Topic 1-Nature of MGT

MGT1103
FUNDAMENTALS OF MANAGEMENT
Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved
COURSE DESCRIPTION
The Course introduces students to the

field of management, and offers an
overview of basic management
concepts, terminology, principles,
practices, functions, operations and
institutions .
LEARNING OBJECTIVES
Explain
Explain mgt org. Describe Describe
principles designs & leadership communica-
tion process
and biz. mgt and and
functions of related to motivation development
mgt real world theories of teams
situation
LEARNING OUTCOMES
Successful students will be able to:
1. Identify the management concepts, principles
and terminology
2. Describe the various functions of management
(planning, organizing, leading and controlling)
and their processes
3. identify the different types of organization
design, leadership and motivation theories.
4. describe the communication process and
conflicts in an organization.
Assessment Weighting Due date
Individual
20% Week 7
assignment
TEST 20% Week 8
Group Presentation 20% Week 13
Final Exam 40% Week 15
WHAT BOOKS TO USE?
TOPIC 1:NATURE OF MANAGEMENT
IN ORGANISATIONS
TOPIC 1 : LEARNING OBJECTIVES
1.1 Describe an organization and its external
environment.
1.2 Explain why managers are important to organizations.
1.3 Tell who managers are and what they do
1.4 Describe the functions, skills and roles of

managers.
WHAT IS AN ORGANIZATION?
Organization – A deliberate arrangement of people assembled
to accomplish some specific purpose.
E.g. Profit making organizations e.g. companies, hypermarket,
college, bank, manufacturers, etc.
Government organization e.g. police, army, ministries, etc.
Voluntary organizations e.g. welfare, charity homes, etc.
Common Characteristics of Organizations

Have a distinct purpose (goal)
Are composed of people
Have a deliberate structure
COMPONENTS OF THE EXTERNAL ENVIRONMENT
THE EXTERNAL ENVIRONMENT (1 OF 2)
External Environment - Those factors and forces outside the
organization that affect it’s performance. The external
environment includes SIX different components.
 Economic – Encompasses economic and cost factors such as

interest rates, inflation, changes in disposable income, stock
market fluctuations, and business cycle stages.
 Demographic – Concerned with trends in population

characteristics such as age, race, gender, education level,
geographic location, income and family composition.
 Political/Legal – Concerned with federal, state and local laws,

and global laws.
THE EXTERNAL ENVIRONMENT (2 OF 2)
Technological – Concerned with scientific or industrial
innovations.
Sociocultural – Concerned with societal and cultural factors such

as values, attitudes, trends, traditions and lifestyles, beliefs,
tastes, and patterns of behavior.
Global – Encompasses issues associated with globalization and

a world economy.
FACTORS IMPACTING GLOBAL BUSINESSES
Like many global businesses, Nestlé is facing increased
commodity (raw materials) costs.
Nestlé, the maker of products from Crunch chocolate bars
to Nescafé coffee to Purina pet foods, spends more than
US$30 billion a year on raw materials.
Commodity costs are just one of the many volatile economic
factors facing organizations. Managers need to be aware
of the economic context so they can make the best decisions
for their organizations.
THE GLOBAL ECONOMY AND THE ECONOMIC CONTEXT
The global financial crisis began with the turmoil in the

United States housing market in 2007, followed by the
Great Depression.
As credit markets collapsed, businesses were impacted.
Credit was no longer readily available to fund
businesses.
Economic difficulties spread across the globe.
The fragile economic recovery continues to be a
business constraint.
ECONOMIC INEQUALITY AND THE ECONOMIC CONTEXT
As economic growth has languished and

sputtered, and as people’s belief that anyone
could prosper declined, social discontent over
growing income gaps has increased.
Business leaders must realize that societal

