Chapter 1

Introduction to Management

1. Chapter Introduction

Management can be defined as all the activities andtasks undertaken by one or more persons for the pur-pose of planning and controlling the activities of oth-ers in order to achieve an objective or complete anactivity that could not be achieved by the others actingindependently [1]. Management as defined by well-known authors in the field of management [2]—[6]contains the following components:

• Planning

• Organizing

Staffing

• Directing (Leading)

• Controlling

For definitions of these terms see Table 1.

WELL CHAPS...THE MISSION OF THE TEAM IS TO CATCH AND ELIMINATE THE NOTORIOUSCOMPUTER BUG—ULTIMA RECTALGIA COMPUPESTI

Table 1.1. Major management functions.

Activity

Planning

Organizing

Staffing

Directing

Controlling

Definition or Explanation

Predetermining a course of action for accomplishing organizational objectives

Arranging the relationships among work units for accomplishment of objectivesand the granting of responsibility and authority to obtain those objectives

Selecting and training people for positions in the organization

Creating an atmosphere that will assist and motivate people to achieve desiredend results

Establishing, measuring, and evaluating performance of activities towardplanned objectives

From Weihrich [7] comes a definition ofmanagement:

All managers carry out the functions ofplanning, organizing, staffing, leading, andcontrolling, although the time spent in eachfunction will differ and the skills requiredby managers at different organizational lev-els vary. Still, all managers are engaged ingetting things done through people. ... Themanagerial activities, grouped into themanagerial functions of planning, organiz-ing, staffing, leading, and controlling, arecarried out by all managers, but the prac-tices and methods must be adapted to theparticular tasks, enterprises, and situation.

This concept is sometimes called the universalityof management in which managers perform the samefunctions regardless of their place in the organizationalstructure or the type of enterprise in which they aremanaging.

The statement from Weihrich means that

management performs the same functions re-gardless of its position in the organization orthe enterprise managed, and

management functions and fundamental ac-tivities are characteristic duties of managers;management practices, methods, detailed ac-tivities, and tasks are particular to the enter-prise or job managed.

Therefore, the functions and general activities ofmanagement can be universally applied to managingany organization or activity. Recognition of this con-

cept is crucial to the improvement of software engi-neering project management, for it allows us to applythe wealth of research in management sciences to im-proving the management of software engineering proj-ects [8]. Additional discussion on the universality ofmanagement can be found in [9].

This chapter and introduction is important to thereaders of this tutorial. The basic assumption of thistutorial on software engineering project managementis based on a scientific management approach asfollows:

1. Management consists of planning, organiz-ing, staffing, directing, and controlling.

2. The concepts and activities of managementapplies to all levels of management, as wellas to all types of organizations and activitiesmanaged.

Based on these two assumptions, this tutorial

is divided into chapters, based on planning,organizing, staffing, directing, and control-ling, and

includes articles from other disciplines thatillustrate the concepts of management thatcan be applied to software engineering proj-ect management.

2. Chapter Overview

The two articles contained in this chapter introducemanagement and show that the management of anyendeavor (like a software engineering project) is thesame as managing any other activity or organization.The first article, by Heinz Weihrich, sets the stage bydefining management and the major functions of man-

agement. The second article, by Alec MacKenzie, is acondensed and comprehensive overview of manage-ment from the Harvard Business Review.

3. Article Descriptions

The first article in this chapter is extracted from aninternationally famous book, Management by Wei-hrich, 10th edition [10], and adapted specifically byWeihrich for this tutorial. Earlier editions of this bookwere written by Harold Koontz and Cyril O'Donnellfrom the University of California, Los Angeles; Wei-hrich joined them as a co-author with the 7th edition.Both Koontz and O'Donnell are now deceased, leav-ing Weihrich to be the author of future editions. In thisarticle, Weihrich

1. defines and describes the nature and purposeof management,

2. states that management applies to all kinds oforganizations and to managers at all organ-izational levels,

3. defines the managerial functions of planning,organizing, staffing, leading [directing], andcontrolling,

4. states that managing requires a systems ap-proach and that practice always takes into ac-count situations and contingencies, and

5. recognizes that the aim of all managers is tobe productive—that is, to carry out their ac-tivities effectively and efficiently and to cre-ate a "surplus."

Weihrich introduced the term "leading" to replacethe term "directing" used by Koontz and O'Donnell intheir earlier books. The articles by Richard Thayer willstay with the older term "directing."

The last article by Alec MacKenzie is also a clas-

sic. It is still the most comprehensive yet condenseddescription of management in existence. MacKenziepresents a top-down description of management start-ing with the elements of management—ideas, things,and people—and ending with a detailed description ofgeneral management activities—all on one foldoutpage.

