Fundamentals of Management-2019 PDF

Université sidi Mohamed Ben Abdellah
École Nationale des Sciences Appliquées
Management et Innovation Industrielle
Pr. Abdellatif EZZOUHAIRI

Département Génie Électrique et Informatique
Spring 2019
Course outline
Chapter 1 : Introduction
Chapter 2 : Survey on Organizations
Chapter 3 : Fundamentals of Management
Chapter 4 : Financial and Case Studies

Motivations
Why it is important to study management ?
 After graduation, most students become managers or managed
 Well-managed organizations prosper even in challenging economic times
 We all benefit from efficiently well managed organizations ….

Motivations
Management ?
Ensemble de techniques visant l’optimisation des ressources
pour atteindre des objectifs.
C’est l’art de mener une organisation pour atteindre ses

objectifs tout en optimisant les ressources disponibles.
Spring 2019 Management et Innovation Indistrielle A. EZZOUHAIRI 4

Motivations
Management is applied to …. ?
We’ll first have a look to organization
Organization ? ? ?
Organization definition
Based on ‘W.R. Scott’ research, an organization can be defined as :
Definition 1 : A community pursuing a specific goals with a highly

formalized social structure
Definition 2 : A community that shares a common interest for

the organization and engages in joint activities
Definition 3 : A coalition of variable interest

groups that develop goals through negotiation
Scott.W.R, (1987), Organizations: rational, natural, and open systems, Englewood Cliffs. NJ, Prentice-Hall.
Organization ?
Entity created to lead a collective action (enterprise, nonprofit

organization, political party, university, hospital…)
Organization structure
Ensemble des règles de répartition de l’autorité,
Process des tâches, de contrôle et de coordination
Le processus dans une organisation représente l’interaction effective

entre les individus pour atteindre les objectifs (ex, processus de direction/pilotage, de réalisation, de supports, etc.)
Organizational chart
Organization structure
Board of
Hierarchical levels Directors /
president
Technical Marketing
Make distinction between conceptuel Director Director
Tasks and operational tasks
Project Sales
Engineer
Manager Manager
Division or department
Number of functions
How can we get an organizational chart / Structure ?

The organizational chart and the enterprise classification can be based on :
Activity

The organizational chart classification can be based on :
Type of economy

The organizational chart can be designed based on :
Size of the company

The organizational chart can be designed based on :
Legal status

How organization is organized ?
Once the structure of an organisation is defined

how individuals can interact inside it ?

Example of organizations
Enterprise A profit organization
Une entreprise demeure un exemple particulier d’organisation

qui est traditionnellement caractérisé par :
- La recherche de profit (objectif ultime)
une entreprise ne peut exister que s’elle crée de la valeur ajoutée du fait
même de sa fonction de transformation.
- Le statut juridique
- Le type d’activité économique,
- Les moyens mis à contribution pour atteindre les objectifs

Non profit organization

C’est une organisation qui est caractérisée par :
- pas de profit (objectif ultime)
- statut juridique
- type d’activité,
- membres

Parlment ?

Political Party ?

Université sidi Mohamed Ben Abdellah
École Nationale des Sciences Appliquées
Pr. Abdellatif EZZOUHAIRI

Organization driven by a Structure vision
Manager
Direct vertical hierarchy
Technical staff
Simple Structure
Direct hierarchy
Personified relation Thanks to scientists like Henri Fayol (1841-1925) the first foundations were laid
low specialization for modern scientific management. These first concepts, also called principles of
Small enterprise management are the underlying factors for successful management.

Fayol proposed 14 principles of Management which are based on a fundamental truth.
These principles of management serve as a guideline for decision-making and
management actions. They are drawn up by means of observations and analyses of
events that managers encounter in practice.
1. Division of Work In practice, employees are specialized in

different areas and they have different skills.
Different levels of expertise can be
distinguished within the knowledge areas (from
generalist to specialist). Personal and
professional developments support this. According
to Henri Fayol specialization promotes efficiency
of the workforce and increases productivity.
2. Authority and Responsibility
In order to get things done in an organization, management has the

authority to give orders to the employees. Of course with this
authority comes responsibility. According to Henri Fayol, the
accompanying power or authority gives the management the right to
give orders to the subordinates. The responsibility can be traced
back from performance and it is therefore necessary to make
agreements about this. In other words, authority and responsibility
go together and they are two sides of the same coin.

