1 Defining Management Chapter

D. Quinn Mills
Principles of Management
© 2005 D. Quinn Mills. All Rights Reserved.
Defining Management
Chapter 1
Principles of Management
What Management Is
Management is probably the most important non-technical
innovation of the last two centuries—and the one most
directly affecting those of us who will be tomorrow’s workers,
professionals and managers. But what is management? Why
does it exist? How should we define “managers?” What are
the tasks and responsibilities of managers? What makes a
successful manager?
Defining Management
Management has several aspects. It is a discipline in its own
right, but a relatively young one. Modern organizations are
little more than a century old, and management arose with
them. Management is, therefore, partly the codified experience
of the past one hundred years or so; at the same time, it is
increasingly an organized body of knowledge drawing on
From another perspective, it is the work of a manager to make
decisions, communicate them to others, and monitor how well
they are carried out (Simon, 1987).
The Role of Managers
Management is about tasks, including what and how things are
done. Tasks are objective and impersonal. Management is
also about people. Every achievement of management is the
achievement of a manager. Every failure is the failure of a
manager. Managers direct and lead other people. The vision,
dedication, and integrity of a manager determine success or
failure. Managers integrate and match people and tasks in
order to get work accomplished.
The role of managers is to accomplish things through other
people. For a review of what managers do, see Executive
Summary 1.1. For the most part, managers are not people
who actually do the work, but rather supervise, direct and
motivate those who perform work. This isn’t to say that
managers don’t work—they do managerial tasks, but not the
tasks related directly to production or services provided to
customers or clients. People who do the direct work are called
individual contributors. It is the role of managers to direct
individual contributors. This is a basic distinction that needs
to be kept always in mind.
Principles of Management
Management is a form of work. Indeed it can be seen as some
of the most characteristic work of modern society; work that
distinguishes our society from all earlier ones. For
management is work specific to modern organization, work
that causes modern organizations to perform. As work,
management has its own skills, its own tools, its own
But the work of management is also different in other distinct
ways. Many people are able to work alone much of the time.
But management is always centered in an organization—that
is, within a web of human relationships. This is because the
essence of what a manager does is to see that work gets done
by other people, who are usually the most accomplished and
efficient at doing particular tasks.
It is the manager’s role to see that work gets organized, that
individuals take responsibility for particular tasks, that tasks
are coordinated so that they add up to accomplishing an
overall project, and that the work is done on schedule and to
the necessary standards of quality. The objective of managers
is always to create top performing organizations. It is this
purpose of management that drives all the topics we will
Management is a term that denotes both a function and the
people who discharge it. The function is organization and
supervision; the people are managers. In our society managers
have a certain social position and authority, and the term
management connotes both.
The first criterion in identifying managers is to identify those
who have responsibility for the accomplishment of the work of
the organization. If the responsibility is for the whole
organization, then the person is a member of top management
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(possibly even the chief executive officer—the CEO). If the
responsibility is for only a department or even a subunit of a
department, then the person is a member of middle or lowerlevel management.
Sometimes people get confused about management and
associate it with the power to direct other people in the
enterprise. Often managers have this authority; but it is the
managerial function (defined just above) which defines
management, not power. It is this function that remains the
distinctive criterion and the organizing principle of
According to the management thinker Peter F. Drucker, there
are five basic activities in the work of a manager that, when
coordinated, can help create a viable, growing organization.
1. A manager sets objectives.
2. A manager organizes work.
3. A manager motivates others and communicates
with them.
4. A manager measures results.
5. A manager develops the abilities of people,
including his or her own.
(These activities are discussed in depth in Drucker, 1999).
These functions are very straightforward ones. But when
managers actually perform them, a host of complications arise.
Managers must confront organizational and human factors.
Principles of Management
Those who study the topic of management have focused on
some of the questions raised, including:
Š Different managerial styles which fit different
organizational situations
Š Methods of motivation of different people
Š Multiple types of decision-making
Š Formulating strategy for an organization
Broadly speaking, the practice of management has two basic
sides: one is often referred to as “hard” and consists of
planning, budgeting, strategy formulation, decision-making
and measuring results; the other is referred to as “soft” and
consists of managing people, hiring, evaluation, motivation,
counseling, coaching, etc.
A frequent clever question is “Why is the soft side of
management so hard?”—reminding us that soft issues are
often more difficult than hard ones.
Why Study Management?
