Table of Contents
♠ CONCEPT AND DEFINITION OF MANAGEMENT
♦ There are several definitions of management.
♦ The most popular definition of management is written by American writer Mary Parker Follet who said that management is the ability of getting things done with the help of other people, or in short: getting things done through people.
♦ Today, it is known that management is a continuous process of conducting business activities, carried out by using the following management functions:
• leadership and
♦ Management is effective knowledge, owned and applied by managers to their employees, in order to detect how existing knowledge can best be applied to obtain results and achieve objectives.
♦ Management can be approached from various aspects.
♦ Particular attention is paid to management as a group of people, management as a process, management as a science and/or skill and management as a profession.
♦ In the modern theory, and increasingly in practice, the staff of the organization consists of leaders and non-managers.
♦ Some of them (managers) perform management jobs(functions, i.e. tasks) and others (executors – workers) perform non-management jobs (functions, i.e. tasks). In the performance of their jobs (functions, i.e. tasks) all managers must act as a unified whole.
♦ When it comes to management (as a phenomenon), it should be noted that this term refers to the process of performing management functions.
♦ In literature, there are many definitions of management as the process of implementation of management functions.
♦ They can all be grouped into:- definitions that emphasize one dimension of the management process such as:
• decision making,
• coordination of human and material resources,
• linking resources and subsystems in organizations, etc.
– definitions that fully and accurately define the essence of management as a process.
♦ Evolution of management is followed by the debate on whether management can be considered both a science and/or a skill.
♦ Until the twentieth century, the predominant belief was that management is a skill.
♦ Later, and especially in the second half of the twentieth century, the prevailing view is that management should be considered a science and a skill.
♦ In modern textbooks and in public discussions, the predominant thesis is that management should be considered, i.e. treated as a special profession.
♦ Management is a very attractive profession, and today, an increasing number of professionals choose to be professionally engaged in management.
♠ STRATEGIC MANAGEMENT
♦ Strategic management is a modern concept (way of thinking and behavior) of management which emerged in the 70s.
♦ Strategic management has attracted the attention of many management researchers.
♦ This has contributed to the development of numerous definitions. Among them, special attention must be paid to those formulated by:Samuel C. Certo and Paul J. Piter who define strategic management as a continuous process, aimed at keeping organization fully able to respond to its environmentIgor Ansoff, who define strategic management as a systematic approach to positioning and connection of the organization with its environment in such a way that will ensure its continuous success.
♦ To achieve strategic change, it is necessary to continuously take many and different activities.
♦ Therefore, we can say that the process of strategic management is a set of actions which are necessary to be taken in order to achieve strategic change.
♦ Strategic management can be defined as a process that consists of five phases or steps: analysis of the environment, directing the organization, strategy formulation, strategy implementation and strategic control.
♦ Analysis is the first step of the strategic management process.
♦ Detection and analysis of environment performances is extremely important step in the strategic management process.
♦ For strategic analysis, managers can use numerous methods, but one of them is inevitable.
♦ This is so-called SWOT, or TOWS analysis.
♦ TOWS represents situational analysis of the following environment performances of the organization:
• Threats, whose purpose is the analysis of the factors which can threaten the organization’s activities
• Opportunities, focused on the disclosure of opportunities which the environment provides for more successful achievement of the objectives of the organization
• Weaknesses, whose purpose is to objectively analyze the limitations of the organization, which should be considered in the management of the organization
• Strengths, aimed to identify the strategic competencies of the organization.
♦ Management of the organization is the second step of the strategic management process, activity which is performed after a successful analysis of the environment.
♦ Management of the organization presupposes the performance of all the actions whose purpose is the development of: vision, mission and strategic objectives.
♦ The strategy defines the main directions and ways of achieving the goal, i.e. the achievement of organizational purpose.
♦ Formulation of strategy involves finding the alternative solutions and choosing the most effective strategy, i.e. optimal strategy, the best one in the given conditions, which will be implemented.Strategy implementation is the process of realization of the chosen strategic option.