3. Discipline
This third principle is about obedience. It is often a

part of the core values of a mission and vision in the
form of good conduct and respectful interactions. This
management principle is essential and is seen as the oil
to make the engine of an organization run smoothly.

4. Unity of Command
The management principle ‘Unity of command’ means that an

individual employee should receive orders from one manager and that
the employee is answerable to that manager. If tasks and related
responsibilities are given to the employee by more than one
manager, this may lead to confusion which may lead to possible
conflicts for employees. By using this principle, the
responsibility for mistakes can be established more easily.

5. Unity of Direction
This management principle is about focus and unity. All employees

deliver the same activities that can be linked to the same
objectives. All activities must be carried out by one group that
forms a team. These activities must be described in a plan of action.
The manager is ultimately responsible for this plan and he monitors
the progress of the defined and planned activities. Focus areas are
the efforts made by the employees and coordination.

6. Subordination of Individual Interest
There are always all kinds of interests in an organization. In

order to have an organization function well, Henri Fayol indicated
that personal interests are subordinate to the interests of the
organization (ethics). The primary focus is on the organizational
objectives and not on those of the individual. This applies to all
levels of the entire organization, including the managers

7. Remuneration
Motivation and productivity are close to one another as far as the

smooth running of an organization is concerned. This management
principle argues that the remuneration should be sufficient to keep
employees motivated and productive. There are two types of
remuneration namely non-monetary (a compliment, more
responsibilities, credits) and monetary (compensation, bonus or other
financial compensation). Ultimately, it is about rewarding the
efforts that have been made.

8. The Degree of Centralization
Management and authority for decision-making process must be properly

balanced in an organization. This depends on the volume and size of an
organization including its hierarchy.
Centralization implies the concentration of decision making authority at
the top management (executive board). Sharing of authorities for the
decision-making process with lower levels (middle and lower management),
is referred to as decentralization.

9. Scalar Chain
Hierarchy presents itself in any given organization. This varies from

senior management (executive board) to the lowest levels in the
organization. “hierarchy” management principle states that there
should be a clear line in the area of authority (from top to bottom
and all managers at all levels). This can be seen as a type of
management structure. Each employee can contact a manager or a
superior in an emergency situation without challenging the hierarchy.
Especially, when it concerns reports about calamities to the
immediate managers/superiors.
10. Order
According to this principle, employees in an organization must have the

right resources at their disposal so that they can function properly in
an organization. In addition to social order (responsibility of the
managers) the work environment must be safe, clean and tidy

11. Equity
The management principle of equity often occurs in the core values

of an organization. According to Henri Fayol, employees must be
treated kindly and equally. Employees must be in the right place
in the organization to do things right. Managers should supervise
and monitor this process and they should treat employees fairly
and impartially.

12. Stability
This management principle represents deployment and managing of

personnel and this should be in balance with the service that is
provided from the organization. Management strives to minimize
employee turnover and to have the right staff in the right place.
Focus areas such as frequent change of position and sufficient
development must be managed well.

13. Initiative
Henri Fayol argued that with this management principle employees

should be allowed to express new ideas. This encourages interest and
involvement and creates added value for the company. Employee
initiatives are a source of strength for the organization. This
encourages the employees to be involved and interested.

14. Esprit de Corps
The management principle ‘esprit de corps’ stands for striving for the
involvement and unity of the employees. Managers are responsible for the
development of morale in the workplace; individually and in the area of
communication. Esprit de corps contributes to the development of the
culture and creates an atmosphere of mutual trust and understanding

Conclusion
The 14 principles of management can be used to manage

organizations and are useful tools for forecasting,
planning, process management, organization management,
decision-making, coordination and control.
Although they are obvious, many of these matters are still
used based on common sense in current management practices
in organizations. It remains a practical list with focus
areas that are based on Henri Fayol ’s research which still
applies today due to a number of logical principles

Administrative management

The top five/four principles of scientific management theory suggested by Taylor
Under the scientific method, each task is based on time and motion study. The time and
motion study divides the work into smaller units, eliminates undesirable motions, arrives at
the best way (motion) of doing the work and times that motion to determine the optimum
output per worker per day
Business operations include estimating the fair day’s work, determining the wage rate for
each work operation, standardization of operations etc. which should be precise and exact
rather than estimates. Scientific techniques are, thus, used to carry out the work which have
replaced the old methods of operations, hit and trial etc.