References

1. Koontz, H., C. O'Donnell, and H. Weihrich, Manage-ment, 7th ed., McGraw-Hill, New York, N.Y., 1980.

2. Koontz, H., C. O'Donnell, and H. Weihrich, Manage-ment, 7th ed., McGraw-Hill, New York, N.Y., 1980.

3. Cleland, D.I. and W.R. King, Management: A SystemsApproach, McGraw-Hill, New York, N.Y., 1972.

4. MacKenzie, R.A., "The Management Process in 3-D,"Harvard Business Review, Nov.-Dec. 1969, pp. 80-87.

5. Blanchard, B.S. and W.J. Fabrycky, System Engineer-ing and Analysis, 2nd ed., Prentice Hall, EnglewoodCliffs, N.J., 1990.

6. Kerzner, H., Project Management: A Systems Ap-proach to Planning, Scheduling, and Controlling, 3rded., Van Nostrand Reinhold, New York, N.Y., 1989.

7. Koontz, H. and C. O'Donnell, Principles of Manage-ment: An Analysis of Managerial Functions, 5th ed.,McGraw-Hill, New York, N.Y., 1972.

8. Thayer, R.H. and A.B. Pyster, "Guest Editorial: Soft-ware Engineering Project Management," IEEE Trans-actions on Software Engineering, Vol. SE-10, No. 1,Jan. 1984.

9. Fayol, H., General and Industrial Administration, SirIsaac Pitman & Sons, London, UK, 1949.

10. Weihrich, H. and H. Koontz, Management: A GlobalPerspective, 10th ed., McGraw-Hill, New York, NY,1993.

Management: Science, Theory, and Practice1

Heinz WeihrichUniversity of San FranciscoSan Francisco, California

One of the most important human activities is man-aging. Ever since people began forming groups toaccomplish aims they could not achieve as individu-als, managing has been essential to ensure the coor-dination of individual efforts. As society has come torely increasingly on group effort and as many organ-ized groups have grown larger, the task of managershas been rising in importance. The purpose of thisbook is to promote excellence of all persons in organi-zations, but especially managers, aspiring managers,and other professionals.

Definition of Management: Its Natureand Purpose

Management is the process of designing and main-taining an environment in which individuals, workingtogether in groups, accomplish efficiently selectedaims. This basic definition needs to be expanded:

1. As managers, people carry out the managerialfunctions of planning, organizing, staffing,leading, and controlling.

2.

3.

4.

Managementorganization.

applies to any kind of

It applies to managers at all organizationallevels.

The aim of all managers is the same: to createa surplus.

5. Managing is concerned with productivity;that implies effectiveness and efficiency.

The Functions of Management

Many scholars and managers have found that theanalysis of management is facilitated by a useful andclear organization of knowledge. As a first order ofknowledge classification, we have used the five func-tions of managers: planning, organizing, staffing,leading, and controlling. Thus, the concepts, princi-ples, theory, and techniques are organized aroundthese functions and become the basis for discussion.

This framework has been used and tested for manyyears. Although there are different ways of organizingmanagerial knowledge, most textbook authors todayhave adopted this or a similar framework even afterexperimenting at times with alternative ways of struc-turing knowledge.

Although the emphasis in this article is on manag-ers' tasks in designing an internal environment forperformance, it must never be overlooked that manag-ers must operate in the external environment of anenterprise as well as in the internal environment of anorganization's various departments. Clearly, managerscannot perform their tasks well unless they understand,and are responsive to, the many elements of the exter-nal environment—economic, technological, social,political, and ethical factors that affect their areas ofoperations.

Management as an Essential for AnyOrganization

Managers are charged with the responsibility of takingactions that will make it possible for individuals tomake their best contributions to group objectives.Management thus applies to small and large organiza-

This paper has been modified for this book by Heinz Weihrich from Chapter 1 of Management: A Global Perspective, 10th ed. by HeinzWeihrich and Harold Koontz, McGraw-Hill, Inc., New York, N.Y., 1993. Reproduced by permission of McGraw-Hill, Inc.

tions, to profit and not-for-profit enterprises, to manu-facturing as well as service industries. The term"enterprise" refers to business, government agencies,hospitals, universities, and other organizations, be-cause almost everything said in this book refers tobusiness as well as nonbusiness organizations. Effec-tive managing is the concern of the corporation presi-dent, the hospital administrator, the government first-line supervisor, the Boy Scout leader, the bishop in thechurch, the baseball manager, and the universitypresident.

Management at Different Organizational Levels

Managers are charged with the responsibility of takingactions that will make it possible for individuals tomake their best contributions to group objectives Tobe sure, a given situation may differ considerablyamong various levels in an organization or varioustypes of enterprises. Similarly, the scope of authorityheld may vary and the types of problems dealt withmay be considerably different. Furthermore, the per-son in a managerial role may be directing people in thesales, engineering, or finance department. But the factremains that, as managers, all obtain results by estab-lishing an environment for effective group endeavor.

