What is Management?
- There is no precise definition of management.
- Management has decision oriented definition, people oriented definition, function oriented definition and production or efficiency oriented etc.
- Management is a universal phenomenon. It is a very popular and widely used term.
- All organizations – business, political, cultural or social are involved in management because it is the management which helps and directs the various efforts towards a definite purpose.
In general we define the management as follow;
“Management is the process involving planning, organizing, staffing, directing and controlling human efforts and by optimizing and utilizing other resources achieve stated objectives in an organization.”
- Mary parker Follet defines the term management as “the art of getting things done through others”
- According to Harold Koontz, “Management is an art of getting things done through and with the people in formally organized groups. It is an art of creating an environment in which people can perform and individuals and can co-operate towards attainment of group goals”.
- According to F.W. Taylor, “Management is an art of knowing what to do, when to do and see that it is done in the best and cheapest way”.
- Good management includes both being effective and efficient.
Being effective means: doing the appropriate task i.e, fitting the square pegs in square holes and round pegs in round holes.
Being efficient means: doing the task correctly, at least possible cost with minimum wastage of resources.
5M’s of Management
- Man, the first of the five M’s is the most important. Man in management is referred as a human resource.
- Even in the automated world no organization can flourish without human resource.
- Human resources determine the workings of the other four basic business resources.
- People make sure materials, machines, money and methods are utilized in a productive manner to achieve goals or aims and objectives of organizations and enterprises.
- With the right man in the right job, a large portion of effective business management will have been achieved.
- Material is a basic ingredient in management be it a service industry or a product industry.
- Without materials, human resource is made redundant.
- A group of cement factory workers waiting for supply of limestone may have nothing much to do for as long as the supply does not arrive. Even if it arrives, but in poor quality, the production is certainly doomed for a loss.
- Quality compromised is business pauperized. Poor quality of materials potentially ruins entrepreneurship.
- Machine are the basic tools to produce goods or to generate services.
- Selection of an appropriate machine not only enhances efficiency but also saves times and increases revenue.
- Machines have made man fulfill almost effortlessly various dreams of creating things that make a existence more worthwhile.
- Without money, no venture or enterprise can motivate workers, get quality and sufficient materials, get the right machines and maintain them or even ensure that time is properly managed.
- Where there is not enough money, no good workers, materials, or machines can be employed or purchased…
- Method refers to techniques , tools and process that are utilized to produce goods or services
Features of Management
- Management is an activity concerned with guiding human and physical resources such that organizational goals can be achieved.
Nature, Feature of management can be highlighted as: –
- Management is Goal-Oriented:
- Management integrates Human, Physical and Financial Resources:
- Management is Continuous:
- Management is all Pervasive:
- Management is a Group Activity:
Management is Goal-Oriented:
- The success of any management activity is assessed by its achievement of the predetermined goals or objective.
- Management is a purposeful activity.
- It is a tool which helps use of human & physical resources to fulfill the pre-determined goals.
Management integrates Human, Physical and Financial Resources:
- In an organization, human beings work with non-human resources like machines. Materials, financial assets, buildings etc.
- Management integrates human efforts to those resources. It brings harmony among the human, physical and financial resources.
Management is Continuous:
- Management is an ongoing process.
- It involves continuous handling of problems and issues.
- It is concerned with identifying the problem and taking appropriate steps to solve it.
Management is all Pervasive:
- Management is required in all types of organizations whether it is political, social, cultural or business because it helps and directs various efforts towards a definite purpose.
- Thus clubs, hospitals, political parties, colleges, hospitals, business firms all require management.
Management is a Group Activity:
- Management is very much less concerned with individual’s efforts.
- It is more concerned with groups.
- It involves the use of group effort to achieve predetermined goal of management of the enterprise.
Levels of Management
- The term “Levels of Management’ refers to a line of demarcation between various managerial positions in an organization.
- The number of levels in management increases when the size of the business and work force increases and vice versa.
- The level of management determines a chain of command, the amount of authority & status enjoyed by any managerial position.
The levels of management can be classified in three broad categories: –
- Top level / Administrative level
- Middle level / Executory
- Low level / Supervisory / Operative / First-line managers
- Managers at all these levels perform different functions.
Top Level of Management
- It consists of board of directors, chief executive or managing director.
- The top management is the ultimate source of authority and
- it manages goals and policies for an enterprise.
- It devotes more time on planning and coordinating functions.
Role of the top management –
- Top management lays down the objectives and broad policies of the enterprise.