The top five principles of scientific management theory suggested by Taylor
Principle # 1. Rule of Thumb should be Replaced with Science
Trial and error approach should not be used for taking

decisions, rather scientific way of working should be
followed. Work should not be performed on the basis
of past experience, trial and error approach or Rule of
Thumb. It should be performed in a scientific manner.

Principle # 2. There should be Harmony, not Discord in Group Action
All members of the organization (employers and employees) should work as

a team. Conflicts should be resolved by mutual discussions and
coordination and disagreements should be eliminated. All group actions
should be based on mutual understanding so that group, as a whole,
contributes to organizational output.

Principle # 3. Cooperation, not Individualism
People should not promote individual interests at the cost of

organizational interests. They should cooperate with each
other, promote mutual understanding in their thinking, solve
each other’s problems and work as a team to achieve
organizational goals.

Principle # 4. Maximum Output, not Restricted Output
People should not restrict production. They should increase the output and
share the benefits with the management. Workers should not feel that if they
maximize organizational output, they would be turned out by management.
Instead, they should appreciate the fact that increase in output shall be shared
by employers (in the form of profits) and employees (in the form of wages)
together.

Principle # 5. Development of Workers to their Fullest Capacity
Workers should be developed to their full potential through scientific

selection, formal education, training and motivation to give their best
to organizational output for the benefit of both; the organization and
the workers. Training should be provided at the work place so that
workers learn about new technologies and methods of work to meet
the needs of the changing environment.
Organization driven by a Scientific vision
Taylor’s principles and techniques are relevant mainly with

respect to production activities. As he focused his attention on
factory management, as a result, his principles are directly
applicable at the shop floor. Whereas Fayol’s principles have
wider relevance in functional areas and his principles can be
applied to all kinds of activities
More hierarchy
Product specialization
Medium
One activity
Discussion
Comparison: Taylor’s and Fayol’s Principles of Management
Commonalities
Taylor’s principles of scientific management and Fayol’s principles of management are mutually complementary.
Both of them evolved their principles through practical experience and brought them forward to the world through
their books.
Both of them realized the importance of management in industrial progress. As a result, they endeavoured to
develop a rational and systematic basis of management. However, the two pioneers differ from each other in the
following aspects.
Differents points
1. Taylor’s principles and techniques are relevant mainly with respect to production activities. As he focused his
attention on factory management, as a result, his principles are directly applicable at the shop floor. Whereas Fayol’s
principles have wider relevance in functional areas and his principles can be applied to all kinds of activities.
2. Taylor called his philosophy ‘scientific management’ whereas Fayol described his approach as ‘General
administration’.
The main drawbacks of the previous management schools are :
- No dynamism/flexibility
- No adaptability
- Dedicated to specific organization

(1) the key part of the organization

How organization is organized ?
Henry Mintzberg suggests that organizations can be seen along three basic dimensions
(2) the prime coordinating mechanism

(3) the type of decentralization ???

According to Mintzberg, six coordination mechanisms are considered
1.Mutual adjustment, which achieves coordination by the

simple process of informal communication (as between
two operating employees)

2. Direct supervision, is achieved by having one person

issue orders or instructions to several others whose work
interrelates (as when a boss tells others what is to be
done, one step at a time)

3. Standardization of work processes, which achieves coordination by specifying the

work processes of people carrying out interrelated tasks (those standards usually
being developed in the technostructure to be carried out in the operating core, as in the
case of the work instructions that come out of time-and-motion studies)

4. Standardization of outputs, which achieves coordination by specifying the results of

different work (again usually developed in the technostructure, as in a financial plan that
specifies subunit performance targets or specifications that outline the dimensions of a
product to be produced)