All managers carry out managerial functions.However, the time spent for each function may differ.Figure I2 shows an approximation of the relative timespent for each function. Thus, top-level managersspend more time on planning and organizing thanlower level managers. Leading, on the other hand,takes a great deal of time for first-line supervisors. Thedifference in time spent on controlling varies onlyslightly for managers at various levels.

All Effective Managers Carry Out EssentialFunctions

All managers carry out the functions of planning, or-ganizing, staffing, leading, and controlling, althoughthe time spent in each function will differ and the skillsrequired by managers at different organizational levelsvary. Still, all managers are engaged in getting thingsdone through people. Although the managerial con-cepts, principles, and theories have general validity,their application is an art and depends on the situation.Thus, managing is an art using the underlying sci-ences. Managerial activities are common to all manag-ers, but the practices and methods must be adapted tothe particular tasks, enterprises, and situations.

Organizational Hierarchy Precent Effort 100 %

Figure 1. Time spent in carrying out managerial functions.

This figure is partly based on and adapted from T.A. Money, T.H.Jerdee, and S.J. Carroll's "The Job(s) of Management," IndustrialRelations, Feb. 1965, pp. 97-110.

This concept is sometimes called the universalityof management in which managers perform the samefunctions regardless of their place in the organizationalstructure or the type of enterprise in which they aremanaging.

Managerial Skills and the OrganizationalHierarchy

Robert L. Katz identified three kinds of skills for ad-ministrators.3 To these may be added a fourth—theability to design solutions.

1. Technical skill is knowledge of and profi-ciency in activities involving methods, proc-esses, and procedures. Thus it involvesworking with tools and specific techniques.For example, mechanics work with tools, andtheir supervisors should have the ability toteach them how to use these tools. Similarly,accountants apply specific techniques in do-ing their job.

2. Human skill is the ability to work with peo-ple; it is cooperative effort; it is teamwork; itis the creation of an environment in whichpeople feel secure and free to express theiropinions.

3. Conceptual skill is the ability to see the "bigpicture," to recognize significant elements ina situation, and to understand the relation-ships among the elements.

4. Design skill is the ability to solve problems inways that will benefit the enterprise. To be ef-fective, particularly at upper organizationallevels, managers must be able to do morethan see a problem. If managers merely seethe problem and become "problem watchers,"they will fail. They must have, in addition,the skill of a good design engineer in workingout a practical solution to a problem.

The relative importance of these skills may differat various levels in the organization hierarchy. Asshown in Figure 2, technical skills are of greatest im-portance at the supervisory level. Human skills arealso helpful in the frequent interactions with subordi-nates. Conceptual skills, on the other hand, are usuallynot critical for lower level supervisors. At the middle-management level, the need for technical skills de-creases; human skills are still essential; and the con-ceptual skills gain in importance. At the top-management level, conceptual and design abilities andhuman skills are especially valuable, but there is rela-tively little need for technical abilities. It is assumed,

TOP 4Management

L Middle^^anagement '

w••TT

V

1

• 1 .B B HUM t H H 1

Suppervisor•• I I

J• ••

\ \ Conceptual &\ \ Design Skills

\ Human \\ Skills \

Technicak \ \Skills \ \

Figure 2. Skills versus management levels.

R.L. Katz, "Skilh of an Effective Administrator," Harvard Busi-ness Review, jan.-Feb., 1955, pp. 33-42, and R.L. Katz,"Retrospective Commentary," Harvard Business Review, Sept.-Oct. 1974, pp. 101-102.

especially in large companies, that chief executivescan utilize the technical abilities of their subordinates.In smaller firms, however, technical experience maystill be quite important.

The Aim of All Managers

Nonbusiness executives sometimes say that the aim ofbusiness managers is simple—to make a profit. Butprofit is really only a measure of a surplus of salesdollars (or in any other currency) over expense dollars.In a very real sense, in all kinds of organizations,whether commercial and noncommercial, the logicaland publicly desirable aim of all managers should be asurplus—managers must establish an environment inwhich people can accomplish group goals with theleast amount of time, money, materials, and personaldissatisfaction, or where they can achieve as much aspossible of a desired goal with available resources. Ina nonbusiness enterprise such as a police department,as well as in units of a business (such as an accountingdepartment) that are not responsible for total businessprofits, managers still have budgetary and organiza-tional goals and should strive to accomplish them withthe minimum of resources.

Productivity, Effectiveness, and Efficiency

Another way to view the aim of all managers is to saythat they must be productive. After World War II theUnited States was the world leader in productivity. Butin the late 1960s productivity began to decelerate. To-day government, private industry, and universitiesrecognize the urgent need for productivity improve-ment. Until very recently we frequently looked to Ja-pan to find answers to our productivity problem, butthis overlooks the importance of effectively perform-ing fundamental managerial and nonmanagerialactivities.

