Name: Viqar A.

Usmani
Deputy General Manager (Retd)
&
Head Of SWIFT Operations
HBL
One of the most important human activities is managing.
Ever since people beganforming groups to accomplish aims they could not
achieve as individuals, managing has been essential to ensure the coordination
of individual efforts.
As society has come to rely increasingly ongroup effort andas many organized
groups havegrownlarger, thetask of managershas been rising in importance.
Definitionof Management: ItsNatureandPurpose
Management is the process of designing and maintaining anenvironment in
which individuals, workingtogether in groups, accomplish efficiently selected
aims.
Thisbasicdefinitionneedstobeexpanded:
1.Asmanagers, peoplecarryout themanagerial functionsof planning,
organizing, staffing, leading, andcontrolling.
2. Managementappliestoanykindof organization.
3.It applies to managers at all organizational levels.
4.Theaimof all managersisthesame: tocreateasurplus.
5.Managing is concerned with productivity; that implieseffectivenessand
efficiency.
The Functions of Management
Many scientists and scholars have found that the analysis of management isfacilitated by a
useful andclear organization of knowledge.
As a first order of knowledge classification, wehave used the fivefunctions of
managers:
Planning, Organizing, Staffing, Leading and Controlling.
Thus, the concepts, principles, theory, and techniques are organized aroundthese
functionsandbecomethebasisfor discussion.
This framework has been used and tested for many years.
Although there are different ways of organizing managerial knowledge, most
textbook authors today have adopted this or a similar framework even
after experimenting at times with alternative ways of structuring knowledge.
Although the emphasis in this article is on managers' tasks in designing an
internal environment for performance, it must never be overlooked that
managers must operate in the external environment of an enterprise as well
as in the internal environment of an organization's various departments.
Management as an Essential for Any Organization
Managersarechargedwiththeresponsibility of takingactions that will make it
possible for individuals tomake their best contributions to group objectives.
Management thusapplies tosmall and largeorganizations toprofit and not-for-profit
enterprises, tomanufacturing as well as service industries.
The term"enterprise refers to business, government agencies, hospitals,
universities, and other organizations, because almost everything said in this
lecture refers to business as well as nonbusiness organizations.
Effectivemanaging istheconcern of thecorporation president, the hospital
administrator, the government firstlinesupervisor, theBoyScout leader, the
baseball manager, and the universitypresident.
Management at Different Organizational Levels
Managersarechargedwiththeresponsibility of takingactions that will make it
possible for individuals tomake their best contributions to group objectives.
Tobe sure, a given situation may differ considerablyamong various levels
in an organization or varioustypes of enterprises.
Similarly, the scopeof authority held may vary and the types of problems
dealt withmay be considerably different.
Furthermore, the person in a managerial role may be directing people in the.
sales, engineering, or finance'department.
But the fact remains that, as managers, all obtain results by establishing an
environment for effectivegroupendeavor.
All managers carry out managerial functions.
However, the time spent for each function may differ.
Above Figure shows an approximation of the relative time spent for each function.
Thus, top-level managers spend more time on planning and organizing than lower level
managers.
It isimportant toremember that management isaformof work.
Themanager, indoinghis or her work, must performcertainactivities calledthefunctions of
management.
Theseare:
1.Planning - decidingwhat objectivestopursueduringafuturetimeperiodandwhat todoinorder toachieve
thoseobjectives.
2.Organizing - groupingactivities, assigningactivities, andprovidingtheauthoritytocarryout theactivities.
3.Staffing - determininghumanresourceneeds, recruiting, selecting, training, anddevelopinghumanresources.
4.Motivating - directingor channelinghumanbehavior towardgoals.
5.Controlling - measuring performanceagainst goals, determining causes of deviations, and taking corrective
actionwherenecessary.
Every manager, regardless of his or her level in the organization, performs all of
these functions to some degree.
However, the relative amount of time spent on each function might vary
considerably from situation to situation.
Each level of management does not use the same mixture of 30 percent planning,
20 percent organizing, 20 percent staffing, 15 percent motivating, and 15 percent
controlling.
Furthermore, different managers occupying similar positions within the
organization may use different mixtures of the functions.
