Introduction to Management: formula sheet

Key formulas

Definition in one line

Management = Planning + Organising + Leading + Controlling of resources to achieve goals

Fayol's list is wider: to forecast and plan, to organise, to command, to coordinate and to control.

Efficiency vs effectiveness

Effectiveness = doing the right things (goal achieved); Efficiency = doing things right (least waste)

Management aims for both. A task can be efficient yet ineffective.

Management as a science

Science = organised body of knowledge + principles based on experiment/observation

Management principles are less exact than physics, so it is called an inexact or social science.

Management as an art

Art = theory + personal skill + creativity + practice

Knowledge must be applied with personal skill.

Management as a profession

Profession = specialised knowledge + formal education + professional body + code of ethics + service motive

Management lacks a compulsory licence or single governing body, so it is treated as an emerging profession.

Three groups of management objectives

Objectives = Organisational + Social + Personal

Organisational: survival, profit, growth. Social: benefit to society. Personal: employee needs and growth.

Organisational objectives

Survival, Profit, Growth (and reputation)

Survival means earning enough to cover costs. Profit pays for risk and expansion. Growth means higher sales, more products, more markets.

Importance of management (key points)

Achieves group goals | Efficiency | Dynamism | Stability | Personal development | Social development

Learn these as a list. Questions often ask which point a given statement illustrates.

Planning

Planning = deciding in advance what to do, how, when and who will do it

Keywords: goals, forecasting, policies, budgets, looking ahead. It is the first function and is called a primary function.

Organising

Organising = dividing work + grouping jobs + assigning authority and responsibility

Keywords: structure, departments, delegation, resources arranged.

Staffing

Staffing = manpower planning + recruitment + selection + training + appraisal + remuneration

Keywords: right person for the right job, human resources.

Directing

Directing = supervision + motivation + leadership + communication

Keywords: guiding, instructing, inspiring. It is the action function that starts the work.

Coordinating

Coordinating = bringing activities and people into harmony towards a common goal

Keywords: unity of action, synchronisation, balance between departments.

Controlling

Controlling = set standards → measure actual performance → compare → correct deviations

Keywords: standards, deviation, corrective action. Planning and controlling are closely linked.

Planning vs Controlling

Planning looks forward; controlling looks back at results and then acts

Planning sets standards; controlling checks performance against them. Planning is the base for controlling.

Levels and main focus

Top = strategy and policy; Middle = implementation and coordination; Lower = supervision of operations

Most MCQs test which activity belongs to which level.

Mintzberg's interpersonal roles

Figurehead, Leader, Liaison

Arise from the manager's formal authority and status.

Mintzberg's informational roles

Monitor, Disseminator, Spokesperson

Concern receiving and passing on information.

Mintzberg's decisional roles

Entrepreneur, Disturbance handler, Resource allocator, Negotiator

Concern making choices. Four roles here; three in each of the other groups.

Katz's skills by level

Top: conceptual highest; Middle: human prominent; Lower: technical highest; Human skill: all levels

Conceptual falls and technical rises as you go down the levels.

Taylor's four principles

Science, not rule of thumb | Scientific selection and training | Harmony, not discord; cooperation, not individualism | Division of work between managers and workers

Taylor is called the father of scientific management. His focus is shop-floor efficiency.

Taylor's techniques

Time study, motion study, fatigue study, standardisation, differential piece-rate, functional foremanship

Differential piece-rate pays a higher rate on all units to a worker who reaches or exceeds the standard output. A worker who produces below the standard gets the lower rate on all units.

Fayol's 14 principles

Division of work | Authority and responsibility | Discipline | Unity of command | Unity of direction | Subordination of individual interest | Remuneration | Centralisation | Scalar chain | Order | Equity | Stability of tenure | Initiative | Esprit de corps

Fayol is called the father of modern (general) management theory. Focus is on managers at the top.

Fayol's five functions

Planning, Organising, Commanding, Coordinating, Controlling

Later writers merged these into planning, organising, staffing, directing and controlling.

Weber's features of bureaucracy

Division of labour, hierarchy, rules, impersonality, merit-based selection, written records, career orientation

Weber is the father of bureaucracy. Authority is rational-legal, based on rules and position.

