Chapter 3 – What is Management?

What is Management?

The Paradox of Management

Management operates in a curious contradiction: essential to organizational success yet often vilified by those being managed. Managers frequently find themselves as “messengers” caught between leadership demands and frontline realities, lacking resources to fulfill expectations from either direction. Some researchers even argue that managers are expensive overhead that slow decision-making, increase risk of poor judgment, and disenfranchise employees (Hamel, 2011). Yet complex organizations simply cannot function without them.

Despite this criticism, management evolved to solve two fundamental problems: ensuring semi-skilled employees perform repetitive tasks competently and coordinating efforts to produce complex goods at scale. The solution – bureaucracy with hierarchical structure, detailed rules, precise roles, and top-down goals – created an environment where managers became simultaneously indispensable and unappreciated.

Historical Evolution of Management

Management concepts have existed since ancient times – delegation through hierarchical structures predated Jethro’s advice to Moses. Early societies developed management systems out of necessity when coordinating large groups. It’s unsurprising that Machiavelli’s leadership principles emerged centuries before Frederick Winslow Taylor’s scientific management. Formalized management theory simply wasn’t necessary until the Industrial Revolution created economies of scale and heightened competition.

Peter Drucker, among the most influential management thinkers of the past century, hypothesized that management was discovered before there was “management” to speak of (Drucker, 1974). Early economic thinkers like Adam Smith and Karl Marx viewed business as objective and impersonal. Only when Robert Owens (1771-1858) documented how workers responded differently to different managers did management begin its evolution toward recognizing subjective human factors.

Significant time passed between Owens’ 1820s observations and the emergence of management as a distinct discipline. The 1920s marked the beginning of corporate experimentation with decentralization for managing larger workforces. Scientific management took root in the early twentieth century through Frederick Winslow Taylor’s time and motion studies and the Gilbreths’ efficiency research.

Drucker suggested that management theories represented a refinement of existing concepts rather than wholly new ideas. Techniques such as scientific management, decentralization, personnel management, task allocation, planning, and accountability already existed but hadn’t been organized into coherent systems. We authors believe that while individual management theories may have existed in prototype form, management science emerged as a distinct discipline through the synergistic combination of these approaches rather than mere consolidation.

The Core Functions of Management

Management can be defined as synchronizing people, processes, and technology to achieve established objectives. Drucker proposed that management combines three critical elements:

1. Specifying organizational purpose and mission
2. Making work productive and achieving objectives
3. Producing social impact and fulfilling social responsibilities

Purpose and Mission

While profit remains the fundamental purpose of commercial enterprises, Drucker famously stated, “The purpose of business is to create and keep a customer.” This metaphorical rationale supports his assertion that business has two basic functions: marketing and innovation. Regardless of how effectively managers lead employees, losing sight of the customer dooms the enterprise.

A mission statement helps focus organizational activity around this customer-centered purpose. As Drucker suggested, the most challenging question for businesses is determining their value to customers – a question complicated by differences between product and service value propositions, and increasingly sophisticated marketing techniques influencing consumer desires.

Creating a Productive Workplace

Work, according to Drucker, is both blessing and curse. Creating a productive workplace requires four elements:

1. Analyzing specific operations needed to perform tasks
2. Synthesizing individual tasks into production processes
3. Controlling product quality and quantity
4. Providing appropriate tools for tasks

While fear once served as the primary motivator, education, legislation, and social change have diminished its effectiveness. Above subsistence level, financial rewards only significantly impact performance when they represent substantial lifestyle changes – a 40% increase motivates more than a 5% raise.

In the absence of substantial financial incentives, managers must leverage other motivational approaches. Douglas McGregor’s “Theory Y” proposed that employees may be self-motivated and ambitious, making opportunity provision more effective than threats.

The most critical elements for workplace productivity are providing employees with meaningful work, feedback, and continuous learning (Drucker, 1974). Workers need challenges that provide value, information about their performance results, and conviction that ongoing learning benefits both themselves and the organization. Progress visibility is essential – the dreaded “busy work” kills motivation.

Additionally, employees require clear authority structures to make appropriate decisions about products and processes.

Social Responsibility

Managerial decisions typically involve judgment calls rather than clear right/wrong choices. Drucker noted that managers typically begin with opinions and seek supporting facts, but facts themselves mean little without relevance analysis. The key is examining alternative questions rather than accepting initial premises, which requires open discussion and constructive dissent.

Drucker’s communication theory challenged traditional top-down approaches, arguing that the recipient, not the speaker, determines communication effectiveness. He believed that only commands can flow downward – motivation requires upward communication from those who perceive to those who wish to understand perceptions.

