Organizations come in various sizes and shapes with the aim to perform specific functions. Generally the functions of the organization can be classified as either formal or informal (Naoum, 2001, p.1). A formal function produces a visible product that is usually consumed by the various portions of the society that normally are outside the organization. An informal function does not produce a result immediately visible to the outside society for example organizing a function (Naoum, 2001, p.1).
Basically, with this both functions the organization aim is to achieve certain and specific objectives through the collection of the people and other resources (Naoum, 2001, p.1). The resources are always coordinated by a set of procedures and integrated by a form of organizational structure. The ways in which the objectives are planned and the manner in which people are coordinated and managed differ among the organizations (Naoum, 2001, p.1).
In most cases the formal organizations have six common elements within them. This elements include: the operation which comprise the task and technology; the resources, comprising the human and non-human resources; the objective for both the visible and invisible products; the structure, that can be both formal and informal; the management, that include both the strategic and operational management and lastly; the environment comprising the internal and external environment that affects the organization (Naoum, 2001, p.1).
Therefore, for an organization to succeed or fail, it will largely depend on the clearness of the operation and objectives, the quality of the people employed, the availability of the resources and the suitability of the structure and the management system adopted (Naoum, 2001, p.1). Moreover, in every organization, there exists interdependency of many parts that are largely departments and that no single department within the organization can achieve success in isolation (Naoum, 2001, p.1).
Since the 19th century, the meaning of the word management has always been investigated at length. Many people ask, what it is, who needs it and why it is necessary, (Naoum, 2001, p.11). In trying to find answers to these questions, one will discover that, almost everyone needs management in order to achieve certain individual and collective objectives, through incorporating specific techniques, systems and approaches (Naoum, 2001, p.11).
Henry Fayol (1845-1925), asserts that, “management plays a very important part in the government of undertakings; of all undertakings, large or small, industrial, commercial, political, religious and others.” Fayol observes that management is an activity that is common to all human undertakings, whether in the homes, business or government. He further notes that all these undertakings require planning, organizing, commanding, coordinating and controlling and in order to function properly, all must observe the same general principles (Sapru, 2006, p.102).
With planning, it involves an exercise of examining the future and drawing up a plan of action and that unity, continuity, flexibility and accuracy are the broad features of a good plan of action (Sapru, 2006, p.103). Organizing means; building up a dual structure of human and material to achieve the undertaking and that the human and the material organization has to be consistent with the objectives, resources and the requirements of the particular concern (Sapru, 2006, p.103). With the coordination it involves working together and harmonizing all activity and effort and there has to be regular consultations to improve coordination (Sapru, 2006, p.105). Controlling consists of verifying whether everything occurs in conformity with the “particular plan adopted, the instructions issued and the principles established” (Sapru, 2006, p.105).
Other writers have added the social and cultural factors to the definition of management, so that management can be defined in terms of; relating the organization to the external environment and the response it has to society’s needs and developing an organizational climate where people can accomplish their individual and collective goals (Naoum, 2001, p.11). Therefore, management can be said to be the process that involves planning, organizing, commanding, coordinating and controlling resources in order to achieve specific goals.
Leadership, constitute an aspect that has drawn much literature. No particular common definition has been arrived at but any attempt to defining a leader are done in terms of; group processes, personality, compliance, particular behaviors, persuasion, power, goal achievement, interaction, role differentiation and initiation of structures (Naoum, 2001, p.193). In many cases, leadership is defined in terms of the specific theoretical framework and whichever case you define it, it will have a difference.
There are three distinct theoretical bases for effective leadership: trait theory which considers a leader to have a set of trait or attributes which may not be possessed by others (Naoum, 2001, p.194). Such traits may include; intelligence, confidence and decisiveness. The second theory is the style theory which looks at the approaches a leader uses for a job to be done, the third theory is, leadership theory that looks at the contingency factors that determine the best type of leadership towards success (Naoum, 2001, p.194).
Management vs. Leadership
Management and leadership share some similarities in that a leader and a manager have the following in common: Both think long term, whereby they are able to think for example beyond the day’s crises, beyond the quarterly report and therefore beyond the horizon (Roussel, Swansberg and Swansberg, 2006, p.172).
They also have the capacity to focus beyond their immediate unit and understand the relationship that exists between the unit and the whole organization, including the external environment conditions and the global trends. In addition, emphasis is always put on the vision, values, and motivation aspects of the organization. Lastly; both the leader and manager focus on ensuring that the structure and processes of the organization are flexible enough to adjust with the changing reality (Roussel, Swansberg and Swansberg, 2006, p.172).