♦ Strategic changes include changes in all the performances of organization, which represent an adequate response to the challenges of the environment.
♦ Strategic management as a process includes appropriate strategic control.
♦ Strategic control is a process that occurs in several stages.
♦ Those are the following stages:
• setting standards,
• comparing and
• taking corrective action.
♠ OPERATIVE MANAGEMENT
♦ Operative management is the process of performing activities that are associated with converting of input into output.
♦ More specifically, the operative management is a process aimed to the resource engagement, the conversion of input into output and output realization (realization of products or services).
♦ Operative management aims at managing processes in the organization (because the purpose of operative management is efficiency maximization).
♦ It must be emphasized that the activities of strategic and operative management mutually interweave.
♦ This is natural, because although strategic and operative management have their own characteristics, they are, simultaneously, integral parts of the management of the organization.
♦ Operative management process consists of the following steps:-
• defining operative objectives,
• strategies and plans-creating organizational preconditions for realization of operative goals,
• strategies and plans-implementation of activities necessary to realize operative objectives,
• strategies and plans-surveying current processes and results
♦ One of the most important preconditions for the implementation of the strategic orientations of the organization are bound for their operationalization.
♦ The need for operationalization depends on the nature of strategic management.
♦ Operative decisions can not be implemented if there is no appropriate terms and conditions.
♦ This step consists of activities that can be grouped into the following groups:-
• activities whose purpose is to ensure the input needed to perform operative tasks-activities aimed at creating the organizational preconditions for a successful transformation process of input into output-activities aimed to the successful sale of products or provision of services.
• After the creation of adequate organizational conditions for the successful transformation of input into output, follows the third step of the operative management process: manager’s involvement, whose purpose is the realization of operative objectives, strategies and plans.
♦ This phase consists of performing a number of activities which, observed in total, form the maintenance function.
♦ Control of current processes and results, which is called operative control, is the fourth and final phase of the process of operative management.
♦ Operative management is a form of control which managers must perform continuously, because that is the only way they can get an idea about the performance of current processes and consequent results and, and afterwards take timely corrective actions.
♠ MANAGEMENT AND OWNERSHIP
♦ As already indicated, management is needed in all organizations.
♦ It is a fact known to all the owners of capital.
♦ The owners of capital can actualize their needs for management in several ways:
• to independently perform all management tasks (jobs, functions)
• to attract professional managers and, at the same time, themselves perform one of the management functions
• to entrust all management functions to professional managers.
♦ Historically, until the industrial revolution, the owners also performed the role of general manager.
♦ This is understandable, as a relatively small business systems could successfully have been managed by their owners.
♦ Later, the owners of medium and especially large organizations, were forced to entrust one part of management affairs to professionally skilled individuals, i.e. managers.
♦ Twentieth and twenty-first century are marked by a tendency according to which most part or all management tasks are performed by professional managers.
♦ Besides the fact that it came to the realization that professional managers are people whose knowledge and skills ensure that they will perform management functions better than the owners.
♦ The ownership structure of modern corporations became a significant factor in this phenomenon.
♦ Every owner does not have to be a manager to successfully maneuver his capital, i.e. to receive profit from the invested capital, what is the ultimate goal of any investment of capital.
♦ At the same time, management is independent of ownership.
♦ Management is independent of ownership, because it is the function which needs to be performed professionally within each organization, in order to best meet the requirements of permanent improvement of efficiency and effectiveness.
♦ At the same time, this does not mean that certain management functions can not be performed by the owners of capital.
♦ On the contrary, it is not uncommon that some managers participate in the property of the organization, in which management functions are carried out.
♦ Characteristically, managers have a certain power, because power is a constant companion of capital management.
♦ The power of current managers is very excessive.
♦ Thus it is essential to emphasize: the power of manager has a tendency of permanent growth – this tendency is enforced, understandably, with the intensity of the globalization process.
♦ The foundations for managers’ behavior control exist in every company.
