By its very nature, management requires an understanding of human behavior, to help managers better comprehend those at different levels in the organization, those at the same level, those in other organizations, and themselves.

The manager's job can be characterized terms of four functions, three sets of roles, and four skills. The basic managerial functions are planning, organizing, leading, and controlling. The roles consist of three interpersonal roles, three informational roles, and four decision-making roles. The four basic skills necessary for effective management are technical, interpersonal, conceptual, and diagnostic skills.

Several organizational challenges confront managers. One major organizational challenge is workforce expansion and reduction. Another is the new workplace itself. Organization change also poses significant organizational challenges for managers. Information technology and new ways of organizing are two other important organizational challenges.

There are also several important environmental challenges to consider. Determining the most effective competitive strategy and matching people to that strategy is one important challenge. Today, global competition is one of the most critical environmental challenges. Ethics and social responsibility are significant as well. The manager must also emphasize product and service quality and manage technology successfully.

Managing for effectiveness involves balancing a variety of individual-level, group- and team-level, and organization-level outcome variables.