The first general theories of management appeared around 1916. Henri
Fayol was the first to systematize management behavior and established the 14
principles of management in his book General and Industrial Management.
- Division of work. The tasks to develop and staff should be specialize in order to achieve efficiency.
- Authority and responsibility. Authority is the ability to give orders and expect obedience from others; it creates responsibility.
- Discipline. Obedience, dedication, behavior and respect for the rules.
- Unity of command. Workers should receive orders from only one manager.
- Unity of direction. The entire organization should be moving towards a common objective in a common direction.
- Subordination of individual interests to the general interests. The interests of one person should not take priority over the interests of the organization as a whole.
- Remuneration. Many variables, such as cost of living, supply of qualified personnel, general business conditions, and success of the business, should be considered in determining a worker’s rate of pay.
- Centralization. Fayol defined centralization as lowering the importance of the subordinate role. Decentralization is increasing the importance. The degree to which centralization or decentralization should be adopted depends on the specific organization in which the manager is working.
- Scalar chain. Managers in hierarchies are part of a chain like authority scale. Each manager, from the first line supervisor to the president, possess certain amounts of authority. The President possesses the most authority; the first line supervisor the least. Lower level managers should always keep upper level managers informed of their work activities. The existence of a scalar chain and adherence to it are necessary if the organization is to be successful.
- Order. For the sake of efficiency and coordination, all materials and people related to a specific kind of work should be treated as equally as possible.
- Equity. All employees should be treated as equally as possible.
- Stability of tenure of personnel. Retaining productive employees should always be a high priority of management. Recruitment and Selection Costs, as well as increased product-reject rates are usually associated with hiring new workers.
- Initiative. Management should take steps to encourage worker initiative, which is defined as new or additional work activity undertaken through self direction.
- Team Spirit. Management should encourage harmony and general good feelings among employees.
In other hands, we have another definitions that can helps us to know a little bit more about management.
- Committee. A working group under the laws or rules of an organization,
institution or entity has established certain powers.
- Flowchart. Graphical representation of the logical sequence that is
followed and a set of activities, documents, files, and the jobs that goes into
a detailed procedure.
- Organization chart. Graphical representation of the organizational
structure of a company.
- Manual. Administrative instrument that contains explicitly, orderly and systematic information on objectives, policies, responsibilities, organization and procedures of the organs of an undertaking, and instructions or agreements deemed necessary to carry out the work assigned to staff, taking as reference the objectives of the institution.
- Organization Manual. Explain the most important details of the organization
usually include the purpose of each element of the organization, function
declarations and a glossary of terms.
- Policy Manual. This contains the company policies that are flexible rules.
- Bussines. It relates to the state of being busy either as an individual
or society, as a whole, doing a commercially viable and profitable work.
- Reengineering. It’s the fundamental reconception business processes to
achieve dramatic improvements in performance measures such as cost, quality,
service and speed, in this process are identified that may represent extra
costs and delays for the company.
- Reporting. It is the activity to keep informed of
what is happening to those to whom the leader is responsible, m is the
existence of records, documentation, research and inspections.
- Sole
proprietorship. It is a business owned by one person for-profit. The owner may
operate the business alone or may employ others. The owner of the business has
unlimited liability for the debts incurred by the business.
- Partnership.
It is a business owned by two or more people. In most forms of partnerships,
each partner has unlimited liability for the debts incurred by the business.
The three typical classifications of for-profit partnerships are general
partnerships, limited partnerships, and limited liability partnerships.
- Corporation.
A corporation is a limited liability business that has a separate legal
personality from its members. Corporations can be either government-owned or
privately owned, and corporations can organize either for-profit or
not-for-profit. A privately owned, for-profit corporation is owned by
shareholders who elect a board of directors to direct the corporation and hire
its managerial staff. A privately owned, for-profit corporation can be either privately
held or publicly held.
- Cooperative.
It is a limited liability business that can organize for-profit or
not-for-profit. A cooperative differs from a for-profit corporation in that it
has members, as opposed to shareholders, who share decision-making authority.
Cooperatives are typically classified as either consumer cooperatives or worker
cooperatives. Cooperatives are fundamental to the ideology of economic
democracy.
- Consumer. A
consumer is a person or group of people who are the final users of products and
or services generated within a social system. A consumer may be a person or
group, such as a household. The concept of a consumer may vary significantly by
context, although a common definition is an individual who buys products or
services for personal use and not for manufacture or resale.
- Market
sector. It describes a set of businesses that are buying and selling such
similar goods and services that they are in direct competition with each other.
- Budgeting.
It includes matters relating to the development, implementation and monitoring.
- Intellectual property. Is a legal
concept which refers to creations of the mind for which exclusive rights are
recognized.
