CH 1 NATURE AND SIGNIFICANCE OF MANAGEMENT

MEANING OF MANAGEMENT

Management, defined as a process of getting things done with the aim of achieving goals effectively
and efficiently.

There are certain terms which require elaboration.

These are (a) process, (b) effectively, and (c) efficiently.

Process in the definition means the primary functions or activities that management performs to get
things done. These functions are planning, organising, staffing, directing and controlling.

Effectiveness in management is concerned with doing the right task, completing activities and
achieving goals. In other words, it is concerned with the end result.

Efficiency means doing the task correctly and with minimum cost.

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Characteristics of Management

(i) Management is a goal-oriented process:

An organisation has a set of basic goals which are the basic reason for its existence.

These should be simple and clearly stated.

Different organisations have different goals.

For example, the goal of a retail store may be to increase sales, but the goal of The Spastics Society of
India is to impart education to children with special needs.

Management unites the efforts of different individuals in the organisation towards achieving these
goals.

(ii) Management is all pervasive:

The activities involved in managing an enterprise are common to all organisations whether economic,
social or political.

A petrol pump needs to be managed as much as a hospital or a school.

What managers do in India, the USA, Germany or Japan is the same.

(iii) Management is multidimensional:

Management is a complex activity that has three main dimensions.

These are: (a) Management of work:

All organisations exist for the performance of some work. In a factory, a product is manufactured, in a
garment store a customer’s need is satisfied and in a hospital a patient is treated.

Management translates this work in terms of goals to be achieved and assigns the means to achieve it.

This is done in terms of problems to be solved, decisions to be made, plans to be established, budgets
to be prepared, responsibilities to be assigned and authority to be delegated.

(b) Management of people:

Human resources or people are an organisation’s greatest asset.

Despite all developments in technology “getting work done through people” is still a major task for the
manager.

Managing people has two dimensions

(i) it implies dealing with employees as individuals with diverse needs and behavior;

(ii) it also means dealing with individuals as a group of people.

(c) Management of operations:

No matter what the organisation, it has some basic product or service to provide in order to survive.

This requires a production process which entails the flow of input material and the technology for
transforming this input into the desired output for consumption.

This is interlinked with both the management of work and the management of people.

(iv)Management is a continuous process:

The process of management is a series of continuous, composite, but separate functions (planning,
organising, directing, staffing and controlling).

These functions are simultaneously performed by all managers all the time.

The task of a manager consists of an ongoing series of functions.

(v)Management is a group activity:

An organisation is a collection of diverse individuals with different needs.

Every member of the group has a different purpose for joining the organisation but as members of the
organisation they work towards fulfilling the common organisational goal.

This requires teamwork and coordination of individual effort in a common direction.

At the same time management should enable all its members to grow and develop as needs and
opportunities change.

(vi) Management is a dynamic function:

Management is a dynamic function and has to adapt itself to the changing environment.

An organisation interacts with its external environment which consists of various social, economic and
political factors.

In order to be successful, an organisation must change itself and its goals according to the needs of
the environment.

You probably know that McDonalds, the fast food giant made major changes in its menu to be able to
survive in the Indian market.

(vii) Management is an intangible force:

Management is an intangible force that cannot be seen but its presence can be felt in the way the
organisation functions.

The effect of management is noticeable in an organisation where targets are met according to plans,
employees are happy and satisfied, and there is orderliness instead of chaos.

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Objectives of Management

(i) Organisational Objectives:

The main objective of any organisation should be to utilise human and material resources to the
maximum possible advantage, i.e., to fulfill the economic objectives of a business.

These are survival, profit and growth.

Survival:
The basic objectives of any business is survival.
Management must strive to ensure the survival of the organisation.
In order to survive, an organisation must earn enough revenues to cover costs.
Profit:
Mere survival is not enough for business.
Management has to ensure that the organisation makes a profit.
Profit provides a vital incentive for the continued successful operation of the enterprise.
Profit is essential for covering costs and risks of the business.

Growth:
A business needs to add to its prospects in the long run, for this it is important for the business to grow.
To remain in the industry, management must exploit fully the growth potential of the organisation.
Growth of a business can be measured in terms of sales volume increase in the number of employees,
the number of products or the increase in capital investment, etc.