This may be due to different levels of personal expertise or environmental factors.
There is no fixed amount of time required for any one particular function.
The allocation of time is the manager`s own decision.
However, a manager who is spending almost all of his or her time doing one
particular function with almost no time spent in one or more of the other functions
should critically analyze his or her work performance.
This concept is sometimes called the universality of management in which
managers perform thesamefunctions regardless of their placein theorganizational
structure or the type of enterprise in which they aremanaging.
Determining the most important management function is like attempting to
determine the most important leg on a chair.
All legs are important and must be present in order for the chair to function
properly.
J ust as with the chair, if one of the management functions is weak or missing, the
management process does not function properly.
Managerial Skills and the Organizational Hierarchy
Robert L. Katz identified three kinds of skills for administrators.
To these may be added a fourth-the ability to design solutions.
1. Technical skill
It is the knowledge of and proficiency in activities involving methods, processes, and procedures.
Thus it involves working with tools and specific techniques.
For example, mechanics work with tools, and their supervisors should have the ability to teach
them how to use these tools.
Similarly, accountants apply specific techniques in doing their job
2. Human skill
Itistheability to work withpeople
It iscooperativeeffort; it isteamwork;
It is the creation of an environmentinwhichpeoplefeel secure and free to express their opinions.
3.Conceptual skill
It is the ability to see the "big picture," to recognize significant elements in a situation, and to understand the
relationshipsamongtheelements.
4. Design skill
I t istheabilitytosolveproblemsinwaysthat will benefit theenterprise.
To beeffective, particularly at upper organizational levels, managers must be able to do morethan seea
problem.
If managers merely seetheproblemandbecome"problemwatchers," they will fail.
They must have, in addition, theskill of agooddesignengineer inworkingout apractical solutiontoaproblem.
The relative importance of these skills may differ at various levels in the
organization hierarchy.
As shownin thefollowing figure, technical skills areof greatest importance at the
supervisory level. Human skills are also helpful in the frequent interactions with
subordinates.
Conceptual skills, ontheother hand, areusuallynot critical for lower level supervisors.
At themiddlemanagement level, the need for technical skills decreases;
human skillsare still essential; and the conceptual skills gain in importance.
At the topmanagement level, conceptual and design abilities andhuman skills are
especially valuable, but thereisrelatively littleneed for technical abilities
It is assumed, especially in large companies, that chief executives can utilize
thetechnical abilitiesof their subordinates.
In smaller firms, however, technical experience maystill bequiteimportant.
The Aim of All Managers
Nonbusiness executivessometimessay that theaimof profit is really only a measure
of a surplus of sales dollars(or inanyother currency) over expensedollars. In a very
real sense, in all kinds of organizations, whether commercial and noncommercial,
the logical andpublicly desirableaimof all managersshouldbeasurplus.
Managers must establish an environment in which people can accomplish group
goals with the least amount of time, money, materials, and personal dissatisfaction, or
where they can achieve asmuch as possibleof adesired goal with availableresources.
In anonbusiness enterprise suchasapolice department, aswell asinunitsof abusiness
(suchasanaccounting department) that arenot responsible for total businessprofits,
managers still have budgetary and organizational goalsandshouldstrivetoaccomplish
themwiththeminimumof resources.
Productivity, Effectiveness, and Efficiency
Another way to viewtheaimof all managers is to say that they must be
productive.
After World War II theUnitedStateswastheworld leader inproductivity.
But inthelate1960sproductivity begantodecelerate.
Today government, private industry, and universities recognize the
urgent need for productivity improvement.
Until very recently we frequently looked toJ apanto find. answers to our
productivity problem, but this overlooks the importance of effectively
performingfundamental managerial and nonmanagerial activities.
Definition of productivity.
Successful companiescreate a surplus through productive operations.
Although there is not complete agreement on the true meaning of
productivity, we will define it asthe out put-input ratio within a time period
with due consideration for quality.
It canbeexpressedasfollows:
Productivity = Output within a time period,
input
Quality considered
Thus, productivity can be improved by increasing outputs with the same
inputs, by decreasing inputs but maintaining thesame outputs, or by increasing
outputanddecreasinginputstochangetheratiofavorably.