A person might want to study management for any of several
reasons. First, management jobs are often highly desirable
positions, so that a person might want to learn how to manage
in order to get a management job. Management jobs often pay
well; they usually fit into a well-defined ladder of promotion
to the very top of an organization; they carry respect and
authority in an organization and status in the wider
community. A person who aspires to rise to high position in a
large corporation is well-served by making an intense study of
management and business, to equip his or her mind
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professionally with all he needs, so that he may be ready when
the moment to take charge comes his way.
Further, many people have special aptitudes that suit them
well for management positions, and they may want to exercise
those aptitudes.
For example, some people excel at organizing things;
something managers do continually. Some people like
working closely with others more than they like working
alone; managers work with others a great deal. Some people
enjoy teamwork; something managers are often engaged in.
Finally, some people want to have a role in the decisionmaking in the organizations for which they work; managers
often have input to important decisions, and those managers
who are at the top of the organization get to make key
decisions about the organization as a whole.
Thus, because a person aspires to a managerial career (either
because managerial jobs are well-compensated, high status
jobs, or because he or she has a special aptitude for
management), he or she may want to know more about
There are other reasons for studying management. Sometimes
people want to learn more about management because, while
they are not themselves managers, nor want to be, they are
directed at work by managers, and want to understand how
managers think and act. Managers often approach their role
with a different, and distinct, mind-set (sometimes called the
“managerial perspective.”)
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Management, Leadership, and Administration
Modern organizations involve management, leadership and
administration. What are the differences among the meanings
of these three terms?
Management is about accomplishing tasks, plans, and goals
through the motivation and direction of others. Leadership is
about energizing others so that they will set out to do things
that are desired by the leader. Leadership adjusts more than
management to a particular situation; it involves activities that
energize others, including offering an exciting vision of the
future, inspiring confidence, and demonstrating emotional
There is often a useful role for leadership qualities in the
world of business, but a company or organization can also be
run by managerial and administrative skills alone.
Administration is about applying policies, procedures,
standards, and guidelines to actions that take place in an
organization. In essence, an administrator resolves a problem
by looking up or referring to a rule which covers the situation
and applying it. Managers, in contrast, are more creative
problem-solvers; they look for a solution to a problem that
will be both efficient (getting the task accomplished in as short
a period as possible) and cost-effective (getting the task
accomplished with as little cost in time, money and other
resources as possible).
Management is in some senses the broadest of these three
terms. There is an element of leadership in effective
management; and there is an element of administration in
management as well. There is also an element of management
that isn't leadership or administration; rather, it is something
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unique. What’s unique in management is the motivation and
direction of people who report to the manager. A leader
inspires, but doesn’t motivate and direct; but a manager does a
bit of all three. An administrator issues rulings, but doesn’t
motivate and direct. A manager does a bit of all three.
A leader isn’t an administrator, and ordinarily does little or no
administrative work. An administrator ordinarily isn’t a
leader. So in a sense the manager lies between the leader and
administrator—the manager’s work involves some aspects of
leadership; some of administration and the work that is unique
to a manager.
These are very important distinctions which we make at the
outset of our discussion of management because there is much
confusion in the general public usage of these terms.
Managers are sometimes assumed to be leaders and sometimes
castigated for not being leaders. The term leader is often used
to apply to top or senior managers, no matter how deficient
they are in actual leadership skills. Administrators who
neither organize nor motivate people are often labeled
managers. The result is a confusion that can make it very hard
Principles of Management
for a person to understand what the work of a manager is, and
therefore can make it difficult to learn to manage well.
To accomplish the work of his or her organization, a manager
employs some of the skills of the leader and some of the
methods of the administrator, but he or she merges them in
imaginative ways to get work accomplished.
We note that skills of leadership and administration are not
fully useful in an organization unless combined by managers
and applied in a particular context. Management is about
applying leadership skills and administrative processes in a
particular context to achieve positive results.
A Managerial Perspective
It is also important to remember that the managerial
perspective is always oriented toward:
Š Getting results
Š Being efficient
Š Besting competitors
Earlier we defined management in a manner suggested by
Peter F. Drucker, focusing on the functions of management.
Another way to define it is by emphasizing the managerial
perspective. In this definition a manager is a person whose
behavior is oriented to three basic objectives: getting results,
achieving efficiency and beating competitors. In fact, at
several major business schools, candidates for doctorates in
management are asked to pass a verbal examination in which
they are asked to demonstrate a managerial perspective.
Defining Management
Learning the managerial perspective is a key element of
advanced training in the field. Demonstrating the perspective
is not as simple as it may sound. People have very different
perspectives, and under close examination it is difficult to
alter one’s basic orientations.
For example, an economist is fascinated by markets, by
systems and by processes of optimization; her attitude is
therefore different from that of a manager. An economist
presumes results and efficiency and welcomes competition as
a guarantor of efficiency in markets.
