Everything you need to know about management. Management means many things to many people. There is no dearth of people who consider management as to command others.
To many others, management is nothing more than checking managerial work and putting signatures here and there. Trade unionists consider management as an exploiting set of people.
Management is not today’s concept. It has been in use since the existence of civilization. The uncivilized societies had to manage their survival but with time and experience the societies became civilized and so came the rules and regulations governing commercial and non-commercial activities of a society. Theoretical relationships and experiences of managers led to development of principles and practices of management.
Learn about:-
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1. What is Management? 2. Evolution of Management 3. Definitions 4. Concept 5. Objectives 6. Nature 7. Characteristics 8. Purpose
9. Importance 10. Functional Areas 11. Role 12. Techniques 13. Management and Resources 14. Administration and Management 15. Universal Applications in Future.
What is Management: Definitions, Concept, Objectives, Nature, Characteristics, Objectives, Importance, and Other Details
Contents:
- What is Management?
- Evolution of Management
- Definitions of Management
- Concept of Management
- Objectives of Management
- Nature of Management
- Characteristics of Management
- Purpose of Management
- Importance of Management
- Functional Areas of Management
- Role of Management
- Management Techniques
- Management and Resources
- Administration and Management
- Universal Applications of Management in Future
What is Management?
Management means many things to many people. There is no dearth of people who consider management as to command others. To many others, management is nothing more than checking managerial work and putting signatures here and there. Trade unionists consider management as an exploiting set of people.
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Members of the Board of Directors may look at it in terms of the meetings they attend, the fees they collect and the resolutions they pass. Management students join the issue by equating management with a course of study open to a select few. Some say it is an art of getting things done.
Some others say it is a full-fledged science with a systematic body of knowledge. Management is all these, and much more. Management, in its true sense, is what management does. Management is a process, and let us say, universal process, by which an organisation realises its objectives in a planned way.
Today’s business management practices demand an integrated management approach considering prime factors such as ethics, global environment and quality, which are really challenging for modern managers. Managing the business in real time, is more an amazing and learning experience from the theoretical aspects that may be understood from studying some management related material.
But basic principles of management have to be studied to understand the domain of management. This domain focuses on the sub functional management areas such as production, finance, marketing, HRD and other general management issues.
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In the present-day industrial world, management has become universal. With the increase in the complexities of management of business concerns, the importance of ‘management’ has increased enormously. The principles of management are being applied not only for managing business concerns, but also to manage various other institutions like hospitals, educational and social institutions and government. Management occupies such an important place in the modern world that the welfare of the people and the destiny of the country are very much influenced by it.
Marshall E. Demock has rightly stated that “The management is not a matter of pressing a button, pulling a lever, issuing an order it is the power to determine what shall happen to the personalities and happiness of the entire people, the power to shape the destiny of a nation and of all the nations which make up the world.”
Peter F. Drucker, considered as the “Father of Management”, in his book “Management: Tasks, Responsibilities and Practice” states three vital tasks of management.
(i) “To determine the goals and mission of the organisation,
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(ii) To make work productive and the worker achieving,
(iii) To take care of social impacts and responsibilities.”
Of these three tasks, second task assumes priority. Human resource of the organisation is the real resource. This resource has to be effectively managed to achieve high productivity from this. Managers have to co-operate with human elements in and out of the organisation. They have to coordinate each human element to attain the organisational goals.
What is Management – Evolution: Contribution of Some Eminent Personalities in the Field of Management: Marry Parker Follet, F.W.Taylor, Henry Fayol and a Few Others
Evolution of management thought can be traced back to a very ancient period as 1300 BC, in Egypt, China and Rome. This concept has an origin from the Roman Catholic Church, Military organization and Cameralist (Cameralist was a group of German and Austrian administrators). In the 19th century we can see the contributions of pioneers like Charles Babbage, Robert Owen, Charles Dupin and many others.
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Management thought has, therefore, come into being due to inter-related development of many factors in the past. Among all these, industrial revolution and pioneers’ contributions are significant in this respect.
Considering the extreme necessity for the study of management today, one can understand that development of a theory was retarded in the past many years, due to the following reasons –
i. Prior to industrial revolution, business was regarded as a degrading occupation.
ii. There was a strong feeling that management was a mere mechanical action of reproduction of goods by machine with the help of resources.
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iii. There was no distinction between human and material resources.
iv. In the olden days, economists failed to pay much attention to the fact that the industrial wealth contributed to material wealth.