Definition of productivity. Successful companiescreate a surplus through productive operations. Al-though there is not complete agreement on the truemeaning of productivity, we will define it as the out-put-input ratio within a time period with due consid-eration for quality. It can be expressed as follows:

Productivity = — — within a time period,input

quality considered

and decreasing inputs to change the ratio favorably. Inthe past, productivity improvement programs weremostly aimed at the worker level. Yet, as Peter F.Drucker, one of the most prolific writers in manage-ment, observed, "The greatest opportunity for in-creasing productivity is surely to be found in knowl-edge, work itself, and especially in management."4

Definitions of effectiveness and efficiency. Produc-tivity implies effectiveness and efficiency in individualand organizational performance. Effectiveness is theachievement of objectives. Efficiency is the achieve-ment of the ends with the least amount of resources.To know whether they are productive, managers mustknow their goals and those of the organization.

Managing: Science or Art?

Managing, like so many other disciplines—medicine,music composition, engineering, accountancy, or evenbaseball—is in large measure an art but founded on awealth of science. It is making decisions on the basisof business realities. Yet managers can work better byapplying the organized knowledge about managementthat has accrued over the decades. It is this knowledge,whether crude or advanced, whether exact or inexact,that, to the extent it is well organized, clear, and perti-nent, constitutes a science. Thus, managing as prac-ticed is an art; the organized knowledge underlying thepractice may be referred to as a science. In this contextscience and art are not mutually exclusive but arecomplementary.

As science improves so should the application ofthis science (the art) as has happened in the physicaland biological sciences. This is true because the manyvariables with which managers deal are extremelycomplex and intangible. But such management knowl-edge as is available can certainly improve managerialpractice. Physicians without the advantage of sciencewould be little more than witch doctors. Executiveswho attempt to manage without such management sci-ence must trust to luck, intuition, or to pastexperiences.

In managing, as in any other field, unless practitio-ners are to learn by trial and error (and it has been saidthat managers' errors are their subordinates' trials),there is no place they can turn for meaningful guidanceother than the accumulated knowledge underlying theirpractice.

Thus, productivity can be improved by increasingoutputs with the same inputs, by decreasing inputs butmaintaining the same outputs, or by increasing output

P.F. Drucker, Management, Tasks, Responsibilities, Practices,Harper & Row, New York, 1973, p. 69.

The Elements of Science

Science is organized knowledge. The essential featureof any science is the application of the scientificmethod to the development of knowledge. Thus, wespeak of a science as having clear concepts, theory,and other accumulated knowledge developed fromhypotheses (assumptions that something is true), ex-perimentation, and analysis.

The Scientific Approach

The scientific approach first requires clear concepts—mental images of anything formed by generalizationfrom particulars. These words and terms should beexact, relevant to the things being analyzed, and in-formative to the scientist and practitioner alike. Fromthis base, the scientific method involves determiningfacts through observation. After classifying and ana-lyzing these facts, scientists look for causal relation-ships. When these generalizations or hypotheses aretested for accuracy and appear to be true, that is, toreflect or explain reality, and therefore to have valuein predicting what will happen in similar circum-stances. They are called principles. This designationdoes not always imply that they are unquestionably orinvariably true, but that they are believed to be validenough to be used for prediction.

Theory is a systematic grouping of interdependentconcepts and principles that form a framework for asignificant body of knowledge. Scattered data, such aswhat we may find on a blackboard after a group ofengineers has been discussing a problem, are not in-formation unless the observer has knowledge of thetheory that will explain relationships. Theory is, asC.G. Homans has said, "in its lowest form a classifica-tion, a set of pigeonholes, a filing cabinet in which factcan accumulate. Nothing is more lost than a loosefact."

The Role of Management Theory

In the field of management, then, the role of theory isto provide a means of classifying significant and perti-nent management knowledge. In designing an effectiveorganization structure, for example, a number of prin-ciples are interrelated and have a predictive value formanagers. Some principles give guidelines for dele-gating authority; these include the principle of dele-gating by results expected, the principle of equality ofauthority and responsibility, and the principle of unityof command.

Principles in management are fundamental truths(or what are thought to be truths at a given time), ex-plaining relationships between two or more sets ofvariables, usually an independent variable and a de-pendent variable. Principles may be descriptive orpredictive, and are not prescriptive. That is, they de-scribe how one variable relates to another—what willhappen when these variables interact. They do notprescribe what we should do. For example, in physics,if gravity is the only force acting on a falling body, thebody will fall at an increasing speed; this principledoes not tell us whether anyone should jump off theroof of a high building. Or take the example of Parkin-son's law: Work tends to expand to fill the time avail-able. Even if Parkinson's somewhat frivolous principleis correct (as it probably is), it does not mean that amanager should lengthen the time available for peopleto do a job.

