Management: Concept, Definition and Process

After reading this article you will learn about Management:- 1. Concept of Management 2. Definitions of Management 3. Process 4. Principles 5. Comments.

Concept of Management:

One way to analyse management is to think in terms of what a manager does. Using this approach, we can arrive at the management process which describes the work of any manager.

The management work can divided into a few basic functions of management, viz:

(1) Planning,

(2) Organising,

(3) Directing,

(4) Controlling.

Planning is the determination of objectives and formulation of plans, strategies, programmes, policies, procedures and standards needed to achieve the desired organisation objectives. To implement the plans there must be some organisation structure.

The human and material resources or inputs are allocated to the various units and relationships are established among the sub-units. Organising is the second function of a manager. Organising is the process of developing a structure among people, function, and physical facilities to execute the plans and achieve stated objectives.

The third function of a manager is that of directing stimulating and motivating people in the organisation to undertake willingly the desired actions as per predetermined plans and objectives. Motivation is an integral part of direction to assure desired results.

The fourth and final function of management is that of controlling to assure directed action as per plans and objectives. Controlling incorporates the establishment of standards, measurements and comparison of actual results against the standard, and necessary corrective action to remove deviations from the plan.

Experts agree that management is a distinct type of activity primarily responsible to get things done through other people, and it is different from all other types of human activities. Similarly they also agree that all managerial functions are universal and all managers in any field of human efforts perform those typical managerial functions irrespective of what they are managing.

However, we do not have unified views of authorities on what are the managerial functions and what is management precisely. The differences of opinion and approach are reflected in the following often quoted definitions of management.

1. “To manage is to forecast, to plan, to organise, to command, to co-ordinate and to control.” —Henry Fayol. It attempts to describe management in terms of what a manager does, and not what management is.

2. “Management is a multipurpose organ that manages a business and manages manager, and manages worker and work.”— P. Drucker: The Practice of Management

Drucker stresses three jobs of management:

(i) Managing a business;

(ii) Managing manager; and

(iii) Managing workers and work.

Even if one is omitted, we would not have management any more and we also would not have a business enterprise or an industrial society. According to P. Drucker, the manager has to balance and harmonies three major functions of the business enterprise.

Hence, a manager is a dynamic and life-giving element in every business. Without efficient management we cannot secure the best allocation and utilisation of human, material and financial resources.

Definitions of Management:

(i) Generalized Definition of Management:

Management is a distinct ongoing process of allocating inputs of an organisation (human and economic resources) by typical managerial functions (planning, organising, directing and controlling) for the purpose of achieving stated objectives, viz., output of goods and services desired by its customers (environment).

In the process, work is performed with and through personnel of the organisation in an ever-changing business environment.

This definition include principal ideas of any school of management thought:

(1) Functional school sees management as a process of planning, organising, directing and controlling.

(2) Behavioural school is not interested in the process only but rather in the way the process affects the organisation, i.e., with and through personnel or human resources.

(3) Quantitative school wants to improve the quality of decision making, i.e., fulfilling the stated objectives of the enterprise.

(4) Systems approach concentrates on the entire organisation, i.e., inputs-process-outputs.

(5) Contingency approach emphasises dynamic nature of management process in an ever-changing business environment.

(ii) Precise Definition of Management:

Let us formulate a precise definition of management. It should be the basis of our study of the principles of management. The substance of management should be identified as a process. A process is something that a person does.

A process also implies ongoing and unceasing cyclical operations. In management we have planning-action-control cycle. Our definition must incorporate this management cycle. A process indicates the dynamic nature of management.

It also implies that change is a constant reality of organisational life and management is the management of change. Lastly, management is regarded as a social process because it is directly concerned with management of human resources in order to secure co­operation and teamwork from the people in their performance,

There are twin purposes of the management process:

(1) Maximum productivity or profitability and

(2) Maximum human welfare and satisfaction.

There are five parts to a definition of management as a process: first, the co-ordination of resources; second, the performance of managerial functions as a means of achieving co-ordination; the third, establishing the objective or purpose of management process, i.e., it must be purposeful managerial activity; the fourth aspect is that management is a social process, and the fifth is its cyclical nature.