(ii) Social objectives:

It involves the creation of benefits for society.

This includes
using environmental friendly methods of production,

giving employment opportunities to the underprivileged sections of society and

providing basic amenities like schools and healthcare, etc., for the community.
(iii) Personnel objectives:

Organisations are made up of people who have different personalities, backgrounds, experiences and
objectives.

They all become part of the organisation to satisfy their diverse needs.

These vary from

financial needs such as competitive salaries and perks,

social needs such as peer recognition and

higher level needs such as personal growth and development.

Management has to reconcile personal goals with organisational objectives for harmony in the
organisation.

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Importance of Management

(i) Management helps in achieving group goals:

Management is required not for itself but for achieving the goals of the organisation.

The task of a manager is to give a common direction to the individual effort in achieving the overall goal
of the organisation.

(ii) Management increases efficiency:

The aim of a manager is to reduce costs and increase productivity

through better planning, organising, directing, staffing and controlling the activities of the organisation.

(iii) Management creates a dynamic organisation:

All organisations have to function in an environment which is constantly changing. It is generally seen
that individuals in an organisation resist change as it often means moving from a familiar, secure
environment into a newer and more challenging one.

Management helps people adapt to these changes so that the organisation is able to maintain its
competitive edge.

(iv) Management helps in achieving personal objectives:

A manager motivates and leads his team in such a manner that individual members are able to
achieve personal goals while contributing to the overall organisational objective.

Through motivation and leadership the management helps individuals to develop team spirit,
cooperation and commitment to group success.

v) Management helps in the development of society:

Management helps in the development of the organisation and through that it helps in the development
of society.

It helps to provide good quality products and services,

creates employment opportunities,
adopts new techno-logy for the greater good of the people and
leads the path towards growth and development

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NATURE OF MANAGEMENT

MANAGEMENT AS AN ART
Art is the skillful and personal application of existing knowledge to achieve desired results. It can be
acquired through study, observation and experience.

The basic features of an art are as follows:

(ii) Personalised application: The use of this basic knowledge varies from individual to individual. Art,
therefore, is a very personalised concept.

(iii) Based on practice and creativity: All art is practical. Art involves the creative practice of existing
theoretical knowledge.

Features of management

1.There is lot of literature available in different areas of management like marketing, finance and human
resources which the manager has to specialise in.

2. A manager applies scientific method and body of knowledge to a given situation in his own manner.

3.A successful manager practices the art of management in day to day life based on study observation
and experience a good manager works through a combination of practice creativity imagination
initiative and innovation

Conclusion:on the basis of above discussion we can say that management is an art as it is concerned
with theoretical knowledge, personal applications and creativity.

Management as a science:

Science is a systematic body of knowledge that explains certain general truth.

1. Science is a systematized body of knowledge.

2. Principle based on experimentation

3. Universal validity

Features of management

1. Management has its own theories, principles, vocabulary and concepts that have developed over a
period of time as it is drawn on other disciplines such as economics, mathematics etc.

2.the principle of management have developed over a period of time based on repeated
experimentation and observation in different types of organisation. However since management deals
with human beings and human behaviour the outcome of these experiments is not capable of being
accurately predicted and tested in laboratories.

3.Since the principles of management are not as exact as the principle of science.Their application and
use is not universal they have to be modified according to the given situation.

Conclusion: Based on above features we can say that management has some characteristics of
science but not all so we can say that management is an exact science or soft science it is not a pure
science like Physics and Chemistry.

Management as a profession

a profession is an occupation backed by specialised knowledge and training.

Features of profession

1. Well defined body of knowledge

2. Restricted entry
3. Professional association
4. Ethical code of conduct
5. Service Motive
Features of management

1. management based on a systematic body of knowledge comprising well defined principle based
on variety of business situation which is taught in different institutions like IIM's
2. There are no restrictions on appointment as manager in any business but now in the present
scenario professional knowledge and training is concerned to be a desirable option as those
who possess a degree are more in demand.
3. there are several association of practicing manager in India like a AIMA that have laid a code of
conduct however it is not necessary for managers to join them.
4. AIMA HAS A DEVISED A CODE OF CONDUCT FOR INDIAN MANAGERS BUT IT IS NOT
COMPULSORY FOR ALL THE MANAGERS TO FOLLOW THAT CODE OF CONDUCT.
5. The basic purpose of management is to help the organisation in achieving its stated goal which
is profit maximization in case of the most of the organisation ever most of the managers are
salaried people they do not charge fees.