Inthe past, productivity improvement programs weremostly aimed at the
worker level.
Yet, as Peter F. Drucker, oneof the most prolific writers in management,
observed, 'The greatest opportunity for in creasing productivity is surely
to be found in knowledge, work itself, and especially in management.'
Definitions of effectiveness and efficiency.
Productivity implies effectiveness and efficiency in individual and organizational
performance.
Effectiveness is theachievement of objectives.
Efficiency is the achievement of the ends with the least amount of resources. To
knowwhether they areproductive, managers must knowtheir goals andthoseof the
organization
Managing: Science or Art?
Managing, like so many other disciplines like medicine, music composition, engineering,
accountancy, is in largemeasureanart but founded onawealth of science.
It ismaking decisions on thebasisof businessrealities.
Yet managers canwork better by applying the organized knowledge about management that has
accruedover thedecades.
It is this knowledge, whether crude or advanced, whether exact or inexact, that, to theextent it is
well organized, clear, andpertinent, constitutes a science.
Thus, managing as practiced is an art; the organized knowledgeunderlying the practicemay be
referredtoasascience.
Inthiscontextscience and art are not mutually exclusive but, arecomplementary.
As science improves so should the application of this science (the art) ashas happened in the
physical andbiological sciences.
Thisistrue because themanyvariables with which managers deal are extremelycomplex and
intangible.
But such management knowledge as is available can certainly improve
managerial practice.
Physicians without the advantage of sciencewould be little more than witch
doctors.
Executiveswhoattempt tomanage without suchmanagement science must trust
to luck, intuition, or to pastexperiences.
In managing, as in any other field, unless practitioners are to learn by trial and
error (and it has been said that managers' errors are their subordinates' trials),
thereisnoplacetheycanturnfor meaningful guidanceother thantheaccumulated
knowledgeunderlyingtheir practice.
The Elements of Science
Science isorganized knowledge.
The essential feature of any science is the application of the scientific
method to the development of knowledge.
Thus, wespeak of a science: as having clear concepts, theory, and other
accumulated knowledge developed from hypotheses (assumptions that
something is true), experimentation, andanalysis.
The Scientific Approach
The scientific approach first requires clear concepts mental images of anything
formed by generalizationfromparticulars.
These words and terms should beexact, relevant to the things being analyzed,
and informative tothe scientist andpractitioner alike.
Fromthis base, the scientific method involves determining facts through
observation.
After classifying and analyzing these facts, scientists look for causal relation
ships.
When these generalizations or hypotheses aretested for accuracy and appear to
be true, that is, to reflect or explain reality, and therefore to have value in
predicting what will happen in similar circumstances.
They are called principles.
This designation does not always imply that they are unquestionably or invariably true,
but that they arebelieved to be validenoughtobeusedfor prediction.
Theory is asystematic groupingof interdependent concepts and principles that form a
framework for asignificant body of knowledge.
Scattered data, suchaswhat we may find on a blackboard after a group of engineers
has been discussing aproblem, are not information unless the observer has knowledge
of thetheory that will explain relationships.
Theory is, as C.G. Homans has said, "in its lowest form a classification, a set of
pigeonholes, a filing cabinet in which fact can accumulate. Nothing is more lost than
a loose fact.
The Role of Management Theory
In the field of management, then, the role of theory is to provide a means of
classifyingsignificant andpertinent management knowledge.
Indesigninganeffectiveorganizationstructure, for example,
anumber of principlesareinterrelated and have apredictive value for managers.
Some principles give guidelines for delegating authority; theseinclude
the principle of delegatingby resultsexpected,
theprincipleof equality of authority and responsibility,
andtheprinciple of unityof command.
Principles in management are fundamental truths (or what arethought to betruths at agiven
time), explaining relationships between two or more sets of variables, usually an independent
variable and a dependent variable.
Principles may be descriptive or predictive, and are not prescriptive.
That is, they describehowonevariablerelates toanother what will happen when these variables
interact. They do notprescribewhat weshoulddo.
