What is Organizational and Business Management? How Do I Manage?

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    What is Organizational and Business Management? How Do I Manage?

    © Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC.

    Comprehensive, practical book by Carter McNamara

    Leadership and Supervision in Business - Book Cover

    The guidelines and resources in this topic are not sufficient to develop strong competencies in management. Those competencies come from extensive experience in applying that information.

    Sections of This Topic Include

    WHAT IS MANAGEMENT?

    Traditional View of Management

    There are a variety of views about the term “management”. Traditionally, the term “management” (sometimes referred to as “organizational management” or “business management”) refers to the activities involved in the four general functions listed below.

    1) Planning, including identifying goals, objectives, methods, resources needed to carry out methods, responsibilities and dates for completion of tasks. Examples of planning are strategic planning, business planning, project planning, staffing planning, advertising and promotions planning.

    2) Organizing resources to achieve the goals in an optimum fashion. Examples are organizing new departments, human resources, office and file systems and re-organizing businesses.

    3) Leading, including to set direction for the organization, groups and individuals and also influence people to follow that direction. Examples are establishing strategic direction (vision, values, mission and / or goals) and championing methods of organizational performance management to pursue that direction.

    4) Controlling, or coordinating, including the organization’s systems, processes and structures to reach effectively and efficiently reach goals and objectives. This includes ongoing collection of feedback, and monitoring and adjustment of systems, processes and structures accordingly. Examples include use of financial controls, policies and procedures, performance management processes and measures to avoid risks.

    Common Terms, Levels and Roles in Management

    It helps to be acquainted with this information about management because, even among experienced managers, there are different interpretations. What is most important is that you come up with your own interpretations and be able to explain them to others with whom you work. See Common Terms and Roles in Management

    Different Views of Management

    Another view is that “management” is getting things done through others. Yet another view, quite apart from the traditional view, asserts that the job of management is to support employee’s efforts to be fully productive members of the organizations and citizens of the community.

    To most employees, the term “management” probably means the group of people (executives and other managers) who are primarily responsible for making decisions in the organization. In a nonprofit, the term “management” might refer to all or any of the activities of the Board of Directors, executive director and/or program directors.

    Some writers, teachers and practitioners assert that the above view is rather outmoded and that management needs to focus more on leadership skills, e.g., establishing vision and goals, communicating the vision and goals, and guiding others to accomplish them. They also assert that leadership must be more facilitative, participative and empowering in how visions and goals are established and carried out. Some people assert that this really isn’t a change in the management functions, rather it’s re-emphasizing certain aspects of management.

    Is Leading Different Than Managing?

    There seems to be an increasing number of perspectives that leading is different than managing. They explain that perspective with phrases like “Leaders do the right things, and managers do things right” or “Leaders lead people and managers manage resources”. See the View That Leading is Different Than Managing. There are others who disagree with that view and agree with a more traditional view as included above. Also see View That Separating “Leading” from “Managing” Can Be Destructive.

    Additional Perspectives on the Term “Management”

    TO TRULY UNDERSTAND MANAGMENT, KNOWS ITS BROAD CONTEXT

    Historical Theories

    It also helps you to be acquainted with historical theories, especially to appreciate the rather recent changes (which are quite different than traditional approaches) so you might adjust your own management styles accordingly.

    Scientific Management Theory

    (1890-1940)
    At the turn of the century, the most notable organizations were large and industrialized. Often they included ongoing, routine tasks that manufactured a variety of products. Back then, the United States prized scientific and technical matters, including careful measurement and specification of activities and results. Management tended to be the same. Frederick Taylor developed the “scientific management theory” which espoused this careful specification and measurement of all organizational tasks. Tasks were standardized as much as possible. Workers were rewarded and punished. This approach appeared to work well for organizations with assembly lines and other mechanistic, routinized activities.

    Bureaucratic Management Theory

    (1930-1950)
    Max Weber embellished the scientific management theory with his bureaucratic theory. Weber focused on dividing organizations into hierarchies, establishing strong lines of authority and control. He suggested organizations develop comprehensive and detailed standard operating procedures for all routinized tasks.