We should also note that a manager’s perspective is not that of
a businessperson. A businessperson focuses on profit,
whether or not it is associated with results, efficiency or
competitive advantage. Often profit is associated with those
things, so that the manager appears like a businessperson; but
often profit is not associated with managerial concerns.
For example, a profit might be made by acquiring a scarce
resource and selling it for a high price (such as occurs in real
estate speculation) even when there is no production and so no
results to be attained, no efficiency to be pursued, and no
competition to be bested. It should be no surprise, therefore,
that many people engage in the business of buying and selling
real estate without needing managers involved.
Further evidence of the difference between management and
business can be found in the different orientation of what we
loosely label “business schools.” In fact, most so-called
business schools are actually schools of management. Their
names often reveal this. But some business schools label
themselves as schools of business. The subtle difference is
often reflected in the school’s approach to education. Schools
that are schools of management train people for roles in
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business, government and the not-for-profit sector of our
economy; they focus on managerial skills. Schools of
business focus on the for-profit sector and on management for
that sector.
People who graduate from business schools with degrees in
management (the Master of Business Administration is the
most common degree, but its origin dates from a time before
the modern distinctions outlined above between administration
and management were made) can, of course, take positions in
government and not-for-profits, but their education has been
focused on much that is specific to the business sector.
Finally, government departments and not-for-profit
organizations usually pay no attention to profits and so are not
businesses, but along with accomplishing their societal
mission are concerned about attaining good results in what
they do, and achieving efficient operations, and so have a use
for managers.
The ordinary (but not universal) lack of competition for
government means that managers in government face
somewhat different conditions than those elsewhere; but many
non-profits (for example, private colleges and universities) are
very competitive even though they lack a profit motive, and so
have use for the full-range of managerial attitudes and skills.
The three orientations that make up the managerial perspective
are not the same orientations as those of a leader or an
administrator, which again demonstrates that management is a
separate and distinct discipline. Leaders are rarely concerned
about efficiency; though they are concerned about results and
besting competitors. Administrators are rarely concerned
about efficiency, nor even about results or competition—they
are concerned about following rules.
Defining Management
Above we noted that managers and business people have
different orientations. But management and business are
closely related. Management involves running an enterprise;
business involves making a financial return. Managers often
run business enterprises, and that is the core of the relationship
of management and business. In America about eighty
percent of our economy is made up of private business
organizations, and most managers in America work for them.
At the same time, managers also play increasingly important
roles in both government and not-for-profit organizations.
Government agencies have been the traditional home of
administrators since government agencies started long before
business enterprises. The people who work in government
agencies are often referred to as bureaucrats—people who
work in government bureaus. The people who supervise their
work are administrators. Today, however, more and more
government agencies have turned to effective managers, not
just administrators. Top level government officials recognize
that with the growth of government and the increasingly
complexity of its tasks, managers are increasingly needed.
Not-for-profit organizations are also embracing management
as they become larger and their missions become more
complex. The administrators who used to run not-for-profits
increasingly lack the wider and more sophisticated skills
possessed by managers, and are less desired in not-for-profit
organizations than managers.
Management: Lessons from Family Life
We know something about management from our families: in
many ways being a parent is like being a manager. When we
are children, we both benefit from and resist the authority of
our parents. Children benefit from what their parents do to
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help them learn and grow; but they resist the discipline that
parents often impose, believing it is necessary to help children
grow up properly.
As children, we get a glimpse into how people feel about
management from the side of people who are managed. Like
children in a family, people who work in an organization both
benefit from the efforts of managers and sometimes resist their
authority. They benefit because the work that is done by
managers helps the organization succeed and so helps people
earn a living and fulfill their objectives about their careers.
They sometimes resist managerial authority because managers
must often enforce discipline and press people to meet
schedules and keep costs down (not always the most pleasant
of tasks!).
When we look to our own families, we can learn about being
business managers from the management side. We learn
entrepreneurship by starting a family; partnering via our
relationship with our spouse; leadership by energizing our
children about good things to do; supervision as we watch
over our children; finance as we try to manage the income and
expenses of our families; supply chain management as we
make multiple trips each week to the grocery store to feed the
whole family; and even marketing and sales as we try to get
positions for our children on local sports teams and in music
Management as an Art and Science
Management is a practice which involves elements of art and
science. The art usually involves how people are handled,
although there is an element of science to this as well; the
science is usually involved with decision-making, though
there is an element of art here also.