attitudes in the economic context have the
potential to create constraints.
THE DEMOGRAPHIC ENVIRONMENT (1 OF 2)
Gen Y is an important demographic at Facebook, where most employees
are under 40. The company values the passion and pioneering spirit of its
young employees who embrace the challenges of building
groundbreaking technology and of working in a fast-paced environment
with considerable change and ambiguity.
THE DEMOGRAPHIC ENVIRONMENT (2 OF 2)
The size and characteristics of a country’s population can have a
significant effect on what it’s able to achieve in politics,
economics, and culture.
Baby Boomers – Born between 1946 and 1964, one of the
largest and most influential demographic groups in history.
Gen Y or (Millennials) – Children of Baby Boomers, born
between 1978 and 1994, making an impact on technology and
the workplace.
Post-Millennials (Gen Z) – The youngest group identified age
group—basically teens and middle-schoolers. They have also
been called the iGeneration because advances in technology
have customized everything to the individual.
WHY ARE MANAGERS IMPORTANT?
Organizations need their managerial skills and abilities

more than ever in these uncertain, complex, and chaotic
times.
Managerial skills and abilities are critical in getting things
done.
The quality of the employee/supervisor relationship is the
most important variable in productivity and loyalty.
- It is the way employees are managed that can affect the
organisation’s financial performance
Management
& leadership
The success of any business depends on
its employees. The performance level of
these employees is greatly affected by
Employees the leadership and management they
experience
Organization
Version 1 Copyright © 2016, 2014, 2012 Pearson Education,

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19
WHO ARE MANAGERS?
Manager - Someone who coordinates and oversees the

work of other people so that organizational goals can be
accomplished.
THREE LEVELS OF MANAGEMENT
TOP MANAGERS
Top Managers
 Individuals who are responsible for making organization-wide
decisions and establishing plans and goals that affect the entire
organization.
Example: CEO (Chief Executive Officer), General Manager,

Managing director, Principal/Headmaster, etc.
Copyright © 2016, 2014, 2012 Pearson Education, Inc.MANAGEMENT

REF: ROBBINS, S. P. (2014). All Rights
(7TH ED.).Reserved
MIDDLE MANAGERS
Middle managers – Managers between the first line level and the top
level of the organization who manage the work of front-line managers
They are often called department head or division managers.
Example: Sales and marketing directors, Product Division manager, Food
and Beverage manager, Head of Schools/Departments, etc.
 Middle managers develop the tactics, specific policies and short term
plans to achieve the organization's overall goals and vision.

(7TH ED.).Reserved
FIRST-LINE MANAGERS
 Individuals who manage the work of non-managerial employees.
 They are often called supervisors, or line manager

Examples: Accounts supervisor, Factory supervisor, foreman,
Administrative Officer, Front Desk/Reception Hotel manager, Exam
Officers, etc
 They are the only managers who have direct and daily contact with the
workforce who are servicing the customers.
 Their role is unique and one of the most important in any organisation.
REF: ROBBINS, S. P. (2014). MANAGEMENT (7TH ED.).
WHAT DO MANAGERS DO?
Management involves coordinating and overseeing the

work activities of others so that their activities are
completed efficiently and effectively.
EFFECTIVENESS AND EFFICIENCY
Efficiency Effectiveness
Doing things right Doing the right things
Getting the most output Attaining organizational goals
for the least inputs
It means achieving results, to
It means using resources make the right decisions and to
(people, money, raw successfully carry them out so that
materials) wisely and cost- they achieve the organization’s
effectively goals.
EFFECTIVENESS AND EFFICIENCY
REAL-LIFE SITUATION OF
EFFICIENCY AND EFFECTIVENESS
If you have a box of 10 eggs, two buns and some
ham (limited resources), what can you do to cook
a satisfying meal for three persons (two adults
and one child) at home?
THE FOUR MANAGEMENT FUNCTIONS
Henri Fayol, a French industrialist in 1916, discovered that managers
perform four functions:
Planning – Defining goals, establishing strategies to achieve goals,
and developing plans to integrate and coordinate activities.
Organizing – Arranging and structuring work to accomplish
organizational goals.
Leading – Working with and through people to accomplish goals.
Controlling – Monitoring, comparing, and correcting work.
If Q in exam asked for 5 mgt functions, another mgt function is
Staffing – Involves recruiting, hiring and training people.
 Includes determining what skills and experiences people must
possess to hold each position, and how many persons will be
needed to meet both short-and long-term requirements.
EXHIBIT 1-4 FOUR FUNCTIONS OF MANAGEMENT
FOUR MANAGERIAL FUNCTIONS Organizing
24%
Planning
First-Level 15%
Managers Leading
51%
Organizing
33%
Planning
18%
Middle
Leading Managers
Controlling
36%
13%
Planning
28%
Organizing
Controlling 36%
14%
Top
Managers Leading
22%