To take another example, in management the prin-ciple of unity of command states that the more often anindividual reports to a single superior, the more thatindividual is likely to feel a sense of loyalty and obli-gation, and the less likely it is that there will be confu-sion about instruction. The principle merely predicts.It in no sense implies that individuals should neverreport to more than one person. Rather, it implies thatif they do so, their managers must be aware of the pos-sible dangers and should take these risks into accountin balancing the advantages and disadvantages of mul-tiple command.

Like engineers who apply physical principles to thedesign of an instrument, managers who apply theory tomanaging must usually blend principles with realities.A design engineer is often faced with the necessity ofcombining considerations of weight, size, conductiv-ity, and other factors. Likewise, a manager may findthat the advantages of giving a controller authority toprescribe accounting procedures throughout an organi-zation outweigh the possible costs of multiple author-ity. But if they know theory, these managers will knowthat such costs as conflicting instructions and confu-sion may exist, and they will take steps—such asmaking the controller's special authority crystal clearto everyone involved—to minimize or outweigh anydisadvantages.

Management Techniques

Techniques are essentially ways of doing things, meth-ods of accomplishing a given result. In all fields ofpractice they are important. They certainly are in man-aging, even though few really important managerialtechniques have been invented. Among them arebudgeting, cost accounting, network planning and

control techniques like the Program Evaluation andReview Technique (PERT) or the critical path method(CPM), rate-of-return-on-investment control, variousdevices of organizational development, managing byobjectives, total quality management (TQM). Tech-niques normally reflect theory and are a means ofhelping managers undertake activities most effectively.

The Systems Approach to OperationalManagement

An organized enterprise does not, of course, exist in avacuum. Rather, it depends on its external environ-ment; it is a part of larger systems such as the industryto which it belongs, the economic system, and society.Thus, the enterprise receives inputs, transforms them,and exports the outputs to the environment, as shownby the very basic model in Figure 3. However, thissimple model needs to be expanded and developedinto a model of operational management that indicateshow the various inputs are transformed through themanagerial functions of planning, organizing, staffing,leading, and controlling. Clearly, any business or otherorganization must be described by an open-system

model that includes interactions between the enterpriseand its external environment.

Inputs and Stakeholders

The inputs from the external environment may includepeople, capital, and managerial skills, as well as tech-nical knowledge and skills. In addition, various groupsof people make demands on the enterprise. For ex-ample, employees want higher pay, more benefits,and job security. On the other hand, consumers de-mand safe and reliable products at a reasonable price.Suppliers want assurance that their products will bebought. Stockholders want not only a high return ontheir investment but also security for their money.Federal, state, and local governments depend on taxespaid by the enterprise, but they also expect the enter-prise to comply with their laws. Similarly, the commu-nity demands that enterprises be "good citizens," pro-viding the maximum number of jobs with a minimumof pollution. Other claimants to the enterprise mayinclude financial institutions and labor unions; evencompetitors have a legitimate claim for fair play. It isclear that many of these claims are incongruent, and itis the managers' job to integrate the legitimate objec-tives of the claimants.

Re-energizing theSystem

TransformationProcess

ExternalEnvironment

Figure 3. Input-output model.

The Managerial Transformation Process The Communication System

Managers have the task of transforming inputs, effec-tively and efficiently, into outputs. Of course, thetransformation process can be viewed from differentperspectives. Thus, one can focus on such diverse en-terprise functions as finance, production, personnel,and marketing. Writers on management look on thetransformation process in terms of their particular ap-proaches to management. Specifically, as you will see,writers belonging to the human behavior school focuson interpersonal relationships; social systems theoristsanalyze the transformation by concentrating on socialinteractions; and those advocating decision theory seethe transformation as sets of decisions. However webelieve that the most comprehensive and useful ap-proach for discussing the job of managers is to use themanagerial functions of planning, organizing, staffing,leading, and controlling as a framework for organizingmanagerial knowledge (see Figure 4).

Communication is essential to all phases of the mana-gerial process: It integrates the managerial functionsand links the enterprise with its environment. A com-munication system is a set of information providersand information recipients and the means of transfer-ring information from one group to another group withthe understanding that the messages being transmittedwill be understood by both groups. For example, theobjectives set in planning are communicated so thatthe appropriate organization structure can be devised.Communication is essential in the selection, appraisal,and training of managers to fill the roles in this struc-ture. Similarly, effective leadership and the creation ofan environment conducive to motivation depend oncommunication. Moreover, it is through communica-tion that one determines whether events and perform-ance conform to plans. Thus, it is communication thatmakes managing possible.

Planning

Organizing

Figure 4. Management model.

