Introduction to Business Dersi 3. Ünite Özet

Management – Terms and Definitions

Management is achieving goals by the contribution of others. Management is also defined as a process which reflects a more sophisticated task environment. It is “The attainment of goals by others through planning, organizing, leading, and controlling activities”. The above-mentioned definitions emphasize elements pertinent to the management environment. These key elements are; goals, people, and activities relevant to the management environment.

Another definition for management refers to key terms in business: “Management is coordinating and overseeing the work activities of others for completing their work efficiently and effectively”. This definition for management is a focus on organizational performance which is the ultimate goal of organizations of any type as well as the people managing these organizations. Organizational performance is measured by effectiveness and efficiency. Organizational effectiveness is the degree to the achievement of organizational goals based on the statements and expectations. Organizational efficiency on the other hand is about the amount of overall resources used for the achievement of an organizational goal. Organizational performance is at the highest when effectiveness and efficiency is well balanced.

Management Functions

Management is a process through which required resources are utilized by a sequence of functions starting with planning, followed by organizing, leading, and controlling for attaining organizational goals.

Planning: Planning is identifying goals and deciding which tasks that will be performed and the resources that will be utilized for reaching these goals. The planning process is carried out by identifying goal/s, reviewing the alternative ways or methods including the resources involved, and deciding which alternative/s to employ. At the end of this process plans of different types are generated, either short, medium, or long term as well as strategic plans.

Organizing: The organizing function of the management process follows planning and provides the appropriate workplace for implementing the plans. The organizing process is determining tasks relevant to goals; grouping tasks by departments; assigning the work force for specific tasks; deciding the authority relationships, and preparing the work environment which includes allocating equipment, technology, and personnel.

Leading: also referred to as directing, is more dynamic than planning and organizing functions. Leading, in other words the leadership process, is about guiding the organization and/or the group towards the goals. A leader guides and motivates employees or groups for attaining goals. Leadership is the ability to influence people for attainment of the organizational goals.

Controlling: Controlling is the monitoring function of the management process and is critical for the success of other management functions. The progress towards the organizational goals of any type is monitored, measured, assessed, and if necessary modified through the controlling function. which is achieved by the control process. Controlling is about measuring the organizational performance which is mostly about financial performance.

Management Structure

The management structure indicates the hierarchical design of an organization. An organization chart is a visual diagram that shows the relationships among people and divides the organization’s work. Top/executive management: Top management is at the highest level of the management structure of a corporation, a holding company, or an institution. Top management involves key titles such as board of directors, chief executive officer (CEO), chief operating officer (COO), rector, president, vice president, or executive director. Top management teams are responsible for the entire organization and ensures the coordination of overall activities towards the achievement of ultimate goals. Middle management: Middle managers are department heads, branch, or plant managers. Middle level management is responsible for overseeing the contribution to the organizational goals and strategies developed by the top management. First line/supervisory management: First-line managers are supervisors, branch managers, section chiefs, shift managers, or project leaders. First line management team is primarily any type of horizontal unit which they achieve by non-managerial employees. Organizational culture is shared values, beliefs, and attitudes that provides its members with a common understanding of the organizational norms and their roles.

Management Skills

Management skill is a combination of knowledge, behaviors, and attitudes for performing a task. Conceptual skills are related to seeing the organization as a whole to reach, coordinate, and integrate resources to attain established goals throughout the organization. Human skills , also referred to as soft skills, are related are related to establishing constructive relationships with other members of a group. Conceptual skill, are most critical for top/ executive managers. Such analytical ability provides top managers with a strong understanding of the internal and external environment of their organizations and reinforces the quality of strategic decision policies. Human skills (soft skills) must be most mastered by middle level managers. The basic function of middle management is leading their departments’ activities and inspiring employees with high performance for contributing to the ultimate organizational goals. Technical skills are directly related to the task itself and must be possessed by the first-line managers whose task is to see jobs to completion. First-line or supervisory-level managers need not only the technical knowledge relevant to the tasks they are supervising but also must be able to monitor the performance and quality of the employees’ jobs.

Managerial Roles

Managers at any level or position are responsible for a variety of tasks. A role is defined as behaviors and applications expected of someone relevant with her/his position. A manager’s most expected role is to achieve goals with and by others. However, the term manager stands for an “authority”, a “leader”, a “guide”, a “director”, a “representative”, or a “negotiator” which is in most cases a blend of expected roles. In other words, a manager needs to find her/his way out efficiently and effectively in a “management labyrinth”. The interpersonal roles of managers are about relationships with internal and external stakeholders such as employees, customers, relevant interest groups, or suppliers - even communities where a company has its headquarters or markets its goods or services. Decisional roles are related to the decision making behaviors of management teams. Decision making is the fundamental function of managers at any level.

The entrepreneur as a decisional role is about being innovative and of paramount importance in today’s competitive environment. A focus on the entrepreneur role indicates the positive attitude towards change in an organization. Another role regarding decision making is allocating resources . New initiatives and current operations need the allocation of resources in the most efficient way. Allocating work force, funds, or technology in terms of expanding or contracting operations requires intelligent and informed decision-making because it impacts the efficieny and the motivation of the entire organization. Roles of negotiator and disturbance handler are also fulfilled as part of decisions. Decision- making is at the heart of management - either autocratic to democratic or somewhere in between. Thus decisional roles inform the primary function of managers at all levels.

Informational roles directs a constant flow of information throughout the internal organization as well as transmitting information to and from the external environment. Informational roles are designated through monitoring, disseminating, and providing information to the external parties. Monitoring roles channel information about the environmental developments, opportunities, or risks. The disseminator role is about sharing updated information with relevant individuals, groups, or divisions. The spokesperson role requires managers to reach out to the external parties for providing information regarding their operations.

