SHS

Organization and
Management
Quarter 1 – Module 1:
Definition and Functions of
Management and the Different Types
of Management Theories

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Organization and Management – SHS

Quarter 1 – Module 1: Definition and Functions of Management and

the Different Theories of Management

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Regional Director: Gilbert T. Sadsad

Assistant Regional Director: Jessie L. Amin

Development Team of the Module

Writer: Glenda C. Bas

Editors: Elsa B. Regalado
Meriam L. Camila
Jinky A. Villareal
Reviewer: Jinky A. Villareal
Illustrator: Ryan B. Cerillo
Layout Artist: Glenda C. Bas
Cover Art: Jed Adra

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 DEFINITION AND FUNCTIONS OF
Lesson MANAGEMENT AND THE DIFFERENT
THEORIES OF MANAGEMENT

This module explains the meaning of management and the different

functions that a manager and an employee observe and exercise in the
organization. Further, it discusses the different theories that evolves and still
used by companies even to the present days.

The following are the things that

you will learn after the lesson:

• discuss the meaning and functions of

management; and
• explain the various Types of
Management Theories.

Consider the following terms below…

Management – is handling of people tactfully and the consolidation of their
efforts and activities in the organization.

Organization – is a group of people who work together in an organized way

for a shared purpose/common good.

Planning – involves mapping out of exactly how to realize a specific goal.

Organizing – determines what tasks have to be done, who needs to do the

task and how the tasks are to be performed.

Staffing – involves thorough recruitment, selection, and hiring of potential

personnel in the organization.

Directing – involves the supervision and motivation of manager towards

his/her employees to be more productive and efficient.

Controlling – deals with monitoring the company’s progress and ensuring

that all other functions are operating efficiently.

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 Classical Theory – is the oldest theory which gives emphasis on the
economic rationality of people that through their efforts yield greatest
monetary benefits or income.

Neo-Classical Theory – believes that the best way toward gaining maximum
productivity from workers is through motivation, structure and supporting
employers, workers intrinsic values in their job and positive social relationship.

Modern Management Theories – focuses on the interaction between

organizations, workers, and the environment. The application of management
knowledge is extended to non-business areas like Education, government,
health care and others.

Let’s see what you

already know by simply
answering the posted
questions below.

Direction: Choose your answer from the options given below; write the letter of your
answer on the space provided for.

a. Staffing b. Neo-Classical Theory c. Controlling

d. Directing e. Planning f. Organizing
g. Management h. Modern Management Theory

_____1. This deals with the monitoring of the company’s progress and using
corrective measures if necessary.

_____2. It involves mapping out how to realize a specific goal.

_____3. It involves manning in the organization.

_____4. Focuses on handling of people tactfully.

_____5. This determines what, who and how task is to be done.

_____6. This deals with the complexity and the relationship of organizations,
workers, and environment.

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 _____7. Believes that the best way toward gaining maximum productivity is
through motivation, structure and supporting employers.

Worried about the test

result? Don’t be for there
are a lot more to learn. Now,
take the next activity below.

What you know?

Activity #1 – Management Personal Introspection

Guide questions: (Write your answer in the space provided for.)

1. What do you understand about the term “management”?

2. As a student, how are you going to apply the concept of management in the
classroom?

1._________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________

2._________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________

Would you believe that even in your

personal life you are practicing
management? How? In what instances?

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 Let’s get started by understanding what
Management is.

Management of people has already been observed and has long existed as
there were already groups of people in every community even before. This setup
gives different perspectives or ideas on how management is defined. Management is
defined as handling of people tactfully and consolidating their efforts and activity in
the organization. But according to Theo Heimann management can be defined in
three ways:

1. Management as a noun, is used as singular collective noun (like group)

which refers to a discrete nature of grouping of managers or people in charge of
running a company or organization.

2. Management as a process, it refers to organizational process that includes

strategic planning, setting objectives, managing resources, deploying labor force,
financial assets and measuring results.

3. Management as a discipline, this refers to that branch of knowledge

which is connected to study of principles & practices of basic administration. It
specifies certain code of conduct to be followed by the manager and indicates
various methods of managing enterprise.

The following are the different managerial functions that a manager exercise.

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 Planning
This includes defining goals, establishing strategy, and developing plans to
coordinate activities. It involves mapping out exactly how to realize a specific goal. It
also requires knowledge to create, develop and analyze opportunities which is
known as strategic planning. There are two types of planning;

a.) Long range planning

b.) short range planning

Organizing

This is also known as the backbone of management. It is the structure of the

organization which help determines what task to be done, who needs to do the task
and how the task is to be performed and for whom to report to after the task is
achieved.

