THE MANAGEMENT PROCESS,

FUNCTIONS AND TECHNIQUES

FAYOL’S Four Functions of Management
 Managerial Functions
• Henri Fayol
First outlined the four managerial functions in his
book General Industrial Management.
Managers at all levels in all organizations perform
each of the functions of planning, organizing,
leading, and controlling.
 Planning
• Identifying and selecting appropriate goals
and courses of action for an organization.
The planning function determines how effective and
efficient the organization is and determines the
strategy of the organization.
• Three Steps in the Planning Process:
Deciding which goals to pursue.
Deciding what courses of action to adopt.
Deciding how to allocate resources.
 Three Stages of the Planning Process
Figure 7.1
Determining the Organization’s
mission and goals
(Define the business)

Strategy formulation
(Analyze current situation &
develop strategies)

Strategy Implementation
(Allocate resources & responsibilities
to achieve strategies)
 Organizing
• Structuring working relationships in a way
that allows organizational members to work
together to achieve organizational goals.
• Organizational Structure
A formal system of task and reporting relationships
that coordinates and motivates organizational
members.
Creating organizational structure:
Grouping employees into departments according to
the tasks performed.
Laying out lines of authority and responsibility for
organizational members.
 Leading
• Articulating a clear vision to follow, and
energizing and enabling organizational
members so they understand the part they
play in attaining organizational goals.
Leadership involves using power, influence, vision,
persuasion, and communication skills.
The outcome of leadership is highly motivated and
committed organizational members.
 Controlling
• Evaluating how well an organization is
achieving its goals and taking action to
maintain or improve performance.
Monitoring individuals, departments, and the
organization to determine if desired performance
standards have been reached.
Taking action to increase performance as required.
The outcome of control is the ability to measure
performance accurately and to regulate the
organization for efficiency and effectiveness.
 Control Process Steps
Figure 9.2
1. Establish standards of performance, goals, or
targets against which performance is evaluated.

2. Measure actual performance

3. Compare actual performance

against chosen standards

4. Evaluate results and take corrective action

when the standard is not being achieved.
 Decision Making

• In deciding, the managers respond to opportunities

and threats by analyzing options, and making
decisions about goals and courses of action.
• Decision-making requires managers to respond to
various problems resulting to the improvement of
organizational performance.
• Managers must also decide in responding to
threats which usually occurs when managers are
impacted by adverse events to the organization.
 Decision Making Steps
Figure 6.4
Recognize need for
a decision

Frame the problem

Generate & assess

alternatives
Choose among
alternatives

Implement chosen
alternative

Learn from feedback

 Communicating

In communicating, Managers:
Send clear and complete messages.
Encode messages in symbols the receiver understands.
Selecta medium appropriate for the message AND
monitored by the receiver.
Avoidfiltering (holding back information) and distortion as
the message passes through other workers.
Ensure a feedback mechanism is included in the message.
Provide accurate information to avoid rumors.
 MANAGERIAL QUANTITATIVE
TECHNIQUES
• A) Linear Programming
 It is a mathematical method for determining a way to
achieve the best outcome (such as maximum profit or
lowest cost) in a given mathematical model for some
list of requirements represented as linear
relationships.
 Industries that use linear programming models include
transportation, energy, telecommunications, and
manufacturing. It has proved useful in modeling
diverse types of problems in planning, routing,
scheduling, assignment, and design.
 Management Techniques…..
B) Decision Tree Analysis
It is a decision support tool that uses a tree-like graph
or model of decisions and their possible consequences,
including chance event outcomes, resource costs, and
utility. It is one way to display an algorithm.
Decision trees are commonly used in
operations research, specifically in decision analysis, to
help identify a strategy most likely to reach a goal.
 Management Techniques….
C. PERT-CPM
The Program (or Project) Evaluation and Review
Technique, commonly abbreviated PERT, is a
statistical tool, used in project management, that is
designed to analyze and represent the tasks involved in
completing a given project.
PERT-CPM is a method to analyze the
involved tasks in completing a given project,
especially the time needed to complete each
task, and to identify the minimum time needed
to complete the total project.
 Management Techniques……