Unity of command vs unity of direction

Unity of command: one boss per employee | Unity of direction: one plan per group of activities with the same objective

A frequently tested pair.

Neo-classical = classical + human side

Human relations approach = formal organisation + social and human needs of workers

Mayo and the Hawthorne studies are the standard link.

Systems approach flow

Inputs → Transformation process → Outputs, with Feedback from the environment

An organisation is an open system as it interacts with its environment.

Contingency rule

Best management action = depends on the situation (no universal best way)

Also called the situational approach.

Hawthorne finding

Output depends on social and psychological factors, not only physical conditions

Attention and group belonging raised productivity.

Nature of principles (memory list)

Universal + General guidelines + Practice-based + Flexible + Behavioural + Cause-and-effect + Contingent

Principles are guidelines, not rigid laws. Any option calling them 'rigid' or 'fixed' is wrong.

Administration (traditional view)

Administration = Determinative function = Policy making = Top level = decides WHAT and WHY

Usually linked with board of directors, owners or government bodies.

Management (traditional view)

Management = Executive function = Policy implementation = Middle and lower level = decides HOW and WHO

Usually linked with managers and supervisors working under the policies set.

Views on the relationship

Administration > Management | Management ⊂ Administration | Administration ⊂ Management | Administration = Management

First: administration is a higher-level function. Second: management is a part of administration. Third: administration is a part of management. Fourth: some writers treat the two as the same.

Quick revision

• Management is getting work done through others to achieve set goals efficiently and effectively.
• Management is goal-oriented, continuous, universal and a group activity.
• The five functions: planning, organising, staffing, directing, controlling.
• Planning decides what to do in advance; controlling compares actual results with plans.
• Three levels: top (policy and strategy), middle (implementation), lower or supervisory (day-to-day work).
• Top managers set objectives; lower managers deal directly with workers.
• Mintzberg grouped managerial roles as interpersonal, informational and decisional.
• Classical approaches focus on tasks, structure and efficiency; neo-classical stresses people and human relations.
• Taylor is linked with scientific management, Fayol with administrative principles, Weber with bureaucracy.
• Modern approaches include systems and contingency views: no single best way for every situation.
• Administration is often linked with top-level policy making, management with execution of policy.
• Principles are broad guidelines, not rigid laws; managers adapt them to the situation.

Common mistakes

• Calling management an exact science Fix: Remember it is an inexact or social science because human behaviour cannot be fully predicted.
• Treating management as a full-fledged profession Fix: No compulsory degree, licence or single statutory body exists for managers. Say it is an emerging profession.
• Calling profit a social objective because it helps the economy. Fix: Profit is the business's own need, so it is organisational. Social objectives are benefits aimed at customers and the community.
• Treating employee training as an organisational objective. Fix: If the statement stresses the employee's growth or satisfaction, mark it personal.
• Treating recruitment and training as part of directing. Fix: Recruitment, selection and training belong to staffing. Directing covers supervision, motivation, leadership and communication.
• Saying controlling happens only at the end of a project. Fix: Controlling is continuous. Performance is measured during the work so that corrections can be made in time.
• Calling department heads top level managers. Fix: Top level means Board, Chairman, CEO and MD. Department heads are middle level.
• Confusing the three Mintzberg groups. Fix: Learn the groups as 3-3-4 lists. Leader is interpersonal; spokesperson is informational.
• Crediting Fayol with time and motion study, or Taylor with the 14 principles. Fix: Remember Taylor works at the job level with methods and tools, Fayol at the manager level with principles.
• Confusing unity of command with unity of direction. Fix: Command: one employee, one boss. Direction: one head and one plan for activities with the same goal.

Exam tips

• Learn each thinker's definition by its keyword, as MCQs often ask who said what.
• Expect statements with absolutes like 'exact' or 'always'. These are usually wrong.
• For science, art and profession, memorise two or three tests for each and match the clue.
• Know the difference between efficiency and effectiveness, as it is a common trap.
• Attempt every question, since there is no negative marking.
• Practise the beneficiary test until you can classify a statement in ten seconds.
• Learn one example for each objective: profit, fair prices, employee training.
• Do not confuse objectives with functions or principles of management.