10

The second function of the communication systemis to link the enterprise with its external environment,where many of the claimants are. Effective managerswill regularly scan the external environment. While itis true that managers may have little or no power tochange the external environment, they have no alter-native but to respond to it. For example, one shouldnever forget that the customer, who is the reason forthe existence of virtually all businesses, is outside acompany. It is through the communication system thatthe needs of customers are identified; this knowledgeenables the firm to provide products and services at aprofit. Similarly, it is through an effective communi-cation system that the organization becomes aware ofcompetition and other potential threats and constrain-ing factors.

Outputs

Managers must secure and utilize inputs to the enter-prise, to transform them through the managerialfunctions—with due consideration for external vari-ables—to produce outputs.

Although the kinds of outputs will vary with theenterprise, they usually include a combination ofproducts, services, profits, satisfaction, and integra-tion of the goals of various claimants to the enter-prise. Most of these outputs require no elaboration,and only the last two will be discussed.

The organization must indeed provide many"satisfactions" if it hopes to retain and elicit contri-butions from its members. It must contribute to thesatisfaction not only of basic material needs (for ex-ample, earning money to buy food and shelter orhaving job security) but also of needs for affiliation,acceptance, esteem, and perhaps even self-actualization.

Another output is goal integration. As notedabove, the different claimants to the enterprise havevery divergent—and often directly opposing—objectives. It is the task of managers to resolve con-flicts and integrate these aims. This is not easy, asone former Volkswagen executive discovered. Eco-nomics dictated the construction of a Volkswagenassembly plant in the United States. However, animportant claimant, German labor, out of fear thatjobs would be eliminated in Germany, opposed thisplan. This example illustrates the importance of inte-grating the goals of various claimants to the enter-prise, which is indeed an essential task of anymanager.

Re-energizing the System or ProvidingFeedback to the System

Finally, we should notice that in the systems model ofoperational management, some of the outputs becomeinputs again. Thus, the satisfaction of employees be-comes an important human input to the enterprise.Similarly, profits, the surplus of income over costs, arereinvested in cash and capital goods, such as machin-ery, equipment, buildings, and inventory.

The Functions of Managers

Managerial functions provide a useful framework fororganizing management knowledge. There have beenno new ideas, research findings, or techniques thatcannot readily be placed in the classifications of plan-ning, organizing, staffing, leading, and controlling.

Planning

Planning involves selecting missions and objectivesand the actions to achieve them; it requires decisionmaking, that is, choosing future courses of action fromamong alternatives. There are various types of plans,ranging from overall purposes and objectives to themost detailed actions to be taken, such as to order aspecial stainless steel bolt for an instrument or to hireand train workers for an assembly line. No real planexists until a decision—a commitment of human ormaterial resources or reputation—has been made. Be-fore a decision is made, all we have is a planningstudy, an analysis, or a proposal, but not a real plan.

Organizing

People working together in groups to achieve somegoal must have roles to play, much like the parts actorsfill in a drama, whether these roles are ones they de-velop themselves, are accidental or haphazard, or aredefined and structured by someone who wants to makesure that people contribute in a specific way to groupeffort. The concept of a "role" implies that what peo-ple do has a definite purpose or objective; they knowhow their job objective fits into group effort, and theyhave the necessary authority, tools, and information toaccomplish the task.

Organizing, then, is that part of managing that in-volves establishing an intentional structure of roles forpeople to fill in an organization. It is intentional in the

11

sense of making sure that all the tasks necessary toaccomplish goals are assigned and, it is hoped, as-signed to people who can do them best. Imagine whatwould have happened if such assignments had notbeen made in the program of flying the special aircraftVoyager around the globe without stopping or refuel-ing. The purpose of an organization structure is to helpin creating an environment for human performance. Itis, then, a management tool and not an end in and ofitself. Although the structure must define the tasks tobe done, the roles so established must also be designedin light of the workers' abilities and motivations.

Staffing

Staffing involves filling, and keeping filled, the posi-tions in the organization structure. This is done byidentifying workforce requirements, inventorying thepeople available, recruiting, selecting, placing, pro-moting, planning the career, compensating, and train-ing or otherwise developing both candidates and cur-rent job holders to accomplish their tasks effectivelyand efficiently.

Leading

Leading is influencing people so that they will con-tribute to organization and group goals; it has to dopredominantly with the interpersonal aspect of man-aging. All managers would agree that their most im-portant problems arise from people—their desires andattitudes, their behavior as individuals and in groups—and that effective managers also need to be effectiveleaders. Since leadership implies followership andpeople tend to follow those who offer a means of satis-fying their own needs, wishes, and desires, it is under-standable that leading involves motivation, leadershipstyles and approaches, and communication.

