05 Bmom5203 T1

Topic  Foundations of
1 Management
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1. Discuss the importance of management and its new landscape;
2. Explain how the functions of management are evolving in todayÊs
business environment;
3. Compare how the nature of management varies at different
organisational levels; and
4. Define the skills and roles of a manager.
 INTRODUCTION
A key to achieving success is to assemble a strong and stable management team.
-Vivek Wadhwa (2013)
According to Vivek Wadhwa, an American technology entrepreneur and

academic in America, the real challenge for all managers today is to build a
strong and stable management team comprising people with diverse cultural
background, gender and age as well as being highly technologically savvy. This
means managers who are not able to use the latest apps or gadgets in their
smartphones effectively already makes them irrelevant for a managerial position.
Morever, the rapid pace of development, new advancement in technologies and

increasing number of Generation Y into the workforce will definitely create new
dimensions in managing people. It is also a common phenomena in most
Copyright © Open University Malaysia (OUM)

2  TOPIC 1 FOUNDATIONS OF MANAGEMENT
organisations today to see young people or Generation Y increasingly holding a

managerial position at an early age.
The challenge today, in order to manage effectively, is to identify the best talent
to hold a managerial position, whereby the main criteria is the ability to integrate
technology in managing people and resources.
ACTIVITY 1.1
1. Identify the number of Baby Boomers, Generation X and Generation Y
who are holding managerial positions within your company.
2. Evaluate which generation of employees is the most preferred by
managers, and which generation is the least preferred by managers.
Explain your answer.
1.1 MANAGEMENT AND ITS NEW LANDSCAPE

With the advancement of new technology, rapid pace of business and
technological development in the new world, managers are required to manage
effectively in the new landscape in order to be more competitive.
1.1.1 Managing in the New Landscape

As a manager, you should be aware of the challenges that shape the new
business landscape which comprises globalisation, technological changes,
knowledge management, and collaborations between boundaries. These are
becoming more and more prevalent in the new business landscape.
In todayÊs new business landscape, business operations are becoming globalised,

where your business transactions and business operations are 24/7, provided
that you are able to integrate internet technologies into your business operations.
In addition, your knowledge management, experiences, and exposure across

boundaries will enable you to operate your international business transactions
with minimal costs.
Hence, in view of the new business landscape, you must analyse the new rules
and regulations of your business transactions, revisit situations where your
businesses are operating and make changes in order to be more competitive.

TOPIC 1 FOUNDATIONS OF MANAGEMENT  3
Let us now discuss some of the competitive challenges faced by organisations in

the current business setting:
(a) Globalisation
Globalisation has taken place and most managers today have to manage
employees from different nationalities, cultures and values. This creates
challenges and the ability of managers to communicate and manage their
employees effectively will contribute to company profitability. When the
diversity is well-managed, the organisation will be able to produce
products and services that will capture new markets or might be able to
develop unique products and services to capture one single international
market or products and services that can be accepted by all, irrespective of
their differences.
(b) Technological Change

Nowadays, with technological changes and development, the way we
perform our tasks is different from before. As a manager, you should be able
to change in order to manage and communicate with your employees more
efficiently and effectively. For example, today you can create a „whatsApp‰
group to communicate and have a short discussion or meeting with all your
staff almost immediately. It also allows your employees to respond
immediately wherever they may be. Hence, in the future a huge meeting
room might be irrelevant as the mode of communication has changed.
(c) Knowledge Management

With the advancement of technology, you will see changes in storing and
retrieving information. This will reduce the need to have physical
document files scattered around the office. Instead the information can be
scanned and filed in „cloud‰ storage on online servers. They can be
retrieved anytime, anywhere and is becoming more convenient to do so.
The way we manage the filing system will certainly be different from the
way it was done previously.
Today in Malaysia, there are companies whose primary business is

digitising and storing patientsÊ information for private hospitals using the
cloud storage system. The information which is scanned and stored in the
cloud storage system enables it to be retrieved easily and without damage.
(d) Collaboration across „Boundaries‰