The logic of a series of changes and complexities of business compelled businessmen to develop a theory for management. Introduction of new ideas like specialisation, separation of ownership, the regulatory measures of government and also the rise of labour unions were a serious concern to businessmen in their task of management.
Management as a social science became prominent, due to a systematised body of knowledge pertaining to an area of study. It contained some general truth giving past events and phenomena. Management provided a set of principles for guidance in the solutions of specific management problems. It also helped in objective evaluation of the results. The art of management is the application of skills for making pre-determined result solving situations in particular cases.
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History of management is as old as the subject of history itself. As long as economic enterprise whether small or big was having very little esteem, development and study of management could not make much progress in the early days.
The contributions of some of the eminent personalities in the field of management thought during the past centuries are given below:
1. Mary Parker Follet (1808-1933):
Mary Parker Follet deserves special mention among all the social scientists of the past. Her major contributions were in the field of group dynamics and human relations. She was a political scientist and philosopher, whose interest was mainly in the study of Psychology behind the individual and the group.
She advocated that individual’s thought and action were always guided by group influence. In all cooperative efforts group makes a positive result, when properly guided. She pointed out the exercise of authority is involved in leadership. She also was of the opinion that authority should not be personalised.
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Taylor was known as the father of scientific management. He published his book “The Principles of Scientific Management” in 1911. Main theme of Taylor’s philosophy was that separation of planning function from doing function. He was of the opinion that workers must perform their job purely in a mechanical fashion evolved through the study of scientific activities.
Taylor stated that managers should scientifically study all types of Industrial activities and make them into a set of rules. These rules are to be taught to workers, Managers are to perform planning and organising work. Workers will be responsible for the task of producing the finished goods. Therefore, a proper division of work will evolve.
Fayol after a thorough analysis of the entire activities of industrial organisation, arrived at a final conclusion.
This conclusion of his analysis made him to divide all the activities of an organisation into following six groups:
i. Production
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ii. Commercial activity
iii. Finance
iv. Security
v. Accounting, and
vi. Managerial activity.
He further divided the managerial activity into five major functions like:
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i. Planning
ii. Organising
iii. Commanding
iv. Coordinating, and
v. Controlling.
He stressed that workers must possess the technical ability, as it is the most important thing. When an individual goes up in the scalar chain, the individual must have the required managerial skill. It is to be noted that higher the level of authority, more the technical ability and skill.
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4. Elton Mayo & F.J. Roethlisberger:
Contributions of these two eminent behavioural scientists in tackling the human relation aspects in the case of Hawthorne plant of Western Electric Company is an important landmark in management thought. This study was carried out during late 1920’s and early 1930’s.
The main focus of the entire investigation was to find out the relationship between improved working conditions and productivity. It was surprising to note when all improvements and facilities of working conditions were withdrawn to find out the effect, the productivity remained above the initial level.
This factor was a new dimension in the research. It proved that improved working condition was not the main factor for production. The experiment established that ‘best human relation’ can improve work standard and production too. As a sequel to this experiment, the management started practising the human relation theory at work.
The work of Taylor and Fayol was complimentary. They both understood that problems of personnel and the management in the organisation were the main hindrance to achieve success. Taylor concentrated mainly on operational level (workshop level), whereas Fayol focused on the management. The critics of Taylor’s scientific management observed that total separation of ‘planning function’ from ‘doing function’ was wrong.
It is an unrealistic approach. They also pointed out that assignment of mechanical jobs to workers by breaking it into different parts seems to be an unproductive concept. This concept denies job satisfaction to employees. Fayol’s principles have stood the test of time and have been accepted as essence of management discipline.
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After the First World War, the induction of psychology in the field of industry made drastic improvement in the thinking and practice of management. The industrial expansion and large size business organisations caused human relation problems in industries. The emergence of Industrial Psychology and human behavioural approach is another significant change in management thought.
Apart from the above, in the recent past, quantitative approach, system approach and contingency approach have added to the list of management theories.
Human relation theory is well-explained in Hawthrone experiment conducted on the employees working under specific conditions between 1924 and 1932 in Hawthrone plant. This experiment was based on the observations by a team of experts.
In 1924 Elton Mayo and Roethlisberger along with their associates designed a research programme at the Hawthrone plant of Western Electric Company to study the effects of illumination on productivity. Accordingly the experts of the team divided the employees into two groups.
