Introduction to Management and Organizations
Organization: Definition and Characteristics
An organization is a deliberate collection of people brought together to accomplish a specific purpose. This deliberate structuring allows for coordinated effort towards shared objectives.
Examples: A college/university provides education and research, United Way aims for community improvement, a neighborhood convenience store serves local consumer needs, the New Orleans Saints pursue athletic championship, fraternities/sororities foster social and academic development, Cleveland Clinic offers patient care and medical research, Alibaba Group provides e-commerce services, Lego creates and sells toys, and Starbucks operates coffee shops globally.
All organizations, regardless of their size or mission, share three common characteristics:
Distinct Purpose expressed as a goal or a set of goals. This purpose guides the organization's activities and decision-making. For instance, Mark Zuckerberg explicitly stated Facebook’s evolving goal is to fix issues around protecting users' privacy and data, and actively return to providing meaningful interactions between family and friends, thus restoring its original social purpose.
People work individually and collaboratively to achieve those established goals by making decisions and engaging in various work activities. For example, Facebook employees are involved in creating programming/algorithms for features, while others monitor content for adherence to community standards or address specific user problems and support queries.
The organization is structured in some intentional way that defines and limits members’ behavior. This structure can include formal divisions into different businesses or departments (e.g., marketing, finance, operations), established rules and policies, clear supervision relationships, and the formation of various types of teams (e.g., project teams, cross-functional teams).
Management intrinsically occurs within this defined organizational structure; the structure itself sets the environment, constraints, and opportunities in which managers operate.
management is getting job done efficiency and effectively through people
Managers vs Nonmanagerial Employees
Organizational members typically fall into two broad categories based on their roles and responsibilities:
Nonmanagerial employees: These individuals work directly on a specific job or task and do not have supervisory responsibilities over other employees. Their focus is on executing assigned duties.
Examples: Cashiers at Home Depot directly assist customers and process transactions, drive-through staff at Starbucks prepare and serve beverages, and class registration processors handle student enrollment data. They are often referred to by various operational titles such as associates, team members, individual contributors, or employee partners.
Managers: These individuals are responsible for directing and overseeing the activities of others to ensure the accomplishment of organizational goals. Their primary job is enabling and helping others do their work effectively through coordination, leadership, and supervision.
It is also common for some managers to perform individual-task duties in addition to their supervisory roles. For example, an insurance claims supervisor might process a certain number of claims directly alongside coordinating the work of their team.
Example: Aditi Banga, an associate product manager at Pocket Gems, exemplifies a managerial role by collaborating closely with engineers and designers to manage and guide games through their entire lifecycle, from initial concept development to successful launch.
Manager Titles and Levels
Managers can be differentiated by a variety of titles and are typically classified by their level within the organizational hierarchy:
Top managers: Positioned at or near the very top of the organization, these individuals are responsible for making organization-wide decisions. They establish the overall organizational direction, define policies, and set the organizational values. Typical titles include Executive Vice President, President, Chancellor, Managing Director, Chief Operating Officer (COO), Chief Executive Officer (CEO), and Chairperson of the Board.
Middle managers: These managers occupy the levels between top and lower management. Their key role is to translate the broad goals and strategies set by top management into more specific objectives and operational details for lower levels. They may supervise other managers (e.g., first-line managers) and occasionally some nonmanagerial employees. Titles often include Department Head, Agency Head, Project Leader, Unit Chief, District Manager, Division Manager, or Store Manager.
First-line managers: These managers directly supervise and coordinate the day-to-day activities of nonmanagerial employees and/or team leaders. They are involved in the immediate operational execution. Common titles include Supervisors, Shift Managers, Office Managers, Department Managers, or Unit Coordinators.
Team leaders: A special type of manager, increasingly common with the rise of employee work teams, who lead and facilitate the activities of a specific work team. Their role is often more about guidance and empowerment rather than direct command.
What Is Management?
In its simplest form, management can be described as "what managers do."