Staffing

This involves manning in the organization. This requires recruitment, thorough

selection of applicants and hiring of potential employees for the organization. It is
also responsible for training and development of the employee to be promoted,
transferred, demoted or even be fired from the organization.

Directing

This involves the supervision and motivation of manager towards his/her

employees to be more productive and efficient. When there is a high morale in the
organization, it usually has a significant impact on the performance and productivity
of the employees. Therefore, there is a need for the manager to motivate
employees, supervise, and direct them to be more effective and efficient at work.
Good communication is essential since this builds positive interpersonal relationship
from and among employees. Thus this can resolve conflicts that might arise in the
organization.

Controlling

This deals with monitoring the company’s progress and ensuring that all other
functions are operating efficiently. Since this is the last stage, uncertain situation
usually arises that might disrupt the operation of the business. Therefore, there is a
need for the management to exercise corrective actions after thorough assessment
and evaluation.

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 After knowing what management is as well as the different functions of
management, you are now ready to perform the activity below.

Try this!

Activity #2 – Friends’ Birthday Party

Direction: Read carefully the situation and answer the question in the space
provided for.

You and your friends come up with an idea of surprising a friend who will be
celebrating her birthday tomorrow. Unfortunately, it is only now that they asked
you to organize the said event. Given the least possible time, what will you do?
How are you going to organize the event?

Write your answer in the space provided for.

How do you find the activity? Is it exciting,

fun or a tough thing to do? It would surely
be fun and exciting if you considered the
Five Management Functions which are
very essential in every group to attain
success.

Good management is really essential in a

company as this enables employees or workers to
perform productively and efficiently their work
tasks.

To do this, industries and companies apply

management theories.

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The following are the different Theories of Management:

The Classical The Neo-Classical The Modern

Theories of Theories of Theories of
Management Management Management

A. Classical Theories of Management

Classical Theory (1900 – 1920’s) is the oldest theory. This theory evolved in
response to the shift from handicraft to industrial production. The emphasis is on the
economic rationality of people and organizations, motivated by economic incentives
that through their efforts yield greatest monetary benefits or income.
Classical management theories come in the likes of:

Theorist Theory
Max Weber (1905) The Theory of Social and Economic Organization
- follows the principles of bureaucracy such as;
management by rules, employment are based on
technical qualification and other principles.
Frederick Taylor (1911) Principles of Scientific Management
-proposed an objective and systematic method to
identify “the one best way” to do a job using scientific
selection and training methods; cooperation and
clear division of responsibility between managers
and workers; pay for performance.
Frederick Taylor (1912-1924) Time and Motion Studies
-The expected results are employee satisfaction,
productivity and efficiency.
Henry Gantt (1910-1915) Project Scheduling or the Gantt Chart
- a project scheduling model for increasing the
efficiency of project execution and completion.
Henry Fayol (1916) The Administrative School of Management
- emphasize that managers need specific roles in
order to manage work and workers. He enumerated
6 functions/roles of management the forecasting,
planning, organizing, commanding, coordinating and
controlling.

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 B. The Neo-Classical Theories of Management

The Neo-classical theories believe that the best way toward gaining
maximum productivity from workers is through motivation, structure and supporting
employees, consider the worker’s intrinsic value in their jobs and having emphasis in
the positive impact of social relationship of worker productivity.

Under neo-classical theories, theorist focuses on human relations and

behavior of the employees.

Theorist Theory
Mary Parker Follett Participative Leadership
- Workers and managers equally share
power and responsibility for decision
making and therefore, their outcomes.
Hawthrone Studies The Hawthrone effect
- Workers care about self-fulfilment,
autonomy, empowerment, social status and
personal relationship with co-workers and
managers.
Elton Mayo / Fritz Roethlisberger Human Relation Theory of Management
- People are social being, motivated by
social needs. The psychological needs of
individual significantly impact group
performance.
Chester Barbard The Function of the Executive
-proposed the acceptance theory of
authority which organizational goals will be
achieved and managerial authority will be
accepted if workers believe that their
individual needs are being meet.
Abraham Maslow Hierarchy of Needs Theory
-If motivation is driven by the existence of
unsatisfied needs, then it is worthwhile for
a manager to understand which needs are
more important for individual employees.
Douglas McGregor The Theory X and Theory Y
- Theory X states that workers inherently
lazy, lack of ambition and prefer to be
directed rather than take responsibilities.
While Theory Y workers seek out and fulfil
responsibilities of their own. They apply
ingenuity, creativity and hard work to meet
organizational goals.

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 C. The Modern Theories of Management

Dealing with complexity is the core of modern management theory. Focus is

on the interaction between Organizations, Workers, and Environment.