(i) The first, an experimental or test group, which was to work under varying degree of light (illumination) and
(ii) The second group was a control group, which was supposed to work under normal conditions of light in the plant.
The test group working with increasing degree of light showed an increase in their output. At the same time, the productivity of the control group also showed increase in the output.
Elton Mayo and coworkers commenced their study with women employees (assembling telephone relays in the plant). Mayo introduced various changes in their working hours and reset the period of lunch and recess.
The changes introduced and the results are summarized below:
(i) Under normal conditions with forty-eight working hours a week including Saturday with no recess, the women workers completed 2400 relays a week.
(ii) They were then asked to do piece work continuously for eight weeks. The output went up.
(iii) Later on, two recess, of five minutes each, one in the morning and the other in the afternoon were introduced for a period of five weeks. With this the productivity increased again.
(iv) The recess further extended to ten minutes each. The output showed a remarkable increase.
(v) Thereafter, six recess of five minutes each were introduced. At this time the women workers complained of disturbance in the work due to so many small recess. This time the output came down slightly.
(vi) The recess were again reverted to two (as in (iii) above) supported by free oatmeal (meal made of oats) provided by the company. The result was found to be quite encouraging.
(vii) In this, women workers were allowed to leave the work place half an hour earlier by 4:30 p.m. instead of 5:00. The production went up.
(viii) Further reduction of half an hour was introduced in pack-up time, however, the output remained unchanged.
(ix) At the end of the experiment all the concessions were withdrawn and the workers went back to their normal working conditions, viz., forty-eight hours a week inclusive of Saturday, no recess, no piece wage and no free meal. This process lasted for twelve weeks. The results were surprising and the output was the highest ever before, averaging 3000 relays a week. This created a question ‘Why?’
The answer to this question was not found in production aspects of the experiment, i.e., changes in plant and physical working conditions. Whereas it is clearly seen in the human aspect. This experiment brings out the norms like increased satisfaction that leads to increase organisational effectiveness. The management not only process technical skill to supervise but also effective social skills.
People are motivated in the organisation not merely by the satisfaction of basic level needs but by fulfilling certain higher needs. The conclusion of Hawthrone experiment could make an impact in changing the attitude and thinking of management that an informal leader plays an important role in affecting workers’ behaviour.
What is Management – Definitions Provided by Henry Fayol, Sir Charles Reynold, Mary Cushing Niles, John F. Mee, Koontz and O’Donnell
Various Definitions of “Management”:
“Management” carries different meanings depending on the context in which it is used. It is variously described as an “activity”, a “process”, and a “group of people” vested with authority to make decisions. Why, sometimes it is also used in the sense of trickery.
Henry Fayol – To manage is “to forecast and plan, to organize, to command, to coordinate, and to control.”
Sir Charles Reynold – Management is “the process of getting things done through the agency of a community. The functions of management are the handling of a community with a view to fulfilling the purposes for which it exists.”
Mary Cushing Niles – “Good management, or ‘Scientific Management’, achieves a social objective with the best use of human and material energy and time, and with satisfaction for the participants and the public.”
John F. Mee – Management is the “art of securing maximum result with minimum of effort so as to secure maximum prosperity for the employer and employee, and give the public the best possible service.”
Koontz and O’Donnell – Management is the “creation and maintenance of an internal environment in an enterprise where individuals, working in groups, can perform efficiently and effectively towards the attainment of group goals. It is the art of getting the work done with and through people in formally organized group.”
What is Management – Concept: Management As an Activity, Economic Resource, Process, Academic Discipline and Group
The term management has been interpreted in several ways depending upon the context in which it is used.
Some important concepts of management are as follows:
Concept # 1. Management as an Activity:
Management is an activity just like playing, teaching, walking etc. To ascertain this management has been explained as the art of getting things done through the efforts of the other people. Management is also known for its group activity wherein the managers do to achieve the objectives of the group. The management activities are interpersonal, decisional and informational.
Concept # 2. Management as an Economic Resource:
Management is a vital factor of production like land, capital, labour and entrepreneurship. The inputs of capital, labour, machinery and material do not by themselves ensure growth. The management works like a catalyst for these factors of production to produce outputs. Management coordinates between various inputs of production. Thus, management is viewed as a separate resource which largely determines the productivity of the organisation.
Concept # 3. Management as a Process:
Process is known as a course of action or proceeding which involves a series of steps to carry out any activity. Management is considered a process because it involves a series of interrelated functions. Getting the objectives and taking steps to achieve the organizational objectives are involved in the management process.