While this participatory management ideal has gained popularity, certain environments still require directive approaches. Military situations, for example, demand clear orders rather than consensus-building. Interestingly, Israel’s military allows lower-ranking soldiers to challenge potentially unethical orders without punishment—demonstrating that even hierarchical structures can incorporate ethical flexibility.

The Four Functions of Management

Traditionally, managers were defined as those “responsible for the work of other people” (Drucker, 1974). Drucker identified five managerial operations: setting objectives, organizing, motivating and communicating, measuring, and developing people (including self-development). These align with the four widely recognized management functions: planning, organizing, directing (or leading), and controlling.

These functions don’t operate in isolation – organizations cannot plan effectively without understanding resources and evaluation metrics. While some critics argue that management cannot be neatly categorized this way, and alternatives like team management and systems theory exist, this framework provides an effective structure for analyzing biblical management examples.

Planning

Planning involves developing a mission, objectives, and tactics to achieve organizational goals. While leaders typically establish overarching goals, managers plan, organize, direct, and control the processes for goal attainment. Effective planning requires organizations to:

• Establish clear goals that maximize stakeholder benefits
• Create mission statements articulating customer and shareholder value propositions
• Set measurable objectives (e.g., increasing market share from 7% to 10%)
• Develop specific objectives with supporting tactics

These elements are typically divided into short-term goals (under one year) and long-term plans (five to ten years).

Organizing

Organizing entails assembling the right people through recruiting, training, and team building, while providing appropriate resources and environments for success. This function includes:

• Determining internal directorial configuration
• Establishing and maintaining relationships
• Allocating necessary resources

Organizational structures vary widely – small companies often have flat hierarchies, while larger corporations develop complex multilevel structures. Some organizations have abandoned traditional charts for nimble units or team-based approaches. Regardless of structure, clear authority chains remain essential.

Finding the right people represents a critical organizing component. This extends beyond recruiting to identifying potential, training, developing job descriptions, interviewing, hiring, and when necessary, terminating underperforming employees.

Directing/Leading

Directing spans from top management to line supervision, specifying task execution with appropriate resources, timing, and authority. Even with excellent planning and staffing, bureaucratic impediments often prevent effective implementation. When employees receive proper supervision while executing their responsibilities, both organizational objectives and personal career goals become achievable.

Controlling

Controlling focuses on evaluation – determining whether the other management functions are effectively implemented. This requires:

• Objective measurement tools (product count, quality statistics, labor costs)
• Established standards (self-developed, industry best practices, benchmarks)
• Employee evaluation systems

Through these tools, managers assess organizational effectiveness and progress toward objectives, enabling corrective actions when needed.

Controlling has evolved significantly with increasingly sophisticated measurement tools and expanding definitions of success metrics. This provides managers with improved capabilities for monitoring and enhancing employee performance.

Management Approaches

Management theory continues to evolve, with approximately 10,000 business books published annually, 80,000 MBAs awarded yearly, and $60 billion spent on corporate training. Numerous approaches have gained prominence, including management by objectives, Theory Z, value chain analysis, zero-based budgeting, six sigma, team building, and many others. These approaches typically reflect reactions to societal, technological, educational, and demographic changes.

Traditional theories face challenges in increasingly automated manufacturing environments and service-oriented economies. Perhaps the most significant contemporary management impacts come from nearly unlimited data availability and instantaneous communication capabilities.

Several trends appear likely to continue:

• Chronic higher unemployment in developed economies
• Increased training costs
• Dramatic shifts in worker skill valuation
• Decentralized manufacturing
• Information access as the decisive economic success factor
• Endemic social upheaval
• Shifting consumerism to emerging economies
• Intensifying competition
• Greater organizational diversification
• Flatter organizational structures

Despite these changes, biblical parallels exist. For instance, masonry skills’ value dramatically changed when the Israelites began their forty-year desert wandering. While our information capabilities continually improve, management fundamentally remains about human interaction – a constant throughout history.

Situational Leadership

Paul Hersey and Kenneth Blanchard popularized “Situational Leadership” in the 1970s, proposing that managers should adapt their behavior to subordinate maturity levels. This approach includes four behavior types:

1. Telling (S1): Providing explicit instructions on what to do and how to do it
2. Selling (S2): Providing information while persuading others to join common goals
3. Participating (S3): Focusing on relationships through team involvement and shared decision-making
4. Delegating (S4): Transferring responsibility to subordinates who exercise control

Over 70 percent of Fortune 500 companies use this approach (CLS, 2012). Biblical examples abound:

• Moses told Israelites exactly what the Lord expected
• Moses eventually sold his plan during 38 relatively incident-free years
• Moses shared decision-making with priests, judges, and wise men
• Moses delegated to subordinates and formally transferred authority to Joshua

Deming’s System of Profound Knowledge

1. Edwards Deming, credited with revolutionizing Japanese industrial management post-World War II, developed a “System of Profound Knowledge” comprising:

• Understanding industry processes from suppliers to customers
• Using statistical techniques to understand quality variations
• Understanding knowledge concepts and limitations
• Understanding human nature

From these principles came his famous 14 management points, including creating purpose consistency, instituting training, eliminating fear, breaking down departmental barriers, replacing quotas with leadership, and embracing organizational transformation.