5. Standardization of skills (as well as knowledge), in which different work is

coordinated by virtue of the related training the workers have received (as in medical
specialists – say a surgeon and an anesthetist in an operating room –responding
almost automatically to each other’s standardized procedures)

6. Standardization of norms, in which it is the norms

infusing the work that are controlled, usually for the entire
organization, so that everyone functions according to the
same set of beliefs (as in a religious order) / enterprise
culture

(3) the type of decentralization Decentralized
Centralized
Vertical decentralization : decisional power is transferred to the bottom inside the same structure
horizontal decentralization the decisional power is transeferred to external experts
Types of structures according to the Mintzberg’s view

The main role is delegated to the board
Example
Small enterprise
High flexibility and adaptation

More appropriate for environment where processes

should be clearly defined

More autonomy and high qualifications

Big companies

Innovative structure

Informal organizations

No hierarchy

Summary

Formal and Informal structures
Formal structure
Division and work coordination
Vertical Division it separates first line tasks and conceptual tasks
Horizontal Division Tasks are divided in elementary actions (Taylor)

Formal and informal structures
Formal structure
Division and work coordination
Coordination Mintzberg mechanisms

Formal and informal structures
Informal structure
it completes the formal structure through personal

relationship, personal communication and networking

Evolution of managerial structures
Why is it important to make adaptation of managerial structures ?
Market instability
New Technology trends
New requirements of employees and shareholders
New client requests

What are the main points to be considered to initiate a structure migration ?
Reduction of the power levels (hierarchy)
Redefine the organization borders
Reengineering

Examples
Innovative organization (Adhocratie)
Organization built over projects
Network structure

Evolution life cycle

Summary ?

Case study !

Chapter 3 : Fundamentals of management
Motivations
management can be seen as a soul of the success
Indeed :
According to a Bank of America report, more than 90% of commercial bankruptcies
are due to management (lack of experiment executives)
After many years studying North American commercial firms, Forbes concludes that
the success of companies is closely related to the quality of their management

Brief history of management root

Etymology
Le verbe manager est dans les dictionnaires de Français synonyme de

diriger, gérer, organiser.
To Manage: diriger, administrer, gérer, mener, conduire, maîtriser,

dompter, gouverner, mater, tenir, venir à bout, arranger, manier,
manoeuvrer.
To Manage: S'y prendre, se tirer d'affaire, s'en tirer, s'arranger, se

débrouiller, trouver moyen de, parvenir à…

Definition
Management is a process of :
Allocating
Through
To reach

Concept of management 3. Information

/ Environment
1. Human
4. POLC /
Resources
PODC
Management
5. Financial
2. Efficiency

1. Human resources
Managers
Who are managers and where they work ?
Organization : a deliberate arrangement of people brought together to accomplish a specific purpose
A collection of people working together for a common goal
All the time the common goal is making profit
Common Characteristics of Organizations
Goals : profit/ non profit

People : every organization is built of people
Structure : top, middle and down levels of the organization (how it is tailored and structured)
1. Human resources
Managers
Individuals in the organization who direct the activities / work of others
Managing basically mean: run other people

1. Human resources
Managers vs Management levels

1. Human resources
Managers ?
Top Managers
Make decisions about the directions of the organization
Examples : President, chief Executive Officer, Vice President

1. Human resources
Managers ?
Middle Managers
Manage activities of other managers
Example : district Managers, division Managers

1. Human resources
Managers ?
First-line managers
Direct nonmanagarial employees
Examples : supervisor, team leader

1. Human resources
Managers
What these Managers do ?
All managers play roles and perform functions
Functions Fayol approach
Managers
Roles Mintzberg approach

1. Human resources
Manager’s Functions
Planning
Defining the organizational purpose and ways to achieve it
Organizing
Arranging and structuring work to accomplish organizationnal goals
Leading
Directing the work activities of others
Controlling
Monitoring, comparing and correcting work performance
1. Human resources
Manager’s Roles
Minzberg manager’s roles
- Managing actions directly
- Managing people who take action
- Managing information that propels people to take action
Manager’s dual role include :
- Framing
- Scheduling
1. Human resources
Managers
What are management roles ?
Interpersonnal roles Decisional roles
- Figurehead
- Entrepreneur
- Leader
- Disturbance handler
- Liaison
- Resource allocator
- Negociator
Information roles
- Monitor
- Disseminator (to spread news)
- Spokesperson
1. Human resources
Managers
What skills do managers need ?
Conceptual skills
Used to analyse and diagnostic complex situations
Interpersonal skills
Used to work with, undestand, and motivate individuals and groups
Technical skills
Involve job-specific knowledge and techniques required to perform tasks
Political skills
Used to build a power base and establish connections
1. Human resources
Managers
Who is doing what ?

