Unit 5. On Management and Managers

Text 1. What is management?

Nowadays the English word “management” is well known all over the world. It means “управление” in the Russian language. The definition of management is the central point of discussion today. It is undoubtedly that there is the difference between what is meant by “management” and by administration. Harold Koonz, the theorist of management, gives the following definition: “Managing is the art of getting things done through and with people in formally organized groups”. E.F.L Brech offers another definition: “Management is a social process entailing responsibility for the effective and economical planning and regulation of the operation of the enterprise”.

Some authors view management as a skill whereas the other theorists state that it is an art. What is not a doubt is the fact that management is both: the skill and the art of directing human activities by the achievement of predetermined goals. It deals with the process of making decisions.

As for “administration”, it is not easy to define and made clear the distinction between that and management. “Administration” is used in the field of narrower activity of regulation day-to-day operations of any organizational section. It is also used to describe the various top functions in public service; it is the part of management and it is rarely taken to be involved in decision policy-making. Finally, it should be noted that “management” and “administration” are in close interrelation.

A structure of management

Owners (shareholders)

Directors

Chief Executive officer

Senior executive officers (general and top functional managers)

Middle management (departmental managers)                    

The purpose of management follows from the main objective of business activity: that is the profit maximization. The desire for money obliges entrepreneurs look for new management techniques or use the better from the old ones to protect their business interest.

But it isn’t the sole management objective; the other objectives are subservient to this. There is a number of interested parties to formulate the objectives: not only managers and stock holders but also: consumers, suppliers, employees etc. Therefore, management must unite the interests of all these groups. So, management objectives can be seen to be socio-economic. The organizational policy is shaped out of the combination of objectives and social factors. It is true to say that top managers develop the policy and objectives, according to the accepted firm’s philosophy, so, the agreeing and policy formulating are the important responsibilities of any objectives executives.

It is sufficient to say that the objectives represent what a company has to achieve and policy is how to go about achieving them.

In a traditional company there are policy committees: the finance committee, the marketing committee, the personnel committee, the production committee and so on. They coordinate all the efforts for successful policy-making process. In the modern rapid technological development and change, any organization must have specific and clear goals to be profitable and successful.

According to Peter Drucker, success is the result of doing the right thing, whereas the effectiveness is caused by doing things right. Taking into account that management concept, a team of executives ensures the complete way of running business.

It is commonly stated that the theorists consider management in many aspects:

MANAGEMENT:

AS FUNCTIONS (ACTIVITIES);

AS PROCESS;

AS MANAGEMENT ORGAN;

AS CATEGORY OF PEOPLE;

AS SCIENCE AND ART

Experience shows that the main management components are as follows:

Organizational structure, HRM, Finance, Business plan, Marketing economy, Logistics.