A more precise and comprehensive definition states that management is the process of getting things done, effectively and efficiently, with and through other people. This definition highlights the dynamic, interpersonal, and resource-oriented nature of the manager's role.
Process: This refers to a sequential set of ongoing and interrelated activities or primary functions that managers perform universally, namely planning, organizing, leading, and controlling.
Key concepts that underpin the definition of management are efficiency and effectiveness:
Efficiency: Doing things right. This means getting the most output from the least amount of inputs. Managers must judiciously manage scarce inputs (such as human resources, financial capital, and equipment) to minimize resource usage and costs. The concept can be formally expressed as: \text{Efficiency} = \frac{\text{outputs}}{\text{inputs}} \quad \text{(maximize outputs, minimize inputs)} . High efficiency implies a good utilization of resources.
Effectiveness: Doing the right things. This involves completing important work activities that directly contribute to achieving overall organizational goals or desired outcomes. The goal is to select and execute tasks that align with the organization's strategic objectives. See also: \text{Effectiveness} = \text{achievement of goals or desired outcomes} . A focus solely on efficiency without effectiveness can lead to successfully doing the wrong things.
Modern examples highlight the critical balance between efficiency and effectiveness in action. For instance, Amazon is constantly seeking innovative ways to ship more products with less cardboard, not only to achieve cost efficiencies but also to satisfy environmentally conscious, younger consumers, thereby enhancing effectiveness in meeting market demands.
Approaches to Describing What Managers Do
There are four general and complementary approaches used to describe the multifaceted nature of managerial work:
Functions Approach (POCCC → four functions): Originally, Henri Fayol, a French industrialist, identified five common activities of managers: \text{Plan}, \text{Organize}, \text{Command}, \text{Coordinate}, \text{Control} . Today, these are commonly condensed into four essential functions that describe the universal managerial process:
\text{Planning} : Defining goals, establishing strategies for achieving those goals, and developing plans to integrate and coordinate activities.
\text{Organizing} : Determining what tasks need to be done, who is to do them, how tasks are to be grouped, who reports to whom, and where decisions are to be made.
\text{Leading} : Motivating employees, directing the activities of others, selecting the most effective communication channels, and resolving conflicts.
\text{Controlling} : Monitoring actual performance, comparing it with planned performance, and taking corrective action if necessary.
Management Roles Approach (Mintzberg): Henry Mintzberg’s extensive studies revealed that managers perform specific categories of actions, which he termed managerial roles. These roles are not mutually exclusive and often overlap in practice.
Interpersonal roles: involve people and other duties that are ceremonial and symbolic in nature.
Figurehead: Performing symbolic duties, like greeting visitors or signing legal documents.
Leader: Motivating and directing employees, responsible for staffing, training, and associated duties.
Liaison: Maintaining a network of outside contacts and alliances that provide information and favors.
Informational roles: involve receiving, collecting, and disseminating information.
Monitor: Actively seeking and receiving information from internal and external sources to understand the organization and its environment.
Disseminator: Transmitting information from outside or from subordinates to members of the organization.
Spokesperson: Transmitting information to outsiders about the organization's plans, policies, actions, and results.
Decisional roles: revolve around making choices or initiating action.
Entrepreneur: Initiating and overseeing new projects that will improve the organization’s performance.
Disturbance-handler: Taking corrective action when the organization faces significant, unexpected disturbances.
Resource-allocator: Distributing resources (money, people, equipment, time) of all kinds.
Negotiator: Representing the organization in major negotiations.
Skills and Competencies Approach: This approach focuses on the essential skills managers need to perform their jobs effectively. Robert Katz identified three core skill sets, which have since been expanded.
\text{Conceptual skills} : The ability to analyze and diagnose complex situations, to abstract and identify underlying causes, and to see how things fit together (seeing the "big picture"). This skill is crucial for strategic planning and effective decision-making, particularly for top managers.
\text{Interpersonal skills} : The ability to work well with, understand, mentor, motivate, and delegate to other people, both individually and in groups. This encompasses effective communication, empathy, and conflict resolution.
