Unit 2.

The role of the manager within the organization

2.1 The Organization

2.2 The Functions of Management
2.3 Management Skills
2.4 Management Types
2.5 Manager Roles

2.1 The Organization

A formal definition of an organization is a social entity that is goal-directed and

deliberately structured. Social entity means being made up of two or more people. Goal directed
means designed to achieve some outcome, such as make a profit (Target Stores), win pay
increases for members (United Food & Commercial Workers), meet spiritual needs (Lutheran
Church), or provide social satisfaction (college sorority Alpha Delta Pi). Deliberately structured
means that tasks are divided, and responsibility for their performance is assigned to organization
members. This definition applies to all organizations, including both profit and nonprofit ones.
Small, offbeat, and nonprofit organizations are more numerous than large, visible
corporations—and just as important to society. Based on our definition of management, the
manager’s responsibility is to coordinate resources in an effective and efficient manner to
accomplish the organization’s goals. Organizational effectiveness is the degree to which the
organization achieves a stated goal, or succeeds in accomplishing what it tries to do.
Organizational effectiveness means providing a product or service that customers value.
Organizational efficiency refers to the amount of resources used to achieve an organizational
goal. It is based on how much raw material, money, and people are necessary for producing a
given volume of output. Efficiency can be defined as the amount of resources used to produce a
product or service. Efficiency and effectiveness can both be high in the same organization.
All managers have to pay attention to costs, but severe cost cutting to improve efficiency
—whether it is by using cutting-edge technology or old-fashioned frugality— can sometimes
hurt organizational effectiveness. The ultimate responsibility of managers is to achieve high
performance, which is the attainment of organizational goals by using resources in an efficient
and effective manner.

2.2 The Functions of Management

Every day, managers solve difficult problems, turn organizations around, and achieve
astonishing performances. To be successful, every organization needs good managers. The
famed management theorist Peter Drucker (1909–2005), often credited with creating the modern
study of management, summed up the job of the manager by specifying five tasks, as outlined in
Exhibit 1. In essence, managers set goals, organize activities, motivate and communicate,
measure performance, and develop people.
The activities outlined in Exhibit 1 fall into four fundamental management functions:
planning (setting goals and deciding activities), organizing (organizing activities and people),
leading (motivating, communicating with, and developing people), and controlling (establishing
targets and measuring performance). Depending on their job situation, managers perform
numerous and varied tasks, but they all can be categorized within these four primary functions.

1
 Exhibit 1. What do managers do?

Planning means identifying goals for future organizational performance and deciding on
the tasks and use of resources needed to attain them. In other words, managerial planning defines
where the organization wants to be in the future and how to get there.

Organizing typically follows planning and reflects how the organization tries to
accomplish the plan. Organizing involves assigning tasks, grouping tasks into departments,
delegating authority, and allocating resources across the organization.

Leading is the use of influence to motivate employees to achieve organizational goals.

Leading means creating a shared culture and values, communicating goals to people throughout
the organization, and infusing employees with the desire to perform at a high level. Many
managers working quietly in both large and small organizations around the world provide strong
leadership within departments, teams, nonprofit organizations, and small businesses.

Controlling is the fourth function in the management process. Controlling means

monitoring employees’ activities, determining whether the organization is moving toward its
goals, and making corrections as necessary. One trend in recent years is for companies to place
less emphasis on top-down control and more emphasis on training employees to monitor and
correct themselves.

2.3 Management Skills

A manager’s job requires a range of skills. Although some management theorists propose
a long list of skills, the necessary skills for managing a department or an organization can be
placed in three categories: conceptual, human, and technical. As illustrated in Exhibit 2, the
application of these skills changes dramatically when a person is promoted to management.
Although the degree of each skill that is required at different levels of an organization may vary,
all managers must possess some skill in each of these important areas to perform effectively.
2
 Exhibit 2. Relationship of Technical, Human and Conceptual Skills to Management

Technical Skills
Many managers get promoted to their first management jobs because they have
demonstrated understanding and proficiency in the performance of specific tasks, which is
referred to as technical skills. Technical skills include mastery of the methods, techniques, and
equipment involved in specific functions such as engineering, manufacturing, or finance.
Technical skills also includes specialized knowledge, analytical ability, and the competent use of
tools and techniques to solve problems in that specific discipline. Technical skills are particularly
important at lower organizational levels. However, technical skills become less important than
human and conceptual skills as managers move up the hierarchy. Top managers with strong
technical skills sometimes have to learn to step back so others can do their jobs effectively.