Defining Management
In order to be successful, managers must be effective at selfdiscipline. In particular, it is a personal challenge of the first
magnitude to stay focused on a particular objective when so
much has to be done and so much is going on. It is not
unusual for a manager to work in an environment in which the
entire leadership team of his organization turns over in only a
year or two, so that she has to keep focused on her work while
the people to whom she is responsible for results are
continually changing, and their priorities with them.
Focus permits accomplishment on a grand scale. About the
French leader Napoleon one of his senior aides wrote, “He
was totally given over to his object. He always applied all his
means, all his facilities, all his attention to the action or
discussion of the moment…hence the enormous advantage he
had over his adversaries, for few people are entirely absorbed
by one thought or one action at one moment.” (De
Caulaincourt, 1935).
Managing for Whom
In recent years there has been a vigorous debate about for
whose interests business managers exert themselves. Those of
one opinion point to the legal ownership of a corporation and
insist that executives are agents of shareholders charged with
the sole purpose of maximizing shareholders’ financial gain.
Those of another opinion point to the importance of
employees and customers to the success of any business and
insist that executives are leading on behalf of customers and
employees first and shareholders third. (See, for example,
George, 2003).
A further differing opinion is that managers, like other people,
have their highest responsibility to the divine power and must
Principles of Management
make their efforts first and foremost in accordance with divine
will. (For a Christian approach to management see Campolo,
Our discussion about effective management is consistent with
any of these positions as to the ultimate goals to which
managers should be directing their efforts.
Managers and Individual Contributors
Broadly speaking, all organizations consist of two categories
of employees: managers and individual contributors.
Managers get things done through other people; manage
individual contributors; contribute to production and delivery
of services in an indirect fashion.
Individual contributors perform work tasks themselves; do not
manage other people; have a direct contribution to production
or delivery of services.
Because managers direct the work of other people, there is a
tendency to think of them as more important than others in an
organization. In many instances this is simply not the case.
Managers are often less important to an organization than are
key individual contributors. There are individual contributors
without whom the organization cannot function. In contrast,
most managers are replaceable. Nor are managers always paid
more than individual contributors.
There are numerous industries in which the most important
individual contributors make more than their managers,
among them professional sports, where top players like Barry
Bonds or Shaquille O’Neal make much more than the coaches
and managers of the teams on which they play. In television,
anchor persons often make more than program managers who
Defining Management
direct them; in motion pictures, top stars often make more
money than directors or producers of the shows in which they
star; rock star often make much more money than their
managers; the most successful sales people in most companies
make more money via commissions than do their managers
via salaries. Top scientists can make more money than their
managers; and medical doctors often make more money than
the managers of the wards on which they work.
The Importance of Individual Contributors
There are many stories that exhibit the importance of
individual contributors to firms, and the high esteem in which
they are held. Once I visited an engineering facility of a large
company. It was a tightly managed company with rules about
everything, and managers to enforce them. Yet as I was
walking down a long corridor with my host, we suddenly
heard a loud noise coming closer. I turned to my host in
surprise. “That sounds…” I began with astonishment in my
voice, intending to finish, “like a motorcycle,” when around a
corner ahead of us came a middle-aged man on a small
motorcycle, riding right down the corridor. We pressed
ourselves against the wall to let him pass on his bike; he
grinned at us as he went by.
“Who was that?” I asked.
My host grinned sheepishly in embarrassment.
“That’s our top engineer,” he told me. “He’s made so much
money for the company with the patents he’s got for us that
he’s free to do pretty much what he likes.”
“Don’t the other people complain about his getting favored
treatment?” I asked.
Principles of Management
“We just tell them that when another person produces like he
does,” my host responded, “he or she can ride a motorcycle up
and down the halls as well.”
Then there is a story about Norbert Weiner, the creator of
much of modern computer theory, who was a professor at
MIT. Decades ago, Weiner would sometimes walk alone from
his office down the long corridors of the university on his way
to lunch. In his hand would be a book, which Weiner was
focusing on intently. To avoid hitting other people or running
into a wall, Weiner would let his left hand trail gently along
the side of the corridor to guide himself.
Once in a while he’d come to an open door in a classroom
which was in use. Led by his hand moving along the wall,
he’d turn into the open door, go around the four walls of the
classroom, with the students and professor in the room
stopping their class to watch in astonishment, until having
made a trip around the room, he exited through the same door
he had entered and resumed his path down the main building
corridor toward the faculty club.
No one else would have been allowed to disrupt a class in
progress in so unusual a way, but so great was the respect for
Weiner and his contributions to the university, that eccentric
behavior like this was tolerated in good humor by all.