Leadership

Leadership is influencing a group of individuals toward the accomplishment of common goals. A leader is the one who applies the leadership process through inspiring, motivating, encouraging, guiding, and empowering.

Leadership emerges through a synergistic and contextual combination of the following dimensions and elements as noted above elements as noted above: goals; followers; circumstances; and personality. Leadership and leader are terms that are often used as having the same meaning with management and manager. Beside similarities between the management and leadership roles, there are also distinguishing characteristics. Few are:

• Management is based on position; leadership is about personal qualifications.
• Management is attaining goals through others; leadership is pursuing goals with others.
• Management authority is based on legal authority; leadership power comes from followers.
• Management produces order and consistency; leadership produces change and movement.

Leaders and the leadership process have been subject to scholarly research from different perspectives. The traits approach is based on the thinking that “A leader with a powerful standing can be distinguished from non-leaders”. The behavioral perspective analyses the leadership process with a focus on how leaders act and what they do. Task oriented behaviors indicate the focus on production and technical aspects of a job. People oriented behaviors indicate a supportive approach to subordinates. The Michigan studies , based on interviews with managers and employees the outcome of this group of studies was two basic forms of leadership behaviors: Task-oriented behaviors indicate a focus on production and technical aspects of a job. Managers who were task-oriented were concerned about issues such as keeping low costs and scheduling meetings. People-oriented behaviors indicate a supportive approach to subordinates. Managers with this type of orientation dealt with high performance goals and human needs. The Ohio State studies : The researchers from Ohio State University introduced two basic leader behaviors or styles: Initiating structure is parallel to the task oriented behavior and shows the emphasis on formal processes such as designing roles and responsibilities. Consideration behavior is a form of people orientation and indicates the extent of concern for the relationships with subordinates and their feelings. Managerial Grid (Leadership Grid) intersects two basic leadership behaviors, concern for people and concern for production to place the leader in one of the five styles.

The contingency approach emphasizes that leadership style and best managerial approach change according to environmental factors. Fiedler’s contingency model : Fiedler’s model seeks for the appropriate combination between the leadership style and environmental circumstances with an aim to determine the most efficient leadership outcome. The model refers to two main leadership styles: Task oriented and relations-hip or people oriented. Situational theory : This approach also emphasizes that the leadership style is contingent. The premise of the situational theory: Leadership is shaped by the demands of situations where employees are the situational variables. This theory refers to two primary leadership styles which are directive and supportive. A leader will decide whether to be supportive or directive according to the competency and commitment level of employees.

Some contemporary leadership models are transformational - transactional leadership, charismatic leadership, team leadership, leader- member exchange model, and authentic leadership. In this chapter, we will describe the transformational - transactional leadership briefly. Transactional leadership is employed where accomplishment of organizational goals is the primary focus and the leader is fixed on the results. Transformational leadership goes well beyond ordinary expectations by transmitting a sense of mission, stimulating learning experiences, and inspiring new ways of thinking.

Communication in Organizations

Communication is critical to all managers at all levels because it takes place whenever there is a managerial process whether planning, organizing, or controlling. Furthermore, management is about creating a common understanding throughout the organization, in both the internal and external environment: communication with all stakeholders, communication with a diversified workforce, and communication globally. Likewise, success can only be achieved by an atmosphere of shared values, goals, policies, and strategies. Communication can be described as the process of transmitting a message from a person, a group, or a unit to another. The message in a business environment is mostly sent in the form of a request, an appraisal, or a warning.

The communication process is composed of components each of which is key to create an efficient process: the message, source/s (sender), encoding, channel (medium), receiver/s, decoding, environmental affects, and feedback messages. A message , the main component and motive force of the communication is formed by a source (sender). The sender is someone occupying a managerial position, a regular employee, or a group. The message is encoded by the sender using words and/or symbols which may be based on an information, an idea, a reaction, or a feeling. The message follows the communication channel which changes from face -to -face to long distance digital medium. The communication channel is either fortified or distracted by the environmental elements . The receiver who is a person and/or a group decodes the message which passes through the communication channel. The efficient communication process is two directional that is the receiver becomes the sender with a feedback message which is a response based on the receiver’s interpretation for the message.

Managers use varying forms of communication which depend on the context: the extent of importance; urgency of the matter; distance; availability of technology; manager’s style; and the overall organizational culture. Formal communication refers to communication channels between formally designated positions and tasks which mainly forms at the vertical and horizontal levels. Vertical communication refers to communication channels between hierarchical levels either in the downward or upward direction are present in most of the organizations. Downward communication is the channel from top managerial levels to the rest of the organization. Downward communication covers a content such as the transmission of the rationale of organizational goals, directives, overall strategies, values, principles, performance assessment results, developments in the external environment, and changes. Upward communication follows a route from bottom to top, that is from employees to managers at any hierarchical level. Horizontal communication forms between positions and tasks at the same hierarchical level. Informal communication occurs outside the formal communication based on personal relations in an organization.

Personal communication network refers to establishing relationships in and outside the organization either directly related to formal tasks or only about being a part of social incidents. The grapevine is an informal formation of communication that develops as people interact in organizations. The metaphor grapevine indicates the spontaneous nature. Non-verbal communication is a form of interpersonal communication, intentionally or not designed by body movements, facial expressions, and gestures, explicit or tenuous.

Information and communication technologies (ICT) can promote the timeliness and effectiveness of the decision making process, the quality of products and services as well as the overall organizational performance in different sectors.

A successful and effective organizational communication process has certain features: the message should reach its destination in the original form as much as possible; the message should reach the receiver on time; and the receiver is engaged in the process by sending acknowledgment of the receipt of the message in the form of a feedback.