(7TH ED.).Reserved
SKILLS FOR EFFECTIVE MANAGEMENT
There are three areas of skills required in order to perform the
duties and activities and to be an effective and competent
manager.
Robert Katz (1970) found that managers need three
essential skills:
Technical skills
People skills/Interpersonal skills and
Conceptual skills (Robbins,2012)

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights
STFI JVPReserved
SKILLS
Technical Skills
The ability to perform particular tasks or activities.
Knowledge of and proficiency in a certain
specialised field e.g. Computing, Accounting,
Marketing, Engineering, Law, Finance, etc.
People Skills/ Interpersonal Skills

The ability to work well with others and understand
others to motivate and to manage conflicts.

STFI JVPReserved
Interpersonal skills are “soft” skills
 Motivating
 Leading
 Negotiating
 Managing conflict
Needed by managers at all levels
Core Interpersonal skill-set:
 Clear Communication
 Assertiveness & empathy
 Integrity
 Encouraging & motivating
 Respect for Others
 Team player & work effectively with others

STFI JVPReserved
The ability to think and to conceptualise about abstract
(difficult to understand) and complex situations
 See organisation as a whole (big picture)
 See how organisation fits into environment – competition,
government, society, etc.
 High level planning & decision-making
• The ability to analyze and diagnose a situation and distinguish
between cause and effect.
More important at higher levels

STFI JVPReserved
CONCEPTUAL SKILLS (2)
Ability to use information to solve business problems
Recognising problem areas and implementing solutions
 Understand inter-relationships in and outside organisation
(e.g. purchasing, manufacturing, sales, finance)
 Manage relationships so that customer expectations
met/exceeded
Identification of opportunities for innovation
Understanding of business uses of technology

STFI JVPReserved
EXHIBIT 1-6 SKILLS NEEDED AT DIFFERENT
MANAGERIAL LEVELS
EXHIBIT 1-7 OTHER IMPORTANT MANAGERIAL SKILLS
REQUIRED IN TODAY’S ORGANISATIONS
MANAGEMENT ROLES
• In 1973, Henry Mintzberg, a

management researcher, studied
actual mangers at work.
• He studied 5 CEOs and found that
they perform 10 different roles.
• Roles are specific actions or
behaviours expected of a manager.
THE 3 CATEGORIES OF MANAGERIAL
ROLES
Activities within interpersonal roles
Interpersonal involve people and other ceremonial or

Role symbolic duties
Figurehead •perform ceremonial and legal duties e.g.
greet visitors, attend staff’s weddings, ribbon
cutting ceremony, signing legal documents, etc.
Leader •responsible for the work of the people of
that unit e.g. hiring and training his staff,
motivate his employees, etc.
Liaison •makes own contacts outside his unit e.g.
spend time with peers and external contacts,
mainly to find information, acknowledge
mails, etc.
Managers send & receive information
through informational roles
Informational role Collect, receive and disseminate information
Monitor •Requests new information & receives

unsolicited information e.g. read periodicals
and reports, maintain personal contacts, etc.
Disseminator •Passes information (from within and
outside unit) to subordinates e.g. holding
meetings, making phone calls, etc.
Spokesperson •Sends information to outsiders on
organizational plans, policies, actions or
results e.g. holding board meetings, giving
information to media
Activities within the Decisional Role
Decisional Roles Making choices.
Entrepreneur •Voluntarily improves/adapts unit e.g. initiate

“improvement projects”, organize strategy and
review sessions to develop new programs, etc
Disturbance •Responds to involuntary change e.g. acts to
Handler avoid/solve problems
Resource •Decides who gets time, work, money, etc e.g.

scheduling, request authorization, perform any
allocator activity that involves budgeting and programming
of subordinates work.
Negotiator •Represents the organization at major
negotiations e.g. participating at union contract
negotiations,
EXHIBIT 1-10 REWARDS AND CHALLENGES OF BEING A
MANAGER
Rewards Challenges
Create a work environment in which organizational Do hard work
members can work to the best of their ability
Have opportunities to think creatively and use May have duties that are more clerical than managerial
imagination
Help others find meaning and fulfillment in work Have to deal with a variety of personalities
Support, coach, and nurture others Often have to make do with limited resources
Work with a variety of people Motivate workers in chaotic and uncertain situations
Receive recognition and status in organization and Blend knowledge, skills, ambitions, and experiences of a
community diverse work group
Play a role in influencing organizational outcomes Success depends on others’ work performance
Receive appropriate compensation in the form of blank

salaries, bonuses, and stock options
Good managers are needed by organizations blank
REVIEW LEARNING OBJECTIVE 1.1
Explain organizations and its environment.