This management process includes planning, organizing, staffing, directing and controlling functions. This is the simplest and most pragmatic concept of the management. The universal nature of management is also highlighted by this.
Concept # 4. Management as an Academic Discipline:
Management has established as a specialized branch of knowledge. It includes principles and practices for managerial excellence. Management has become a popular discipline of study as is evident from the admissions into universities and institutions imparting education and training in management. This also offers a rewarding and very fruitful career.
Concept # 5. Management as a Group:
Management is known as a group of peoples occupying managerial positions and performing managerial functions in the organisations. The managers at different levels have different authority and responsibility and they do the different activities of the organisation. The whole group works for the common objectives of the organisation. Managers have become a very respected and powerful group in the society, because the decision of senior managers affects the lives of a large number of people.
What is Management – Objectives: To Earn Profit for Business, To Fulfill Social Responsibility, To Interact with Outsiders, To Increase the Efficiency of Staff and a Few Others
The word ‘management’ is derived from the Latin word ‘Manus’ which means hands. Thus, management refers to handling a particular activity. Management refers to the process of setting certain pre-determined objectives and achieving them through optimum utilization of resources.
Every organization operates to achieve its pre-determined goals. Goals differ for different organizations. Thus, every organization has its specific objectives. However, there are certain objectives that are basic and common to all types of organizations.
These objectives are as below:
i. To Earn Profit for Business:
Every business organization is set up with the main aim of earning profit. A business organization flourishes in long run only if it fetches handsome amount of profits. Hence, all the management activities should ideally be focused towards both, earning profits as well as maximizing profits. However, non-profit organizations do not have the objective of profit making as they intend to serve the society.
ii. To Co-Ordinate the Activities of Various Departments:
Management is a group activity. Proper co-ordination of all group members of the organization is essential. This helps in smooth working of the organization.
iii. To fulfill Social Responsibility:
Business organizations are a part of the society and in the modern world, they are expected to contribute towards the betterment of the society. This is necessary as each and every business enterprise gets its resources from the society. Profit making should not be the sole objective of business organizations. Management helps the managers to understand their responsibility towards the society. Management fulfills such social objectives by paying fair wages, providing quality product/service, paying proper taxes, controlling pollution, avoiding wastage of scarce resources, etc.
iv. To Interact with Outsiders:
Proper interaction with outsiders is considered as one of the important objectives of management. This is mainly because; a business organization cannot exist in isolation. It needs to interact with customers, suppliers, government bodies, stakeholders, etc. A business unit to flourish needs proper interaction with the aforesaid parties.
v. To Increase the Efficiency of Staff:
A business unit should ensure that its employees perform the task assigned in an effective and efficient manner. This is needed as the task can be accomplished faster and without much wastage. Therefore, it becomes vital for the management to manage the activities in a way that would increase the efficiency of the staff and ensure the funds are also managed effectively. Certain activities like – giving appropriate salaries, providing good working conditions, timely appreciation of good performance and timely increments etc., motivate the staff to perform better.
vi. To get Maximum Result with Minimum Efforts:
Management aims at getting the maximum result/output with minimum efforts. It, therefore, frames policies which ensure the optimum use of available resources. Management, thus, aims at maximizing results with minimum cost and efforts in order to achieve good results.
What is Management – Nature: Management as an Art or a Science or a Profession
Management is not today’s concept. It has been in use since the existence of civilization. The uncivilized societies had to manage their survival but with time and experience the societies became civilized and so came the rules and regulations governing commercial and non-commercial activities of a society. Theoretical relationships and experiences of managers led to development of principles and practices of management.
On one hand, managers follow the already set principles and practices but on the other hand, they need to be creative to act as per circumstances. If we see broadly, the managers seem to be the professionals who follow the set rules and regulations as a guideline to achieve their goal but if we observe more closely the managers cannot strictly follow the rule book, they need to be creative and dynamic to adapt to changes in the environment and achieve their goals most effectively and efficiently.
In the light of the above discussion, let us examine what actually management is… is it an Art? A Science? A Profession? Or a bit of all?
A. Management as an Art:
What is Art?
Art is a skill-based creativity. Art involves use of theoretical knowledge, observation and experiences with creativity and personal touch to achieve desired results effectively and efficiently.
For management to be an art it is a must that it has characteristics, of ‘ART”.