- Patents. A patent grants an inventor
exclusive rights to make, use, sell, and import an invention for a limited
period of time, in exchange for the public disclosure of the invention. An
invention is a solution to a specific technological problem, which may be a
product or a process.
- Industrial design right. An
industrial design right protects the visual design of objects that are not
purely utilitarian. An industrial design consists of the creation of a shape,
configuration or composition of pattern or color, or combination of pattern and
color in three dimensional form containing aesthetic value. An industrial
design can be a two- or three-dimensional pattern used to produce a product,
industrial commodity or handicraft.
- Copyright. A copyright gives the
creator of an original work exclusive right to it, usually for a limited time.
- Trademark. A trademark is a
recognizable sign, design or expression which identifies products or services
of a particular source from those of others.
- Trade dress. Trade dress is a legal
term of art that generally refers to characteristics of the visual appearance
of a product or its packaging (or even the design of a building) that signify
the source of the product to consumers.
- Trade secrets. A trade secret is a
formula, practice, process, design, instrument, pattern, or compilation of
information which is not generally known or reasonably ascertainable, by which
a business can obtain an economic advantage over competitors or customers.
- Commerce: Commerce
is the whole system of an economy that constitutes an environment for business.
- Mass
production. Mass production is the production of large amounts of standardized
products, including and especially on assembly lines.
- Import. It consist of transactions in goods and
services (sales, barter, gifts or grants) from non-residents residents to
residents.
- Manufacturing.
Manufacturing is the production of goods for use or sale using labor and
machines, tools, chemical and biological processing, or formulation.
- Industry. Industry
is the production of an economic good or service within an economy; is often
classified into three sectors: primary or extractive, secondary or
manufacturing, and tertiary or services.
- Entrepreneurship.
Entrepreneurship is the act and art of being an entrepreneur or one who
undertakes innovations or introducing new things, finance and business acumen
in an effort to transform innovations into economic goods. This may result in
new organizations or may be part of revitalizing mature organizations in
response to a perceived opportunity.
- Business
incubators. Business incubators are programs designed to support the successful
development of entrepreneurial companies through an array of business support
resources and services, developed and orchestrated by incubator management and
offered both in the incubator and through its network of contacts. Incubators
vary in the way they deliver their services, in their organizational structure,
and in the types of clients they serve.
- Just In
Time strategy. Is a production strategy that strives to improve a business
return on investment by reducing in-process inventory and associated carrying
costs.
- Ownership. Ownership
of property may be private, collective, or common and the property may be
objects, land/real estate, or intellectual property. Determining ownership in
law involves determining who has certain rights and duties over the property.
- Tax. is a
financial charge or other levy imposed upon a taxpayer (an individual or legal
entity) by a state or the functional equivalent of a state such that failure to
pay is punishable by law.
- Workflow. A
workflow consists of a sequence of concatenated (connected) steps. Emphasis is
on the flow paradigm, where each step follows the precedent without delay or
gap and ends just before the subsequent step may begin.
- Processes. A
process is a more specific notion than workflow and can apply to physical or
biological processes, for instance. In the context of concepts surrounding
work, a process may be distinguished from a workflow by the fact that it has
well-defined inputs, outputs and purposes, while the notion of workflow may
apply more generally to any systematic pattern of activit.
- Innovation.
Innovation is the development of new values through solutions that meet new
needs, inarticulate needs, or old customer and market needs in value adding new
ways.
Systematizing words
- Management. The process of planning, organizing, directing and controlling the use of the different resources (human, technological, financial, and material resources) to achieve the company's goals
- Company. Is an organization, institution or industry, or activities dedicated to pursuing economic or commercial purposes
- Resources. Means that an organization has to work properly
- Human resources. Is the work transferring all of the employees or collaborators of an organization
- Human Resources (RRHH). Management function that deals with recruitment, selection, contracting, induction, training and development of employees in the organization
- Recruitment. The Human Resources Department must decide whether to hire an individual seasonal, contract, part-time or full. After the decision, disclosed the vacant position to attract individuals with the necessary characteristics
- Selection. To decide whether or not to hire candidates from the search performed previously
- Training and development of employees. This is the process of acquiring technical knowledge and skills that will enhance the performance of employees in their duties.