An organization is a deliberate arrangement of people to
accomplish some specific purpose.
The external environment consists of economic, demographic,
political, technological, socialcultural and global factors
Explain why managers are important to organizations.

 Organizations need their managerial skills and abilities in
uncertain, complex, and chaotic times.
 Managers are critical to getting things done in
organizations.
 Managers contribute to employee productivity and loyalty.
Tell who managers are and what they do
 Managers coordinate and oversee the work of other people
so that organizational goals can be accomplished.
 The three levels of management are top managers (who
makes organization decisions, plans and policies), middle
managers (who implements the strategies and manage first-
line managers) and first-line managers (who manage the
nonmanagerial employees).
 Efficiency is concerned with ‘doing the right things’ and
getting the most output out of the least input.
 Effectiveness focus on ‘doing things right’ and attaining
REVIEW LEARNING OBJECTIVE 1.4 (1 OF 3)
Describe the functions of managers.
 Management involves coordinating and overseeing the
efficient and effective completion of others’ work activities.
 The five functions of management include:
Planning – Defining goals, establishing strategies to achieve goals,
and developing plans to integrate and coordinate activities.
Organizing – Arranging and structuring work to accomplish
Staffing – recruiting, hiring, and training employees
Leading – Working with and through people to accomplish goals.
Controlling – Monitoring, comparing, and correcting work.
Describe the skills of managers
Katz’s managerial skills include:

 Technical (job-specific knowledge and techniques)
 Human (ability to work well with people)
 Conceptual (ability to think and express ideas).
Describe the roles played by managers
The three categories and ten managerial roles developed

by Mintzberg include:
Interpersonal - involve people and other

ceremonial/symbolic duties (figurehead, leader, and
liaison).
Informational - collecting, receiving, and disseminating
information (monitor, disseminator, and spokesperson).
Decisional - making choices (entrepreneur, disturbance
handler, resource allocator, and negotiator).

Topic 1-Nature of MGT

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MGT1103

The Course introduces students to the

TEST 20% Week 8

Group Presentation 20% Week 13

Final Exam 40% Week 15

1.3 Tell who managers are and what they do

1.4 Describe the functions, skills and roles of

Common Characteristics of Organizations

 Economic – Encompasses economic and cost factors such as

 Demographic – Concerned with trends in population

 Political/Legal – Concerned with federal, state and local laws,

Sociocultural – Concerned with societal and cultural factors such

Global – Encompasses issues associated with globalization and

The global financial crisis began with the turmoil in the

As economic growth has languished and

Business leaders must realize that societal

Organizations need their managerial skills and abilities

Version 1 Copyright © 2016, 2014, 2012 Pearson Education,

Manager - Someone who coordinates and oversees the

Example: CEO (Chief Executive Officer), General Manager,

Copyright © 2016, 2014, 2012 Pearson Education, Inc.MANAGEMENT

Copyright © 2016, 2014, 2012 Pearson Education, Inc.MANAGEMENT

 They are often called supervisors, or line manager

Management involves coordinating and overseeing the

Copyright © 2016, 2014, 2012 Pearson Education, Inc.MANAGEMENT

People skills/Interpersonal skills and

Conceptual skills (Robbins,2012)

People Skills/ Interpersonal Skills

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights

• In 1973, Henry Mintzberg, a

Interpersonal involve people and other ceremonial or

Monitor •Requests new information & receives

Entrepreneur •Voluntarily improves/adapts unit e.g. initiate

Resource •Decides who gets time, work, money, etc e.g.

Receive appropriate compensation in the form of blank

Explain organizations and its environment.

Explain why managers are important to organizations.

Describe the skills of managers

Katz’s managerial skills include:

The three categories and ten managerial roles developed

Interpersonal - involve people and other

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