    Human Relations Movement

    (1930-today)
    Eventually, unions and government regulations reacted to the rather dehumanizing effects of the current theories. More attention was given to individuals and their unique capabilities in the organization. A major belief included that the organization would prosper if its workers prospered as well. Human Resource departments were added to organizations. The behavioral sciences played a strong role in helping to understand the needs of workers and how the needs of the organization and its workers could be better aligned. Various new theories were spawned, many based on the behavioral sciences (some with names like theory “X”, “Y” and “Z”).

    Also consider
    History and Theories of Organization Development

    New Paradigm in Management

    Driving Forces of Change

    Around the 1960s and on to today, the environment of today’s organizations has changed a great deal. A variety of driving forces provoke this change. Increasing telecommunications has “shrunk” the world substantially. Increasing diversity of workers has brought in a wide array of differing values, perspectives and expectations among workers. Public consciousness has become much more sensitive and demanding that organizations be more socially responsible. Much of the third-world countries has joined the global marketplace, creating a wider arena for sales and services. Organizations became responsible not only to stockholders (those who owned stock) but to a wider community of “stakeholders.”

    As a result of the above driving forces, organizations were required to adopt a “new paradigm,” or view on the world, to be more sensitive, flexible and adaptable to the demands and expectations of stakeholder demands. Many organizations have abandoned or are abandoning the traditional top-down, rigid and hierarchical structures to more “organic” and fluid forms.

    Today’s leaders and/or managers must deal with continual, rapid change. Managers faced with a major decision can no longer refer back to an earlier developed plan for direction. Management techniques must continually notice changes in the environment and organization, assess this change and manage change. Managing change does not mean controlling it, rather understanding it, adapting to it where necessary and guiding it when possible.

    Managers can’t know it all or reference resources for every situation. Managers must count on and listen more to their employees. Consequently, new forms of organizations are becoming more common, e.g., worker-centered teams, self-organizing and self-designing teams, etc.

    Traits of the New Paradigm

    Marilyn Ferguson, in The New Paradigm: Emerging Strategic for Leadership and Organizational Change (Michael Ray and Alan Rinzler, Eds., 1993, New Consciousness Reader), provides a very concise overview of the differences between the old and new paradigm. (The following is summarized.)

    Old Paradigm

    New Paradigm
    promote consumption at all costs appropriate consumption
    people to fit jobs jobs to fit people
    imposed goals, top-down decision making autonomy encouraged, worker participation
    fragmentation in work and roles cross-fertilization by specialists seeing wide relevance
    identification with job identity transcends job description
    clock model of company recognition of uncertainty
    aggression, competition cooperation
    work and play separate blurring of work and play
    manipulation and dominance cooperation with nature
    struggle for stability sense of change, of becoming
    quantitative qualitative as well as quantitative
    strictly economic motives spiritual values transcend material gain
    polarized transcends polarities
    short-sighted ecologically sensitive
    rational rational and intuitive
    emphasis on short-term solutions recognition that long-range efficiency must take in to account harmonious work environment
    centralized operations decentralized operations when possible
    runaway, unbridled technology appropriate technology
    allopathic treatment of symptoms attempt to understand the whole, locate deep underlying causes of disharmony

    Contemporary Theories

    Contingency Theory

    Basically, contingency theory asserts that when managers make a decision, they must take into account all aspects of the current situation and act on those aspects that are key to the situation at hand. Basically, it’s the approach that “it depends.” For example, the continuing effort to identify the best leadership or management style might now conclude that the best style depends on the situation. If one is leading troops in the Persian Gulf, an autocratic style is probably best (of course, many might argue here, too). If one is leading a hospital or university, a more participative and facilitative leadership style is probably best.

