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Competitive Exams: Introduction
One of the most important activities in business is the management of the 4M's men, machines,
material and money. The term ‘management’ can be interpreted differently in different contexts.
Hence, it is difficult to define. In one context, it may comprise the activities of executives and
administrative personnel in an organization, while in another, it may refer to a system of getting
things done. In a broad perspective, management can be considered as the proper utilization of
people and other resources in an organization to accomplish desired objectives. With increasing
global competition, changes in the world of technology, changing business practices and
increasing social responsibility of organizations, the role of managers has become all the more
significant.
In this chapter, we will first examine the definitions of management given by some eminent
management thinkers to understand the essence of management. Secondly, we will discuss the
five basic functions of management i.e.. planning, organizing, staffing, leading and controlling.
The chapter also focuses on the managerial skills required at various levels of the organizational
hierarchy and briefly explains the various approaches to management.
Definitions Of Management
The term ‘management’ can be interpreted in a variety of ways. To gain a better insight into the
nature of management, let us look at some of the definitions of management:
Harold Koontz and Heinz Weihrich define management as the process of designing and
maintaining an environment in which individuals, working together in groups, efficiently
accomplish selected aims.
Louis E. Boone and David L. Kurtz define management as the use of people and other
resources to accomplish objectives.
Dalton E. McFarland defines management as a process, by which managers create, direct,
maintain, and operate purposive organizations through systematic, coordinated, cooperative
human effort.
Mary Parker Follet termed management as the act of getting things done through people.
Definitions by Follet and Louis E. Boone and Kurtz call attention to the fact that managers
achieve organizational goals by getting others to do the necessary tasks. The other two
definitions suggest that management is much more than just getting the work done and suggest
the following aspects of management:
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1. Managers carry out the functions of planning, organizing, staffing, leading and
controlling: Henry Fayol was the first management thinker to outline the five basic
functions carried out by managers. Every manager performs these basic functions. These
functions are discussed in detail in the later part of this chapter.
2. Management is essential to any kind of organization: Wherever there are groups of people
working together to achieve some common objectives, it becomes essential to guide,
organize and control them. The term ‘management’ applies to any organization
irrespective of the size or nature of operations. The prime concern of a CEO of a
multinational company, the General Manager of a hotel, the first-level supervisor, the
manager of a cricket team and the student president in a college is to manage their people
and resources effectively.
3. Management is essential at all hierarchical levels: Management is necessary at all levels.
However, the type of skills and the degree to which various skills are required at different
levels of the hierarchy may vary. In order to perform their duties satisfactorily, managers
need technical, human, conceptual and design skills.
4. The goal of all managers is to generate surplus: The aim of all business managers is to
create a surplus. To accomplish this objective, the manager has to create an environment
which encourages people to accomplish as much as possible with the least amount of
resources and personal dissatisfaction. Even in non-profit organizations, the aim of
managers is to accomplish their goals with the minimum amount of resources or to make
as much surplus as possible with available resources.
5. The aim of all managers is to improve productivity, efficiency and effectiveness:
Productivity is defined as the output-input ratio within a time period with due
consideration for quality. It can be expressed as:
Improving Productivity
Productivity = Outputs/Inputs (within a time period, quality considered)
Productivity can be improved in the following ways:
By producing more output with the same inputs.
By reducing inputs, but maintaining the same level of outputs.
By increasing outputs and reducing inputs, thereby, making the ratio more favorable.
Productivity can be improved by ensuring efficiency and effectiveness in the operations of the
firm. Effectiveness refers to achievement of stated organizational objectives while efficiency
denotes the judicious use of resources to achieve organizational objectives. In the words of Peter
Drucker, efficiency means doing things right, while effectiveness means doing the right things.
In his book, Management Tasks, Responsibilities, Practices, Drucker states that effectiveness is
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the foundation of success whereas efficiency is a minimum condition for survival after success
has been achieved.
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