The collaboration across „boundaries‰ is made possible with the
advancement of technology whereby managers can appoint employees
from other locations around the world and communicate with them via
„Skype‰ or „WhatsApp‰. Having business partners from other parts of the

world is becoming a norm and an acceptable practice, as some businesses

might not be able to survive without foreign partners. In fact, the ability to
serve international markets is a must in order to ensure the long term
survival of businesses in Malaysia.
ACTIVITY 1.2
1. Discuss how your company can be more competitive by utilising the
latest technologies available in the market.
2. Discuss the advantages and disadvantages of social media in the
business environment.
1.1.2 Managing for Competitive Advantage

As a manager, you should be able to manage your resources effectively and
efficiently in order to gain competitive advantage. There are five elements that
you may focus on to gain competitive advantage. They are innovation, quality,
service, speed and cost competitiveness. Let us now look at these elements in
further detail as follows:
(a) Innovation
This refers to how well you manage your resources in order to be more
efficient and effective. For example, you might have limited space in your
office. Instead of having a normal boardroom meeting, you might opt to
have the meeting via Skype or WhatsApp group meeting or discussion.
This will ensure that all information can be disseminated more timely and
easily as well as allowing more interaction with all staff. Moreover, their
responses in the discussion will be recorded and can be given some
weightage to their year-end performance.
(b) Quality
The quality of your products and services is crucial to the success of your
business. Hence, having quality employees and quality raw materials are
becoming a must rather than an option in order to be more competitive. High
quality employees refers to those who are usually creative and innovative,
and able to serve and generate more profit for the company. Therefore the
ability to retain quality employees and suppliers is becoming critical for
business in order to gain competitive advantage in the marketplace.
(c) Service
The ability to provide quality services to customers and being able to
provide extra services to customers will be an added competitive

advantage. Nowadays, customers always want more value for their money.
Therefore in managing the employees and resources, managers should be
able to think of extra services that can be provided to customers. For
example, updating current information about products and services via e-
mail, SMS, or whatsApp messages to customers. With these value-added
services the business may be able to have a more competitive advantage
over its competitors.
(d) Speed
TodayÊs customers demand for faster information, products and services
than before. Hence, the ability of organisations to deliver their products and
services faster than their competitors can be an added competitive
advantage. In the project management triangle, customers who want
quality product and faster availability or delivery must be willing to pay
higher prices. Hence, the ability to deliver faster and with high quality
products and services will allow the organisation to charge a higher price
and improve its profitability, thus gaining more competitive advantage.
(e) Cost competitiveness

Cost competitiveness refers to how you can reduce your operational cost
which will lead towards improved cost efficiency. Being a manager, you
should always think about the best ways in which you can deliver your
products and services with the highest quality at the lowest cost in order to
gain competitive advantage.
In short, if you are able to deliver all five elements mentioned above, you may
gain competitive advantage over your competitors and be a market leader.
However, if you cannot deliver all five, you should strive to deliver at least one
or two of the five elements.
ACTIVITY 1.3
Identify which element of competitive advantage is the most important
to your organisation. Explain your answer.
1.2 FUNCTIONS OF MANAGEMENT

The functions of management are planning, organising, leading and
controlling or also known as POLC. Let us now take a closer look at these four
functions.

(a) Planning
As a manager, one of the main tasks is planning, whereby you should
always plan all your resources well in order to ensure that your department
is able to synchronise with organisational goals and objectives. The
planning usually takes place at the end of the year, and the plans are
communicated to the employees early the following year. In addition to the
yearly plan, whenever there is a major shift or change in the organisationÊs
direction, you might want to re-think and re-model the planning to serve
your organisation better.
(b) Organising
Another important function of a manager involves organising resources to
ensure that each and every resource is utilised efficiently and effectively in
meeting organisational goals and objectives.
(c) Leading
A manager is also required to lead his/her subordinates. As a manager, you
should be able to lead your subordinates and mobilise your staff efficiently
and effectively towards meeting organisational goals and objectives.
(d) Controlling
As a manager, you are responsible for controlling the resources, including
the human resources (for example, your staff). You should identify the
skills that they are lacking as well as the learning exposure needed in order
to mould or transform them to be ready to take on new challenges in the
business environment. Once you have received a fresh graduate, the main
challenges you might face is actually to expose them to the real business
environment that are totally different from their school years. The ability of
the managers to control the environment will lead towards the achievement
of the organisational goals and objectives.
As a manager, you have to perform all four management functions well. The
inability to perform these four management functions well will lead towards
inefficiency and ineffectiveness of the organisation in meeting its goals and
objectives.
ACTIVITY 1.4
In your opinion, which one of the functions of management
(planning/organising/leading/controlling) is considered the most
critical function for managers? Explain your answer.