    Systems Theory

    Systems theory has had a significant effect on management science and understanding organizations. First, let’s look at “what is a system?” A system is a collection of part unified to accomplish an overall goal. If one part of the system is removed, the nature of the system is changed as well. For example, a pile of sand is not a system. If one removes a sand particle, you’ve still got a pile of sand. However, a functioning car is a system. Remove the carburetor and you’ve no longer got a working car. A system can be looked at as having inputs, processes, outputs and outcomes. Systems share feedback among each of these four aspects of the systems.

    Let’s look at an organization. Inputs would include resources such as raw materials, money, technologies and people. These inputs go through a process where they’re planned, organized, motivated and controlled, ultimately to meet the organization’s goals. Outputs would be products or services to a market. Outcomes would be, e.g., enhanced quality of life or productivity for customers/clients, productivity. Feedback would be information from human resources carrying out the process, customers/clients using the products, etc. Feedback also comes from the larger environment of the organization, e.g., influences from government, society, economics, and technologies. This overall system framework applies to any system, including subsystems (departments, programs, etc.) in the overall organization.

    Systems theory may seem quite basic. Yet, decades of management training and practices in the workplace have not followed this theory. Only recently, with tremendous changes facing organizations and how they operate, have educators and managers come to face this new way of looking at things. This interpretation has brought about a significant change (or paradigm shift) in the way management studies and approaches organizations.

    The effect of systems theory in management is that writers, educators, consultants, etc. are helping managers to look at the organization from a broader perspective. Systems theory has brought a new perspective for managers to interpret patterns and events in the workplace. They recognize the various parts of the organization, and, in particular, the interrelations of the parts, e.g., the coordination of central administration with its programs, engineering with manufacturing, supervisors with workers, etc. This is a major development. In the past, managers typically took one part and focused on that. Then they moved all attention to another part. The problem was that an organization could, e.g., have a wonderful central administration and wonderful set of teachers, but the departments didn’t synchronize at all. See the category Systems Thinking

    Chaos Theory

    As chaotic and random as world events seem today, they seem as chaotic in organizations, too. Yet for decades, managers have acted on the basis that organizational events can always be controlled. A new theory (or some say “science”), chaos theory, recognizes that events indeed are rarely controlled. Many chaos theorists (as do systems theorists) refer to biological systems when explaining their theory. They suggest that systems naturally go to more complexity, and as they do so, these systems become more volatile (or susceptible to cataclysmic events) and must expend more energy to maintain that complexity. As they expend more energy, they seek more structure to maintain stability. This trend continues until the system splits, combines with another complex system or falls apart entirely. Sound familiar? This trend is what many see as the trend in life, in organizations and the world in general.

    Also consider
    Emerging Nature and New Organizational Structures and Design

    HOW TO DO TRADITIONAL FUNCTIONS IN MANAGEMENT

    Planning

    Simply put, planning is selecting priorities and results (goals, objectives, etc.) and how those results will achieved. Planning typically includes identifying goals, objectives, methods, resources needed to carry out methods, responsibilities and dates for completion of tasks. Examples of planning are strategic planning, business planning, project planning, staffing planning, advertising and promotions planning.

    Various Kinds of Plans

    Organizing

    Organizing can be viewed as the activities to collect and configure resources in order to implement plans in a highly effective and efficient fashion. Organizing is a broad set of activities, and often considered one of the major functions of management. Therefore, there are a wide variety of kinds of organizing, as listed below.

    Various Kinds of Organizing

    Human Resources Management

    Facilities

    Leading

    Simply put, leading is establishing direction and influencing to follow that direction, and you might be leading yourself, another individual, a group or an organization. There are a wide variety of theories, models and styles of leadership, as well as areas of focus, each of which requires somewhat different skills in leadership.

    Also consider
    What is Leadership? How Do I Lead?

    Controlling / Coordinating

    Basically, organizational control (or the term coordination, which is often preferred) is assessing if you are doing what you wanted to be doing or not, and if not, then deciding what course of action to take. It is the part of planning after you have decided what you wanted to be doing. The manner in which the coordinating is done depends on the management style preferred by the organization. Below are some of the major approaches to organizational control and coordination.

