Chapter - 1

Nature & Significance of Management

Management is an art of getting things done with and through others. Management can be defined as, the process
of getting things done with the aim of achieving organizational goals effectively and efficiently.

Basis of Difference Effectiveness Efficiency

1. Meaning It refers to completing the job on It refers to completing the job in
time, no matter whatever the cost. the cost effective manner
2. Objective To achieve end result on time To conduct cost-benefit analysis.
3. Main Consideration Time Cost

Characteristics of Management:
1. Goal oriented Process: It is a goal oriented process, which is undertaken to achieve already specified and desired
objectives by proper utilization of available resources.

2. Pervasive: Management is universal in nature. It is used in all types of organisations whether economic, social or
political irrespective of its size, nature and location and at every level.

3. Multidimensional:It is multidimensional as it involves management of work, people and operations. Every

organisation is established for doing some work like school provides education, a factory produces goods etc. The
management has to ensure the participation, of its people in the realisation of the organisation goal. Also
management needs to conduct the various operations such as production, sale, purchase etc.

4. Continuous: Management is not a process which can be performed once and for all, but it is a continuous process.
Functions of management like planning, organising, staffing, directing and controlling continuously need to be done.

5. Group Activity: It is a group activity since it involves managing and coordinating activities of different people as a
team to attain the desired objectives.

6. Dynamic function:It is a dynamic function since it has to adapt according to need, time and situation of the
changing environment in order to be successful, an organisation must change itself and its goals. For example,
McDonalds made major changes in its ‘Menu’ to survive in the Indian market.

7. Intangible Force:Management is such a force that cannot be seen, only its presence can be felt. When the goals of
an organisation are being realised in accordance with its plans, we can say that the management of the organisation
is good.

Objectives of Management
Objectives can be classified into organistional objectives, social objectives and personal or individual objectives.
Management has to achieve these objectives in an effective and efficient manner.
1. Organisational/Economic objectives: Organisation should utilize human and material resources to the
maximum possible advantage. These are survival, Profit & growth.
• Survival– An organisation can survive when it earns enough revenue to cover costs.
• Profit– After achieving the objective of survival, organisation should move towards earring profit for
covering costs & risks of business.
• Growth– Besides earning profits a business must grow in the long run in order to remain in the industry. A
business can grow by increasing sales volume, no of employees, product & capital investment.
2. Social objectives: It involves fulfilling obligations towards society. This includes.
• Creating employment opportunities for society.
• Providing/Producing good quality products & services.
• Protecting environment.
 3. Personal objectives: Personal objectives are concerned with satisfying needs of the employees such as:
• Giving competitive salary and perks to employees.
• Giving recognition to employees.
• Satisfying diverse needs of employees.

Importance of Management
1. Achieving Group Goals: Management creates team work and coordination in the group. Managers give
common direction to individual efforts in achieving the overall goals of the organization.
2. Increases Efficiency: Management increases efficiency by using resources in the best possible manner to
reduce cost and increase productivity.
3. Creates Dynamic organization: Management helps the employees overcome their resistance to change and
adapt as per changing situation to ensure its survival and growth.
4. Achieving personal objectives: Management helps the individuals achieve their personal goals while working
towards organisational objectives.
5. Development of Society: Management helps in the development of society by producing good quality
products, creating employment opportunities and adopting new technology.

Management as an Art
Art refers to skillful and personal application of existing knowledge to achieve desired results. It can be acquired
through study, observation and experience.
The features of art as follows:
1. Existence of theoretical knowledge: In every art, systematic and organized study material should be available
compulsorily to acquire theoretical knowledge.
2. Personalised application: The use of basic knowledge differs from person to person and thus, art is a very
personalised concept.
3. Based on practice and creativity: Art involves the creative practice of existing theoretical knowledge.
In management also a huge volume of literature and books are available on different aspects of
management. Every manager has his own unique style of managing things and people. He uses his creativity in
applying management techniques and his skills improve with regular application. Since all the features of art are
present in management so it can be called an Art.

Management as a Science
Science is a systematised body of knowledge that is based on general truths which can be tested anywhere and
anytime.
The features of Science are as follows:
1. Systematized body of knowledge: Science has a systematized body of knowledge based on principles and
experiments.
2. Principles based on experiments and observation: Scientific principles are developed through experiments and
observation.
3. Universal validity: Scientific principles have universal validity and application. Management has systematic
body of knowledge and its principles are developed over a period of time based on repeated experiments &
observations which are universally applicable but they have to be modified according to given situation.
Conclusion: -As the principles of management are not as exact as the principles of pure science, so it may be
called-an inexact science. The prominence of human factor in the management makes it a Social Science.
Management as Profession
Profession means an occupation for which specialized knowledge and skills are required and entry is restricted.
The main features of profession are as follows:
1. Well-defined body of Knowledge: All the professions are based on well-defined body of knowledge.
2. Restricted Entry: The entry in every profession is restricted through examination or through some minimum
educational qualification.
3. Professional Associations: All professions are affiliated to a professional association which regulates entry and
frames code of conduct relating to the profession.
4. Ethical Code of Conduct: All professions are bound by a code of conduct which guides the behavior of its
members.
5. Service Motive: The main aim of a profession is to serve its clients.
Conclusion:-Management does not fulfil all the features of a profession and thus it is not a full-fledged
profession because anybody can proclaim to be a manager; prescribed compulsory educational degree or license
is not required. Besides there are not any formal ethical codes which are required to be observed.