1.3 NATURE OF MANAGEMENT AT

DIFFERENT LEVELS
There are three levels of management within an organisation. These levels are
frontline managers, middle level managers and top level managers. Let us now
look at these levels of management in further detail.
1.3.1 Frontline Managers

Frontline managers comprise lower-level managers who are supervising the
operational activities of the organisation. Frontline managers are more likely to
perform routine tasks such as ensuring that each subordinate delivers his/her job
requirements.
Frontline managers are also more likely to be aggressive and innovative to

ensure that their staff will be able to meet deadlines and quality standards set by
top management and customers. They are also involved in attracting and
developing talents in the organisation, and act as liaison with external parties
such as society, suppliers, and customers.
Usually the frontline managerÊs tasks are predictable and can be emulated by
others easily. The tasks of the frontline managers are tedious and are easily
replaceable if they are found to be inefficient or ineffective. In addition, as leaders
they are also responsible to motivate, train and identify new staffing for the
department in order to ensure that the operation of the business is not disrupted.
The challenges that may be faced by most frontline managers are over
possessiveness, overburdened or burnout. Hence, it is the responsibility of the
top management to ensure that these frontline managers are given sufficient
moral and motivational support, appreciation, and training in order to upgrade
their managerial skills.
The informational and decisional roles for frontline managers, middle managers
and top level managers are the same, although they are used in different
contexts. Usually if you are a frontline manager your informational and
decisional roles will be used to handle routine and day-to-day operational
activities to enhance organisational performance.
Effective frontline managers are usually viewed as potential leaders in the future
and are highly valuable to the organisationÊs future success, because all the key
activities including knowledge, experiences, skills and techniques are within
their fingertips. Losing them may well be a huge loss for the business operation

as they may use their skills and experiences to develop and enhance the
competitorÊs business operation. Table 1.1 summarises the roles and key activities
of frontline managers.
Table 1.1: Frontline Managers
Description
Roles The roles start from operational implementers to aggressive entrepreneurs.
Key Activities 1. To create and pursue new growth opportunities for the business.
2. To attract and develop resources.
3. To manage continuous improvement within the department.
Source: Bateman and Snell (2015)
1.3.2 Middle Level Managers

Middle level managers are located at the middle level of the organisational
hierachy and report to top level managers. If you are a middle level manager,
you should be aware that the roles have changed from being administrative
controllers towards supportive coaches, whereby you should be listening to
frontline managersÊ challenges and offer advice and assistance to solve the issues
that they are facing.
The other key activities for middle level managers involve developing
individuals and supporting their activities in the organisation, linking diverse
knowledge and skills across departments or units and managing the tension
between achieving short-term and long-term goals of the organisation.
The interpersonal, informational and decisional roles of middle level managers

are similar to those of frontline managers although the context is different. Due to
the organisational hierachy, they act as the middle person between the top level
managers and the frontline managers.
As middle level managers, you should know more about the activities at the
operational levels and also the direction the organisation is heading to. Therefore,
the direction given by the top level managers must be clearly communicated by
middle level managers to the frontline managers in order to ensure efficiency and
effectiveness of the organisationÊs activities. Table 1.2 summarises the roles and
key activities of middle level managers.

Table 1.2: Middle Level Managers
Description
Roles The roles shifted from administrative controllers to supportive
coaches.
Key Activities 1. To develop individuals and support their activities.
2. To link diverse knowledge and skills across units.
3. To manage the tension between short-term purpose and long-
term goals of the organisation.
1.3.3 Top Level Managers