♦ Each organization prescribes by statute all the forms and the dynamics of the control of managers, and is more focused on results, and less on their behavior.
♦ Thus the special place and role is given to:
• direct control (carried out by assembly, board of directors, supervisory board and authorized revisors)
• indirect control (which is implemented using different data or information)
♦ However, practice showed that the existing control system of the behavior of managers in the areas of asset management does not have all the performances needed to successfully control the behavior of managers.
♦ It is about the fact that in many cases it has been proved that even directors of large companies, often in combination with financial and legal advisors, tend to embellish and wrongly represent business reports, and that auditorium houses sometimes more ‘suggest’ than control.
♠ MANAGEMENT AND ENVIRONMENT
♦ The middle of organization represents the totality of factors inside and outside the organization that affect or may affect the objectives, structure and functioning of the organization.
♦ By observing the whole, the surroundings, i.e. environment of the organization is made of:
• organizational surroundings
• natural environment.
♦ Organizational surroundings of each organization consists of many components, or factors that affect or may affect its objectives, structure and functioning.
♦ The surroundings of organizations includes:- internal environment, -internal environment,- internal environment, which consists of all elements outside the organization that affect or may affect the objectives, structure and functioning of the organization.
♦ Enterprises operate in particular natural environment which is composed of the natural environment of the organization, what also includes its environmental elements.
♦ Most part of the input is ‘taken’ by the organization, in natural form, or in some degree of processing natural resources.
♦ At the same time, the functioning of the enterprise affects, directly or indirectly, the performances of the natural environment.
♦ This effect should be positive.
♦ In other words, the interaction between businesses and natural environment must be managed in a way which promotes enterprise development and, simultaneously, the development or preservation of the natural environment.
♦ The last decades of the twentieth century paid great attention to the preservation of the natural environment.
♦ The reason is the following: the survival and development of all systems is largely conditioned by the persistence and cultivation of natural environment.
♦ Although there are many other problems, the center of interest are environmental problems.
♦ It is believed that the largest problems are environmental ones:
• environmental pollution (air, water, flora and fauna, etc.)
• climate changes- ozone extermination (which allows the strengthening of harmful effects of UV rays)
• other problems (such as: preservation of biosphere diversity, ensuring sufficient amount of water, preservation and improvement of population’s health and life quality)
♠ INFLUENCE OF MANAGEMENT ON THE NATURAL ENVIRONMENT
♦ As indicated, there is a need to worry about the performance of the natural environment.
♦ It is not only about preservation but also about the development of the natural environment, because that is the only long term way to ensure the permanent successful development of all organizational systems and human civilization as a whole.
♦ Successful maintain and improvement of the natural environment is not just the need of which managers need to take care.
♦ It also represents a problem for them. This is possible only by increasing the expense, i.e. expenses for this purpose, or by reducing or stopping production.
♦ This is contrary to the interests of the capital owners, i.e. managers. That is why, for many years, there was a dilemma of managers – how to act.
♦ This dilemma, typically, was solved by giving primacy to the economic aspects of organization’s business.
♦ The result is that environmental problems are growing.
♦ Preference of economic better than environmental issues, as well as evident environmental problems, started a number of individuals and non-governmental organizations to the so-called environmental movement.
♦ This movement gave significant results.
♦ This particularly applies to:- a commitment that all countries in their constitutions and relevant legislation impose the standards on both the conservation and improvement of natural environment, control of behavior of all subjects and sanctions for noncompliance to constitutional and legislative provisions.
♦ This creates the obligation, i.e. responsibility of managers to approach the problem of preserving and improving the natural environment more attentively and responsibly.
• the greatest number of countries, especially highly-developed, is actively involved (through various forums and declarations) in the definition of methods and the intensity of the struggle for the preservation of the natural environment
• large (and growing) number of non-governmental organizations (with personal funds or with the help of various donors) participate in actions aimed at the preservation and improvement of the natural environment
• both in local and wider environment.