Let us describe each part separately:

1. Management is Co-Ordination:

The manager of an enterprise must effectively co­ordinate all activities and resources of the organisation, namely, men, machines, materials and money the four M’s of management.

2. Management is a Process:

The manager achieves proper co-ordination of resources by means of the managerial functions of planning, organising, staffing, directing (or leading and motivating) and controlling.

3. Management is a Purposive Process:

It is directed toward the achievement of pre­determined goals or objectives. Without an objective, we have no destination to reach or a path to follow to arrive at our destination, i.e., a goal, both management and organisation must be purposive or goal-oriented.

4. Management is a Social Process:

It is the art of getting things done through other people.

5. Management is a Cyclical Process:

It represents planning-action-control-re-planning cycle, i.e., an ongoing process to attain the planned goals.

(iii) Management — an Art, A Science or A Profession?

Science implies existence of a body of knowledge in a systematized form based upon careful observation, accurate measurement, experimentation and inferences or conclusions derived from detailed analysis of data, i.e., facts and figures.

The knowledge is verifiable through experiments giving us the cause-effect phenomenon. In other words, science provides the theory, principles and the laws on any branch of human knowledge. Science gives knowledge which in turn gives power for application.

Management is a developing science. It has now evolved certain basic principles and elements in the form of process of management which has universal application in each branch of human activity profit-making as well as non-profit organisations. However, management is riot comparable to exact sciences like physics, chemistry, biology, etc. It deals with human beings and it is a social science like the science of economics.

It is quite obvious that principles of management are not fundamental truths and their application may not yield the desired results always. Human behaviour is ever-changing and most unpredictable. It is not governed by the laws of mechanics.

A human being is not an inanimate machine. Hence, management dealing with complex human beings is bound to be an inexact science. Even then theoretical base of knowledge is essential for developing sound practice. In fact, theory must be supplemented by practical knowledge continuously. Science and art are complementary and each supplements the other.

Art reflects practical application of knowledge and it is perfected through knowledge and experimentation. Art is not only based on knowledge but it derives its inspiration through intuition, inspiration and such other purely subjective attributes.

A manager is not only a scientist but also an artist. As a scientist, he relies on the existing theory and philosophy of management and develops new knowledge, new principles and new schools of management thought.

As an artist, he has to depend on his own experience, intuition and judgment while making a decision on any managerial problem and taking action on the decisions to realise the set objectives. Scientific attitude and scientific method shall be applied in problem-solving approach, e.g.. marketing research, business research, etc. But decision making cannot be totally reduced to science.

In reality, human judgement and experience enjoy the veto power in decision and as a decision-maker a manager is an artist. In the ultimate analysis, decision making, the heart of management, is an Art, to be acquired by conscious effort and practice.

‘Knowledge is power’ is an old saying. But to be correct the saying should be ‘Applied knowledge is power.’ Neither science should and the art of management go together hand-in-hand and both are mutually interdependent and complementary. Theoretical teaching of medicine and engineering is almost invariably accompanied by practical work in a hospital or workshop.

Planning and organising are called mechanics of management and indicate emphasis on the science of management, whereas direction (including communication), motivation, co­ordination and control are the dynamics of management emphasizing the art of management. Getting work done through people is an art of management.

It is a tough job demanding initiative, drive, tact, discretion and other higher qualities. We need artistic managerial ability to perform a managerial job. The art of management is fully reflected in the decision making capacity of a manager. Judgment and imagination are essential even in a computerised economy. A computer cannot replace a manager in decision making.

“A professional manager is one who specialises in the work of planning, organising, leading and controlling the efforts of others and does so through systematic use of classified knowledge, a common vocabulary and principles and who subscribes to the standards of practice and code of ethics established by recognised body.” — Louis A. Alien.

Managerial revolution has brought about separation of management from ownership in corporate management in all countries slowly but steadily. Hence, management is assuming a professional character during the last three decades.

1. Body of Knowledge:

Management has now developed a specialised body of management theory and philosophy. Management literature is growing in all countries. In fact, management knowledge is the best passport to enter the world of employment.

2. Management Tools:

Topis of management have been developed such as, accounting, business law, psychology, statistics, econometrics, data processing, etc. These branches of management profession have enhanced the practical utility of the science of management.