Let us examine the characteristics of Art present in management:
1. Existence of Theoretical Knowledge:
To pursue Art, an artist requires basic theoretical knowledge in the specific field. Similarly, in management, managers need to specialize in the areas like marketing, finance, production, human resource etc. The theoretical knowledge can be acquired by reading books, joining a course etc.
Example –
i. A good orator can learn the art of debating by reading literatures, books or by joining a personality development course etc. Even most managers acquire their managing skills by reading management books especially ‘Management by Philip Kotler’ a book considered to be the bible of Management.
ii. Aspiring actors may join an acting course in the National School of Drama. Similarly, aspiring managers do MBA from renowned universities to gain theoretical knowledge.
2. Personalised Application:
Every artist may acquire the same theoretical knowledge but they apply the knowledge as per their personal skills, taste and preferences. Similarly, a manager may follow the principles as laid down in management books but the application of such principles may differ from situation to situation, individual to individual. An efficient manager studies critical situations, formulates his/her own theories and adopts different styles of management in different situations.
Example – There are so many actors in our film industry but not everyone is a super star. Actors who play diverse characters in their films receive better recognition. It is the personal touch not the acting knowledge that brings life to the character. Same way, a manger formulates different strategies to handle different people. Some people get motivated with words of praise, some achieve their targets only if monitored closely whereas some like critical analysis. Thus, a manager needs to deal with different individuals differently.
3. Based on Practice and Creativity:
To be perfect in art, continuous and creative practice of theoretical knowledge is a must. Creativity lies in the personal interpretation of an artist. Similarly, a manager while handling complex issues, solving diverse problems gains experience and improves managerial skills.
Example – You may learn to sketch but if you do not practice regularly and creatively you may not gain perfection in the art of sketching. Mr. Rohit is head of sales in Ragini Exports Ltd. from the last ten years. During this period he has managed his sales team, made many new customers, retained his old customers, worked towards increasing company’s market share etc.
While dealing with people from different countries and diverse cultures, Rohit has gained experience and can easily find creative and innovative ways to deal with business problems.
B. Management as a Science:
What is Science?
Science is a systematised body of knowledge that explains certain general truths or the operation of general laws. It is based on logically observed facts and findings.
For management to be a science it must have basic characteristics of SCIENCE.
So, let us check if management shares features of Science:
1. Systematised Body of Knowledge:
Science is a systematic body of knowledge. Its principles are based on a cause and effect relationship. Similarly, management is also based on theories and principles developed over a period of time. Like science, management follows its own concepts and terminology, which is learnt either through books or by joining courses conducted to teach basic concepts of management.
Example – Like law of gravity explains the reason of an apple falling from a tree towards the ground, same way the theory of human behaviour explains the nature of people working in the organisation.
2. Principles Based on Experimentation:
Scientific principles are first developed through observation and then tested through repeated experimentation under controlled conditions. Management principles are also a result of experimentation and observations gathered while performing diverse activities in different types of organisations.
However, in science the result of an experiment can be predicted or repeated but in management the results may not be repeated or predicted, mainly because of the fact that management deals with human beings with diverse behaviour.
Example – Theory of evolution is the result of research work done by the great scientist Charles Darwin. Similarly, on the basis of research, management scholars like F. W. Taylor, Henri Fayol have identified and formulated principles of management.
3. Universal Validity:
Scientific principles are universally valid and applicable. The principles of management do provide standardised techniques to managers to handle different situations but these principles need modification to be suitable to a given situation.
From the discussions so far, you all must have realized that every organisation needs specialized individuals to manage different activities of an organisation. For example, a chartered accountant or a financial analyst is required to handle financial activities, a marketing expert to handle marketing activities etc. The need of specialized knowledge and experience to handle business activities may categories management as a profession.
C. Management as a Profession:
Let us now examine if the management satisfies the features of profession:
1. Well-Defined Body of Knowledge:
Each professional may it be of a lawyer, chartered accountant or an insurance consultant is required to gain specialized knowledge of the profession. Similarly, management also requires specialized knowledge, which can be gained through books or courses available in various universities.
Example – An individual has to do LLB to become a lawyer or CA to become a chartered accountant. Similarly, an individual may have to do an MBA to gain managing skills.
2. Restricted Entry:
To be a professional it is a must that an individual acquires an educational degree or passes an examination. But, there is no such requirement in the field of management. However individuals may acquire a management degree from reputed universities through an examination to have an edge over other individuals in the field of management.