Top level managers comprise senior executives who are responsible for the whole
management of the organisation, and also ensuring the effectiveness of the
organisation.
If you are a top level manager, your tasks will be more challenging as you are
now less concerned about allocating resources but are more focused on being
institutional leaders. The role of an institutional leader is to lead the organisation
towards achieving the vision and mission of the organisation.
Hence, your key activities will be to establish performance standards for the
organisation, create norms and values for your organisation as well as to create
corporate purpose and ambition for the organisation. That might involve branding
or re-branding, changing your corporate image or upgrading facilities.You might
also want to expand business operations to other parts of the world.
As a top level manager, you also perform interpersonal roles where you have to
be the figurehead, leader and liaison. Top level managers still perform the
symbolic duties representing the organisation in ceremonies, social events and
legal matters. In your leadership role, you must plan how to motivate your staff,
identifying relevant training to enhance their skills and rebuild their attitude in
the organisation. In addition, top level managers are also responsible to maintain
a strong relationship with external parties such as government agencies,
ministries, suppliers, customers as well as competitors.
Top level managers also have informational roles and decisional roles. Although
similar to frontline managers and middle level managers, the context or situation
will be at a higher level.

On most ocassions top level managers will be tasked to speak on behalf of the
organisation on corporate matters during press conferences or meetings with
potential clients or partners. They will usually monitor the flow of confidential
information in the organisation and disseminate information on any new or
changes in policies and procedures in the organisation.
As a top level manager, you are likely to only make critical decisions for the
organisation, those which involve approval for new business opportunities or
initiating a new project. You will need to handle conflicts amongst your
managers especially the middle level managers so as to avoid disrupting the
main business activities. As a top level manager, you are also responsible to
allocate budget diligently to each department to ensure smooth running of the
business operation. In addition, you will also be involved in negotiating with
your major clients, major suppliers, government agencies and other institutions
in order to ensure that your organisation is in a favourable position to take
advantage of the situation that may arise. Table 1.3 summarises the roles and key
activities of top level managers.
Table 1.3: Top Level Managers
Description
Roles The roles shifted from resource allocators to institutional leaders.
Key Activities 1. To establish high performance standards.
2. To institutionalise a set of norms and values to support cooperation
and trust.
3. To create an overarching corporate purpose and ambition.
1.3.4 Working Leaders with Broad Responsibilities

In small business organisations, managers are required to handle all
responsibilities such as strategic, tactical and operational responsibilities. These
managers will usually develop into capable and well-rounded business minded
managers. Thus they are often highly sought after candidates for a Chief Executive
Officer position in a huge organisation. The ability to shoulder all those managerial
responsibilities will showcase their maturity and competency, hence allowing
them to achieve competitive advantage in the challenging corporate world.
ACTIVITY 1.5
Do you agree that all top managers were once frontline managers?
Discuss.

1.4 SKILLS AND ROLES OF MANAGERS

As a manager you are required to have sufficient skills in order to carry out your
roles and duties effectively and efficiently. This subtopic will look at the
managerial roles and skills required to be an effective manager.
1.4.1 Managerial Roles

It is important for managers to prioritise their roles in order to ensure that the
management of the organisation goes smoothly. Table 1.4 summarises the roles
of managers in an organisation based on interpersonal, informational and
decisional roles.
Table 1.4: Managerial Roles
Description
Interpersonal 1. Figurehead: to perform symbolic duties in ceremonies, social events
roles and legal matters.
2. Leader: to plan for motivating staffs, training of staffs and staffing.
3. Liaison: to maintain relationship with external parties.
Informational 1. Spokesperson: to speak on behalf of the organisation on plans,
roles policies, actions and results.
2. Monitor: to seek and receive information to develop a thorough
understanding of the organisation and its environment, serving as the
„nerve centre‰ of communication.
3. Disseminator: to transmit information from source to source, and to
interpret and integrate diverse perspectives.
Decisional 1. Entrepreneur: to search for new business opportunities and initiate
roles new projects to create change.
2. Disturbance handler: to take corrective action during crises or other
conflicts.
3. Resource allocator: to provide funding and other resources to units or
people, including making or approving organisational decisions.
4. Negotiator: to engage in negotiations with parties outside the
organisation as well as inside such as resource exchanges.