For example, inphysics, if gravityistheonlyforceactingonafallingbody, the body will fall at an
increasing speed;
this principledoes not tell us whether anyoneshouldjump off theroof of ahighbuilding.
Or taketheexampleof Parkinson'slaw:
Work tendstoexpandtofill thetimeavailable.
Evenif Parkinson'ssomewhat frivolousprincipleis correct (as it probably is), it does not mean that
amanager shouldlengthenthetimeavailablefor peopletodoajob.
Totakeanother example, inmanagement theprincipleof unityof commandstatesthat
themoreoftenan individual reports to asingle superior, the more that individual is
likely tofeel asenseof loyalty andobligation, andtheless likelyit isthat therewill be
confusion about instruction.
Theprinciple merely predicts.
It in no sense implies that individuals should never report tomorethan one person.
Rather, it impliesthat if theydoso, their managersmust beawareof thepossible
dangers and shouldtake theserisks intoaccount inbalancing theadvantagesand
disadvantages of multiplecommand.
But if they know the theory, these managers will know that such costs as conflicting
instructions, and confusion may exist, and they will take steps such as making the
controller's special authority crystal clear to everyone involved-to minimize or outweigh
anydisadvantages.
Likeengineerswhoapplyphysical principles tothedesignof aninstrument, managerswho
applytheory tomanaging must usually blend principles with realities.
A design engineer is often faced with the necessity of combining considerations of
weight, size, conductivity, and other factors.
Likewise, a manager may find that the advantages of giving a controller authority to
prescribeaccounting procedures throughout an organization outweigh thepossible costs of
multiple authority.
Management Techniques
Techniques areessentially waysof doingthings, methods of accomplishing a given result.
In all fields of practice they areimportant.
Theycertainly areinmanaging, even thoughfew really important managerial techniques
have been invented.
Among them are budgeting, cost accounting, network planning and control techniques
like the Program Evaluation andReviewTechnique(PERT) or thecritical path method
(CPM), rate-of-return-on-investment control, various devices of organizational
development, managing byobjectives, total quality management (TQM).
Techniques normally reflect theory and are a means of helpingmanagersundertake
activitiesmost effectively.
The Systems Approach to Operational Management
Anorganizedenterprisedoesnot exist inavacuum.
Rather, it depends on its external environment; it is apart of larger systems suchas the
industrytowhichit belongs, theeconomic system, andsociety.
Thus, the enterprise receives inputs, transforms them, and exports the outputs to the
environment, as shownby the very basic model in figureonthenext slide.
However, this simple model needs to be expanded and developed into a model of
operational management that indicates how the various inputs are transformed through
themanagerial functions of planning, organizing, staffing, leading, andcontrolling.
Clearly, any business or other organization must be described by anopen-systemmodel
that includesinteractionsbetween theenterpriseanditsexternal environment.
Re Energizing
the system
Transformation
Process
Inputs Outputs
External
Environment
Input- Output Model
The Managerial Transformation Process
Managers have thetask of transforming inputs, effectively and efficiently, into outputs.
Of course, thetransformation process can be viewed fromdifferent perspectives.
Thus, one can focus on such diverse enterprise functions as finance, production, personnel, and
marketing.
Writers on management look on thetransformation process interms of their particular approaches
tomanagement.
Specifically, as youwill see, writers belonging to thehuman behavior school focus on interpersonal
relationships;
social systemstheoristsanalyze the transformation by concentrating on social interactions;
andthose advocatingdecision theory seethe transformation as sets of decisions.
However webelieve that the most comprehensive and useful approach for discussing
thejobof managers is to usethemanagerial functions of planning, organizing, staffing,
leadingandcontrollingasaframework for organizingmanagerial knowledge.
The Communication System
Communication isessential toall phases of themanagerial process:
It integrates the managerial functions and links the enterprise with its
environment.
A communication system is a set of information providers and information
recipients and the means of transfer ringinformation fromonegrouptoanother
group with the understanding that the messages being transmitted will be
understood by both groups.
For example, theobjectives set in planning are communicated so that the
appropriate organization structurecanbedevised.
This is not easy, as one former Volkswagen executive discovered.
Economics dictated the construction of a Volkswagen assembly plant in the United
States.