\text{Technical skills} : Job-specific knowledge and techniques needed to successfully perform work tasks. While lower-level managers often require specialized domain knowledge (e.g., engineering, accounting), higher-level managers typically possess broad industry and process knowledge rather than specific operational technical skills.
\text{Political skills} : This involves the ability to build a power base and create effective connections with people inside and outside the organization to obtain resources for their groups and to advance their personal or departmental objectives.
These diverse approaches are not mutually exclusive but rather complementary, used to model and understand what managers do in various organizational contexts and at different levels.
Level in the Organization, Profit vs Not-for-Profit, and Size
Managerial work varies significantly based on several contextual factors:
Level-related shifts in activity emphasis: As managers ascend the organizational ladder from first-line to top management, the proportion of time spent on certain activities shifts. For instance, top managers typically dedicate more time to planning and strategic decision-making and less to direct oversight of day-to-day operations, while first-line managers focus more on leading and controlling operational tasks. The core activities (plan/organize/lead/control) remain, but their emphasis and nature evolve with the managerial level.
Profit vs Not-for-Profit organizations: Although many managerial tasks are fundamentally similar across these two types of organizations (e.g., staffing, budgeting, goal-setting), a significant difference lies in performance measurement. In for-profit businesses, financial profit (the "bottom line") provides a clear, quantifiable measure of success. Not-for-profit organizations, while still needing to generate funds and manage outcomes, lack such a universal, easily quantifiable metric. Their success is often measured by effectiveness in achieving their specific social missions or community impact (e.g., number of people served, public awareness raised, improvement in community health).
Size of Organization and Small Business: Small businesses, generally defined here as independent businesses with fewer than < 500 employees, often differ in management emphasis and formality compared to large firms. This distinction is crucial for understanding managerial roles.
Managers in small businesses tend to be generalists, often wearing many hats and engaging in a broader range of activities. Their roles are frequently outward-facing, involving customer meetings, securing financing, identifying new market opportunities, and stimulating organizational change.
In contrast, managers in large firms tend to be Specialists, with a greater focus on internal resource allocation, optimizing specific departmental functions, and coordinating within complex bureaucratic structures. Entrepreneurial initiatives, while present, may be less prioritized among first-line and middle managers in large, established firms, as the focus shifts to maintaining existing operations and incremental improvements.
Informality is more common and often a competitive advantage in small firms. Planning is less ritualistic and formalized (e.g., less reliance on extensive written strategic plans); organizational design structures are typically simpler; and control often relies more on direct observation and personal interaction rather than complex computerized systems and formal reporting.
Management Concepts and National Borders
Management concepts, theories, and practices are not universally generic or applicable without modification across all countries. Cross-national studies consistently reveal significant differences due to varying economic, social, political, legal, technological, and cultural environments.
Most core management concepts and theories developed historically tend to apply best to highly developed, individualistic, and stable economic contexts, such as those found in the United States, Canada, Great Britain, Australia, and other English-speaking nations.
Managers working in, or with, organizations in countries like India, China, Chile, or other nations with distinct environmental characteristics must often modify or adapt these concepts. This requires cultural intelligence, an understanding of local customs, legal frameworks, labor practices, and differing societal values to ensure effectiveness and avoid cultural missteps.
Why Study Management?
The chapter's introduction often addresses the myth that management is merely common sense or an intuitive skill. Here are compelling reasons to formally study management:
Improve organizational performance: Most people interact with organizations daily, from schools and hospitals to banks and government agencies. Understanding management improves how these organizations are designed and run, leading to better products, services, and overall societal well-being.
Consequences of poor management: Poor management is a significant contributing factor to organizational failures (e.g., business bankruptcies, non-profit inefficiencies) and subpar customer experiences. Conversely, well-managed organizations often consistently outperform their competitors, even during challenging economic times, demonstrating resilience and adaptability.
