WHAT IS MANAGEMENT?

Management and managers are the specific need of all institutions. They are the specific organ of
every institution. None of our institutions could function without managers.

Legally, management in the business enterprise is still seen as a delegation of ownership. But the
doctrine that already determines practice, even though it is still only evolving in law, is that
management precedes and even outranks ownership.

The boss may be—and often is—a person of great ability and personal power. But the enterprise
will begin to flounder, stagnate, and soon go downhill unless it shifts to the “skeleton” of managers
and management structure. The word “management” is centuries old. Its application to the
governing organ of an institution and particularly to a business enterprise is American in origin.
“Management” denotes both a function and the people who discharge it. It denotes a social position
and authority, but also a discipline and a field of study.

Without the institution, there would be no management. But without management, there would be
only a mob rather than an institution. The institution is itself an organ of society and exists only to
contribute a needed result to society, the economy, and the individual.

WHO ARE THE MANAGERS?

Early in the history of management a manager was defined as someone who is “responsible for the
work of other people.”

In fact, it never was. From the beginning, there were people in the enterprise, often in responsible
positions, who were clearly management and yet did not “manage,” that is, were not responsible
for the work of other people.

Also, the definition focuses on the tools for a task rather than on the task itself. The person in charge
of market research in a company may have a large number of subordinates and is thus a manager
in the traditional sense. But it really makes no difference to his or her function and contribution
whether there is a large staff, a small staff, or no staff at all. The same contribution, in terms of
market research and market analysis, can well be made by a person to whom no one reports.
The most rapidly growing group in today’s organizations is composed of people who are
management in the sense of being responsible for contribution to and results of the enterprise but
who are not responsible for the work of other people.

They are executives, because they bear executive responsibility, yet they are not responsible for the
work of other people.

By defining the measurements for management, he or she, in effect, largely decides whether a
certain product will be kept or will be abandoned. Other people in this same category are the people
charged with the development and maintenance of quality standards for a company’s products, the
woman working on the distributive system through which the company’s products are being
brought to the market, and the advertising director, who may be responsible for the basic
promotion policy of a company, its advertising message, the media it uses, and the measurements
of advertising effectiveness. The traditional definition of “management” is responsible for the fact
that the individual professional contributor presents a problem within the structure and a problem
to himself.

THE NEW DEFINITION OF A MANAGER

What really defines a manager? Who should be considered management? The old definition of the
manager is to recognize the "individual professional collaborator" and asking for "parallel paths of
opportunity" for both.
However, this formula has not completely solved the problem. The organizations remain convinced
that the real opportunities for advancement still exist mainly within the administrative structure,
and that has to become a "boss" to "get ahead". Above all, the separation of the managerial world
into two groups serves to emphasize the inferiority of those who do their work in comparison with
those responsible for the work of others. The emphasis is still on power and authority rather than
responsibility and contribution.
Any analysis that does not start from the traditional definition, but looks at the work itself will
conclude that the traditional definition of a manager as "one responsible for the work of others"
emphasizes a secondary, rather than a primary characteristic.
As we will see a little later, one can divide the work of a manager in the planning, organizing,
integrating, measuring and developing people. Teachers for others in the organization. Career
professionals must also integrate their work with the work of other people in the organization.
Above all, if you are going to have results, you have to integrate "on the side", that is, with people
in other areas and functions that you have to put your work to use.
The traditional definition of the manager focuses on "integrating down" that is, integrating the work
of subordinates. But even for managers who have subordinates, "side" relationships with people
over whom they have no oversight, authority is usually at least as important at work and usually
more important in terms of decision and information.

WHAT DO MANAGERS DO?

Most managers spend most of their time on things they are not "managing". The sales manager
does a statistical analysis or handles an important customer. A manufacturing manager designs a
new plant design or tests new materials. All are necessary and have to be done well. But they are
separated from the work that is common to all managers, whatever their function or activity, rank
or position. And everyone can improve their performance as a manager by improving the
performance of these activities. There are five basic operations in the job of the manager. Together
they result in the integration of resources into a viable and growing organism.
• A manager, in the first place, establishes objectives.
• Second, a manager organizes.
• Third, a manager motivates and communicates.
• The fourth basic element in the manager's job is measurement.
• The manager analyzes, evaluates and interprets performance.

THE MANAGER’S RESOURCE: PEOPLE

The administrator works with a specific resource: people. And the human being is the only resource,
which requires particular qualities in those who try to work with it.
"Working" with the human being always means developing it. This applies, as can not be
overemphasized, not only to the person being managed, but also to the manager. If he or she
develops subordinates in the right direction, helps them grow and become bigger and richer people,
they will directly determine if he or she will develop, grow or wither, become rich or impoverished,
improve or deteriorate.
One can learn certain skills in people management, for example, the ability to lead a conference or
to conduct an interview. You can establish practices that help development: in the structure of the
relationship between the manager and the subordinate, in a promotion system, in the rewards and
incentives of an organization.