Conclusion: management is not a full fledged profession but it is becoming a profession.

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LEVEL OF MANAGEMENT

There are 3 levels of management: -

a.Top level management: It consists of :
 board of directors,
chairman,
chief executive officers,
chief operating officer,
GM,
MD,
Vice president & president. (all chief)

Functions of top level management-

❖ The top level managers frame the policies to achieve the determined objectives.
❖ The top level managers assign jobs to different persons working at the middle
❖ Top level managers set overall organizational goals & objectives.
❖ They arrange all the finance required carrying on day-to-day activities & they arrange
finance for buying fixed assets.
❖ Their basic task is to integrate, co-ordinate & control the activities of different
departments for the achievement of objectives of the organization.

b.Middle level management:

It consists of
departmental heads,
plant superintendent,
operational managers,
division managers etc. (all managers except GM)

Function of middle level management: -

● Interpretation of plans & policies framed by top level management to lower level management
● Organizing resources & activities of their concerned department.
● Motivating the personal for higher productivity to achieve desired objectives.
● Co-operating with other departments so as to ensure smooth functions of the organization
● Collecting reports, statistical information & other records about the work of their respective
department & forwarding them with their observation to the top management.

This level consists of

supervisors,
foremen,
inspectors, etc

Functions of lower level management: –

● They maintain discipline among workers.
● They welcome suggestions from workers for better working conditions.
● They help management in selection, training & promotion of workers.
● They look after safety of workers & safeguard at all critical points to avoid accidents.
● They represent grievances before the middle level management.
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Functions of Management

a.Planning — It is the primary function of deciding in advances: What to do, How to do, When to
do & By whom it is to be done.

b.Organizing — It involves — grouping of the required task into manageable departments &
establishment of authority & reporting relationship within the organization.

c.Staffing — It makes sure that the right people with right qualification are available at the right
place for achievement of organizational goal. Finding the right people for the right job is known
as staffing.

d.Directing — It involves instructing, guiding, leading, influencing & motivating employees to

perform the task assigned to them.

e.Controlling — It involves establishing a standard of performance, measuring actual

performance, comparing it with established standards & taking corrective action where any
deviation is found.
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CO–ORDINATION The process by which a manager synchronizes the activities of different

departments is known as coordination.

Coordination is the essence of management

Coordination is the force that binds all the functions of management. It is called an essence of
management because it is required in every function of management.

a.In planning:- Coordination is required between the master plan & supportive plans of different
department.

b.In organizing:- Coordination is required between different resources of an organization &

activities to be performed.

c.In staffing:- Co ordination is required between Skills of a person & job assigned to him and
Between efficiency & compensation.

d.In directing:- Coordination is required between superior & subordinate, between orders,
instructions, & suggestions etc.
e.In controlling:- In this function, coordination is required between standards & actual
performance.

Nature of coordination

a.Coordination integrates group efforts:- It gives a common focus to group efforts to ensure that
actual performance is as per the planned performance.

b.Coordination ensures unity of action:- It acts as the binding force between the departments &
ensures that all actions are aimed at achieving the goal of organization.

c.Continuous process:- It begins at the planning stage & continues till controlling.

d.Co-ordination is a pervasive function:- Coordination is required at all levels of management &

in all departments of organization.

e.Co-ordination is the responsibility of all managers:- Coordination is the function of every

manager in an organization i.e. Top level managers, Middle level management & Operational
level management.

f.Co-ordination is a deliberate function:- A manager has to coordinate the efforts of different

people in a deliberate manner even when members of a department willingly co-ordinate &
work.

Importance of coordination

a.Growth in size:- As organization grows, the numbers of people also increase. At times, it may
become difficult to integrate their efforts & activities through coordination.

b.Functional differentiation:- However, all departments & individuals are interdependent & they
have to depend on each other for information to perform their activities. The process of linking
the activities of various departments is accomplished by coordination.

c.Specialization:- Specialization arises out of the modern technology & the diversity of tasks to
be performed. Some coordination is required by an independent person to reconcile the
difference in approach.
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