- It issues necessary instructions for preparation of department budgets, procedures, schedules etc.
- It prepares strategic plans & policies for the enterprise.
- It appoints the executive for middle level i.e. departmental managers.
- It controls & coordinates the activities of all the departments.
- It is also responsible for maintaining a contact with the outside world.
- It provides guidance and direction.
- The top management is also responsible towards the shareholders for the performance of the enterprise.
Middle Level of Management
- The branch managers and departmental managers constitute middle level.
- They are responsible to the top management for the functioning of their department.
- They devote more time to organizational and directional functions.
- In small organization, there is only one layer of middle level of management but in big enterprises, there may be senior and junior middle level management.
Role of Middle Level of Management
- Their role can be emphasized as –
- They execute the plans of the organization in accordance with the policies and directives of the top management.
- They make plans for the sub-units of the organization.
- They participate in employment & training of lower level management.
- They interpret and explain policies from top level management to lower level.
- They are responsible for coordinating the activities within the division or department.
- It also sends important reports and other important data to top level management.
- They evaluate performance of junior managers.
- They are also responsible for inspiring lower level managers towards better performance.
Lower Level of Management
- Lower level is also known as supervisory / operative level of management.
- It consists of supervisors, foreman, section officers, superintendent etc.
- According to R.C. Davis, “Supervisory management refers to those executives whose work has to be largely with personal oversight and direction of operative employees”.
- In other words, they are concerned with direction and controlling function of management.
Role of Lower Level of Management
- Assigning of jobs and tasks to various workers.
- They guide, supervise and instruct workers for day to day activities.
- They are responsible for the quality as well as quantity of production.
- They communicate workers problems, suggestions, and recommendatory appeals etc to the higher level and higher level goals and objectives to the workers.
- They help to solve the grievances of the workers.
- They are responsible for providing training to the workers.
- They arrange necessary materials, machines, tools etc for getting the things done.
- They prepare periodical reports about the performance of the worker
- They are the image builders of the enterprise because they are in direct contact with the workers.
Levels of Management and skills required
Levels of Management and skills required
- Managers need three types of key skills to perform the duties and activities:
1. Technical skills:-
- Technical skills include knowledge of and proficiency in a certain specialized field, such as computers, engineering, accounting, or manufacturing.
These skills are more important at lower levels of management since these managers are dealing directly with employees doing the organization’s work.
2. Human skills:-
- Human skills are associated with a manager’s ability to work well with others both as a member of a group and as a leader who gets things done through others. Because managers deal directly with people,
- They know how to communicate, motivate, lead, and inspire enthusiasm and trust.
These skills are equally important at all levels of management.
3. Conceptual skills:-
- Conceptual skills are the skills managers must have to think and to conceptualize about abstract and complex situations.
- Using these skills, managers must be able to see the organization as a whole,
- understand the relationships among various organs,
- visualize how the organization fits into its broader environment.
Objectives of Management
- The objectives of management are narrated as under.
(i) Organisational objectives:
- Management is expected to work for the achievement of the objectives of the particular organization in which it exists.
- Organizational objectives include:
(a) Reasonable profits so as to give a fair return on the capital invested in business
(b) Survival and solvency of the business, i.e., continuity.
(c) Growth and expansion of the enterprise
(d) Improving the goodwill or reputation of the enterprise.
(ii) Personal objectives:
- An organization consists of several persons who have their own objectives.
These objectives are as follows:
(a) Fair remuneration for work performed
(b) Reasonable working conditions
(c) Opportunities for training and development
(d) Participation in management and prosperity of the enterprise
(e) Reasonable security of service.
(iii) Social objectives:
- Management is not only a representative of the owners and workers, but is also responsible to the various groups outside the organisation.
It is expected to fulfill the objectives of the society as given below:
(a) Quality of goods and services at fair price to consumers.
(b) Honest and prompt payment of taxes to the Government.
(c) Conservation of environment and natural resources.
(d) Fair dealings with suppliers, dealers and competitors.
(e) Preservation of ethical values of the society
The general objectives of management are:
1. Getting Maximum Results with Minimum Efforts
- The main objective of management is to secure maximum outputs with minimum efforts & resources.
- Management is basically concerned with thinking & utilizing human, material & financial resources in such a manner that would result in best combination.
2. Increasing the Efficiency of factors of Production
- Through proper utilization of various factors of production, their efficiency can be increased to a great extent
Through right management ,reduce spoilage, wastages and breakage of all kinds, this in turn leads to saving of time, effort and money which is essential for the growth & prosperity of the enterprise.