3. Separate Discipline:

Management studies in many universities and institutions of higher learning are recognised as a separate discipline. Since, 1951, we have even specialised schools of management offering master’s degree in business management and administration.

Seminars, special courses, training programmes are becoming fashionable and popular for orientation and retraining in management areas, e.g., export management, personnel management, general management, production management, marketing management, financial management, etc.

4. Specialisation:

There is a growing tendency to select and appoint highly qualified, trained and experienced persons to manage the business in each functional area of management. Thus we have today an increasing tendency in favour of management by experts or professionals.

5. Code of Conduct:

Enlightened businessmen have recognised that business management is a social institution and it has social responsibilities to be fulfilled — towards customers, employees, and the public or community. Corporations have now social conscience and awareness.

Consumer-oriented marketing concept is the reflection of a corporate code of conduct. Pressure of consumerism, trade unionism, public opinion, and legislation are definitely inducing the management to evolve a code of ethics. No longer ‘buyer beware’ is ruling the exchange relations in the market. Now we have ‘seller beware’ in place of ‘buyer beware’ influencing market practices.

6. Professional Association:

We have now Business Management Associations in many countries to promote the spread of knowledge in all management areas and to build up the bright public image of managerial profession.

Process of Management:

Principles of Management:

Followers of Fayol gave other principles of management such as universality of management, control by exception, equality of authority and responsibility, power and accountability and co-ordination.

By introducing two modifications in Fayol’s concepts, we could easily install the foundation of modern management theory:

(1) Management is the planning, organising, command, co-ordination and control of technical, financial, commercial, accounting and security activities.

(2) It is not command but motivation which can help us to understand why men and women work and how to secure from them maximum productivity.

Thus we substitute motivation for command. Direction and command are not enough to get things done through people. The manager of today has to encourage, communicate, develop and stimulate his employees to secure higher output. Modern management places the greatest emphasis on motivation as the key to productivity.

The pattern of management that developed in Du Pont Company had a far-reaching influence on modern business enterprise. The writings of Taylor and Fayol stimulated further investigations into the theory of management and its application to business. The example of Du Pont provided a pattern that was followed with great success by many other companies.

The works of Taylor and Fayol the two pioneers in the evolution of managerial thought are in reality complementary:

(1) They both pointed out that the problem of personnel and its management at all levels is the master-key to industrial productivity and progress.

(2) Both implied scientific approach and scientific method to solve the management problems.

(3) Taylor worked primarily on the operative level from the bottom of the organisation hierarchy upwards. Whereas Fayol concentrated on the Managing Director and worked downwards on the organisation hierarchy.

(4) Both, however, stressed on the technical or professional aspects of the management and both are responsible for the managerial revolution which took place after 1940.

Comments on Management:

(1) Management is a social process.

(2) It is directly in charge of allocation, utilisation and co-ordination of all human and material resources to be produced from the business environment or Society. The environment provides these resources as inputs to a business enterprise. Most of these resources are scarce and have alternative uses. Management has to evolve an optimum combination of these resources or inputs.

(3) The resources are co-ordinated and integrated by the management through performing the typical managerial functions, viz., planning, organising, staffing, directing, motivating, communicating and controlling. These functions constitute the process of management. The basic resources are subjected to fundamental functions of management.

(4) Management process is necessary to determine the objectives and goals and to take appropriate action, i.e., implement the plan in order to accomplish the stated objectives. Controlling ensures performance as per plan and enables the management to remove the deviations, if any, between the actual results, and expected results.

(5) As people are our greatest resources, management has a special responsibility to create favourable work environment and ensure maximum employee morale and productivity. Hence, management has not only to manage the business but also to manage both managers and workers.

Motivation and leadership are the two unique managerial functions or activities to ensure maximum use of human resources without sacrificing human welfare and human satisfaction.

(6) As a manager, you will be called upon to play different roles under different situations, such as planner, coordinator, leader, liaison (connecting link), monitor, spokesman, disseminator of information, risk-bearer, resource allocator, negotiator, disturbance handler, resolver of interpersonal and interdepartmental conflicts, and so on.

(7) Classical or bureaucratic management is appropriate where the environment is relatively unchanging. Behavioural and organic management is appropriate where the environment is dynamic, and innovation and creativity are at a premium.