D) Cost–benefit analysis
It is sometimes called benefit–cost analysis
(BCA), is a systematic process for calculating
and comparing benefits and costs of a project,
decision or government policy (hereafter,
"project").
Cost–benefit analysis is often used by
governments and other organizations, such as
private sector businesses, to evaluate the
desirability of a given policy.
 Management Techniques

E) Simulation Method
It is the imitation of the operation of a real-world process or
system over time.[1] The act of simulating something first
requires that a model be developed; this model represents the
key characteristics or behaviors/functions of the selected
physical or abstract system or process. The model represents
the system itself, whereas the simulation represents the
operation of the system over time.
Simulation is often used in the training of civilian and military
personnel. This usually occurs when it is prohibitively
expensive or simply too dangerous to allow trainees to use
the real equipment in the real world
 Management Techniques
F) Queue Management System
It is used to control queues. Queues of people form in various
situations and locations in a queue area. The process of queue
formation and propagation is defined as queuing theory.
Under the structured queues type, people form a queue in a
fixed, predictable position, such as at supermarket checkouts,
some other retail locations such as banks, airport security and
so on.
Structured queue types are applied where people form a
queue in unpredictable and varying locations and directions.
This is often the case in some forms of retail, taxi queues,
ATMs
 
© Copyright 2004 McGraw-Hill. All rights reserved . 1–19
 Management Techniques…..
• MANAGEMENT INFORMATION SYSTEMS
(MIS)- it represents the entire portfolio of
computer-based systems and their
complementary manual procedures.
-it is an integrated computer-based, user-
machine system that provides information for
supporting operations & decision making
functions
-it is the development and use of effective
information systems in organization
 Human Resource Management
Human Resource Management includes all
activities used to attract & retain employees and to
ensure they perform at a high level in meeting
organizational goals.
These activities are made up of
1. Recruitment & selection.
2. Training and development.
3. Performance appraisal and feedback.
4. Pay and benefits.
5. Employee-Mgt. relations.
 HRM Components

 Component should be consistent with the others,

organization structure, and strategy.
Recruitment: develop a pool of qualified applicants.
 Selection: determine relative qualifications & potential for
a job.
Training & Development: ongoing process to
develop worker’s abilities and skills.
Performance appraisal & feedback: provides
information about how to train, motivate, and reward
workers.
 Managers can evaluate and then give feedback to
enhance worker performance.
 HRM Components

 Pay and Benefits: high performing employees should be

rewarded with raises, bonuses (CSC).
 Increased pay provides additional incentive.
 Benefits, such as health insurance, reward membership in
firm.
 Employee-Management relations: managers need an
effective relationship with informal groups that represent
employees.. If management moves to a decentralized
structure, HRM should be adjusted as well.
 HRM TASKS AND PROCESS
• The 3 major tasks of GRM as follows:
1)Attracting a quality workforce-human resource
planning, employee recruitment and selection
2)Developing a quality workforce-employee
orientation, training and development and
performance management
3)Maintaining a quality work force-career
development, work-life balance, compensation and
benefits, retention and turnover and labor
management relations.

1–24
 Motivation
• Defined as the psychological forces within a
person that determine:
1) direction of behavior in an organization;
2) the effort or how hard people work;
3) the persistence displayed in meeting goals.
 Intrinsic Motivation: behavior performed for its own
sake.
Motivation comes from performing the work.
 Extrinsic Motivation: behavior performed to acquire
rewards.
Motivation source is the consequence of an action.
 Motivation Equation
Figure 12.1

Inputs from Outcomes

Organizational Performance received by
members members

Time
Contribute to Pay
Effort
organization Job Security
Education
efficiency, Benefits
Experience
effectiveness Vacation
Skills
and Autonomy
Knowledge
attain goals Responsibility
Work Behav.
 Leadership

Leadership is the process where a

person exerts influence over others and
inspires, motivates and directs their
activities to achieve goals.
Effective leadership increases the firm’s
ability to meet new challenges.
 Leader: The person exerting the influence.
Personal Leadership Style: the ways leaders choose to
influence others.
 Some leaders delegate and support subordinates, others are
very authoritarian.
 Managers at all levels have their own leadership style.
 Leadership Models

–Trait Model: sought to identify personal

characteristics responsible for effective leadership.
Research shows that traits do appear to be connected to

effective leadership.
–Many “traits” are the result of skills and knowledge.
–Not all effective leaders possess all these traits.

