Management is the administration of an organization, whether it is a business, a not-for-profit organization, or government body. Management includes the activities of setting the strategy of an organization and coordinating the efforts of its employees to accomplish its objectives through the application of available resources, such as financial, natural, technological, and human resources. The term "management" may also refer to those people who manage an organization - individually: managers.
Social scientists study management as an academic discipline, investigating areas such as social organization and organizational leadership. Some people study management at colleges or universities; major degrees in management include the Bachelor of Commerce Bachelor of Business Administration Master of Business Administration Master in Management and, for the public sector, the Master of Public Administration degree. Individuals who aim to become management specialists or experts, management researchers, or professors may complete the Doctor of Management, the Doctor of Business Administration, or the PhD in Business Administration or Management. There has recently been a movement for evidence-based management.
Larger organizations generally have three levels of managers, which are typically organized in a hierarchical, pyramid structure:
- Senior managers, such as members of a board of directors and a chief executive officer or a president of an organization. They set the strategic goals of the organization and make decisions on how the overall organization will operate. Senior managers are generally executive-level professionals, and provide direction to middle management, who directly or indirectly report to them.
- Middle managers - examples of these would include branch managers, regional managers, department managers and section managers, who provide direction to front-line managers. Middle managers communicate the strategic goals of senior management to the front-line managers.
- Lower managers, such as supervisors and front-line team leaders, oversee the work of regular employees and provide direction on their work.
DefinitionsViews on the definition and scope of management include:
- Henri Fayol stated: "to manage is to forecast and to plan, to organise, to command, to co-ordinate and to control."
- Fredmund Malik defines management as "the transformation of resources into utility".
- Management is included as one of the factors of production – along with machines, materials and money.
- Ghislain Deslandes defines management as "a vulnerable force, under pressure to achieve results and endowed with the triple power of constraint, imitation and imagination, operating on subjective, interpersonal, institutional and environmental levels".
- Peter Drucker saw the basic task of management as twofold: marketing and innovation. Nevertheless, innovation is also linked to marketing. Peter Drucker identifies marketing as a key essence for business success, but management and marketing are generally understood as two different branches of business administration knowledge.
of the human capital of an enterprise to contribute to the success of the enterprise. This implies effective communication: an enterprise environment implies human motivation and implies some sort of successful progress or system outcome. As such, management is not the manipulation of a mechanism, not the herding of animals, and can occur either in a legal or in an illegal enterprise or environment. From an individual's perspective, management does not need to be seen solely from an enterprise point of view, because management is an essential function in improving one's life and relationships. Management is therefore everywhere and it has a wider range of application. Based on this, management must have humans. Communication and a positive endeavor are two main aspects of it either through enterprise or through independent pursuit. Plans, measurements, motivational psychological tools, goals, and economic measures may or may not be necessary components for there to be management. At first, one views management functionally, such as measuring quantity, adjusting plans, meeting goals. This applies even in situations where planning does not take place. From this perspective, Henri Fayol
considers management to consist of five functions:
She described management as philosophy.
Critics, however, find this definition useful but far too narrow. The phrase "management is what managers do" occurs widely,
suggesting the difficulty of defining management without circularity, the shifting nature of definitions and the connection of managerial practices with the existence of a managerial cadre or of a class.
One habit of thought regards management as equivalent to "business administration" and thus excludes management in places outside commerce, as for example in charities and in the public sector. More broadly, every organization must "manage" its work, people, processes, technology, etc. to maximize effectiveness. Nonetheless, many people refer to university departments that teach management as "business schools". Some such institutions use that name, while others employ the broader term "management".
English-speakers may also use the term "management" or "the management" as a collective word describing the managers of an organization, for example of a corporation.
Historically this use of the term often contrasted with the term "labor" – referring to those being managed.
But in the present era the concept of management is identified in the wide areas and its frontiers have been pushed to a broader range. Apart from profitable organizations even non-profitable organizations apply management concepts. The concept and its uses are not constrained. Management on the whole is the process of planning, organizing, coordinating, leading
Nature of workIn profitable organizations, management's primary function is the satisfaction of a range of stakeholders. This typically involves making a profit, creating valued products at a reasonable cost, and providing great employment opportunities for employees. In nonprofit management, add the importance of keeping the faith of donors. In most models of management and governance, shareholders vote for the board of directors, and the board then hires senior management. Some organizations have experimented with other methods of selecting or reviewing managers, but this is rare.
HistorySome see management as a late-modern conceptualization. On those terms it cannot have a pre-modern history – only harbingers. Others, however, detect management-like thought among ancient Sumerian traders and the builders of the pyramids of ancient Egypt. Slave-owners through the centuries faced the problems of exploiting/motivating a dependent but sometimes unenthusiastic or recalcitrant workforce, but many pre-industrial enterprises, given their small scale, did not feel compelled to face the issues of management systematically. However, innovations such as the spread of Hindu numerals and the codification of double-entry book-keeping provided tools for management assessment, planning and control.