Foundational skills for all careers: Studying management builds essential foundational skills applicable to virtually any career path. The vast majority of individuals will either manage others or be managed at some point in their professional lives. Understanding management principles provides a competitive edge.
Enhanced personal effectiveness: Management knowledge helps individuals understand the perspectives and challenges of bosses and coworkers. This insight improves one's ability to contribute effectively, navigate organizational dynamics, and collaborate more successfully in any organizational setting.
Examples of well-known successful firms (e.g., Apple, Google, Toyota) illustrate the benefits of strong management, while examples of firms that failed due to poor management (e.g., Gimbel's department store, RadioShack, Enron's ethical collapse) powerfully demonstrate the costly consequences of mismanagement and lack of oversight.
Welcome to the new world of management: an era characterized by constantly changing workplaces, a dynamic workforce, rapidly evolving technology, and increased global uncertainties that demand adaptive and innovative managerial approaches.
Changing Workplaces and the Workforce
Four major global trends are significantly shaping the nature of managerial work today and influencing organizational strategies:
Digitization and automation: The pervasive integration of digital technologies and the rise of automation are fundamentally changing how work is done, streamlining processes, and redefining how tasks are organized and jobs are structured within organizations.
NextGen work: There is a growing prevalence of alternative work arrangements beyond traditional full-time employment. This includes a rise in part-time, freelance, contract, temporary, or independent-contract work, requiring managers to adapt to flexible workforces and new engagement models.
Telework prevalence: Remote work has become a mainstream practice. Approximately 43\% of U.S. employees now work remotely, either entirely or partially, necessitating effective virtual team management, communication tools, and performance monitoring strategies.
Social and information security concerns: With increased digitization, organizations face heightened risks of data breaches, necessitating robust cybersecurity measures. Additionally, managing workplace misconduct issues, particularly in the context of rising mobile and social technologies, introduces complex challenges related to ethics, privacy, and digital conduct.
Mobile apps and internal social websites are increasingly utilized by organizations to manage and connect diverse workforces, facilitate communication, and support remote operations.
Examples of industry transformations driven by these changes include:
Publix Super Markets, under CEO Todd Jones, continues to focus on maintaining exceptional customer service across all levels of its operations, adapting to changing consumer expectations.
Amazon’s acquisition of Whole Foods Market profoundly impacted the grocery industry by integrating technology and logistics into traditional retail.
The Seattle Post-Intelligencer's shift to an all-digital format resulted in significantly reduced staff and created ongoing management challenges in adapting to the unique demands of digital media consumption and monetization.
Four key areas that managers must particularly highlight and adapt to in today's dynamic environment are:
Customers: Maintaining a strong customer focus.
Innovation: Continuously fostering new ideas and approaches.
Social media: Leveraging digital platforms for communication and engagement.
Sustainability: Integrating ecological and social responsibility into business practices.
Customers, Innovation, Social Media, and Sustainability
Managers today must navigate crucial interconnected challenges and opportunities:
Customer focus:
Deep customer insight is an absolute necessity for competitive advantage. Leaders like John Chambers (Cisco) and Chris McCarthy (MTV Networks) consistently emphasize the importance of actively listening to customers and target audiences, understanding their evolving needs, and adapting strategies accordingly.
Cultivating genuinely customer-centric cultures requires employee attitudes and behaviors to be explicitly aligned with delivering high-quality service. This means providing training and incentives that reinforce customer satisfaction.
A truly customer-responsive organization is characterized by its employees being consistently friendly, accessible, knowledgeable, prompt, and thoroughly customer-focused in every interaction.
Innovation:
Innovation is defined as doing things differently, exploring new territory, and responsibly taking calculated risks to generate new value. It applies broadly to all types and sizes of organizations, not just tech startups.
Examples: Companies like Amazon, Google, Uber, and Apple are hallmarks of continuous innovation. Even traditional brands, such as International Dairy Queen, experiment with new product formats and digital ordering to stay relevant.