Controlling

Controlling is the measuring and correcting of activi-ties of subordinates, to ensure that events conform toplans. It measures performance against goals andplans, shows where negative deviations exist, and, byputting in motion actions to correct deviations, helpsensure accomplishment of plans. Although planningmust precede controlling, plans are not self-achieving.The plan guides managers in the use of resources to

accomplish specific goals. Then activities are checkedto determine whether they conform to plans.

Control activities generally relate to the measure-ment of achievement. Some means of controlling, likethe budget for expense, inspection records, and therecord of labor hours lost, are generally familiar. Eachmeasures and shows whether plans are working out. Ifdeviations persist, correction is indicated. But what iscorrected. Nothing can be done about reducing scrap,for example, or buying according to specifications, orhandling sales returns unless one knows who is re-sponsible for these functions. (Compelling events toconform to plans means locating the persons who areresponsible for results that differ from planned actionand then taking the necessary steps to improve per-formance. Thus, controlling what people do controlsoutcomes.

Coordination, the Essence of Managership

Some authorities consider coordination to be an addi-tional function of management. It seems more accu-rate, however, to regard it as the essence of manager-ship, for managing's purpose is to harmonize individ-ual efforts in the accomplishment of group goals. Eachof the managerial functions is an exercise contributingto coordination.

Even in the case of a church or a fraternal organi-zation, individuals often interpret similar interests indifferent ways, and their efforts toward mutual goalsdo not automatically mesh with the efforts of others. Itthus becomes the central task of the manager to recon-cile differences in approach, timing, effort, or interest,and to harmonize individual goals to contribute to or-ganization goals.

Summary

Management is the process of designing and main-taining an environment in which individuals, workingtogether in groups, accomplish efficiently selectedaims. Managers are charged with the responsibility oftaking actions that will make it possible for individualsto make their best contributions to group objectives.Managing as practiced is an art; the organized knowl-edge underlying the practice may be referred to as ascience. In this context science and art are not mutu-ally exclusive but are complementary.

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All managers carry out the functions of planning,organizing, staffing, leading, and controlling, al-though the time spent in each function will differ andthe skills required by managers at different organiza-tional levels vary. Managerial activities are common toall managers, but the practices and methods must beadapted to the particular tasks, enterprises, and situa-tions. The universality of management states that man-agers perform the same functions regardless of theirplace in the organizational structure or the type of en-terprise in which they are managing.

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R. Alec Mackenzie

The management processin 3-DA diagram showing the activities, functions,and basic elements of the executive's job

ForewordTo many businessmen who are trying to keep up withmanagement concepts, the literature must sometimesseem more confusing than enlightening. In additionto reflecting differences of opinion and semantics, itgenerally comes to the reader in fragments. The aimof this diagram is not to give the executive new in-formation, but to help him put the pieces together.

Mr. Mackenzie is Vice President of The PresidentsAssociation, Inc., an organization affiliated with theAmerican Management Association. He has had ex-tensive experience in planning, organizing, and teach-ing seminars for businessmen here and abroad. He iscoauthor with Ted W. Engstrom of Managing YourTime (Zondervan Publishing House, 1967).

T-he chart of "The Management Process/' fac-ing this page, begins with the three basic ele-ments with which a manager deals: ideas, things,and people. Management of these three elementsis directly related to conceptual thinking (ofwhich planning is an essential part), administra-tion, and leadership. Not surprisingly, two schol-ars have identified the first three types of man-agers required in organizations as the planner,the administrator, and the leader.1

Note the distinction between leader and man-ager. The terms should not be used interchange-ably. While a good manager will often be a goodleader, and vice versa, this is not necessarily thecase. For example:

• In World War II, General George Pattonwas known for his ability to lead and inspiremen on the battlefield, but not for his concep-tual abilities. In contrast, General Omar Brad-ley was known for his conceptual abilities, espe-

1. Sec H. Igor Ansoff and R.G. Brandenburg, "The General Manager ofthe Future," California Management Review, Spring 1969, p. 61.

cially planning and managing a campaign, rath-er than for his leadership.

Similarly in industry, education, and govern-ment it is possible to have an outstanding man-ager who is not capable of leading people butwho, if he recognizes this deficiency, will staffhis organization to compensate for it. Alterna-tively, an entrepreneur may possess charismaticqualities as a leader, yet may lack the adminis-trative capabilities required for overall effectivemanagement; and he too must staff to make upfor the deficiency.

We are not dealing here with leadership ingeneral. We are dealing with leadership as afunction of management. Nor are we dealingwith administration in general but, again, as afunction of management.

The following definitions are suggested forclarity and simplicity:

O Management—achieving objectives throughothers.

Reprinted by permission of the Harvard Business Review. "The Management Process in 3-D" by R. Alex Mackenzie, Nov./Dec.1969, pp. 80-87. Copyright © 1969 by the President and Fellows of Harvard College. All rights reserved.