It is a synthesis of several theories such as, behavioral science, Mathematics,

statistics, operations / quantitative research and computing technologies.

Application of management knowledge is extended to non-business areas like

education, government, health care and others.

Theory Theorist
General System Theory Ludwig Von Bertalanffy (1937)
- each part has a role to perform so the
whole can accomplish its purpose

Contingency Theory Joan Woodward (1965)

- argued that technology and production
system are critical aspects of
organizational design; advanced a
contingency approach to organizing
P. Lawrence / J.W. Lorsch (1967)
- suggested that successful organizations
match their structure to the nature of the
environment
Daniel Katz / Robert Kahn (1966)
- present a unified, open systems
approach extending organizational theory
beyond the boundaries of a single
organization.
Fred Edward Fiedler (1967)
-argued that leadership effectiveness is
contingent upon two interacting factors.
Leadership style and situational
favourableness.

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 Now let’s see what you have learned…
Practice Task 1 - Write True if you believe that the statement
is correct and FALSE if the statement is incorrect.

_______1. Management is on tactfully handling the machineries.

_______2. Management as process refers to discrete nature of groups of people.

_______3. Controlling exercises corrective measures after thorough monitoring and

evaluation.

_______4. Positive interpersonal relationship from the manager and among

employees is significant in the organization.

_______5. Planning creates and develops strategies and analyzes business

opportunity.

_______6. Classical theory perceives that maximum productivity of employees can

be obtained through motivation, structure and supporting employers.

_______7. The oldest theory is the Neo-Classical theory where it evolves in

response to the shift of handicraft to industrial production.

You’re doing great, let’s try some more!

Practice Task 2

Now, let’s have fun! Read carefully the given definitions below and supply the
missing word that gives its exact description. Write your answer in the word scale.
4

1
5

7
3

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1. Management as a ____________, refers to organizational process that includes
strategic planning, setting objectives, managing resources, deploying labor force,
financial assets and measuring results.

2. One of the management functions that ensure that all other functions are
operating efficiently and take corrective action if necessary is called
__________________.

3. Management as a ___________, is used as singular collective noun (like group)

which refers to a discrete nature of grouping of managers or people in charge of
running a company or organization.

4. This function of management is said to be the backbone of the organization, it is

called ________________ , where it helps to determine the task to be done, who
and how the task needs to be performed.

5. Good interpersonal relationship is very essential that impact the job performance
and efficiency of an employee. This management function is called _____________.

6. _____________ theories believe that workers must be motivated, the structure

and social relationship among employees and managers must be observed for
maximum productivity of the workers.

7. This theory evolved in response to shift from handicraft to industrial production, it

is called _____________ theory.

Good job! You are now about to

complete the module by answering the final
test prepared for you. Good luck learner!

Direction: Identify the term referred to in each number. Write your answer in the
spaces provided for.

___________________ 1. This requires recruitment, thorough selection of applicant

and hiring potential employees for the organization.

___________________ 2. This deals with monitoring the company’s progress and

ensures that all other functions are operating efficiently, thus exercises corrective
measure if necessary.
___________________3. A theory that believed that the best way toward gaining
maximum productivity is through motivation, structure and supporting employers.

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___________________4. This refers to a discrete nature of grouping of managers or
people in charge of running a company or organization.

___________________5. This is known as the backbone of the business.

___________________6. It involves mapping out exactly on how to realize a specific

goal through establishing strategy and developing plans to coordinate activities.

___________________7. This theory that deals with the complexity and the
relationship of organizations, workers, and environment.

Additional Activity:
1. How are you going to manage your time at home being productive even in
this time of pandemic? Specify the activities that you can do and how are you going
to carry on the task/s.

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Let’s get started (Pretest):

1. Controlling 5. Organizing
2. Planning 6. Modern Management Theory
3. Staffing 7. Neo-Classical Theory
4. Management

Learning Activity 1 and 2

Criteria for Rubrics:

5pts - brief with clear and complete thoughts/idea

4pts - brief with clear thoughts/idea
3pts - with ideas but not direct to its main point
2pts - not concise idea

Practice Task 1
1. False 5. True
2. False 6. False
3. True 7. False
4. True

Practice Task 2

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O

1 P R O C E S S

G 5
A D

2 C O N T R O L L I N G

I R

Z E

I 7 C L A S S I C A L

3 N O U N T
G I

6 N E O - C L A S S I C A L

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Post Test
1. Staffing 5. Organizing
2. Controlling 6. Planning
3. Neo-Classical Theory 7. Modern Management Theory
4. Management as a noun

Reference:

Samar, Gregorio L. et al. (2016) Introduction to Organization and Management. Hunt

Publishing Center, 1-15.

Thank you learner.

Keep safe …

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