MANAGING ORGANIZATION - SCOPE AND BASIC TERMS

Lecture I.

1. Outline

Basic terms: organization and its elements, management and its functions, leader and manager

Attention is paid to the fact that it is hard to define these terms because management is a rather young science and it is still developing.

It is still a controversial problem whether management is a science or an art – FIRST DILEMMA OF MANAGEMENT

The term organization comes from a Greek word "organizo" that means a harmonious and well-ordered whole. Organization is created and developed by people, who cooperate to achieve given goals.

We can consider organizations in: • a material sense, • a functional sense, • an attribute sense.

The fundamental elements of each organization: • People, • Goals, • Means.

Organization as a given system is acting in an environment. Because of the tight relations between elements that compose organization, this type of structure is very often called organizational system.

The functioning of an organization depends on its environment. From the environment an organization gets resources that it needs for its development: people, physical and financial means, information. Depending on a situation, changes in the organization's environment can be a threat or a chance for development. Organization needs to constantly pay attention to changes in its environment in order to exist and develop.

Because of the fact that organization is related to its environment, it is often called an OPEN SYSTEM

Organization is also called an ADAPTIVE SYSTEM because it adapts to changeable environment

As not only people but also buildings and technical appliances are elements of organization, organization can be described as a complex SOCIALLY-TECHNICAL SYSTEM

Management - term, evaluation criteria, characteristics, functions

Management is a set of activities (including planning, decision making, organizing, leading, that is, managing people and controlling) directed at an organization's resources (human, financial, physical and information) with the aim of achieving organizational goals in an efficient and effective manner (R. Griffin)

Efficient means using resources in a sensible manner, without creating waste

Effective means acting successfully

The rules of perfect management (J.A.F. Stoner and Ch. Wankel):

1.Eagerness to act: it's better to do something than analyze a given issue and discuss it in committees again.

2.Being close to customer, getting to know customer's needs and meeting these needs.

3.Autonomy and enterprise; dividing a syndicate into many smaller firms and encouraging these firms to become competitive and independent.

4.Direct contact, motivation - managers should be focused on the core business

5. Efficiency thanks to people: convincing employees that their good performance is essential for the company and that they will participate in company's success.

6. Being focused on a given specialization: staying in a field that a company knows best.

7. Simple structure, small staff, few levels of management, few people on higher levels.

8. Discipline and freedom at the same time; creating atmosphere in which employees treat values of the company as their own ones.

Peter Drucker identifies the fundamental characteristics of management in a slightly different way:Management concerns mainly people,Management is deeply set in culture, Management needs simple and understandable values, goals and tasks that will unite all members,Management should allow an organization to be able to learn, Management needs communication inside and outside an organization,

Management needs a developed system of indicators that will allow to monitor, access and correct constantly an comprehensively the effectiveness of actions,

Management must be focused on the fundamental and the most important

final result, that is, satisfied customer.

Taking into consideration all the above mentioned elements we can say that:Management of an organization should be: integral, flexible and open to a changeable environment. It should adapt to the environment and, when it is possible, shape the environment in order to achieve goals of the organization.

Phases of management process:1.Planning2.Organizing3.Leading and motivating4.Controlling

Supervisor versus manager and their tasks

The term manager presents better the characteristics of management in business organizations than the term supervisor. Supervisor is a wider term and concerns also different types of organizations, for example: in administration, education and health care etc.

In English - manager means: director, administrator, supervisor, trustee. Most often this word consists of two elements, where the second element specifies in which area a given person is manage an organization, for example: chief director, technical director, economic director, production supervisor etc.

Managers hold different positions:•top-level managers, the positions held by top managers belong such positions as: president, vice-president, chief executive officer and managing director.

Managers at this level direct the work of other managers.

At the middle management level there are managers who hold positions of vice-directors or supervisors of big departments, chief engineers, chief accountants and chief economists

The biggest group in organization is formed by managers at the first or lowest level. They often work as supervisors or manage a given team. Positions that can be included into this category are as follows: supervisor of transport department, warehouse supervisor, complaints supervisor and so on. Employees at this level usually manage only the work of regular employees

Managers play a triple role in an organization:• interpersonal role, • informative role, • decisional role .

Henri Fayol's principles of management are one of the most useful guidelines, apart from the fact that they were formulated at the beginning of XX century:

1. Division of work . The more specialized people are, the more effective they do their job. 2. Authority. Managers should give such orders so that a given task will be completed. (Formal authority and a personal authority, for example, resulting from possessed knowledge). 3. Discipline. Members of the organization should obey the rules that govern the organization. Discipline is a result of effective leadership and fair rules of giving rewards and penalties.

4. Unity of command. Each employee should receive orders from only one superior. Otherwise, conflict of orders and loss of authority take place. 5. Unity of direction. Each group of organizational activities that have the same objective should be directed by one manger. 6. Subordination of individual interests to the general interest. 7. Remuneration. Payment should be fair for employees as well as for employers. 8. Centralization vs decentralization.

9. Scalar chain. The line of authority from top management to the lowest ranks represents the scalar chain. 10. Order. People and materials should be in the right place at the right time. 11. Equity. Managers should be kind and fair to their subordinates. 12. Stability of tenure of personnel. High employee turnover is inefficient. 13. Initiative. Managers should enable subordinates to create and carry out their own plans.14. Esprit de corps. Promoting team spirit will build harmony and unity within the organization.