1.4.2 Managerial Skills

To be an effective manager, there are three skills that he/she needs to be good at.
The managerial skills for managers are technical skills, conceptual and decision
skills, and interpersonal and communication skills:
(a) Technical Skills

As a manager, you should be equipped with technical skills whereby you
should be able to understand the relevant skills in decision making,
operational aspects of the business, the business process and so forth.
(b) Conceptual and Decision Skills

As a manager, you should have strong conceptual and decision skills in
order to move the business forward. Without strong conceptual skills, it
will be difficult for you to make sound decisions. Hence, the ability to
make and execute your decision well will be the main factor for the
organisationÊs success.
(c) Interpersonal and Communication Skills

Good interpersonal and communication skills are of particular importance
to managers within the organisation. This is because managers get their job
done through others whom they manage. The ability to communicate well
and relate to others is therefore one of the more critical skills required for a
manager to function effectively. As a manager, you should be equipped
with strong interpersonal and communication skills or risk facing
turbulence within your department as the number of communication
breakdowns between you and your staff will be high and your staff might
not be able to trust your judgement in the future.
1.5 QUALITIES OF AN EFFECTIVE MANAGER

In order to have a successful career as a manager, it is important to instil or
develop certain qualities that will enable you to carry out your roles and duties
well. These include qualities such as being a specialist and a generalist, being
self-reliant, having the ability to connect with employees, managing relationship
with the organisation as well as surviving and thriving in the organisation. Let us
now look at these in further detail as follows:
(a) Be both a Specialist and a Generalist

As a manager, you should be both a specialist and a generalist. As a
specialist, you should be able to put yourself in the employeeÊs shoes, that
is able to be a marketer, a financial expert, an auditor and so forth.

However, if you are focusing too much as a specialist, you might ignore
other employees within your team. This might demotivate them from
contributing to your organisational performance and causing detrimental
consequenses to the whole business operation. While it is important to
understand and know the tasks required of a specialist, you also need to be
a generalist in order to take into consideration every employeeÊs concern
and job function.
(b) Be Self-reliant
As a manager, you should be self-reliant and learn to trust your instincts
and judgements. You should take precaution not to focus more on your
employeeÊs opinion and ignore your own judgement because by doing so,
you are allowing your employeeÊs opinion to influence your judgement.
This might lead to favouritism, prejudice, conflicts and ultimately fire up
office politics.
(c) Be Connected
The ability to be connected to all your employees will improve overall
company performance. As a manager, you should not work in silo and in
your own world. You should have meetings and allow all employees to
know more about the organisationÊs direction and expectations. By being
connected you may gain employee trust and be able to motivate them better.
(d) Actively Manage your Relationship with your Organisation

As a manager, you should actively manage your relationship with the
organisation. Having a close relationship with the top management and
always knowing where the organisation is heading will allow your
department to perform well. Similarly, educate your employees in the
direction of the organisation in order to ensure that the information will
flow accordingly and to ensure that the team will be able to move in the
same direction as the company.
(e) Survive and Thrive

Managers are expected to remain calm in all situations that they are facing,
always focusing on the given tasks and ensure that whatever is expected to
be delivered will be delivered efficiently and effectively irrespective of the
turbulence experienced by the organisation at any given time. Effective
managers should be able to survive and keep on thriving despite the crisis
in the organisation and should be able to move forward and overcome
those challenges.

ACTIVITY 1.6
Discuss the skills and roles of managers in your workplace. Are they
similar or different from what has been discussed earlier? Elaborate
your answer.
SELF-CHECK 1.1
1. Discuss challenges faced by organisations in the current business

setting.
2. Discuss why POLC is crucial for all managers.
3. Briefly discuss the functions and responsibilities of frontline, middle
and top level managers.
4. What are the roles that managers are required to perform at work?
• Nowadays managers must be able to manage within the new landscape

involving globalisation, technological change, knowledge management and
collaboration across boundaries.
 In order to gain competitive advantage, organisations should be more

focused on being innovative, quality centred, able to provide extra services,
able to speed up the delivery of products and services and able to operate
with low or competitive costs.
 The four functions of management are planning, organising, leading and

controlling (also known as POLC).
 There are three different levels of managers within an organisation, namely

frontline managers, middle level managers and top level managers.
 Managers should equip themselves with three management skills in order to

function effectively. The managerial skills are technical skills, conceptual and
decision skills as well as interpersonal and communication skills.

