All Rights Reserved

CHAPTER SIX

Introduction to Management

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 2
 LEARNING OUTCOMES

In this chapter, you will learn to:

Define what an organization is.
Describe managers and the three managerial levels in
organizations.
Describe management as a process.
Explain communication as an effective tool in
organizations.
Explain the differences between efficiency and
effectiveness, and their importance for organizational
performance.
BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved
Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 3
 LEARNING OUTCOMES (cont.)

Describe the skills needed by managers and how they

differ according to managerial levels.
Explain the roles of managers in organizations.
Describe the five types of organizational structures.
Explain four main theories of motivation.

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 4
 ORGANIZATION

An organization is a systematic arrangement of

people who work together to achieve a common
purpose.
There are two types of organizations:
Profit-oriented
Non-profit oriented

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 5
 CORE ELEMENTS OF AN
ORGANIZATION

There are three core elements that are common in

all organizations:
Organizational goals
People
Structure

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 6
 MANAGERS IN ORGANIZATIONS

A manager is a person who is responsible to

co-ordinate, guide and supervise the work and
performance of other organizational members,
to attain organizational goals.
A managers success depends very much on
his/her ability to get things done through other
individuals.

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 7
 MANAGERIAL LEVELS

There are three managerial levels in organizations:

Top-level
Middle-level
First-level

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 8
 MANAGERIAL LEVELS (cont.)

Top-level managers
Set the goals and provide the strategic directions
for the organization.
Accountable for the overall management of the
organization.

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 9
 MANAGERIAL LEVELS (cont.)

Middle-level managers
Responsible for carrying out the goals set by top
management.
Perform as linkages between the top level and the
first-line managers.

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 10
 MANAGERIAL LEVELS (cont.)

First-level managers
Interact and work most closely with the
operational employees.
Responsible to direct and supervise the actual
day-to-day work of the organization at the
operating level.

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 11
 MANAGEMENT PROCESS
(POLC)

Management is the process and activities involved

in pursuing organizational goals efficiently and
effectively by planning, organizing, leading and
controlling the organizations resources.

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 12
 MANAGEMENT FUNCTIONS

Planning
Planning involves setting appropriate and
clear goals and objectives, and establishing
appropriate strategies to accomplish them.

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 13
 MANAGEMENT FUNCTIONS (cont.)

Organizing
Organizing is the process of arranging and
coordinating organizational resources, particularly
human resources, to carry out the organizational
plan.
Leading
Leading is a process of motivating subordinates,
and inspiring others, towards achieving the
organizational goals.

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 14
 MANAGEMENT FUNCTIONS (cont.)

Controlling
Controlling is the process to ensure that
performance is as planned and taking the
necessary corrective actions/changes when
needed.

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 15
 EFFECTIVE COMMUNICATION
AS A MANAGEMENT TOOL

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 16
 EFFICIENCY AND EFFECTIVENESS

Effectiveness
The degree to which an organization achieves its
goals.
It is about doing the right things, typically in terms of
quantity as well as quality.
Efficiency
The degree of how well resources are used to achieve
a goal.
It is about doing the things right.

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 17
 RELATIONSHIP BETWEEN
EFFICIENCY, EFFECTIVENESS
AND PERFORMANCE

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 18
 MANAGEMENT SKILLS

Technical skills
The ability to understand and demonstrate
knowledge and proficiency in a specialized field.
Human skills
The ability to interact and work well with other
people.
Conceptual skills
The ability to think of situations analytically from
a broad perspective.

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 19
 MANAGEMENT SKILLS AT
DIFFERENT MANAGERIAL LEVELS

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 20
 MANAGERIAL ROLES

Interpersonal Roles
Interpersonal roles are primarily concerned with relationships
with other people. The three roles under interpersonal roles
are figurehead, leader, and liaison.
Informational Roles
Managers obtain information and must communicate
information to people inside and outside the organization.
The three informational roles are monitor, disseminator and
spokesperson.
Decisional Roles
Decisional roles require managers to plan strategy and utilize
resources. There are four decision roles: entrepreneur,
disturbance handler, resource allocator, and negotiator.
BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved
Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 21
 MANAGERIAL ROLES (cont.)

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 22
 MANAGERIAL ROLES (cont.)

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 23
 ORGANIZATIONAL STRUCTURE

Organizational structure is the organizations

formal framework by which tasks and jobs are
divided, grouped and coordinated.

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 24
 FUNCTIONAL STRUCTURE

In a functional structure, work activities are

grouped according to functions.

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 25
 PRODUCT STRUCTURE

Product structures group all activities and

functions needed to produce and market a
particular product/service under one unit/
department.

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 26
 GEOGRAPHICAL STRUCTURE

In a geographical structure, units are divided

according to location or geographical area.

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 27
 CUSTOMER STRUCTURE

In a customer structure, units are divided

according to the type of customers an
organization has.

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 28
 MATRIX STRUCTURE

A matrix structure is a two-dimensional reporting

structure that simultaneously groups people and
resources by function and by project.

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 29
 MOTIVATING EMPLOYEES

Motivation is the driving force that is capable of

bringing out the best in people.

A highly motivated person always strive to work

harder than an unmotivated person.

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 30
 HIERARCHY OF NEEDS THEORY

According to Maslow, there are five categories of needs that

people seek to satisfy:
Physiological needs
Physiological needs are the most basic human needs such as
food, shelter, clothing and water.
Safety needs
These are the basic needs for a safety and security.
Belongingness needs
Relate to the desire for social interaction, relationships and
friendship with others.

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 31
 HIERARCHY OF NEEDS THEORY
(cont.)

Esteem needs
Relate to the desire to feel
good about oneself and
receive recognition from
others.
Self-actualization needs
Relate to the desire for
psychological
development and growth
to realize ones full
potential as a human
being.

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 32
 THEORY X AND THEORY Y

Theory X is a negative view that assumes

employees are inherently lazy and relatively lack
ambitions at work.
Theory Y is a positive view that assumes employees
are ambitious, self-motivated and willing to accept
greater responsibilities.

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 33
 MOTIVATORHYGIENE THEORY

Motivating factors
Factors that are related to the nature of the work itself
(autonomy, responsibility, personal growth, appreciation
and recognition).
Motivator factors are sources of job satisfaction.
Hygiene factors
Factors relating to the context of the job.
When hygiene needs are not met, employees become
dissatisfied.
Satisfying hygiene needs will lead to no dissatisfaction,
but will not necessarily make employees satisfied.
BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved
Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 34
 MOTIVATORHYGIENE THEORY
(cont.)

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 35
 EXPECTANCY THEORY

1. Expectancy
The degree of expectation that exerting an amount of
effort will lead to certain performance.
2. Instrumentality
The degree to which an individual believes that
performance will lead to attaining desired outcomes.
3. Valence
The attractiveness of outcomes as the result of effort
and performance.

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 36
 EXPECTANCY THEORY (cont.)

BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) All Rights Reserved

Oxford Fajar Sdn. Bhd. (008974-T), 2012 6 37