Chapter 6

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CHAPTER SIX
Introduction to Management
BUSINESS MANAGEMENT: A Malaysian Perspective (Second Edition) Oxford Fajar Sdn. Bhd. (008974-T), 2012
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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.
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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.
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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
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CORE ELEMENTS OF AN ORGANIZATION
There are three core elements that are common in

all organizations: Organizational goals People Structure
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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.
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MANAGERIAL LEVELS
There are three managerial levels in organizations:

Top-level Middle-level First-level
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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.
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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.
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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.
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MANAGEMENT PROCESS
Management is the process and activities involved

in pursuing organizational goals efficiently and effectively by planning, organizing, leading and controlling the organizations resources.
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MANAGEMENT FUNCTIONS Planning Planning involves setting appropriate and clear goals and objectives, and establishing appropriate strategies to accomplish them.
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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) Oxford Fajar Sdn. Bhd. (008974-T), 2012 All Rights Reserved
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MANAGEMENT FUNCTIONS (cont.)
Controlling Controlling is the process to ensure that performance is as planned and taking the necessary corrective actions/changes when needed.
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EFFECTIVE COMMUNICATION AS A MANAGEMENT TOOL
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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.
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RELATIONSHIP BETWEEN EFFICIENCY, EFFECTIVENESS AND PERFORMANCE
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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.
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MANAGEMENT SKILLS AT DIFFERENT MANAGERIAL LEVELS
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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.
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MANAGERIAL ROLES (cont.)
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MANAGERIAL ROLES (cont.)
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ORGANIZATIONAL STRUCTURE
Organizational structure is the organizations

formal framework by which tasks and jobs are divided, grouped and coordinated.
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FUNCTIONAL STRUCTURE
In a functional structure, work activities are

grouped according to functions.
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PRODUCT STRUCTURE
Product structures group all activities and

functions needed to produce and market a particular product/service under one unit/ department.
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GEOGRAPHICAL STRUCTURE
In a geographical structure, units are divided

according to location or geographical area.
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CUSTOMER STRUCTURE
In a customer structure, units are divided

according to the type of customers an organization has.
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MATRIX STRUCTURE
A matrix structure is a two-dimensional reporting

structure that simultaneously groups people and resources by function and by project.
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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.
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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.
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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.
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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.
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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.
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MOTIVATORHYGIENE THEORY (cont.)
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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.
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EXPECTANCY THEORY (cont.)
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Define what an organization is.

Describe management as a process.

LEARNING OUTCOMES (cont.)

Explain four main theories of motivation.

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An organization is a systematic arrangement of

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CORE ELEMENTS OF AN ORGANIZATION

There are three core elements that are common in

All Rights Reserved

A manager is a person who is responsible to

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There are three managerial levels in organizations:

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MANAGERIAL LEVELS (cont.)

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MANAGERIAL LEVELS (cont.)

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MANAGERIAL LEVELS (cont.)

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Management is the process and activities involved

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MANAGEMENT FUNCTIONS (cont.)

MANAGEMENT FUNCTIONS (cont.)

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EFFECTIVE COMMUNICATION AS A MANAGEMENT TOOL

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EFFICIENCY AND EFFECTIVENESS

RELATIONSHIP BETWEEN EFFICIENCY, EFFECTIVENESS AND PERFORMANCE

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MANAGEMENT SKILLS AT DIFFERENT MANAGERIAL LEVELS

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MANAGERIAL ROLES (cont.)

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MANAGERIAL ROLES (cont.)

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Organizational structure is the organizations

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In a functional structure, work activities are

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Product structures group all activities and

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In a geographical structure, units are divided

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In a customer structure, units are divided

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A matrix structure is a two-dimensional reporting

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Motivation is the driving force that is capable of

A highly motivated person always strive to work

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HIERARCHY OF NEEDS THEORY

HIERARCHY OF NEEDS THEORY (cont.)

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THEORY X AND THEORY Y

Theory X is a negative view that assumes

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MOTIVATORHYGIENE THEORY (cont.)

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EXPECTANCY THEORY (cont.)