♠ CONCEPT OF MANAGERS
♦ The concept and definition of a manager evolved in line with changing of place and role of management in a changing organizational environment.
♦ So, until the half of the twentieth century, managers were considered persons who are responsible for the work of their subordinates.
♦ Manager was ‘boss’, ‘head’, ‘chief’, and management meant force and power.
♦ Managers were members of the organization who ordered others what to do and how to work.
♦ It was easy to distinguish managers from employees, i.e. they did not have their subordinates and was directly involved in task performance.
♦ Today, managers are primarily considered as people who have effective knowledge and skills, which they know to successfully transmit to other ‘knowledge workers’ in order to achieve results and organized objectives.
♦ The word ‘manager’ is the term used to denote a person responsible for management in all organizations.
♦ Given that this is a specific American expression which does not have a synonym, this expression is most often used in the original form.
♦ Basically, the term manager refers to a person who has a managerial function in a specific organization.
♦ This, in practice, very present definition of manager refers to:-
• special experts (professionals) hired by capital owners, i.e. companies, to perform management function in accordance with certain permissions and responsibilities.
• Managers rent their professionalism- to business owners when they, as individuals or members of the management team, perform (in accordance with the appropriate permissions and responsibilities) managerial functions, and for the performance of this task (function) get the corresponding wage.
♦ Managers are persons:- who possess managerial knowledge and skills (what qualifies them as – potential or actual management holders)- who are responsible and authorized to perform management tasks (functions) in organizations of profit or non-profit character – who are responsible for the activities and results of activities of the organization in which they perform managerial functions.
♦ In contrast to the classical and neoclassical schools of management, modern management theorists particularly emphasize the responsibility as a characteristic of the modern management.
♦ Being a manager means being responsible for results of individual organizational components, or the organization as a whole.
♦ In addition to responsibility for the affairs and tasks for which they are responsible, managers are also responsible for the work and results of the organization which they run.
♠ MANAGER’S WORK
♦ It is not easy to describe what managers do.
♦ Effective and efficient leadership and management involves the execution of many and various types of activities or operations.
♦ This is the reason that in theory and practice of management, special attention is paid to the work that managers perform in organizations.
♦ Managers carry out managerial functions:
• leadership and
• control, as already pointed out.
♦ Planning is management function related to decision-making, through which the organization is directed towards the future.
♦ The management of the organization entails making many and various decisions.
♦ Among them, the most important ones are the following: vision, mission, objectives, strategies and plans.
♦ Organizing is a function that managers make after a successful planning process.
♦ The purpose of organizing is creating the organizational conditions for the efficient and effective functioning of the organization.
♦ Leadership is a function of management, which, in the performance of management work, follows after planning and organizing – the function of whose timely, adequately and effectively performing allows to implement all that is planned.
♦ The purpose of the leadership is ‘placing employees in motion’ towards results (individual, group, organizational) which facilitate implementation.
♦ Control is the management function through which manager leads the organization in the right direction.
♦ It includes the following activities:
• setting standards,
• measuring results,
• comparing results with standards and taking corrective action.
♦ Observation and analysis of manager’s work through the role they have in organizations constitute an approach that is used to a lesser extent than the approach which observes the manager’s work through the functions they perform in organizations.
♦ Role refers to a set of behavior typical for a person in a certain position. In this context, well-known models promoted by Mintzberg, H. and Adizes, I.
♦ The roles of managers can best be seen from the research of one of the most original researchers in the field of management and one of the world’s leading thinkers in the field of project management, professor Henri Mintzberg.
♦ He stated that managers can have ten roles, divided into three groups: interpersonal, informative and decision-making roles.Adizes is known as a theoretician of management who, personally or through a private Institution, provides training and consulting services to numerous managers around the world.
♦ Adizes states that managers have the following four functions:
♠ MANAGERS TYPES
♦ Managers are people who are professionally engaged in management.
