward and promote people whose behaviors
are consistent with desired cultural values

CHANGING ORGANIZATION CULTURE

• Develop a clear idea of what kind of culture
you want to create.
• Bring in outsiders to important managerial
positions.
• Adopt new slogans, stories, ceremonies, and
purposely break with tradition.
CHAPTER 4: MANAGING DECISION MAKING
THE NATURE OF DECISION-MAKING
Decision making - The act of choosing one
alternative from among a set of alternatives
Decision-making process - Recognizing and
defining the nature of a decision situation,
identifying alternatives, choosing the “best”
(effective) alternative, and putting it into practice
~ when you are a manager of an org, you favor your
decisions in accordance to what is the best for the
organization?
~ managers make decisions about both problems and
opportunities.
TYPES OF DECISION-MAKING
Programmed decision
- A decision that is relatively structured or
recurs with some frequency (or both)
~ already know
~ ex. Paying a tax is a programmed decision.
Non-programmed decision
- A decision that is relatively unstructured and
occurs much less often than a programmed-
decision
- Intuition and experience are major factors
~ decisions you make as the problems come and
they are unknown.
DECISION-MAKING CONDITIONS
Decision Making Under Certainty:
• State of certainty
- A condition in which the decision maker
knows with reasonable certainty what the
alternatives are and what conditions are
associated with each alternative
Decision Making Under Risk:
• State of risk
- A condition in which the availability of each
alternative and its potential payoffs and costs
are all associated with probability estimates
Decision Making Under Uncertainty:
• State of uncertainty
- A condition in which the decision maker does
not know all the alternatives, the risks
associated with each, or the likely
consequences of each alternative
- Most of the major decision making in
contemporary organizations
~ everything else is not known
RATIONAL PERSEPECTIVE ON DECISION
MAKING
The Classical Model of Decision Making:
A prescriptive approach to decision making that tells
managers how they should make decisions; it
assumes that managers are logical and rational and
that their decisions will be in the organization’s best
interests.
Classical model views the decision-making
process:
1. Decision makers have complete information
about the decision situation and possible
alternatives.
2. They can effectively eliminate uncertainty to
achieve a decision condition of certainty.
3. They evaluate all aspects of the decision
situation logically and rationally.
As we see later, these conditions rarely, if ever,
actually exist
 POLITICAL FORCES IN DECISION MAKING
Coalition
An informal alliance of individuals or groups formed
to achieve a common goal
~ the impact can either be positive or negative

INTUITION AND ESCALATION OF

COMMITMENT
Intuition
An innate belief about something, without conscious
consideration
~ Managers decide to do something because it “feels
right” or they have a “hunch”
Escalation of commitment
When a decision maker stays with a decision even
when it appears to be wrong

Risk propensity - The extent to which a decision

maker is willing to gamble when making a decision

ETHICS AND DECISION MAKING

Managerial Ethics
Individual ethics:
EVIDENCE-BASED MANAGEMENT
(personal beliefs about right and wrong behavior)
- A commitment to finding and using the best combine with the organization’s ethics to create
theory and data available at the time to make managerial ethics.
decision.
Components of managerial ethics:
➢ Relationships of the firm to employees
BEHAVIORAL ASPECTS OF DECISION ➢ Employees to the firm
MAKING ➢ The firm to other economic agents
Administrative model
A decision-making model that argues that decision GROUP AND TEAM DECISION MAKING IN
makers (1) use incomplete and imperfect ORGANIZATIONS
information, (2) are constrained by bounded
Forms of Groups and Team Decision Making
rationality, and (3) tend to “satisfice” when making
decisions Interacting group or team
Bounded rationality A decision-making group or team in which members
openly discuss, argue about, and agree on the best
A concept suggesting that decision makers are
alternative
limited by their values and unconscious reflexes,
skills, and habits Delphi group
Satisficing A form of group decision making in which a group
arrives at a consensus of expert opinion
The tendency to search for alternatives only until one
is found that meets some minimum standard of Nominal group
sufficiency
A structured technique used to generate creative and
innovative alternatives or ideas
DISADVANTAGE OF GROUP AND TEAM
DEICSION MAKING
Groupthink
A situation that occurs when a group or team’s desire
for consensus and cohesiveness overwhelms its
desire to reach the best possible decision