Human Skills
Human skills involve the manager’s ability to work with and through other people and to
work effectively as a group member. Human skills are demonstrated in the way that a manager
relates to other people, including the ability to motivate, facilitate, coordinate, lead,
communicate, and resolve conflicts. Human skills are essential for frontline managers who work
with employees directly on a daily basis. A recent study found that the motivational skill of the
frontline manager is the single most important factor in whether people feel engaged with their
work and committed to the organization.
Human skills are increasingly important for managers at all levels and in all types of
organizations. Even at a company such as Google, which depends on technical expertise, human
skills are considered essential for managers. Google analyzed performance reviews and feedback
surveys to find out what makes a good manager of technical people and found that technical
expertise ranked dead last among a list of eight desired manager qualities. The exhibit lists eight
effective behaviors of good managers. Notice that almost all of them relate to human skills, such
as communication, coaching, and teamwork. People want managers who listen to them, build
positive relationships, and show an interest in their lives and careers. A recent study found that
human skills were significantly more important than technical skills for predicting manager
effectiveness. Another survey compared the importance of managerial skills today with those
from the late 1980s and found a decided increase in the role of skills for building relationships
with others.

3
 Conceptual Skills
Conceptual skills include the cognitive ability to see the organization as a whole system
and the relationships among its parts. Conceptual skills involve knowing where one’s team fits
into the total organization and how the organization fits into the industry, the community, and the
broader business and social environment. It means the ability to think strategically—to take the
broad, long-term view—and to identify, evaluate, and solve complex problems.
Conceptual skills are needed by all managers, but especially for managers at the top.
Many of the responsibilities of top managers, such as decision making, resource allocation, and
innovation, require a broad view.

2.4 Management Types

Managers use conceptual, human, and technical skills to perform the four management
functions of planning, organizing, leading, and controlling in all organizations—large and small,
manufacturing and service, profit and nonprofit, traditional and Internetbased. But not all
managers’ jobs are the same. Managers are responsible for different departments, work at
different levels in the hierarchy, and meet different requirements for achieving high
performance.

Vertical Differences
An important determinant of the manager’s job is the hierarchical level. Exhibit 3
illustrates the three levels in the hierarchy. For first-level managers, the main concern is
facilitating individual employee performance. Middle managers, though, are concerned less with
individual performance and more with linking groups of people, such as allocating resources,
coordinating teams, or putting top management plans into action across the organization. For
top-level managers, the primary focus is monitoring the external environment and determining
the best strategy to be competitive.

Exhibit 3. Management Levels in the Organizational Hierarchy

4
 Top managers are at the top of the hierarchy and are responsible for the entire
organization. They have titles such as president, chairperson, executive director, CEO, and
executive vice president. Top managers are responsible for setting organizational goals, defining
strategies for achieving them, monitoring and interpreting the external environment, and making
decisions that affect the entire organization. They look to the long-term future and concern
themselves with general environmental trends and the organization’s overall success. Top
managers are also responsible for communicating a shared vision for the organization, shaping
corporate culture, and nurturing an entrepreneurial spirit that can help the company innovate and
deep pace with rapid change.

Middle managers work at middle levels of the organization and are responsible for
business units and major departments. Examples of middle managers are department head,
division head, manager of quality control, and director of the research lab. Middle managers
typically have two or more management levels beneath them. They are responsible for
implementing the overall strategies and policies defined by top managers. Middle managers
generally are concerned with the near future, rather than with long-range planning.
The middle manager’s job has changed dramatically over the past two decades. Many
organizations improved efficiency by laying off middle managers and slashing middle
management levels. Traditional pyramidal organization charts were flattened to allow
information to flow quickly from top to bottom and decisions to be made with greater speed. In
addition, technology has taken over many tasks once performed by middle managers, such as
monitoring performance and creating reports. Exhibit 3 illustrates the shrinking of middle
management.
Middle managers’ status also has escalated because of the growing use of teams and
projects. A project manager is responsible for a temporary work project that involves the
participation of people from various functions and levels of the organization, and perhaps from
outside the company as well. Many of today’s middle managers work with a variety of projects
and teams at the same time, some of which cross geographical and cultural boundaries as well as
functional ones.