♦ This means that they perform managerial tasks (functions) in accordance with precisely defined tasks, permissions and responsibilities.
♦ Managers, each of them or all together, are not only the most significant factor of effective and efficient business activities of all organizations, but also bear the greatest responsibility for results, i.e. the effectiveness and efficiency of the organization as a whole or its parts.
♦ This is the reason why managers have a special place (position) the role and importance in all organizations.
♦ In accordance with the level to which they belong in the organization, managers are divided into:
• top manager
• middle managers
• managers of the first line (supervisors or controllers)
♦ As the name itself says, top managers are at the top of the organizational management hierarchy.
♦ Top-managers are people having the following titles:
• vice presidents,
• members of the board of directors,
• executive directors,
• assistants to executive directors,
• consultants of high rank and others.
♦ Top managers are responsible for managing, functioning and results of the organization as a whole, respectively, for effective and efficient business activities, growth and development of the organization.
♦ The middle managers, as the name itself says, are in the middle of the hierarchical structure of the management system between top managers and managers of the lowest (first) level.
♦ Middle managers are liable to top managers for carrying out of decisions brought by top management.
♦ Middle managers accomplish their tasks in cooperation with first-line managers.
♦ This fact is the reason that these managers are sometimes called managers of managers.
♦ Managers of the first (lowest) level are managers who perform their function (task) in direct connection with executors.
♦ They can carry different names: bosses, employers, managers etc.
♦ Managers of low management are bearers of authority and responsibility linked to timely and effective execution of all tasks contained in a dynamically operationalized plans.
♦ Their attention should be paid to the successful achievement of planned or set tasks.
♦ Depending on the nature of responsibility and the span of organizational activity, managers can be divided into:-General managers-functional managers.
♦ General managers or managers of the general type are managers who are responsible for the functioning, i.e. results of the entire corporation or its organizational parts which have a certain degree of business independence.
♦ Functional managers are the managers who are responsible for the functioning and results of work of organizational units of the enterprise that perform equivalent jobs, i.e. tasks.
♦ More specifically, functional managers and managers who are responsible for the functioning and results of one of the functions in the organization:
• human resources,
• research and development,
• marketing, etc.
♠ CHARACTERISTICS AND SKILLS OF MANAGERS
♦ The goal of every manager is to be successful in performing his/her task (task function), There are numerous assumptions and preconditions for this.
♦ Among them, the most significant are: the possession of adequate knowledge, i.e. abilities and their adequate and effective enforcement in all actions.
♦ That is why management researches for many years paid special attention to the characteristics which managers should possess to be successful.
♦ Because of this, there are numerous views, concepts and theories on the characteristics that managers must have in order to obtain the trust of their employers, i.e. to be successful in performing their tasks.
♦ It is about issues, which, if it wants to be adequately investigated and presented, entails the creation of special labor.
♦ That is why we emphasize some viewpoints, which, historically, represent a significant part of the theoretical heritage that has or have appropriate applicative dimension.
♦ Those are the viewpoints of Taylor, Fayol, Adizes and Ivančević, Lorenci, Skiner and Krozbi.Frederick W.
♦ Taylor is known for (among other things) defending the aspect that each operating manager has nine duties, for which he/she must have nine qualities:
• special or technical knowledge,
• physical ability or power,
• common sense and
• good health.
♦ However, he believed that the majority of people has only four or five of these qualities.
♦ Anry Fayol advocated the aspect that managers should have the following knowledge:
• security and
• accounting knowledge.
♦ Isaak Adizes, starting from the position that the ideal manager can only be found in books, promotes the attitude that this issue must be approached from the point of view of ‘what we can be’, and not from the point of view of ‘what we should be.
♦ ‘Robert Katz, in 1974, stated that successful managers must have the following knowledges or skills:
• technical, which allows to successfully manage things and processes;
• social, which allows to successfully manage personnel or staff;
• conceptual, which allows to successfully manage the organization as a whole or its parts; that the relative importance of previously listed knowledge varies depending on the level of management.