Example – To pursue, CA one has to clear the entrance exam ‘CPT’, similarly, to get admission in management colleges one has to clear entrance through ‘CAT’ on GMAT.
3. Professional Association:
All professionals are affiliated to their respective professional associations, which regulate entry, grants certificate of practice, formulates, and enforces a code of conduct. There are management associations, which have set membership rules and ethical codes, but it is not compulsory for managers to be a part of them.
Example – To be able to practice in India, the Chartered Accountants have to become member of the Institute of Chartered Accountants of India. All Indian Management Association (AIMA), National Institute of Personal Management are the management associations with whom managers may register as members.
4. Ethical Code of Conduct:
Behaviour of each professional is bound by the code of conduct laid by the professional organisation they belong to. Similarly, AIMA, a management body has devised a code of conduct for managers. However, at present it is not compulsory for managers to take its membership.
5. Service Motive:
Professionals provide services to their clients and receive monetary benefits for the same. Management of an organisation aims to earn maximum profits while selling quality products at reasonable prices to its customers. A professional and a manager both aim to provide dedicated and committed services towards the interest of their clients.
Example – A doctor provides medical services to his/her client and in the process ensures that the patient is satisfied with the treatment. Same way to survive in the industry for long period, management of an organisation not only works towards accomplishing its economic objectives but also social objectives by diverting profits for the welfare of the society.
You all must have realized that it is difficult to categories management as a science or an art or a profession. In fact, if we closely observe, management has adopted few characteristics from each. A good manager has to be highly qualified and trained in the area of specialization, should have the creativity, imagination and the desire to modify the standardized techniques according to the given situation. One can learn the facts and theories but the success depends on the ability to put the principles into practice.
Thus, we can say that management as a science, an art or a profession is therefore not mutually exclusive, but complements each other.
What is Management – Characteristics
The characteristics of management are as follows:
1. It is an organised and systematised body of knowledge, principles and techniques. According to A.P.M. Fleming, “Modern management has a technique quite apart from the technology of the particular works concerned.”
2. There is a formal method of acquiring knowledge and principles of management through professional schools of business management.
3. Existence of management associations.
4. The growth of professional management consultants.
5. The growing emphasis on the ethical standards of managerial personnel.
6. The growing emphasis on social responsibility of a manager.
An analysis of the characteristics of management indicates that it does not possess all the essential characteristics of a profession. Like other recognised professions, such as medicine and law, management does not have norms of managerial behaviour, common rules, uniform code of conduct and organisation or licensing. Further, it does not restrict the entry of people into managerial jobs with a special academic degree. In the light of this analysis, we can conclude that management cannot be called a profession.
However, we may state that there are certain trends which indicate that the management is moving in the direction of a profession. For example, it is increasingly becoming not only desirable but also essential to acquire the knowledge of management, if one has to become a successful manager in a business. There is also a growing emphasis on formal training of managers and managers who are trained in management institutions are fast replacing the self-made ones.
Further, various management organisations which have come into existence have been taking increasing interest in guiding the behaviour of individual managers. Management has been identified as a crucial social activity. Further, there is a growing emphasis on the ethical conduct of management personnel as their social responsibility. All these trends indicate that management is moving in the direction of a profession.
What is Management – Purpose
The Prime Minister of India, the Governor of a State, the Chairman of Metro or Family Mart, The Vice-Chancellor of a University are all managers and leaders. Managers preside over organisations as diverse as Vishweshwaraiah Technological University, the Wokhard Hospital or any hotel of your town.
Organisational success of any type of business or NGO depends open effective management. You examine any business failure or failure of a state development. You find that poor quality management will be one of the main reasons for failure. The problem starts with the top management. The Board of Directors and Chairman accept the reports status quo. They never examine the reports and simply accept them and believe their consultants and draw plan after plans. But, who has to execute it? And adopt corrective measures to set the operations right.
Again, if top brass is sensible and sound, they suggest corrective measures to the report to make the organisation successful. Here the role of management, right from chief executive officer- CEO to the last-person in the hierarchy have to play their roles in the a organisation.
In this context we can list out the purpose of the management:
i. The main objective is to look at how a company can create a competitive differentiation.
ii. The management has to examine mission statements and corporate objectives to find out whether they can implement successfully.
iii. Another objective is to examine the master plan and different sub-plans of the organisation. The management force at different levels of management in each sub-functional areas such as finance, marketing, HRD, production etc. have to analyze their plans and effectively implement them.
iv. The management should also understand forecasting techniques stated in the plans and adopt them appropriately for the success of the organisation.
v. The management objective is to look at the organisational structure and understand the span of management.
vi. The management objective should also facilitate the workforce to develop the managerial skills required for managerial success.
vii. The objective of management also focuses on the process of managerial decision making.
viii. The management will also focus on international management issues and also lays down objectives and procedures on new career opportunities for displaced managers.