- An organisation is more stable if members have the right to express their differences and solve their conflicts within it.
- While one person can begin an organisation, "it is lasting when it is left in the care of many and when many desire to maintain it".
- A weak manager can follow a strong one, but not another weak one, and maintain authority.
- A manager seeking to change an established organization "should retain at least a shadow of the ancient customs".
Given the scale of most commercial operations and the lack of mechanized record-keeping and recording before the industrial revolution, it made sense for most owners of enterprises in those times to carry out management functions by and for themselves. But with growing size and complexity of organizations, a distinction between owners and day-to-day managers gradually became more common.
EtymologyThe English verb "manage" comes from the Italian maneggiare, which derives from the two Latin words manus and agere. The French word for housekeeping, ménagerie, derived from ménager, also encompasses taking care of domestic animals. is the French translation of Xenophon's famous book Oeconomicus on household matters and husbandry. The French word mesnagement influenced the semantic development of the English word management in the 17th and 18th centuries.
Early writingManagement has existed for millennia, and several writers have produced background works that have contributed to modern management theories. Some theorists have cited :Category:Ancient military books|ancient military texts as providing lessons for civilian managers. For example, Chinese general Sun Tzu in his 6th-century BC work The Art of War recommends being aware of and acting on strengths and weaknesses of both a manager's organization and a foe's. The writings of influential Chinese Legalist philosopher Shen Buhai may be considered to embody a rare premodern example of abstract theory of administration.
Various ancient and medieval civilizations produced "mirrors for princes" books, which aimed to advise new monarchs on how to govern. Plato described job specialization in 350 BC, and Alfarabi listed several leadership traits in AD 900. Other examples include the Indian Arthashastra by Chanakya, and The Prince by Italian author
Written in 1776 by Adam Smith, a Scottish moral philosopher, The Wealth of Nations discussed efficient organization of work through division of labour.
Smith described how changes in processes could boost productivity in the manufacture of pins. While individuals could produce 200 pins per day, Smith analyzed the steps involved in manufacture and, with 10 specialists, enabled production of 48,000 pins per day.
19th centuryClassical economists such as Adam Smith and John Stuart Mill provided a theoretical background to resource allocation, production, and pricing issues. About the same time, innovators like Eli Whitney, James Watt, and Matthew Boulton developed elements of technical production such as standardization, quality-control procedures, cost-accounting, interchangeability of parts, and work-planning. Many of these aspects of management existed in the pre-1861 slave-based sector of the US economy. That environment saw 4 million people, as the contemporary usages had it, "managed" in profitable quasi-mass production.
Salaried managers as an identifiable group first became prominent in the late 19th century.
20th centuryBy about 1900 one finds managers trying to place their theories on what they regarded as a thoroughly scientific basis. Examples include Henry R. Towne's Science of management in the 1890s, Frederick Winslow Taylor's The Principles of Scientific Management, Lillian Gilbreth's Psychology of Management, Frank and Lillian Gilbreth's Applied motion study, and Henry L. Gantt's charts. J. Duncan wrote the first college management-textbook in 1911. In 1912 Yoichi Ueno introduced Taylorism to Japan and became the first management consultant of the "Japanese-management style". His son Ichiro Ueno pioneered Japanese quality assurance.
The first comprehensive theories of management appeared around 1920. The Harvard Business School offered the first Master of Business Administration degree in 1921. People like Henri Fayol and Alexander Church described the various branches of management and their inter-relationships. In the early-20th century, people like Ordway Tead, Walter Scott and J. Mooney applied the principles of psychology to management. Other writers, such as Elton Mayo, Mary Parker Follett, Chester Barnard, Max Weber, who saw what he called the "administrator" as bureaucrat, Rensis Likert, and Chris Argyris approached the phenomenon of management from a sociological perspective.
Peter Drucker wrote one of the earliest books on applied management: Concept of the Corporation. It resulted from Alfred Sloan commissioning a study of the organisation. Drucker went on to write 39 books, many in the same vein.
H. Dodge, Ronald Fisher, and Thornton C. Fry introduced statistical techniques into management-studies. In the 1940s, Patrick Blackett worked in the development of the applied-mathematics science of operations research, initially for military operations. Operations research, sometimes known as "management science", attempts to take a scientific approach to solving decision-problems, and can apply directly to multiple management problems, particularly in the areas of logistics and operations.
Some of the more developments include the Theory of Constraints, management by objectives, reengineering, Six Sigma, the Viable system model, and various information-technology-driven theories such as agile software development, as well as group-management theories such as Cog's Ladder.