Levels of Management: Top, Middle and Operational Levels “Levels of management” means different
categories of managers, the lowest to the highest on the basis of their relative responsibilities, authority and
status.
Top Level
Consists of Chairperson, Chief Executive Officer, Chief Operating Officer or equivalent and their team. Chief task
is to integrate and to coordinate the various activities of the business, framing policies, formulating
organisational goals & strategies bearing the responsibility for the impact of activities of the business on society.
Middle Level
Consists of Divisional or Departmental heads, Plant Superintendents and Operation Managers etc. Main tasks
are to interpret the policies of the top management, to ensure the availability of resources to implement
policies, to coordinate all activities, ensure availability of necessary personnel & assign duties and responsibilities
to them.
Lower Level/Supervisory Level - Consists of Foremen and Supervisor etc. Main task is to ensure actual
implementation of the policies as per directions, bring workers’ grievances before the management & maintain
discipline among the workers, maintain the quality of output and minimise wastage.

Functions of Management / Elements of Management

(1) Planning implies setting goals and objectives in advance and developing a way of achieving them.
(2) Organising is to assign duties, grouping tasks, establishing authority and allocating resources required to
carry out a specific plan.
(3) Staffing is finding the right people for the right job by following a series of steps and includes training and
development.
(4) Directing is leading, influencing and motivating employees to perform the tasks assigned to them. It includes
four activities: - Supervision, Communication, Leadership and Motivation.
(5) Controlling is monitoring the organizational performance towards the attainment of the organizational goals.
Co-ordination
Coordination is to synchronise the various activities of an organisation. In the context of business unit, the
meaning of coordination is to balance its various activities (purchase, sales, production, finance, personnel etc.)
so that objective of business can be easily achieved. Lack of coordination results in overlapping, duplication,
delay and chaos.
Characteristics of Coordination
1. Coordination integrates group efforts: It integrates diverse business activities into purposeful group activity
ensuring that all people work in one direction to achieve organizational goals.
2. Coordination ensures unity of action: It directs the activities of different departments and employees towards
achievement of common goals and brings unity in individual efforts.
3. Coordination is a continuous process: It is not a specific activity matter, it is required at all levels, in all
departments till the organization continues its operations.
4. Coordination is all pervasive function: It is universal in nature. It synchronizes the activities of all levels and
departments as they are interdependent to maintain organizational balance.
5. Coordination is the responsibility of all managers: It is equally important at all the Three-Top, Middle and
Lower levels of management. Thus it is the responsibility of all managers that they make efforts to establish
coordination.
6. Coordination is a deliberate function: Coordination is never established by itself rather it is a conscious effort
on the part of every manager. Cooperation is voluntary effort of employees to help one another. Effective
coordination cannot be achieved without cooperation of group members.
Coordination is the Essence of Management.
Coordination is not a separate function of management. It is the force that binds all the functions & thus, called
the essence of management.
It is needed in all management functions:
Planning – Coordination between the master plan and departmental plan.
Organising – required between authority, responsibility and accountability
Staffing – Achieve balance between job requirement and qualities of personnel
Directing – Required between supervision, motivation and leadership.
Controlling – Ensure actual result conform to expected results.
Needed at all levels of management..
Top level – needs coordination to integrate activities of the organisation for accomplishing the organisational
goals.
Middle level– Coordination of the efforts of different sections and sub-sections
Lower level – Coordination in the activities of workers to ensure work progresses as per plans

NEED FOR COORDINATION

The reasons that bring out the importance or the necessity for coordination are:
1. Growth in the size of the organisation results in the increase in varied quality of manpower too with varied
individual aspirations. Coordination seeks to match the individual goals with the organisational goals.
2. Functional Differentiation arising out of departmentalisation and division brings forth a motive for
achievement of individual objectives, in isolation from other objectives leading to departmental clashes.
Coordination seeks to iron out these variations.
3. Specialisation can give rise to feeling of superiority and prioritising of their zone or activities. Coordination
seeks to sequence and integrate all the specialist of activities into a wholesome effort.
 ***********

S.No. CONCEPTS KEYWORDS

1 Management • Deliberate process
• Group Activity
• Term used for taking charge of different
activities
• Guiding activity for achievement of
goals
• Concerned with efficient use of
resources.

2 Effectiveness • Finishing the task

• Doing right task
• Completing activities
• Concerned with end result.
3 Efficiency • Doing the task correctly
• Minimum cost
• Cost-benefit analysis
• Less input more output.
4 Input Resources • Money, Materials, Equipments and
persons
5 Poor management • Inefficiency and ineffectiveness
results in
6 Nature of • Art or Science or Profession
Management
7 Management as an • Observation
Art • Experience
• Personalised application

8 Management as • Systemised body of knowledge

Science • Experimentation
• Universal validity

9 Management as • Emphasis on managed business

Profession concerns
10 Levels of • Hierarchy
Management • Authority-responsibility relationship
11 Co-ordination • Process
• Synchronize
• Force
• Common thread
• Minimum of conflict
• Integration of efforts

***********