What is Management – Importance: To Increase Efficiency, To Crystallize the Nature of Management, To Carry on Researches and To Attain Social Objectives
Management has been defined as a science, though an inexact science. It means managerial, functions are based on certain principle. Principle is a fundamental truth which establishes cause and effect relationship of a function and theory is a systematic grouping of inter-related principles. The principles of management have a tremendous impact upon the practice of management in increasing the efficiency of the organization.
The need and importance of management can be visualized as follows:
(1) To Increase Efficiency:
The established principles of management provide managers guidelines as how they should work in different situations. These principles increase managerial efficiency. Today, a management graduate, who has acquired acknowledge of management principle, definitely puts better efficiency and effectiveness in the organization.
Though, there is a serious limitation of management principles, that is, these have to be modified according to situations as these deal with human beings of diverse nature, these enable a manager to understand the different situations in a better way and save him from costly trial and error method.
(2) To Crystallize the Nature of Management:
Lack of understanding of management principles makes it difficult to analyze the management job and to define the exact scope of managerial functions. Thus, individuals cannot be trained effectively for managerial positions. According to Henri Fayol, management principles, rules, methods and procedures are necessary to train and educate future management.
(3) To Carry on Researches:
If in any subject certain fundamentals are developed, the scope and limitations defined, these become the basis for future researches. In the absence of these principles, researches become difficult and future horizons of knowledge cannot be expanded. It is scarcely too much to say that the most important index of the state of maturity of science is state of its systematic theory.
This includes the character of the general conceptual scheme in use in the field, the kinds and degrees of logical integration of the different elements which make it up, and the ways in which it is actually used in empirical research. The recent emphasis on management researches has increased the quantum of knowledge in this field.
(4) To Attain Social Objectives:
Management itself is part of the society and it takes the inputs from the society and gives the output to the society. Thus the standard of the society depends upon the quality of the management. If the management is efficient, the resources of the society are better utilized thereby giving more satisfaction to the society and improving the quality of life of people. In this context, management principles play an important role.
Thus, the understanding of management principles enables managers to take a more realistic view of organizational problems and their solution. Management deals with people in the organization and the structure and behavior of the atom is far less complex than the structure and behavior of groups of people. To direct the human behavior for objective achievement, some principles are certainly required.
Development of management principles would definitely have an impact on the cultural level of society by increasing efficiency in the use of human as well as material resources. However, managers, while using management principles in practice, should check their validity and applicability before use. For this reason they should be aware of the fundamental nature of management principles.
What is Management – Functional Areas: Financial Management, Personnel Management, Purchasing Management, Marketing Management and a Few Others
It consists of the following functional areas:
(i) Financial management- It includes cost control, budgetary control, financial planning, management accounting, standard costing etc.
(ii) Personnel management- It includes aspects such as recruitment, training, transfers, promotions, retirement, industrial relations, social security, etc.
(iii) Purchasing management- It consists of purchasing of raw materials, maintaining of records, materials control, issuing relations, social security, etc.
(iv) Production management- It deals with aspects such as production planning, quality control and inspection, production control techniques, etc.
(v) Marketing management- It includes marketing of goods and services, price determination, market research, sales promotion, advertisement, publicity, etc.
(vi) Office management- It is concerned with office layout, staffing, equipment of office, etc.
(vii) Maintenance Management- It relates to the proper care and maintenance of the building, plant and machinery etc.
(viii) Transport Management- It includes packing, warehousing, transportation by rail, road, air etc.
What is Management – Role of Management in Modern Society
Management plays a vital role in modern society. It regulates man’s productive activities by organising factors of production. Drucker observes that without the leadership provided by management, the resources of production remain mere resources and never become production. The well-being of society is largely dependent upon the quality of management. By making the factors of production perform better, management enables society to get a better and increased supply of goods and by this, it promotes the welfare of society.
Urwick and Brech have rightly observed that no ideology, no ‘ism’, no political theory can win a greater output with less effort from a given complex of human and material resources. And it is on such greater output that a higher standard of life, more amenities for all must necessarily be founded.
