What Is Management?

What Is Management?

In business, management is the administration of an organization. In other words, it’s the process of controlling resources that include people and things.

Difference between leadership and management

Management and leadership are often mixed or confused, so it’s important to understand the difference between these two terms.

What Is Leadership?

Leadership is a process of social influence. It’s the ability of a person (the leader) to attract followers and guide or influence them through charisma.

What Is Management?

Management is the art of getting work done through other people.

In business, organizations can't reach all of their goals simply as a set of individuals. Hence, they need to gather people together to collaborate. Management comes in as the deployment and manipulation of human resources, financial resources, technological resources, natural resources, and more.


Management and leadership are different but the they are complementary. In other words, we need leaders and we need managers.

The Failure of Traditional Management

The number of employees who are actively engaged is very low (around twenty or thirty percent). Many employees do the bare minimum required to be paid and not get fired.


Why is it that people in most companies are not fulfilled and motivated?


Well, the mechanisms by which we get management work done are basically the same as they've been for the past 80 years or so.


So, we need to develop new management systems. Let’s look at some ways that companies are experimenting with the different dimensions of management: coordination, decision making, motivation, and objective setting.

Coordination: Emergence vs. Bureaucracy

When it comes to businesses, we can coordinate through bureaucracy (in other words, procedures) or through emergence.


So what is emergence?


Rather than telling people exactly what to do, emergence is about creating a setting where people figure out for themselves how to coordinate their activities.


The main benefit of this model is that it’s very responsive. That’s because we’re leaving important choices to the people at the front lines. For these individuals, this model is also energizing, as it allows them to feel ownership of the choices. Finally, this model enables creativity.


Emergence has many advantages, but it has to be within a structure and with a very clear sense of direction, and it needs support and structures from managers. That’s to ensure that people actually have the resources (for example, information) they need to make smart decisions. So that is where emergence goes wrong.


Emergence and bureaucracy are opposing principles that can be reconciled to some degree for management success.

Decision making: Hierarchy vs. Collective Wisdom

In the world of managing down, how do we make decisions?


Hierarchy is the established way of making decisions, of managing down.

What is hierarchy? In a business context, it’s the legitimate authority that one person has over another. In other words, it’s a model where your boss has the right to tell you what to do.

The alternative to hierarchy is collective wisdom.


Collective wisdom is the aggregation of inputs from a large number of people, who might be at the bottom of the organization or even outside of the organization.


Many businesses manage to find a balance between hierarchy and collective wisdom to get benefits from both models.

Motivation: Extrinsic vs. Intrinsic motivators

There are three types of drivers that a company can use to get maximum effort out of people: The first is material drivers, which is essentially money. The second is personal drivers, which are about making work interesting. And the last is social drivers, which are about encouraging people to want to give more, often through, for example, teamwork.


Studies of high individual and organizational performance show that intrinsic motivation (personal and social drivers) are higher performing models than the classic model based on extrinsic motivation consisting of pay for performance.


Despite that, most organizations continue to build their entire performance review system, and bonus system around extrinsic drivers.


Can we create a system to make the work interesting by providing performance evaluation tools and bonuses that are aligned to intrinsic drivers?

Objective Setting: Linear Alignment vs. Obliquity

Alignment is the process of ensuring that all employees are working towards a specific objective. It’s not a wrong model, but there are limits to it.


And what is obliquity?

It comes from the fact that goals are best achieved indirectly. To get to point A, you should go for point B.


If a company shoots for a long term goal, the chance of being profitable is higher than that of companies with a short-term, financial focus.


While charities and charitable foundations can afford to put all the money into good deeds, commercial organizations need to also manage the short term goals in order to ensure a profit.

What Is Product Management?

Product Management deals with the planning, forecasting, production, and marketing of a product or products at all stages of the product life cycle.

What Is a Product Manager?

Product managers are in charge of the overall and continuous success of a product throughout its entire lifecycle. To do this, product managers perform the product strategy and market research, taking a long-term view and deciding what direction the product should grow in based on factors like customer needs.


The goal of a product Manager is to maximize value and create new revenue streams.


This role is both external and internal, manages up and down, and spans technical, business, and operational domains.

What Is Project Management?

Project management is the application of processes, methods, knowledge, skills, and experience to achieve the objectives of a project.

What Is a Project Manager?

Project managers are responsible for the successful delivery of a project within a specific deadline and budget, with a clear beginning and end.


Project managers administer the development of the product by using available resources and managing issues and risks until a project is completed.

Difference Between Project Management and Product Management

A project is an attempt to create a product or service by a certain date in time.


With a product, on the other hand, there is no clear direction, since customer needs evolve over time, and products must evolve accordingly.


A project manager delivers a project and then moves on to the next one. Once the product is delivered the manager hands the responsibility over to the product manager.

Most organizations are trapped with an old fashioned model of management. So they're attempting to gradually evolve that model and become more innovative in terms of more bottom-up decision-making processes, a greater focus on intrinsic rewards, etc. This is where management innovation becomes important.

Learn more about management