There are many instances, however, in which managers direct
the work of lesser skilled or less well-known people, and in
those instances managers are usually better paid than those
whom they direct. But even there, in many situations workers
can earn enough through their regular work weeks and
overtime (for which a premium, usually time and a half, is
paid) that the worker earns more than his or her boss.
Defining Management
In general, managers and individual contributors both play
significant roles in organizations and both are entitled to
respect for the roles they play.
Without individual
contributors an organization cannot do its work; without
managers, the efforts of many individual contributors cannot
be coordinated into the activities of a large organization.
Managers often make their way into management by first
being individual contributors. Sometimes people make it to
the top of large corporations having started as workers. For
example, Sam Palmisano began as a salesman for IBM in
Baltimore in 1973. In 2003 he became CEO of IBM, having
spent thirty years working as a salesperson and then a manager
in the company. Sam was an excellent individual contributor
at IBM. But when he became a manager, he had to give up
being a salesperson.
Making the Transition
This is something all managers must do—give up doing the
work themselves. Sometimes the work is tiring and dangerous
or unpleasant (as for example on a construction job, or in a
manufacturing plant, or cleaning hotel rooms) so that when an
individual contributor becomes a manager, he or she is glad to
be free of the necessity to do the work. But other times, work
is enjoyable, especially for a person who is good at it (as for
example for a salesperson, or a professor, or an attorney, or a
skilled worker in many trades) and when a person becomes a
manager he or she is often reluctant to give up being an
individual contributor.
In fact, for people who greatly enjoy the work itself, the
transition from individual contributor to manager is difficult—
sometimes it is even unsuccessful.
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Such a manager (who longs for the work he used to do as an
individual contributor) continually leaves managerial tasks
undone to return to the work; either because she is a
perfectionist and can do the work better than the people she is
managing, and so insists on doing it herself; or because the
new manager simply finds management a less rewarding
pursuit and prefers an individual contributor’s role.
Looking Ahead
There are many problems that go with a managerial role—
among them: time schedules to meet, irritations in dealing
with difficult people, and not seeing production emerge from
your direct efforts (a manager’s contribution to getting
production done or services delivered is indirect). For some
managers, there is the frustration of not being able to direct
people as strongly as he or she would like. In the old days of
the American economy, when manufacturing involved a much
larger proportion of our workforce than it now does, managers
felt themselves clearly in control.
But in today’s service economy, things are less clear. As the
CEO of IBM told a reporter, “If three-fifths of your business is
manufacturing, then management is basically supervisory.
You can say, ‘You do this. You do that.’ But that no longer
works when your business is primarily based on knowledge.”
(Sam Palmisano, CEO of IBM, quoted in Hemp and Stewart,
In the chapters that follow we will be discussing management
while it is in the middle of the historical transition that Sam
Palmisano has described. We will find therefore that managers
are adopting novel means of organizing and motivating the
workforce for the new types of economic activities which are
now burgeoning in the world economy.
Defining Management
Underneath these changes, however, the important concerns
and challenges of management haven’t altered, just as its
functions and perspectives have not altered. But the context in
which they are applied is changing rapidly, and so how
managers act in detail to accomplish their functions is
changing. The American economy today is made up of a
complex combination of old and new. When we speak of
management, we mean both the old and the new.
As can be seen in Executive Summary 1.3, today’s managers
are called upon to deal with a host of issues. Organizations
face increasingly complex challenges and managers are the
ones called upon to handle them.
These concerns we’ll address in later chapters, together with
the following list of the top challenges for management:
Š Finding new employees
Š Planning strategically
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Š Satisfying customers
Š Building a high performance culture
Š Reducing stress for themselves and others
This book is about management. We will touch on topics of
both business administration and leadership in an
organization. However, the focus of the text will be to
highlight issues of management and the ability to apply
administration and leadership skills and techniques within the
context of an organization.
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Campolo, Tony. Everything You've Heard Is Wrong.
Nashville, TN: W Publishing Group, 1992.
Caulaincourt, Armand De, Duke of Vicenza. With Napoleon in
Russia: Memoirs of General De Caulaincourt. New York:
William Morrow & Co., 1935.
Drucker, Peter F. Management: Tasks, Responsibilities,
Practices. New York: McGraw-Hill, 1999.
George, Bill. Authentic Leadership. New York: Jossey-Bass,
Hemp, Paul and Thomas A. Stewart. “Leading Change When
Business Is Good.” Harvard Business Review. December
Mills, D. Quinn. Leadership: How to Lead, How to Live.
Waltham, MA: MindEdge Press, 2005.
Simon, Herbert A. “Making Management Decisions: the Role
of Intuition and Emotion.” The Academy of Management
Executive. February 1987.