- Financial resources. Are cash and all financial assets that have a degree of liquidity
- Coaching. Is a technique that has emerged to improve the performance of employees, working with them in different areas. Coaching methodically develops the skills and abilities of people, doing to improve the self-esteem of individuals and the performance of the functions and duties of the job
- Material resources. It is known as an enterprise resource materials to those tangible with which the company in question will be able to offer their facilities and services such as raw material
- Technological resources. Is a medium that uses technology to fulfill its purpose
- Shareholder. Is an equity partner that participates in the management of the company to the same extent that it provides capital to
- Marketing. Is a process that involves the identification of needs and wants of the target market, the development of consumer-oriented goals, building strategies that create superior value, the implementation of customer relationship and retention of consumer value to achieve benefits
- Planning. Deciding what needs to happen in the future,may be today, next year, etc. generating plans for action
- Mission. It describes the basic function of production or service that the company develops and is the reason for its existence; exposes what the company does
- Vision. The vision of the business reflects its aspirations and specifies its intended direction or future destination
- Policies. The business's policy is a guide that stipulates rules, regulations and objectives, and may be used in the managers' decision-making. It must be flexible and easily interpreted and understood by all the employees
- Strategy. It refers to the coordinated plan of action that it is going to take, as well as the resources that it will use, to realize its vision and long-term objectives. It is a guideline to managers, stipulating how they ought to allocate and utilize the factors of production to the business's advantage
- Organizing. Pattern of relationships among workers, making optimum use of the resources required to enable the successful carrying out of the plans
- Directing. Determining what to do in a situation and getting people to do it. For this, must have leadership, communication and motivational skills
- Motivation. Desire to devote much effort to the company's goals, conditioned by the effort ability to satisfy some individual needs
- Comunication. Is the process by which information can be passed from one entity to another
- Leadership. is the set of managerial skills or directives that an individual has to influence the way of being of persons or a group of persons, making this team work enthusiastically in achieving goals and objectives
- Controlling. Checking progress against plans and correcting wrong processes
- Staffing. Job analysis, recruitment and hiring for appropriate jobs
- Feedback. Process in which the effect or output of an action is returned to modify the next management action
- Franchise. Is the granting of rights to use a product, business or trade name, granted by a company to one or more people in an area
- Input. Is the term denoting either an entrance or changes which are inserted into a system and which activate or modify a process, such as raw material
- Warehouse. Location or physical space for the storage of goods within the supply chain
- Output. Is the term denoting either an exit or changes which exit a system and which activate or modify a process, it may be the final product
- Benchmarking. Process of comparison between operations and performance with other companies known for its excellence
- Outsourcing. Some activities are made by other companies that are able to do these better and cheaper
- Empowerment. Strengthening of the Human Resources through the concession of autonomy and responsibility todo their work
- Hierarchy of authority. Is the criterion for establishing an order of superiority or subordination between employees and people in a company
- Organization power structure. The amount of authority increases with each level higher a person or organization is in hierarchy. The ultimate power remains with the person or organization at the very top of the hierarchy, with that position holding the authority to make final decisions in all matters
- Top-level managers. Consists of board of directors, president, vice-president, CEOs, etc. They're responsible for controlling and overseeing the entire organization. They develop goals, strategic plans, company policies, and make decisions on the direction of the business. In addition, top-level managers play a significant role in the mobilization of outside resources and are accountable to the shareholders and general public
- Middle-level managers. Consist of general managers, branch managers and department managers. They are accountable to the top management for their department's function. They devote more time to organizational and directional functions. Their roles can be emphasized as executing organizational plans in conformance with the company's policies and the objectives of the top management, they define and discuss information and policies from top management to lower management, and most importantly they inspire and provide guidance to lower level managers towards better performance
- First-level managers. Consist of supervisors, section leads, foremen, etc. They focus on controlling and directing. They usually have the responsibility of assigning employees tasks, guiding and supervising employees on day-to-day activities, ensuring quality and quantity production, making recommendations, suggestions, and upchanneling employee problems, etc. They are role models for employees
- Wage. Is the sum of goods or money received periodically from your employer a worker for a certain period of work or a specific product of their work
- Employee. Is a person providing their labor to an employer for wages
- Payroll. Is the sum of all financial records of salaries for an employee, wages, bonuses and deductions
- Chief Executive Officer (CEO). Is the highest authority in charge of the call management and administrative leadership in an organization
- Effectiveness. Is the ability to achieve the expected effect is desired or after performing an action
- Efficiency. Is the ability to have someone or something to achieve a particular goal with the best use of resources
- Productivity. Is the relationship between the quantity of products obtained by a production system and the resources used for this production, also it is the relationship between the results and the time taken to obtain. Effectiveness + Efficiency = Productivity
- Division of labor. Specialize the tasks to develop and staff in their work
- Bureaucracy. Is the organization or organizational structure characterized by regularized procedures and explicit, division of responsibilities and specialization of labor, hierarchy, and impersonal relationships
- Economics. It's the manner or means of meeting human needs through the resources that are considered scarce
- Accounting. Is responsible for testing, measuring and analyzing the assets of organizations, businesses and individuals, in order to serve in decision-making and control, presenting the information previously recorded in a systematic and useful to stakeholders
- Stakeholders. Are the people who can affect or are affected by the activities of a company