 The three main roles of managers in organisations are interpersonal,

informational and decisional roles.
 The qualities that would make for successful managers include the
following:
− Being a specialist and generalist;
− Self-reliant;
− Ability to connect to employees;
− Managing a relationship with the organisation; and
− Ability to survive and thrive.
Competitive advantage Innovation

Conceptual skills Knowledge management
Cost competitiveness Self-reliant
Decisional skills Technical skills
Frontline managers Technological change
Interpersonal skills
Bateman, T. S., & Snell, S. A. (2015). Management: Leading & collaborating in a

competitive world. New York, NY: McGraw-Hill Education.
Certo, S. C., & Certo, S. T. (2012). Modern management: Concepts and skills (12th
ed.). Boston, MA: Prentice Hall.
Daft., R. L. (2014). Management (11th ed.). Australia: Cengage Learning.

Lim, G. S., Chua, S. B., Skulkerewathana, U., & Daft, R. L. (2015). New era of
Management in a globalized world: An Asian perspective. Singapore:
Cengage Learning Asia.
Robbins, S. P., & Coulter, M. (2014). Management (12th ed.). Harlow, England:
Pearson Education Limited.
Wadhwa, V. (2013). Corruption in business and the importance of ethics. The
Wall Street Journal. Retrieved from http://blogs.wsj.com/accelerators/2013/
06/28/weekend-read-corruption-in-business-and-the-importance-of-ethics/

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Topic  Foundations of

According to Vivek Wadhwa, an American technology entrepreneur and

Morever, the rapid pace of development, new advancement in technologies and

Copyright © Open University Malaysia (OUM)

organisations today to see young people or Generation Y increasingly holding a

1.1 MANAGEMENT AND ITS NEW LANDSCAPE

1.1.1 Managing in the New Landscape

In todayÊs new business landscape, business operations are becoming globalised,

In addition, your knowledge management, experiences, and exposure across

Copyright © Open University Malaysia (OUM)

Let us now discuss some of the competitive challenges faced by organisations in

(b) Technological Change

(c) Knowledge Management

Today in Malaysia, there are companies whose primary business is

(d) Collaboration across „Boundaries‰

Copyright © Open University Malaysia (OUM)

world is becoming a norm and an acceptable practice, as some businesses

1.1.2 Managing for Competitive Advantage

Copyright © Open University Malaysia (OUM)

(e) Cost competitiveness

1.2 FUNCTIONS OF MANAGEMENT

Copyright © Open University Malaysia (OUM)

Copyright © Open University Malaysia (OUM)

1.3 NATURE OF MANAGEMENT AT

1.3.1 Frontline Managers

Frontline managers are also more likely to be aggressive and innovative to

Copyright © Open University Malaysia (OUM)

Source: Bateman and Snell (2015)

1.3.2 Middle Level Managers

The interpersonal, informational and decisional roles of middle level managers

Copyright © Open University Malaysia (OUM)

Table 1.2: Middle Level Managers

Source: Bateman and Snell (2015)

1.3.3 Top Level Managers

Copyright © Open University Malaysia (OUM)

Source: Bateman and Snell (2015)

1.3.4 Working Leaders with Broad Responsibilities

Copyright © Open University Malaysia (OUM)

1.4 SKILLS AND ROLES OF MANAGERS

1.4.1 Managerial Roles

Source: Bateman and Snell (2015)

Copyright © Open University Malaysia (OUM)

1.4.2 Managerial Skills

(a) Technical Skills

(b) Conceptual and Decision Skills

(c) Interpersonal and Communication Skills

1.5 QUALITIES OF AN EFFECTIVE MANAGER

(a) Be both a Specialist and a Generalist

Copyright © Open University Malaysia (OUM)

(d) Actively Manage your Relationship with your Organisation

(e) Survive and Thrive

Copyright © Open University Malaysia (OUM)

1. Discuss challenges faced by organisations in the current business

• Nowadays managers must be able to manage within the new landscape

 In order to gain competitive advantage, organisations should be more

 The four functions of management are planning, organising, leading and

 There are three different levels of managers within an organisation, namely

 Managers should equip themselves with three management skills in order to

Copyright © Open University Malaysia (OUM)

 The three main roles of managers in organisations are interpersonal,

− Being a specialist and generalist;

− Ability to connect to employees;

− Managing a relationship with the organisation; and