Path-Goal Theory

Robert House and Martin Evans’ “Path-Goal” theory (1971, revised 1996) suggests managers should make rewards contingent on objective achievement, clarify paths to goals, and remove obstacles impeding achievement. Moses potentially employed this approach during the Israelites’ final 38 desert years – they understood their objective (entering the Promised Land), and Moses removed obstacles while keeping them on track.

Management by Objectives (MBO)

Peter Drucker introduced Management by Objectives in his 1954 book The Practice of Management. MBO emphasizes shared understanding of goals between managers and employees, suggesting that participation in goal setting increases performance standard achievement. Job performance evaluation centers on specific objectives, with employees who fail to reach objectives considered unsuccessful. Moses and the Lord established an objective for the Israelites: reaching and conquering the Promised Land.

Management by Walking Around (MBWA)

Coined by Hewlett-Packard executives in the 1970s and later popularized in Peters and Waterman’s 1982 book In Search of Excellence, MBWA involves managers spontaneously visiting workspaces. This builds rapport, makes managers accessible, and encourages innovation. Moses exemplified this approach by remaining accessible rather than isolating himself in a leadership bubble.

Open Book Management (OBM)

John Case of Inc. Magazine developed Open Book Management in 1993, proposing that organizations perform best when employees view themselves as partners. OBM involves making financial and performance information transparent, training employees to understand this information, and providing equity stakes in success. Moses practiced transparency when building the sanctuary, publicly accounting for all donations to prevent accusations of misappropriation.

Team Management

Team approaches have gained recognition since World War II as methods for breaking bureaucratic barriers. Moses employed teams when sending spies to the Promised Land. Teams typically include cross-functional members working toward specific objectives, though they sometimes fail due to trust issues, diffused accountability, or insufficient results focus. The twelve tribes exemplified this approach, each with specific roles and responsibilities – when coordination failed, the kingdom split and eventually faced exile.

Bruce Tuckman’s 1965 “Forming-Storming-Norming-Performing” model describes team development stages:

1. Forming: Leaders answer questions about purpose, objectives, powers, and resources
2. Storming: Members fight for position amid increasing clarity but persistent uncertainty
3. Norming: Agreement and consensus emerge as members accept roles
4. Performing: The team functions autonomously to accomplish objectives

Systems Theory

Systems theory examines how different organizational elements interact for effectiveness. This interdisciplinary approach recognizes that management combines multiple fields working together for results. Organizations require all subsystems (production, marketing, accounting, finance) to function cooperatively – failure in one area threatens the entire entity. Biblical examples show tribes, priests, laypeople, judges, prophets, and kings working collectively to follow divine directives.

Deliverables

Management defies simple formulation – it has been compared to herding cats. Nevertheless, science underlies this art. Effective managers develop detailed implementation plans for directives, maintain operational discipline, lead ethically, demonstrate social consciousness, and focus on employee needs to advance organizational missions.

While some argue that traditional management models have become outdated in favor of systems theory or team approaches, the fundamental functions of planning, organizing, directing, and controlling remain essential. Within these categories, managers demonstrate unique skills and approaches. The various management methods evident in biblical narratives suggest the Bible provides valuable management guidance applicable even in contemporary settings.

Understanding management fundamentals allows practitioners to:

1. Apply Contextual Management: Select appropriate management approaches based on situation, organizational maturity, and employee capabilities.
2. Balance Art and Science: Recognize that while management employs scientific principles, effective application requires judgment, emotional intelligence, and adaptability.
3. Integrate Multiple Approaches: Combine complementary management techniques such as MBO, MBWA, and team management to address complex organizational needs.
4. Recognize Historical Patterns: Understand that despite technological and social evolution, fundamental management challenges have remained consistent throughout human history.
5. Employ Effective Communication: Develop communication approaches that facilitate both downward directive clarity and upward perceptual understanding.

Discussion Questions

1. Maimonides extrapolated that a person has two perfections: perfection of the body and perfection of the soul. He hypothesized that one cannot perfect the soul without first perfecting the body – a concept similar to Maslow’s Hierarchy of Needs but proposed nearly 600 years earlier. Do you believe additional intermediate levels must be mastered before achieving a truly restful and connected soul?
2. Why do you think ethical management proves so challenging for many managers?
3. Among the four management functions (planning, organizing, directing, and controlling), is one element more important than the others? If so, why?