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Université sidi Mohamed Ben Abdellah

École Nationale des Sciences Appliquées

Management et Innovation Industrielle

Pr. Abdellatif EZZOUHAIRI

Chapter 2 : Survey on Organizations

Chapter 3 : Fundamentals of Management

Chapter 4 : Financial and Case Studies

 After graduation, most students become managers or managed

 Well-managed organizations prosper even in challenging economic times

 We all benefit from efficiently well managed organizations ….

C’est l’art de mener une organisation pour atteindre ses

Spring 2019 Management et Innovation Indistrielle A. EZZOUHAIRI 4

We’ll first have a look to organization

Definition 1 : A community pursuing a specific goals with a highly

Definition 2 : A community that shares a common interest for

Definition 3 : A coalition of variable interest

Entity created to lead a collective action (enterprise, nonprofit

Le processus dans une organisation représente l’interaction effective

How can we get an organizational chart / Structure ?

Spring 2019 Management et Innovation Indistrielle A. EZZOUHAIRI 9

Spring 2019 Management et Innovation Indistrielle A. EZZOUHAIRI 10

Spring 2019 Management et Innovation Indistrielle A. EZZOUHAIRI 11

Size of the company

Spring 2019 Management et Innovation Indistrielle A. EZZOUHAIRI 12

The organizational chart can be designed based on :

Spring 2019 Management et Innovation Indistrielle A. EZZOUHAIRI 13

How organization is organized ?

Once the structure of an organisation is defined

Spring 2019 Management et Innovation Indistrielle A. EZZOUHAIRI 14

Enterprise A profit organization

Une entreprise demeure un exemple particulier d’organisation

Spring 2019 Management et Innovation Indistrielle A. EZZOUHAIRI 15

Non profit organization

Spring 2019 Management et Innovation Indistrielle A. EZZOUHAIRI 16

Spring 2019 Management et Innovation Indistrielle A. EZZOUHAIRI 17

Spring 2019 Management et Innovation Indistrielle A. EZZOUHAIRI 18

Chapter 2 : Survey on Organizations

Pr. Abdellatif EZZOUHAIRI

Direct vertical hierarchy

Spring 2019 Management et Innovation Indistrielle A. EZZOUHAIRI 20

1. Division of Work In practice, employees are specialized in

2. Authority and Responsibility

In order to get things done in an organization, management has the

Spring 2019 Management et Innovation Indistrielle A. EZZOUHAIRI 22

This third principle is about obedience. It is often a

Spring 2019 Management et Innovation Indistrielle A. EZZOUHAIRI 23

The management principle ‘Unity of command’ means that an

Spring 2019 Management et Innovation Indistrielle A. EZZOUHAIRI 24

This management principle is about focus and unity. All employees

Spring 2019 Management et Innovation Indistrielle A. EZZOUHAIRI 25

6. Subordination of Individual Interest

There are always all kinds of interests in an organization. In

Spring 2019 Management et Innovation Indistrielle A. EZZOUHAIRI 26

Motivation and productivity are close to one another as far as the

Spring 2019 Management et Innovation Indistrielle A. EZZOUHAIRI 27

8. The Degree of Centralization

Management and authority for decision-making process must be properly

Spring 2019 Management et Innovation Indistrielle A. EZZOUHAIRI 28

Hierarchy presents itself in any given organization. This varies from

According to this principle, employees in an organization must have the

Spring 2019 Management et Innovation Indistrielle A. EZZOUHAIRI 30

The management principle of equity often occurs in the core values

Spring 2019 Management et Innovation Indistrielle A. EZZOUHAIRI 31