Crowdfunding platforms (e.g., Kickstarter) have become significant enablers, stimulating creativity and allowing novel ideas to gain funding and market traction. There is an ongoing need to foster a culture of innovation throughout an organization, encouraging employees at all levels to contribute new ideas.
Effective managers should actively model innovative thinking and create environments that encourage and reward experimentation and creativity among their employees.
Social media:
Social media platforms serve as powerful internal and external communication tools for organizations. Many firms increasingly use internal social tools (e.g., Slack, Yammer, Microsoft Teams) to significantly improve collaboration, knowledge sharing, and employee engagement.
A large share of firms (approximately 72\% ) now utilize such internal social tools for employee communication and team coordination.
The SuperValu case study illustrated how the adoption of internal social media helped connect over 135,000 employees across multiple store brands, offering the potential for better performance by fostering a unified corporate culture, though its full impact is still being assessed.
Benefits: Well-managed social media can enhance cooperation, collaboration, and employee engagement by providing direct communication channels and fostering a sense of community. Risks: Potential misuse for unproductive purposes such as excessive bragging, one-way top-down messaging, or airing grievances publicly, which can negatively impact morale and productivity.
Sustainability:
The development of BMW’s all-electric i3 car demonstrates a deep commitment to integrating sustainability directly into product strategy, using carbon fiber for weight reduction, focusing on energy efficiency, and leveraging smart apps for eco-friendly driving.
Sustainability has transitioned from a niche concern to a mainstream management discussion, profoundly influencing corporate strategy, supply chain management, and stakeholder engagement.
The widely adopted definition of sustainability in a business context is: achieving business goals and creating long-term shareholder value by integrating and balancing economic, environmental, and social opportunities into core business strategies.
Global leaders like BMW, McDonald’s, Walmart, Levi Strauss, and L’Oreal exemplify corporate engagement with sustainability, demonstrating its importance for brand reputation, regulatory compliance, and long-term financial viability.
The book consistently frames these dynamic changes as ongoing and emphasizes that managers must continuously adapt their planning, organizing, leading, and controlling functions accordingly to thrive in this evolving landscape.
Sustainability and Global Perspective
Sustainability, viewed through a global lens, inherently involves balancing economic prosperity, environmental protection, and social equity dimensions to achieve long-term value creation for all stakeholders.
The World Business Council for Sustainable Development articulates this vision as a future scenario where all inhabitants of the planet can live well with adequate resources, without compromising the ability of future generations to meet their own needs. This holistic perspective is crucial for global business.
Practical management implications of sustainability include:
Open communication with stakeholders: Regularly engaging with customers, employees, investors, suppliers, local communities, and governmental bodies to understand their needs and concerns regarding environmental and social impact.
Understanding requirements: Continuously assessing and incorporating evolving environmental regulations, social expectations, and ethical standards into organizational policies and practices.
Integrating into decisions: Embedding sustainability considerations into daily operational decisions, strategic planning, product development, and supply chain management. This includes eco-efficiency measures, ethical sourcing, and community investment.
The book promises to explore the multifaceted relationship between sustainability and various management aspects throughout subsequent chapters, illustrating how it impacts every managerial function.
Employability Skills and Chapter Features
The text explicitly emphasizes the development of five core employability skills, directly linked to specific chapter features, to prepare students for current and future career demands:
Critical thinking: This involves goal-directed thinking to effectively define and solve complex problems, analyze information rigorously, and draw evidence-based conclusions. It’s about not just accepting information but evaluating its validity and relevance.
Communication: Encompasses much more than just speaking and writing. It includes effective oral, written, and nonverbal communication, active listening skills, proficiency in technology-mediated communication (e.g., virtual meetings, professional emails), and the ability to critically evaluate one's own and others' communication effectiveness.
Collaboration: The essential skill of working effectively and respectfully with others from diverse backgrounds to produce joint outcomes, share responsibilities, and resolve disagreements constructively. This includes teamwork, negotiation, and conflict management.