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Exhibit I. The management process

PEOPLE TO ACCOMPU

OFCtSfONSOtiMUVRTANT

ADMINISTRATION

STANDARDIZEMETHODS

. ^ - • ' ^

This diagram shows the different elements, functions,and activities which are part of the managementprocess. At the center are people, ideas, and things,for these are the basic components of everyorganization with which the manager must work.Ideas create the need for conceptual thinking;things, for administration ,• people, for leadership.

Three functions—problem analysis, decision making,and communication—are important at all times andin all aspects of the manager's iob; therefore, theyare shown to permeate his work process. However,other functions are likely to occur in predictablesequence,- thus, planning, organizing, staffing,directing, and controlling arc shown in that order onone of the bands. A manager's interest in any oneof them depends on a variety of factors, including hisposition and the stage of completion of the projectshe is most concerned with. He must at all times sensethe pulse of his organization. The activities thatwill be most important to him as he concentrates—now on one function, then on another—are shown onthe outer bands of the diagram.

ONil rma

R. Alec Mackenzie,

'The Management Process in 3-

Harvard Business Review,

November-December 1969Copyright

O Administration—managing the details of ex-ecutive affairs.

O Leadership—influencing people to accom-plish desired objectives.

Functions described

The functions noted in the diagram have beenselected after careful study of the works of manyleading writers and teachers.2 While the authori-ties use different terms and widely varying clas-sifications of functions, I find that there is farmore agreement among them than the variationssuggest.

Arrows are placed on the diagram to indicatethat five of the functions generally tend to be"sequential." More specifically, in an undertak-ing one ought first to ask what the purpose orobjective is which gives rise to the function ofplanning; then comes the function of organiz-ing—determining the way in which the work isto be broken down into manageable units; afterthat is staffing, selecting qualified people to dothe work; next is directing, bringing about pur-poseful action toward desired objectives; finally,the function of control is the measurement ofresults against the plan, the rewarding of thepeople according to their performance, andthe replanning of the work to make corrections—thus starting the cycle over again as the processrepeats itself.

Three functions—analyzing problems, makingdecisions, and communicating—are called "gen-eral" or "continuous" functions because theyoccur throughout the management process rath-er than in any particular sequence. For example,many decisions will be made throughout theplanning process as well as during the organiz-

2. The following studies were particularly helpful: Harold Koontz,Toward a Unified Theory of Management (New York, McGraw-HillBook Company, 1964); Philip W. Shay, "The Theory and Practice ofManagement," Association of Consulting Management Engineers, 1967;Louis A. Allen, The Management Profession (New York, McGraw-HillBook Company, 1964), a particularly useful analysis of managerialfunctions and activities; Ralph C. Davis, fundamentals of TopManagement (New York, Harper & Brothers, 1951); Harold F. Smiddy,"GE's Philosophy & Approach for Manager Development," GeneralManagement Series # 174, American Management Association, 1955;George R. Terry, Principles of Management (Homewood, Illinois, RichardD. Irwin, Inc., 19S6); William H. Newman, Administrative Action(Englewood Cliffs, N.J., Prentice-Hall, Inc., 1950); Lawrence A. Appley,Values in Management (New York, American Management Association,1969); Ordway Tead, Administration: Its Purpose and Performance(New York, Harper & Brothers, 1959); Peter F. Dnicker, The Practiceof Management (New York, Harper & Row, 19S4).

ing, directing, and controlling processes. Equally,there must be communication for many of thefunctions and activities to be effective. Andthe active manager will be employing problemanalysis throughout all of the sequential func-tions of management.

In actual practice, of course, the various func-tions and activities tend to merge. While select-ing a top manager, for example, an executivemay well be planning new activities which thismanager's capabilities will make possible, andmay even be visualizing the organizational im-pact of these plans and the controls which willbe necessary.

Simplified definitions are added for each ofthe functions and activities to ensure under-standing of what is meant by the basic elementsdescribed.

Prospective gains

Hopefully, this diagram of the managementprocess will produce a variety of benefits forpractitioners and students. Among these bene-fits are:

O A unified concept of managerial functionsand activities.

O A way to fit together all generally acceptedactivities of management.

O A move toward standardization of termi-nology.

O The identifying and relating of such activi-ties as problem analysis, management of change,and management of differences.

O Help to beginning students of managementin seeing the "boundaries of the ballpark" andsensing the sequential relationships of certainfunctions and the interrelationships of others.

O Clearer distinctions between the leadership,administrative, and strategic planning functionsof management.

In addition, the diagram should appeal to thosewho, like myself, would like to see more em-phasis on the "behaviorist" functions of man-agement, for it elevates staffing and communi-cating to the level of a function. Moreover, itestablishes functions and activities as the twomost important terms for describing the job ofthe manager.

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