Read this article to learn about management: meaning, efficiency and effectiveness, relation with administration and significance!


Management has several meanings, depending on context and purpose.


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It is used as a known, subject, trickery and process. As a known, the term management refers to individuals who exercise leadership in the organization. Thus, the boards of directors of a company, the executive council of a university, and the board of trustees of a trust, make up the management of their respective organization.

Management as a subject refers to a branch of knowledge and practice. Management is an organized and formal discipline, which is researched and taught in institutions of higher learning. As trickery manage­ment is also used in the sense of artifice practice or doing something by hook or by crook. For example, if you say to a train conductor that manages a berth at any cost; it denotes to manage in trickery sense.

As a process, management refers to the procedure or functions as planning, organizing, directing, controlling and coordinating. Though used in a variety of ways, the term management is often used in the sense of a process.

Efficiency and Effectiveness:

Managerial skills require efficiency and effectiveness both. But the distinction between efficiency and effectiveness is very important to explain why some managers are effective but highly inefficient, or highly efficient but ineffective.


Effectiveness is not the same thing as efficiency. Efficiency means ‘doing things right’ and effectiveness means ‘doing right things’. Efficiency is the ability to get things done correctly. It is an engineering concept implying an input-output relationship. It concentrates on the technical side of performance.

Managers who are able to minimize the cost of output are treated efficient. On the other hand, effectiveness is the ability to choose appropriate objectives. An effective manager is one who choose the right things to get done. For example, a manager who selects to produce only large cars while the demand for small car is increasing. Such manager would be ineffective even if the large cars are produced with maximum efficiency and low cost.

If the customers are not willing to buy the product, all efforts would become meaningless. Modern management should focus on doing effective (result-oriented) activities in an efficient (cost-saving) manner.

Effectiveness is a broad concept, which centres more on human side. Efficiency is a limited concept and centres more on technological side. Effectiveness focuses on internal and external both factors of the organization, where efficiency takes into account only the internal factors. For example, two workers, using the same amount of resource, produce ten and twelve units in one day.


Obviously the second worker is more efficient. But if the second worker breaks a tool in the pro­duction process, the first worker may be treated more effective. Manager should be both effective and efficient, but effectiveness is more important Drucker opines that effectiveness is the key to the success of an organization. Effectiveness rather than efficiency is essential to business management. The pertinent question is not how to do things right, but how to find the right things to do, and to concentrate resources and efforts on them.

Management and administration:

A question is often raised whether the task of administra­tion is the same or different as of management. Some writers demarcate the two terms and others totally ignore such demarcation. The terminological conflict between administration and management can be expressed from three angles:

1. Management is a part of administration:

According to American School of thought administration is broader than management. Administration determines the specific goals and policies and management are concerned with carrying out the policies laid down by the administration.

In the words of W.R. Spriegel, “administration is largely determinative, whereas management is essentially executive.” So we can say that administration thinks, management acts, adminis­tration is a top level activity and management is a lower level function.


For example, in the university set-up the Governor (Chancellor) is administrator and the Vice Chancellor is manager. If Chancellor thinks that the under-graduate examinations should be over before the month of July.

Now, the Vice-Chancellor will make effort to achieve this target. The Chancellor is administrator for the V.C. But V.C. is administrator also for the various Head of the Departments. Each authority performs both-administrative and managerial work.

2. Administration is a part of management:

According to British School of thought, management is a wider term than administration. Management is comprehensive term and planning organizing, directing, controlling and coordinating are its fundamental functions. Management is the rule making body and administra­tion handles the current problems that may arise in carrying out the policies laid down by management.

3. Administration and management are synonymous:

Some modern management writers like Harold Knootz, Earnest Dele, William Newman and Dalton E. McFarland consider both the terms synonymous. According to them any attempt to distinguish the two may be self-defecting and misleading.


The manager and administrator both have to perform ‘thinking and doing’ functions. The have to wear both the hats gracefully in order to be effective and successful. Keith Davis has attempted to resolve the theoretical contro­versy. He divided the comprehensive management process into two groups:

(a) Top level management function as administrative management and

(b) Lower level management function as operative management.

In fact, any water-proof compartmentalization may be of use in academic circles but from a practical point of view it is of no use to draw the curtain between management and administration. But for the sake of convenience the following distinction may be useful:


1. Administration is concerned with determining the major policies and objectives of the business enterprise. It refers to the owners of the enterprise. Management is concerned with executive function and refers to the employees of the enterprise.

2. Administrators are ‘thinkers’ concerning decision making whereas managers are ‘doers’ concerning implementation task.

3. Top level personnel are in-charge of administration but middle and lower level personnel are in-charge of management.

4. Administrators are not directly concerned with the achievement of the goal of the business and managers are directly concerned.


5. In case of governmental functioning such as health, hygiene, education, police, fiscal tax and monetary areas the word administration is used. But in industrial and business sector the word management is treated more proper.

Significance of management:

When a business is organized it has compulsion to be managed. ‘No business runs on itself, even on momentum. Every business needs repeated stimulus which can only be provided by management.’ Management is the brain behind the organization. It is the life-giving element without which the resources of production will remain as mere resources and not became production.

Urwick and Brech have rightly stated, “No ideology, no ism, no political theory can win a greater output with less effort from a given complex of human and material resources, than only sound management.” The importance of management can be summarized as follows:

(i) Management creates a vital and dynamic life-giving force in the organization.

(ii) It directs and controls the organization just as mind directs and controls the body.

(iii) Through innovation the management provides new ideas and vision to the organization.


(iv) There are seven ‘M’s in the business-men, materials, methods, money, machines, market and management. Management stands at the apex and controls all other elements.

(v) It provides basic plans, projects and strategy to the business.

(vi) It helps to provide dynamic leadership, increases productivity and brings down operational costs of business.

(vii) It ensures uninterrupted flow of work, maximum results and minimum friction.

(viii) Management is the best friend, philosopher and guide to every business.

(ix) Management is an economic resource by itself. It connects the missing link of our society by directing the way through which a work can be perfectly accomp­lished.


(x) Management skill can fruitfully utilize capital and economies the use of raw materials, money and machines.

(xi) It accelerates economic growth and stimulates flares of economic activities.

(xii) Management is the most powerful prime mover for bringing about social justice. Its importance is very large in underdeveloped and developing economies, where resources are acutely limited and wants are ever growing. Management helps to reconcile the contradictory currents for the maximum benefits to the society.