MANAGEMENT: A PRACTICE, NOT A SCIENCE

In the performance of these institutions, the performance of modern society, if not the very survival
of its members, depends more and more. The performance and survival of the institution depend
on the performance of the management. The individual has a direct participation in the
performance of the managers and the administration. Nine out of ten people who go to college
beyond high school go to work as employees in organizations. Their effectiveness and performance,
their satisfaction, their achievement and their growth as human beings depend to a large extent on
the performance of the management in the employing institution. And a good many of these
"knowledge workers" will themselves become managers, so their own ability to perform and
achieve will depend on their knowledge of management and their ability as management
professionals. In view of this, it would be comforting to be able to talk about management as a
"Science". But, in fact, we can only hurt to believe that administration can ever be a science.

Without a doubt, the work of the manager can be systematically analyzed and classified. There are,
in other words, different professional characteristics and a scientific aspect to management.
Management is not just a matter of experience, hunch or native ability. Nothing can contribute so
skill, effectiveness and performance as a manager. And underlying this theme is the conviction that
the impact of the manager in modern society and its citizens are so great that the administrator
requires the self-discipline and high standards of service of the true professional.

NOTE: THE ROOTS AND HISTORY OF MANAGEMENT

Some recent writings on administration give the impression that their authors consider
management to be an invention of the years since the Second World War, and a US Invention in
that. When the first economists - from Adam Smith (1723-1790) to Karl Marx (1818-1883) - did their
work, management did not exist. For them, the economy was impersonal and governed by objective
economic forces. As a modern spokesman for the classical tradition, Anglo-American Kenneth
Boulding (1910-1993) put it this way: "Economics deals with the behavior of commodities, rather
than with the behavior of men." Or, as with Marx, impersonal laws of history were seen to dominate.
Humanity can only adapt. It can, in the best of cases, optimize what the economy makes possible;
at worst, it impedes the forces of the economy and wastes resources. The last of the great English
classical economists, Alfred Marshall (1842- 1924), added management to factors of production,
land, labor and capital.
But this was a half-hearted concession. The administration was not yet a central factor.
From the beginning there was, however, a different approach that put the manager at the center of
the economy and (1760-1825). At that time there were no large organizations or managers, but both
Fourier and Saint-Simon anticipated developments and "discovered" management before it was
actually created. Saint-Simon, in particular, saw the appearance of the organization. And he saw the
task of making productive resources and building social structures. He saw administrative tasks.

THE EMERGENCE OF LARGE-SCALE ORGANIZATION

What had to happen first was the rise of large-scale organization. This occurred simultaneously—
around 1870—in two places. In North America the transcontinental railroad emerged as a
managerial problem. On the continent of Europe, the “universal bank”—entrepreneurial in aim,
national in scope, and with multiple headquarters—made obsolescent traditional structures and
concepts and required management. One response was given by Henry Towne (1844–1924) in the
United States, especially in his paper The Engineer as Economist. Towne outlined what might be
called the first program for management. He raised basic questions: effectiveness as against
efficiency; organization of the work as against the organization of workers; value set in the
marketplace and by the customer as against technical accomplishment. With Towne begins the
systematic concern with the relationship between the tasks of management and the work of
management. At roughly the same time, in Germany, Georg Siemens (1839–1901), in building the
Deutsche Bank into the leading financial institution of continental Europe, first designed an effective
top management, first thought through the topmanagement tasks, and first tackled the basic
problems of communications and information in the large organization.

Around the same time in France, Henri Fayol (1841–1925), head of a coal mine that for its time was
a very large company, first thought through organization structure and developed the first rational
approach to the organization of enterprise: the functional principle. In Germany, Walter Rathenau
(1867–1922), whose early training had been in a large company, asked, “What is the place of the
large enterprise in a modern society and in a modern nation? What impact does it have on both?
And what are its fundamental contributions and its fundamental responsibilities?” Most of the
present questions concerning the social responsibilities of business were first raised and thought
through by Rathenau in the years before World War I. Also in Germany, at the same time, the new
discipline of Betriebswissenschaft (literally, the science of enterprise) was developed by such men
as Eugen Schmalenbach (1873–1955). The management sciences developed since—managerial
accounting, operations research, decision theory, and so on—are largely extentions (though, in the
main, unconscious ones) of the Betriebswissenschaft of those years before World War I. And in
America, German-born Hugo Muensterberg (1863– 1916) first tried to apply the social and
behavioral sciences, and especially psychology, to modern organization and management.

THE FIRST MANAGEMENT BOOM

After World War I there came what might be called the first management boom. It was sparked
primarily by two of the most highly respected statesmen of the period, the American Herbert
Hoover (1874–1964) and the Czech Thomas G. Masaryk (1850–1937). Hoover, a Quaker engineer,
had vaulted to worldwide prominence by applying principles of management to the first massive
foreign-aid operation in history. He planned the feeding of hundreds of thousands of starving
people: first, before America’s entry into World War I, in his Belgian Relief Operation, and then,
after the end of World War I, in the relief operations in Central and Eastern Europe. But it was
Masaryk, a historian who had become the first president of the new Czech Republic, who conceived
the idea that management would be able to restore the economies of Europe after their destruction
by war— an idea that then found its realization twenty-five years later in the Marshall Plan after
World War II. These two men founded the international management movement and tried to
mobilize management as a major social force