First-line managers are directly responsible for the production of goods and services.
They are the first or second level of management and have such titles as supervisor, line
manager, section chief, and office manager. They are responsible for teams and non-management
employees. Their primary concern is the application of rules and procedures to achieve efficient
production, provide technical assistance, and motivate subordinates. The time horizon at this
level is short, with the emphasis on accomplishing day-to-day goals. This type of managerial job
might also involve motivating and guiding young, often inexperienced workers; providing
assistance as needed; and ensuring adherence to company policies.

Horizontal Differences
The other major difference in management jobs occurs horizontally across the
organization.
Functional managers are responsible for departments that perform a single functional
task and have employees with similar training and skills. Functional departments include
advertising, sales, finance, human resources, manufacturing, and accounting. Line managers are
responsible for the manufacturing and marketing departments that make or sell the product or
service. Staff managers are in charge of departments, such as finance and human resources, that
support line departments.
General managers are responsible for several departments that perform different
functions. A general manager is responsible for a self-contained division, such as a Nordstrom
department store or a Honda assembly plant, and for all the functional departments within it.

5
Project managers also have general management responsibility because they coordinate people
across several departments to accomplish a specific project.

2.5 Manager Roles

Mintzberg’s observations and subsequent research indicate that diverse manager activities
can be organized into ten roles. A role is a set of expectations for a manager’s behavior. Exhibit
4 describes activities associated with each of the roles. These roles are divided into three
conceptual categories: informational (managing by information), interpersonal (managing
through people), and decisional (managing through action). Each role represents activities that
managers undertake to ultimately accomplish the functions of planning, organizing, leading, and
controlling. Although it is necessary to separate the components of the manager’s job to
understand the different roles and activities of a manager, it is important to remember that the
real job of management isn’t practiced as a set of independent parts; all the roles interact in the
real world of management.

Exhibit 4. Ten Manager Roles

Informational Roles
Informational roles describe the activities used to maintain and develop an information
network. General managers spend about 75 percent of their time communicating with other
people. The monitor role involves seeking current information from many sources. The manager
6
acquires information from others and scans written materials to stay well informed. The
disseminator and spokesperson roles are just the opposite: The manager transmits current
information to others, both inside and outside the organization, who can use it.

Interpersonal Roles
Interpersonal roles pertain to relationships with others and are related to the human skills
described earlier. The figurehead role involves handling ceremonial and symbolic activities for
the department or organization. The manager represents the organization in his or her formal
managerial capacity as the head of the unit. The presentation of employee awards by a branch
manager for Commerce Bank is an example of the figurehead role. The leader role encompasses
relationships with subordinates, including motivation, communication, and influence. The
liaison role pertains to the development of information sources both inside and outside the
organization.

Decisional Roles
Decisional roles pertain to those events about which the manager must make a choice and
take action. These roles often require conceptual as well as human skills. The entrepreneur role
involves the initiation of change. Managers are constantly thinking about the future and the
changes needed to achieve a future goal or vision. The disturbance handler role involves
resolving conflicts among subordinates or between the manager’s department and other
departments. The resource allocator role pertains to decisions about how to assign people, time,
equipment, money, and other resources to attain desired outcomes. The manager must decide
which projects receive budget allocations, which of several customer complaints receive priority,
and even how to spend his or her own time.
The relative emphasis that a manager puts on the ten roles shown in Exhibit 4 depends on
a number of factors, such as the manager’s position in the hierarchy, natural skills and abilities,
type of organization, or departmental goals to be achieved. Note that the importance of the leader
role typically declines, while the importance of the liaison role increases, as a manager moves up
the organizational hierarchy.
Managers stay alert to needs both within and outside the organization to determine which
roles are most critical at various times. A top manager may regularly put more emphasis on the
roles of spokesperson, figurehead, and negotiator, but the emergence of new competitors may
require more attention to the monitor role, or a severe decline in employee morale and direction
may mean that the CEO has to put more emphasis on the leader role. A marketing manager may
focus on interpersonal roles because of the importance of personal contacts in the marketing
process, whereas a financial manager may be more likely to emphasize decisional roles such as
resource allocator and negotiator. Despite these differences, all managers carry out
informational, interpersonal, and decisional roles to meet the needs of the organization.