3. Maximum Prosperity for Employer & Employees
- Management ensures smooth and coordinated functioning of the enterprise.
- This in turn helps in providing maximum benefits to the employee in the shape of good working condition, suitable wage system, incentive plans on the one hand and higher profits to the employer on the other hand.
4. Human betterment & Social Justice
- Management serves as a tool for the upliftment as well as betterment of the society.
- Through increased productivity & employment, management ensures better standards of living for the society. It provides justice through its uniform policies.
Importance of Management
1 It helps in Achieving Group Goals
- It arranges the factors of production, assembles and organizes the resources, integrates the resources in effective manner to achieve goals.
- It directs group efforts towards achievement of pre-determined goals. Management converts disorganized resources of men, machines, money etc. into useful enterprise.
- These resources are coordinated, directed and controlled in such a manner that enterprise work towards attainment of goals.
2. Optimum Utilization of Resources
- Management utilizes all the physical & human resources productively.
- This leads to efficacy in management.
- Management provides maximum utilization of scarce resources by selecting its best possible alternate use
3. Reduces Costs
- It gets maximum results through minimum input by proper planning
- Management uses physical, human and financial resources in such a manner which results in best combination. This helps in cost reduction.
4. Establishes Sound Organization
- No overlapping of efforts (smooth and coordinated functions).
- it establishes effective authority & responsibility relationship i.e. who is accountable to whom, who can give instructions to whom, who are superiors & who are subordinates.
- Management fills up various positions with right persons, having right skills, training and qualification. All jobs should be cleared to everyone.
5. Establishes Equilibrium
- It enables the organization to survive in changing environment.
- It keeps in touch with the changing environment.
- So it adapts organization to changing demand of market / changing needs of societies. It is responsible for growth and survival of organization.
6. Essentials for Prosperity of Society
- Efficient management leads to better economical production which helps in turn to increase the welfare of people.
- Organization comes with new products and researches beneficial for society.
Functions of Management
- Different experts have classified functions of management differently.
- According to George & terry, “There are four fundamental functions of management i.e. planning, organizing, actuating and controlling”.
- According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to control”.
- Whereas Luther Gullick has given a keyword ’POSDCORB’ where
P stands for Planning
O for Organizing,
S for Staffing,
D for Directing,
Co for Co-ordination and controlling,
R for reporting
B for Budgeting.
- Most widely accepted are functions of management given by KOONTZ and O’DONNEL i.e. Planning, Organizing, Staffing, Directing and Controlling.
- For theoretical purposes, it may be convenient to separate the function of management but practically these functions are overlapping in nature i.e. they are highly inseparable. Each function blends into the other & each affects the performance of others.
Management as a Process
- As a process, management refers to a series of inter – related functions.
- It is the process by which management creates, operates and directs purposive organization through systematic, coordinated and co-operated human efforts.
- According to George R. Terry, “Management is a distinct process consisting of planning, organizing, actuating and controlling, performed to determine and accomplish stated objective by the use of human beings and other resources”.
- It is the basic function of management.
- It deals with chalking out a future course of action & deciding in advance the most appropriate course of actions for achievement of pre-determined goals.
- According to KOONTZ, “Planning is deciding in advance – what to do, when to do & how to do. It bridges the gap from where we are & where we want to be”.
- It is the process of bringing together physical, financial and human resources and developing productive relationship amongst them for achievement of organizational goals.
- According to Henry Fayol, “To organize a business is to provide it with everything useful or its functioning i.e. raw material, tools, capital and personnel’s”.
- To organize a business involves determining & providing human and non-human resources to the organizational structure.
- Organizing as a process involves:
- Identification of activities.
- Classification of grouping of activities.
- Assignment of duties.
- Delegation of authority and creation of responsibility.
- Coordinating authority and responsibility relationships.
- It is the function of manning the organization structure and keeping it manned.
- Staffing has assumed greater importance in the recent years due to advancement of technology, increase in size of business, complexity of human behavior etc.
- The main purpose o staffing is to put right man on right job i.e. square pegs in square holes and round pegs in round holes.
- According to Koontz & O’Donell, “Managerial function of staffing involves manning the organization structure through proper and effective selection, appraisal & development of personnel to fill the roles designed un the structure”.
- It is considered life-spark of the enterprise which sets it in motion the action of people because planning, organizing and staffing are the mere preparations for doing the work.