However, animportant claimant, German labor, out of fear that jobs would be
eliminated in Germany, opposed thisplan.
Thisexampleillustrates theimportance of integrating the goals of various claimants to
the enterprise, which is indeed an essential task of anymanager.
Communication isessential intheselection, appraisal, andtraining of managers tofill
theroles inthis structure.
Similarly, effective leadership and the creation of an environment conducive to
motivation depend oncommunication.
Moreover, it is through communication that one determines whether events and
performanceconformtoplans.
Thus, it iscommunication thatmakesmanagingpossible.
Thesecondfunctionof the communication systemistolink theenterprisewith itsexternal
environment, where many of the claimants are.
Effective managerswill regularly scan theexternal environment.
While it is true that managers may have little or no power to change theexternal
environment, they have no alternative but to respond to it.
For example, one shouldnever forget that the customer, who is the reasonfor the
existence of virtually all businesses, is outside acompany.
I t isthroughthecommunication systemthat the needs of customers areidentified;
This knowledgeenablesthefirmtoprovide products and services at aprofit.
Similarly, it is through an effective communication systemthat the organization
becomes aware of competition and other potential threats andconstrainingfactors.
Outputs
Managers must secure and utilize inputs to the enterprise, to transform
them through the managerial functions-with due consideration for
external variables-to produceoutputs.
Although the kinds of outputs will vary with theenterprise, they
usually include a combination of products, services, profits, satisfaction,
and integration of the goals of various claimants to the enterprise.
Most of these outputs require no elaboration, andonly thelast twowill
bediscussed.
The organization must indeed provide many"satisfactions" if it hopesto retain
andelicit contributions fromits members.
I t must contribute to the satisfaction not only of basic material needs (for example,
earning money to buy food and shelter or havingjob security) but alsoof needs
for affiliation, acceptance, esteem, and perhaps even self actualization.
Another output is goal integration.
As noted above, the different claimants to the enterprise havevery divergent-and
often directly opposingobjectives.
It isthe task of managers toresolve conflicts and integrate these aims.
Although the kinds of outputs will vary with theenterprise, they usually
include a combination of products, services, profits, satisfaction, and
integration of the goals of various claimants to the enterprise.
Most of these outputs require no elaboration, andonly thelast twowill be
discussed.
The organization must indeed provide many"satisfactions" if it hopes
to retain and elicit contributions fromits members.
I t must contribute to thesatisfaction not only of basic material needs (for
example, earning money to buy food and shelter or havingjob security) but
alsoof needs for affiliation,
Acceptance, esteem,and perhaps even self actualization.
Another output is goal integration.
As noted above, the different claimants to the enterprise havevery divergent-and often
directly opposingobjectives.
I t isthe task of managers toresolve conflicts and integrate these aims.
This is not easy, as one former Volkswagen executive discovered.
Economics dictated the construction of a Volkswagen assembly plant in the
United States.
However, animportant claimant, German labor, out of fear that jobs would
be eliminated in Germany, opposed thisplan.
Thisexampleillustrates theimportance of integrating the goals of various
claimants to the enterprise, which is indeed an essential task of any
manager.
Re-energizing the System or Providing Feedback to the System
Finally, weshould noticethat in thesystems model of operational management, some of the
outputsbecomeinputs again.
Thus, the satisfaction of employees becomes an important human input to the enterprise.
Similarly, profits, thesurplus of incomeover costs, arereinvested incashand capital goods,
suchasmachinery, equipment, buildings, andinventory.
The Functions of Managers
Managerial functions provide auseful framework for organizing management
knowledge.
Therehave been no new ideas, research findings, or techniques that cannot
readily beplaced intheclassificationsof
planning, organizing, staffing, leading, and controlling
Planning
Planning involves selecting missions and objectivesand the actions to achieve them
It requires decision making, that is, choosingfuturecoursesof actionfrom among alternatives.
Thereare various types of plans, ranging from overall purposes and objectives to themost
detailed actions to'be taken, such as
to order aspecial stainlesssteel bolt for aninstrument or tohire and train workers for an
assembly line.