The first distinction between leadership and management can be captured in the statement “leadership is about doing the right things while management involves doing things right” (Marie and Chisholm-Burns, 2010, p.9). Leaders are concerned with the broad, general mission or vision of an organization while the managers are concerned with more operational details such as budgeting, planning, hiring and developing employees to accomplish a mission or a vision (Marie and Chisholm-Burns, 2010, p.9). Therefore, for a manager he is a good planner and an effective manager. A manager normally administrates while the leader innovates. Furthermore, a manager focuses on systems and structures while a leader greatly focuses on the people, lastly, managers will largely accepts the status quo whereas a leader will challenge the status quo (Naoum, 2001, p.195).
Levels of Management
There are three levels of management: Strategic management, Tactical management and the Operational management.
Strategic management is a type of planning management that is reserved for top-level managers and it involves the determination of overall direction, that is, the direction the organization should be going. This type of management concerns itself with issues such as the purpose of organization, the major social, political and technological influences which might seriously affect the business. Largely it is a process in which strategic decision makers determine the objectives within the constraints of the resources available and the firm’s mission (Dale, 1969, p.19).
This is the type of planning management that is reserved for the middle and lower-level managers and is primarily concerned with determining the tasks to be done, the establishment of responsibilities and accountabilities, setting quantitative measures for each task, implementing the planned actions and exercising controls.
The field of Operational management encompasses the design and management of the transformation processes in the manufacturing and service organizations that create value for the society. It basically involves the search for rigorous laws governing the behaviors of the physical systems and the organizations. This type of management takes place at the lower level of the organization (Loch and Wu, 2008, p.1).
Key elements in Organizational Management
Human Resource involves the process of designing management systems to ensure that human talent is used effectively and efficiently to accomplish the organizational goals (Mathis and Jackson, 2007, p.4). In any organization small or big, there has to be employees to do the work. They must be recruited, selected, trained and managed possibly effective. They also must be adequately and competitively compensated and also be given available benefits. The human resource section in an organization will therefore be responsible for all these functions that broadly involves; recruitment, training, talent management and development, rewarding, risk management and worker protection and employee and labor relations (Mathis and Jackson, 2007, p.4).
Finance in an Organization
The finance department manages the organizational financial resources and record and report all the financial transactions. Other functions in the organizational finance department may include: insurance and risk management, contract administration and pricing, internal auditing, investor relation, bank relations cash management and everything having to do with making sure the organization has enough cash to carry out its functions and that cash is productively invested (Siciliano,2003,p.5).
In the organization, planning involves making choices among various alternatives. In this circumstance, decision-making becomes important; therefore, decision making involves choosing from among alternatives, which may be limited or abundant, the path that the firm may follow in making the organizational decisions. Major decisions of great importance or impact reside primarily with the top-level management and in most time no major decisions are made by any single manager alone (Liebler and McConnell, 2004, p.141). In many organizations it is the organizational hierarchy that determines the pattern of participation in the decision-making process.
The process of making decisions involves several sequential steps (Liebler and McConnell, 2004, p.144). The first step involves agenda building that include problem definition; secondly, is searching for alternatives; thirdly, is evaluating the alternatives; fourth is the commitment and fifth is about, continuing assessment of decisions. Sometimes certain barriers may inhibit the decision-making process. Such barriers originate from the social, political and economic climate outside the organization; also barriers originating from the organizational structure; organizational politics and human nature (Liebler and McConnell, 2004, p.151).
Management of organizations whether small or big, is very vital to the success of the organization. Various interdependent key elements have to be incorporated into the management of organizations. The success or failure of an organization will involve the effective strategic decisions that are made with adequate knowledge of the internal and external operation of the organization. The emerging issues especially the globalization has resulted into many organizations changing their decision-making strategies in order to remain relevant.
Liebler, J.L. and McConnell, R.C (2004). Management principles for health professionals. Edition4. MA, Jones & Bartlett Learning. Web.
Loch, C.H and Wu, Y. (2008). Behavioral Operations Management. MA, Now Publishers Inc. Web.
Mathis, R.L. and Jackson, J.H. (2007). Human Resource Management. OH, Cengage Learning. Web.
Marie, C. A. and Chisholm-Burns, M. A. 2010. Pharmacy Management, Leadership, Marketing and Finance. MA, Jones & Bartlett Learning. Web.
Naoum, S. (2001). People and organizational management in construction. LONDON, Thomas Telford. Web.
Roussel, L., Swansburg, R.C. and Swansburg, R.C. (2006). Management and leadership for nurse administrators. MA, Jones & Bartlett Learning. Web.
Sapru, R.K. (2006). Administrative Theories and Management Thought. New Delhi, PHI Learning Pvt. Ltd. Web.
Siciliano, G. (2003). Finance for the non-financial manager. NY, McGraw-Hill Professional. Web.