As the general recognition of managers as a class solidified during the 20th century and gave perceived practitioners of the art/science of management a certain amount of prestige, so the way opened for popularised systems of management ideas to peddle their wares. In this context many management fads may have had more to do with pop psychology than with scientific theories of management.
Business management includes the following branches:
- financial management
- human resource management
- Management cybernetics
- information technology management
- marketing management
- operations management and production management
- strategic management
Branches of management theory also exist relating to nonprofits and to government: such as public administration, public management, and educational management. Further, management programs related to civil-society organizations have also spawned programs in nonprofit management and social entrepreneurship.
Note that many of the assumptions made by management have come under attack from business-ethics viewpoints, critical management studies, and anti-corporate activism.
As one consequence, workplace democracy has become both more common and more advocated, in some places distributing all management functions among workers, each of whom takes on a portion of the work. However, these models predate any current political issue, and may occur more naturally than does a command hierarchy. All management embraces to some degree a democratic principle—in that in the long term, the majority of workers must support management. Otherwise, they leave to find other work or go on strike. Despite the move toward workplace democracy, command-and-control organization structures remain commonplace as de facto organization structures. Indeed, the entrenched nature of command-and-control is evident in the way that recent layoffs have been conducted with management ranks affected far less than employees at the lower levels. In some cases, management has even rewarded itself with bonuses after laying off lower-level workers.
According to leadership-academic Manfred F.R. Kets de Vries, a contemporary senior-management team will almost inevitably have some personality disorders.
BasicsAccording to Fayol, management operates through five basic functions: planning, organizing, coordinating, commanding, and controlling.
- Planning: Deciding what needs to happen in the future and generating plans for action.
- Organizing : Making sure the human and nonhuman resources are put into place.
- Commanding : Determining what must be done in a situation and getting people to do it.
- Coordinating: Creating a structure through which an organization's goals can be accomplished.
- Controlling: Checking progress against plans.
- Interpersonal: roles that involve coordination and interaction with employees
- Informational: roles that involve handling, sharing, and analyzing information
- Decision: roles that require decision-making
SkillsManagement skills include:
- political: used to build a power base and to establish connections
- conceptual: used to analyze complex situations
- interpersonal: used to communicate, motivate, mentor and delegate
- diagnostic: ability to visualize appropriate responses to a situation
- leadership: ability to lead and to provide guidance to a specific group
- * cross-cultural leadership: ability to understand the effects of culture on leadership style
- technical: expertise in one's particular functional area.
- behavioral: perception towards others.
Implementation of policies and strategies
- All policies and strategies must be discussed with all managerial personnel and staff.
- Managers must understand where and how they can implement their policies and strategies.
- A plan of action must be devised for each department.
- Policies and strategies must be reviewed regularly.
- Contingency plans must be devised in case the environment changes.
- Top-level managers should carry out regular progress assessments.
- The business requires team spirit and a good environment.
- The missions, objectives, strengths and weaknesses of each department must be analyzed to determine their roles in achieving the business's mission.
- The forecasting method develops a reliable picture of the business' future environment.
- A planning unit must be created to ensure that all plans are consistent and that policies and strategies are aimed at achieving the same mission and objectives.
Policies and strategies in the planning process
- They give mid and lower-level managers a good idea of the future plans for each department in an organization.
- A framework is created whereby plans and decisions are made.
- Mid and lower-level management may add their own plans to the business's strategies.
These managers are classified in a hierarchy of authority, and perform different tasks. In many organizations, the number of managers in every level resembles a pyramid. Each level is explained below in specifications of their different responsibilities and likely job titles.
TopThe top or senior layer of management consists of the board of directors, president, vice-president, CEOs and other members of the C-level executives. Different organizations have various members in their C-suite, which may include a chief financial officer, chief technology officer, and so on. They are responsible for controlling and overseeing the operations of the entire organization. They set a "tone at the top" and develop strategic plans, company policies, and make decisions on the overall direction of the organization. In addition, top-level managers play a significant role in the mobilization of outside resources. Senior managers are accountable to the shareholders, the general public and to public bodies that oversee corporations and similar organizations. Some members of the senior management may serve as the public face of the organization, and they may make speeches to introduce new strategies or appear in marketing.