No real planexists until a decision a commitment of human or material resources or
reputation-has been made.
Before a decision is made, all we have is a planningstudy, ananalysis, or aproposal, but not
areal plan
Organizing
People working together in groups to achieve somegoal must haverolestoplay, muchlikethe
partsactorsfill in adrama,
whether these roles are ones they develop themselves,
areaccidental or haphazard, or
are defined and structured by someone who wants to make sure that people contribute in a
specific way togroupeffort.
Theconcept of a"role" implies that what peopledohas adefinitepurpose or objective
They knowhowtheir job objectivefitsintogroupeffort, and
theyhavethenecessary authority, tools, andinformationtoaccomplishthetask.
Organizing, then, isthat part of managing that involvesestablishing anintentional
structureof roles for peopleto fill in an organization. It is intentional in thesense of making
sure that all the tasks necessary toaccomplish goals are assigned and,
It is hoped, assignedtopeoplewho candothembest.
Imaginewhat would have happened if such assignments had not been madeintheprogram
of flyingthespecial aircraftVoyager around the globe without stopping or refueling.
Thepurposeof anorganization structureistohelpincreating anenvironment for
humanperformance.
It is, then, amanagement tool and not an end in andof itself.
Although the structure must define the tasks to be done, the roles so
established must also be designed in light of the workers' abilities and
motivations.
Staffing
Staffing involves filling, and keeping filled, the positions in the organization structure.
This is done byidentifying workforce'requirements,
inventorying thepeople available, recruiting, selecting, placing, promoting, planning the
career, compensating, and trainingor otherwise developing both candidates and current job
holders to accomplish their tasks effectivelyandefficiently.
Leading
Leading is influencing people so that they will contribute to
organization and group goals
It has to dopredominantly with the interpersonal aspect of managing.
All managers would agree that their most important problems arise frompeople their
desires andattitudes, their behavior as individuals andingroups and that effective managers
also need to be effective'leaders
Since leadership implies followership andpeopletendto followthosewho offer ameans
of satisfyingtheir
ownneeds, wishes, anddesires,
it isunderstandable that leading involves
motivation, leadershipstyles and approaches, and communication.
Controlling
Controlling is the measuring and correcting of activities of subordinates, to ensure that
events conform to plans.
It measures performance against goals andplans,
shows where negative deviations exist, and,
byputting in motion actions to correct deviations,
helps ensure accomplishment of plans.
Although planningmust precede controlling,
plans arenot self-achieving.
The plan guides managers in the use of resources to accomplish specific goals. Then
activities arecheckedtodetermine,whether theyconformtoplans.
Control activities generally relate to the measurement of achievement.
Somemeans of controlling, likethe budget for expense, inspection records, and therecord
of labor hours lost, aregenerally familiar.
Eachmeasures andshowswhether plans areworkingout.
If deviationspersist, correction isindicated.
But what iscorrected. Nothing canbedone about reducing scrap,
for example, or buying according to specifications, or
handling sales returns unless one knows who is responsible for these functions.
(Compelling events toconformto plans means locating the persons who areresponsible for
results that differ fromplanned actionand then taking the necessary steps to improve
performance.
Thus, controlling what people do controlsoutcomes.
Coordination, the Essence of Managership
Someauthorities consider coordination tobeanadditional function of management
It seems more accurate, however, to regard it as the essence of Managership
for managing's purpose is to harmonize individual efforts in the accomplishment of group
goals.
Eachof themanagerial functionsisanexercisecontributingto coordination.
Even in the case, of a church or a fraternal organization, individuals often
interpret similar interests in different ways, and their efforts toward mutual
goals do not automatically mesh with the efforts of Others.
It thus becomes the central task of the manager to reconcile differences in
approach, timing, effort, or interest, and
to harmonize individual goals to contribute to organization goals
.
Summary
Management is the process of designing and maintaining an environment in
which
individuals, working together in groups, accomplish efficiently selected aims.
Managers are charged with the responsibility of taking actions that will make it
possible for individuals to make their best contributions to group objectives.
Managing as practiced is an art
The organized knowledge underlying the practice may be referred to as a science.
In this context science and art are not mutually exclusive but are complementary.