    Feedback Mechanisms

    Financial Management

    Groups

    Team Performance Management

    Legal and Taxation Compliance

    Operations

    Operations Management

    Organizational Performance

    Organizational Performance Management (balanced scorecard, TQM, etc.)

    Personnel

    Processes

    Quality Management (quality control, benchmarking, continuous improvement, etc.)

    Risk, Safety and Liabilities

    HOW TO MANAGE YOURSELF, GROUPS AND ORGANIZATIONS

    Suggested Core Competencies and Resources to Manage in Any Situation

    Various experts would disagree on what skills and practices should be required for managers in organizations. Various roles and skills are listed throughout the next sections in this topic. However, it would be difficult to undertake them without having the following core skills.

    Also consider
    Suggested Core Competencies to Lead in Any Situation

    How to Manage Yourself

    It is well understood among experienced managers that you cannot effectively lead and manage others unless you first can effectively lead and manage yourself. That can be quite difficult especially for new managers, when starting a group or organization, or when the group or organization is undergoing significant change. Basics for New Managers and Supervisors to Management Themselves

    Also consider

    How to Manage a Group

    Managing a group typically includes getting clear on the purpose and goals of the group, ensuring that it has clear roles in leadership and sufficient resources to work toward its goals, establishing means for making group decisions and solving group problems as well as communicating among members, and that members of the group can work well together.

    Also consider
    All About Facilitation

    How to Manage an Organization

    Managing an overall organization is typically a cyclical and systematic approach of clarifying its purpose and priorities (via strategic planning), assessing the current activities in the organization, changing and re-organizing the organization if needed to more effectively address priorities, and then continuing the management the performance of the organization toward those priorities.

    How to Manage Nonprofit-Specific Activities

    There is often a misunderstanding that nonprofit organizations are very different than for-profit organizations. However, the differences between organizations is determined by its life cycle, culture and strategic priorities, much more than by the nature of its services. However, the following activities are somewhat unique to the needs of a nonprofit management and governance.

    Fundraising and Grantwriting

    Nonprofit management must engage in fundraising in order to meet the fiscal needs of their organization. Generally, fundraising is not one of an executive director’s favorite tasks. It can be an all-consuming activity, tapping an executive director’s creative and social energy. Executive directors are constantly challenged to strike a balance between the time they devote to fundraising and program management. Too little attention to one area can leave an organization bereft of cash or quality services. See All About Nonprofit Fundraising

    Governance (Boards of Directors)

    Generally, this term refers to the nature and operations of the board of directors. Some people use the term to also refer to the role of chief executive as well. Nonprofit management — particularly chief executives — must have strong skills in working with an often highly diverse collection of board members, each of whom is typically a volunteer to the nonprofit. These skills in working with a board are often not taught in management schools and, instead, must be developed over time “on the job”. See All About Boards of Directors

    Nonprofit Budgeting and Accounting

    Nonprofits are unique entities created to provide a public service, rather than generate profit. Therefore, nonprofits can enjoy special tax-exempt status with the IRS. Nonprofits also receive grants and other forms of donations to support their operation. These special features unique to nonprofits require highly customized forms of budgeting and accounting, not taught in general management schools. See All About Financial Management in Nonprofits

    Program Planning and Management

    Nonprofits typically deliver ongoing services in the form of organizational programs. Therefore, it’s important that nonprofit management understand the basic principles of program development and evaluation. See Program Planning and Management

    Volunteer Programs

    Many nonprofit organizations rely to a great extent on the use of volunteers. Volunteers should be managed much like any other human resource. There should be staffing planning, recruitment, job descriptions, suitable policies and risk management measures, some form of performance management, etc. Performance management includes setting suitable goals, evaluating performance, providing appropriate rewards or actions to terminate services. See Developing and Managing Volunteer Programs

    How Can You Improve Your Management Skills?

    You can improve your management skills in a rather informal approach or in a carefully designed and systematic approach. The latter is often referred to as a management development program. Here are guidelines for either approach. See How to Design Your Management Development Program

    General Resources

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