- Direction is that inert-personnel aspect of management which deals directly with influencing, guiding, supervising, motivating sub-ordinate for the achievement of organizational goals.
- Direction has following elements:
- It implies measurement of accomplishment against the standards and correction of deviation if any to ensure achievement of organizational goals.
- The purpose of controlling is to ensure that everything occurs in conformities with the standards.
- An efficient system of control helps to predict deviations before they actually occur.
- According to Theo Haimann, “Controlling is the process of checking whether or not proper progress is being made towards the objectives and goals and acting if necessary, to correct any deviation”.
- According to Koontz & O’Donell “Controlling is the measurement & correction of performance activities of subordinates in order to make sure that the enterprise objectives and plans desired to obtain them as being accomplished”.
- Therefore controlling has following steps:
- Establishment of standard performance.
- Measurement of actual performance.
- Comparison of actual performance with the standards and finding out deviation if any.
- Corrective action.
SCOPE OF MANAGEMENT
- Production Management
- Marketing Management:
- Financial Management:
- Personnel Management:
- Production management implies planning, organising, directing and controlling the production function so as to produce the right goods, in right quantity, at the right time and at the right cost.
It includes the following activities:
- designing the product
- location and layout of plant and building
- planning and control of factory operations
- operation of purchase and storage of materials
- repairs and maintenance
- inventory cost and quality control
research and development etc.
- Marketing management refers to the identification of consumers needs and supplying them the goods and services which can satisfy these wants.
It involves the following activities:
- marketing research to determine the needs and expectation of consumers
- planning and developing suitable products
- setting appropriate prices
- selecting the right channel of distribution, and
- promotional activities like advertising and salesmanship to communicate with the customers
- Financial management seeks to ensure the right amount and type of funds to business at the right time and at reasonable cost.
It comprises the following activities:
- estimating the volume of funds required for both long-term and short-term needs of business
- selecting the appropriate source of funds
- raising the required funds at the right time
- ensuring proper utilisation and allocation of raised funds so as to maintain safety and liquidity of funds and the credit- worthiness and profitability of business, and
- administration of earnings
- Thus, financial management involves the planning, organizing and controlling of the financial resources.
Personnel/Human resource Management:
- Personnel management involves planning, organising and controlling the procurement, development, compensation, maintenance and integration of human resources.
It consists of the following activities:
- manpower planning
- promotions and transfers,
- employee welfare services, and
- personnel records and research, etc.
Roles of a Manager
- Inter-personal role: Interacting with other people
- Represent as symbolic head, signing legal documents.
- Performs routine duties of a social nature as a representative of the organization.
Making speeches, bestowing honours, inaugurating new offices, welcoming official visitors, distributing gifts to retiring employees are examples of such ceremonial and social duties.
- This role defines the manager’s relationship with his own subordinate.
- The manager sets an example, directs and coordinates the activities of subordinates and brings their needs in accord with those of his organisation.
Responsible for motivation of subordinates
- It describes a manager s relationship with the outsiders.
- Maintain network of outside contacts to obtain favour and information
- A manager maintains mutually beneficial relations with other organizations, governments, industry, groups, etc.
2. Informational roles: exchanging information
- It implies seeking, collecting and receiving information about his organisation and external events.
- An example Is picking up a rumour about his organisation.
It involves passing or transmitting Information and judgments directly to his subordinates or concerned person or department which he has collected from different sources and means. Particularly from external environment
- In this role, a manager speaks for his organization.
- He lobbies and defends his enterprise.
- Transmits information to outsiders/insider on organizational plan, policies or action.
- A manager addressing the trade union is an example.
3. Decisional Roles: Processing and using information for decision making
- Entrepreneurial role:
- As a entrepreneur , the manger is creator and innovator.
- He seeks to improve his department.
- He adapt to the changing environmental factors.
- Manager appreciates new ideas and initiate new
- He initiate changes or acting as a change agent.
- example, a manager decides to launch a feasibility study
For setting up a new plant
- Disturbance Handler.
- This refers to taking charge when the organisation faces a problem or crisis,
e.g., a strike, feud between subordinates, loss of a important customer.
- A manager handles conflicts, complaints and competitive actions.
- Responsible for corrective action when organization faces unexpected crisis.
- Resource Allocator.
- In this role a manager approves budgets and schedules, sets priorities and distributes resources.
- Responsible for allocation of various resources
- As a negotiator, a manager bargains with suppliers, dealers, trade unions, agents, etc.
- Represents the corporation in negotiating important agreements.