– Behavioral Model: Identifies types of behavior.

Consideration: leaders show care toward workers.
–Employee-centered.

InitiatingStructure: managers take steps to make sure

work is done.
–Done by assigning work, setting goals, etc.
–Job-oriented.
 Managing Organizational Change
Assess need for change: recognize a problem exists and
find its source.
Look inside and outside the firm for sources.
Decide on the change to make: determine the ideal future
state.
 Decide exactly what the future organization will look like.
 What obstacles need to be changed to get there.
Implement the change: a top-down change is quickest,
bottom-up is more gradual.
.
Evaluate Change: Bottom-up is more effective at
eliminating obstacles? Benchmark (compare) your change
to others.
 Steps in the Organizational Change
Figure 16.7
Process
Assess need for
change
Find source of problem

Decide on the
change
Identify obstacles

Implement Change
Top-down or
Bottom-up

Evaluate Change
Is it successful?
Benchmark to others
 ORGANIZATIONAL CULTURE
• ORGANIZATIONAL CULTURE is the “set of shared, taken-
for-granted implicit assumptions that a group hold and that
determines how it perceives, thinks about, and reacts to its
various environments.
• It is passed on to new employees through the process of
socialization, and it influences our behavior at work.
• \Organizational values and beliefs constitute the foundation
of an organizational culture.
• Four functions of Organizational culture:a) Gives an
organizational identity; b) facilitate collective commitment; c)
promote social system stability; d) shape behavior by helping
members make sense of their surrounding (i.e., know what
the top mgt. doing and why?

© Copyright 2004 McGraw-Hill. All rights reserved . 1–31

 ORGANIZATIONAL DEVELOPMENT
Organizational Development or O.D. is a planned effort initiated
by process specialists to help an organization develop its
diagnostic skills, coping capabilities, linkage strategies( in the
form of temporary and semi-permanent systems) and a culture
of mutuality.
•A planned effort – thinking and planning
•initiated by process specialists
•Diagnostic skills- data collection-overtime
•Coping capabilities-problem-solving,confront and cope
•Linking strategies-Indl.& Organl. Goals
•Culture of Mutuality-fostering of certain values and open and
proactive systems viz. openness, confrontation, trust,
authenticity, pro-activeness, autonomy, collaboration and
experimentation.
 POLICY ANALYSIS
• POLICY is a principle or protocol to guide decisions and
achieve rational outcomes. A policy is a statement of intent,
and is implemented as a procedure  or protocol.
• PUBLIC POLICY is the principled guide to action taken by the
administrative executive branches of the state with regard to
a class of issues in a manner consistent
with law and institutional customs. In general, the foundation
is the pertinent national and substantial constitutional law and
implementing legislation.

© Copyright 2004 McGraw-Hill. All rights reserved . 1–33

 Policy Analysis…..
• POLICY ANALYSIS- It is "determining which of various
alternative policies will most achieve a given set of goals in
light of the relations between the policies and the goals".
• Steps in Policy Analysis
Verify, define and detail the problem
Establish evaluation criteria
 Identify alternative policies
Assess alternative policies
Display and distinguish among alternatives
Choose curse of action

© Copyright 2004 McGraw-Hill. All rights reserved . 1–34

 Managerial Skills
• Conceptual Skills What should be the right thing?
The ability to analyze and diagnose a situation and
distinguish between cause and effect.
• Human Skills
The ability to understand, alter, lead, and control
the behavior of other individuals and groups.
• Technical Skills How can we do better?
The specific knowledge and techniques required to
perform an organizational role.
 Organizational Performance
• Organizational Performance
A measure of how efficiently and effectively
managers are using organizational resources to
satisfy customers and achieve goals.
• Efficiency To do the things right!
A measure of how well or productively resources
are used to achieve a goal.
• Effectiveness To get the right things done!
A measure of the appropriateness of the goals an
organization is pursuing and the degree to which
they are achieved.