The board of directors is typically primarily composed of non-executives who owe a fiduciary duty to shareholders and are not closely involved in the day-to-day activities of the organization, although this varies depending on the type, size and culture of the organization. These directors are theoretically liable for breaches of that duty and typically insured under directors and officers liability insurance. Fortune 500 directors are estimated to spend 4.4 hours per week on board duties, and median compensation was $212,512 in 2010. The board sets corporate strategy, makes major decisions such as major acquisitions, and hires, evaluates, and fires the top-level manager. The CEO typically hires other positions. However, board involvement in the hiring of other positions such as the chief financial officer has increased. In 2013, a survey of over 160 CEOs and directors of public and private companies found that the top weaknesses of CEOs were "mentoring skills" and "board engagement", and 10% of companies never evaluated the CEO. The board may also have certain employees report to them or directly hire independent contractors; for example, the board typically selects the auditor.
Helpful skills of top management vary by the type of organization but typically include a broad understanding of competition, world economies, and politics. In addition, the CEO is responsible for implementing and determining the broad policies of the organization. Executive management accomplishes the day-to-day details, including: instructions for preparation of department budgets, procedures, schedules; appointment of middle level executives such as department managers; coordination of departments; media and governmental relations; and shareholder communication.
MiddleConsist of general managers, branch managers and department managers. They are accountable to the top management for their department's function. They devote more time to organizational and directional functions. Their roles can be emphasized as executing organizational plans in conformance with the company's policies and the objectives of the top management, they define and discuss information and policies from top management to lower management, and most importantly they inspire and provide guidance to lower level managers towards better performance.
Middle management is the midway management of a categorized organization, being secondary to the senior management but above the deepest levels of operational members. An operational manager may be well-thought-out by middle management, or may be categorized as non-management operate, liable to the policy of the specific organization. Efficiency of the middle level is vital in any organization, since they bridge the gap between top level and bottom level staffs.
Their functions include:
- Design and implement effective group and inter-group work and information systems.
- Define and monitor group-level performance indicators.
- Diagnose and resolve problems within and among work groups.
- Design and implement reward systems that support cooperative behavior. They also make decision and share ideas with top managers.
Front-line managers typically provide:
- Training for new employees
- Basic supervision
- Performance feedback and guidance
TrainingColleges and universities around the world offer bachelor's degrees, graduate degrees, diplomas and certificates in management, generally within their colleges of business, business schools or faculty of management but also in other related departments. In the 2010s, there has been an increase in online management education and training in the form of electronic educational technology. Online education has increased the accessibility of management training to people who do not live near a college or university, or who cannot afford to travel to a city where such training is available.
RequirementWhile some professions require academic credentials in order to work in the profession, management and administration positions do not necessarily require the completion of academic degrees. Some well-known senior executives in the US who did not complete a degree include Steve Jobs, Bill Gates and Mark Zuckerberg. However, many managers and executives have completed some type of business or management training, such as a Bachelor of Commerce or a Master of Business Administration degree. Some major organizations, including companies, not-for-profit organizations and governments, require applicants to managerial or executive positions to hold at minimum bachelor's degree in a field related to administration or management, or in the case of business jobs, a Bachelor of Commerce or a similar degree.
UndergraduateAt the undergraduate level, the most common business program are the Bachelor of Business Administration and Bachelor of Commerce.
These typically comprise a four-year program designed to give students an overview of the role of managers in planning and directing within an organization.
Course topics include accounting, financial management, statistics, marketing, strategy, and other related areas.
There are many other undergraduate degrees that include the study of management, such as Bachelor of Arts degrees with a major in business administration or management and Bachelor of Public Administration, a degree designed for individuals aiming to work as bureaucrats in the government jobs.
Many colleges and universities also offer certificates and diplomas in business administration or management, which typically require one to two years of full-time study.
Note that to manage technological areas, one often needs an undergraduate degree in a STEM-area.
GraduateAt the graduate level students aiming at careers as managers or executives may choose to specialize in major subareas of management or business administration such as entrepreneurship, human resources, international business, organizational behavior, organizational theory, strategic management, accounting, corporate finance, entertainment, global management, healthcare management, investment management, sustainability and real estate.
A Master of Business Administration is the most popular professional degree at the master's level and can be obtained from many universities in the United States. MBA programs provide further education in management and leadership for graduate students. Other master's degrees in business and management include Master of Management and the Master of Science in business administration or management, which is typically taken by students aiming to become researchers or professors.
There are also specialized master's degrees in administration for individuals aiming at careers outside of business, such as the Master of Public Administration degree, for students aiming to become managers or executives in the public service and the Master of Health Administration, for students aiming to become managers or executives in the health care and hospital sector.
Management doctorates are the most advanced terminal degrees in the field of business and management. Most individuals obtaining management doctorates take the programs to obtain the training in research methods, statistical analysis and writing academic papers that they will need to seek careers as researchers, senior consultants and/or professors in business administration or management. There are three main types of management doctorates: the Doctor of Management, the Doctor of Business Administration, and the Ph.D. in Business Administration or Management. In the 2010s, doctorates in business administration and management are available with many specializations.