Knowledge application and analysis: The ability to flexibly apply learned concepts, theories, and problem-solving techniques from academic settings to new and unfamiliar real-world situations, demonstrating practical competence.
Social responsibility: This vital skill involves understanding and applying business ethics, demonstrating corporate social responsibility, identifying various ethical dilemmas in organizational contexts, recognizing diverse stakeholders, and evaluating various options to make sound, ethical decisions that benefit society as a whole.
Chapter features specifically designed to develop these critical skills include:
Classic Concepts in Today's Workplace: Sections that revisit foundational historical management concepts and illustrate their enduring relevance and current applications in modern organizations.
Being Ethical: A 21st-Century Skill: Dedicated segments that present real-world ethics dilemmas, prompting students to analyze and propose solutions, fostering ethical decision-making.
Managing Technology in Today's Workplace: Features that explore the profound impact of evolving technology on work processes, organizational structures, and managerial roles, encouraging adaptability.
MyLab assignments: Interactive exercises, such as "Write It" (critical thinking and communication), "Watch It" (analysis of real-world scenarios), and "Try It" (practical application), designed to reinforce learning.
Management Skill Builder: Focused activities that guide students through the sequential development of specific managerial skills (e.g., delegation, feedback).
Experiential Exercise: Hands-on group tasks or simulations that promote collaboration, problem-solving, and practical application of theories.
Case Applications: Detailed real-world organizational stories and scenarios that require students to analyze complex situations, apply management concepts, and propose strategic solutions.
The overarching goal of these features and the text is to significantly enhance students' collaboration and communication skills, critical thinking, and overall preparedness for a dynamic and constantly changing workplace.
The Value of Talented Managers
Extensive polling and research conducted by Gallup among millions of employees and managers globally consistently demonstrate the profound quantitative impact of talented managers on organizational success:
Employee-supervisor relationship: Gallup's findings indicate that the most significant variable influencing employee productivity, loyalty, and engagement is the quality of the relationship between employees and their immediate supervisors. This direct link underscores the importance of the manager as a catalyst for positive workplace outcomes.
Employee engagement: Defined as an employee's emotional connection, satisfaction with their job, and enthusiasm for their work, engagement is strongly correlated with the quality of management. Engaged employees are more productive, innovative, and less likely to leave the organization.
Financial performance: When companies strategically increase the number of talented managers they employ and successfully double the number of engaged employees, their Earnings Per Share (EPS) is approximately 1.47 times higher than that of their competitors. This highlights a clear return on investment in good management.
Profit contribution: Talented managers contribute roughly 0.48 higher profit margin compared to managers who are merely average in their performance, demonstrating their direct impact on the bottom line.
Productivity boost: Replacing an underperforming or poor manager with a truly great one can lead to a substantial approximately 12\% boost in team productivity, illustrating the transformative power of effective leadership.
Conclusion: The evidence unequivocally shows that talented and effective managers matter greatly to organizational success, directly influencing employee engagement, productivity, financial performance, and overall competitive advantage.
Notation and Key Numbers Summary
Key Percent Figures and Multipliers:
72\% of firms utilize internal social tools for employee communication.
Approximately 43\% of U.S. employees work remotely (all or part-time).
70\% engagement baseline reference (often used in Gallup studies).
A 12\% productivity gain can be achieved by replacing a poor manager with a great one.
Companies with talented managers and doubled employee engagement achieve 1.47 \times higher EPS relative to competitors.
Talented managers contribute about 0.48 (e.g., percentage points) more profit compared to average managers.
Small business definition: Generally characterized as independent businesses with fewer than < 500 \text{ employees} .
Notable Definitions and Formulas:
\text{Efficiency} = \frac{\text{outputs}}{\text{inputs}} \quad \text{(Doing things right; maximizing outputs, minimizing inputs)} . Efficiency focuses on resource utilization.
\text{Effectiveness} = \text{whether the right things are done to achieve goals} . Effectiveness focuses on goal attainment.
\text{EPS} = \text{earnings per share} . A key financial metric for public companies.