What is Organizational and Business Management? How Do I Manage?
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
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
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.
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
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
That Separating “Leading” from “Managing” Can Be Destructive.
Additional Perspectives on the Term “Management”
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
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
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
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”).
and Theories of Organization Development
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.)
|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|
|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|
|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
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 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
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.
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
Various Kinds of Plans
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
Various Kinds of Organizing
Yourself (your office, files, etc.)
/ Designing Tasks, Jobs or Roles
Various Types of Groups
Communities (typically a nonprofit goal)
a New Business (whether for-profit or nonprofit)
to Reorganize a Current Organization
Human Resources Management
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.
Core Competencies to Lead in Any Situation
Yourself (career & and personal development, personal productivity &
Another Individual (setting goals, methods of influence, building trust, managing
Groups (facilitation, meeting management, group problem solving, managing conflict,
Organizations (strategic analysis, strategic direction, org’l communications,
What is Leadership?
How Do I Lead?
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.
Legal and Taxation Compliance
Laws, Topics and Issues (understanding major laws and regulations)
Performance Management (setting goals, feedback, performance reviews, etc.)
in the Workplace (ensuring highly ethical standards and behaviors)
(ensuring compliance to legal and organizational rules and regulations)
policies, employee performance management, training, etc.)
Risk, Safety and Liabilities
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.
Core Competencies to Lead in Any Situation
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
for New Managers and Supervisors to Management Themselves
Intelligence (managing your emotions)
Yourself (this subtopic is in “Personal Productivity”)
Career Development (resumes,
networking, interviewing, etc.)
Yourself (career & and personal development, personal productivity &
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.
All About Facilitation
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.
Select Library Topics from “Diagnosing” Yourself, Group or Organization
Methods and Resources for Organizational Change Agents
for Organizational Design
Performance Management — Evaluating and Improving Organizations
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
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
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
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
Managing Volunteer Programs
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.
Glossary of Business Terms A-Z
Three Management Approaches
Management – a General Theory
Is Hard Work: Avoid These Four Mistakes
Management: Should You Break the Rules?
Micro Managing: Start Smart Managing
Learn More in the Library’s Blogs Related to Management
In addition to the articles on this current page, also see the following blogs
that have posts related to Management. Scan down the blog’s page to see various
posts. Also see the section “Recent Blog Posts” in the sidebar of
the blog or click on “next” near the bottom of a post in the blog.
The blog also links to numerous free related resources.
For the Category of Management:
To round out your knowledge of this Library topic, you may
want to review some related topics, available from the link below.
Each of the related topics includes free, online resources.
Also, scan the Recommended Books listed below. They have been
selected for their relevance and highly practical nature.