The running of a modern business has become a complex matter due to numerous factors such as the size, structure, ever-changing trends of consumers’ tastes and needs, ceaseless competitive drive, new techniques of production, government regulations, social responsibility of business, etc. Because of these, ‘management which consists of scientific thinking, accurate planning and meticulous control’ plays a vital role in the running of a modern business.
Management enables the enterprises build up its competitive strength and develop and expand its assets and profits. Drucker has rightly observed that “management, which is the organ of society specially charged with making resources productive, with the responsibility for organised economic advance, reflects the basic spirit of the modern age.”
Management is needed not only for business concerns but also for social organisations like educational, religious, charitable and other non-business institutions. Further, governments of all types need management as much as others, perhaps, more than all other social organisations. The late President Roosevelt of the USA aptly said that “a government without good management is a house built on sand.” In short, management is an essential accompaniment of all social organisations and everywhere it is found as a distinct, separate and dominant activity.
What is Management – Techniques: Management by Communications, Motivation, Participation and System
Management is a process which brings the scarce human and material resources together and motivates people for the achievement of objectives of the organisation. Management is not a one time act but an on-going series of interrelated activities. The sum total of these activities is known as management process.
It consists of a set of interrelated operations or functions necessary to achieve desired organisational goals. A process is a systematic way of doing things. It is concerned with conversion of inputs into outputs. An analysis of management process will enable us to know the functions which managers perform.
The economic environment of the world is changing rapidly. The globalisation has brought all world markets together. The competition in business has thrown opportunities and challenges for business enterprises. Every business organisation is expected to improve its productivity and control costs in order to survive in the competitive environment.
Organisations are devising various methods to improve their performance and face competition in the market. Newer and innovative techniques need to be developed to improve competitiveness in the market. Some managerial techniques are discussed in the following pages.
These techniques are:
1. Management by Communication,
2. Management by Motivation,
3. Management by Participation, and
4. Management by Systems
1. Management by Communication:
Communication is an indispensable part of any management. Human beings interact with each other through communication. It keeps the members of an organisation informed about the internal and external happenings. Communication refers to an exchange of ideas, feeling emotions, knowledge and information between two or more persons.
Communication involves at least two persons, a sender and a receiver. There should also be a subject matter (message) to be communicated, which may be written or oral. Communication is the art and science of reaching not only to employees in the organisation but also the target audiences outside.
Management by communication is a technique to improve the working of an organisation and also creating a healthy working environment. Effective verbal and non-verbal communication skills are valuable in the workplace. Good communication skills go beyond conversations, but employees must know how to communicate well in writing reports and emails.
Some companies spend lot of money on improving the communication of employees. An effort is made to focus on developing a work force that is able to communicate within the firm, with customers, vendors and international business partners.
2. Management by Motivation:
Motivation is an inner feeling which exercises a person to work more. Motivation is an important factor which encourages persons to give their best performance and help in reaching enterprise goals. A strong motivation will enable the increased output of employees, but a negative motivation will reduce their performance.
Management by motivation describes ways in which managers promote productivity in their employees. It is the process through which managers encourage employees to be productive and effective. There are many ways to motivate employees.
Managers who want to encourage productivity should work to ensure that:
(i) Employees feel that the work they are doing is important and meaningful,
(ii) That the work will be rewarded, and
(iii) Employees believe that they are treated fairly.
The main thrust of the management should be that employees perform to the best of their ability. So the role of a manager is to arouse interest among employees to perform their jobs well.
3. Management by Participation:
Management by participation is the type of management in which employees at all levels are encouraged to contribute ideas towards identifying and setting organisational goals, problem solving, and other decisions that may directly affect them. So it is a practice of empowering employees of an organisation to participate in decision making.
It is used as an alternative to traditional vertical management structures, which has shown to be less effective. This practice grew out of the human relation movement in the 1920s and is based on some of the principles discovered by scholars doing research in management and organisation studies.
Management by participation states that stakeholders in the organisation should be encouraged to associate with various issues concerning the business. They should be involved in the analysis of problems, development of strategies, and implementation of solutions.
The employees are invited to share in decision making process of the firm by participating in activities, such as- goals setting, determining work schedules and making suggestions. Management by participation is more than just involvement of employees in decision making process. It also involves management treating the ideas and suggestions of employees with consideration and respect.
4. Management by Systems:
Management by systems is a technique to improve the overall performance of the organisation and is helpful in achieving overall goals. It is necessary that the performances of individuals and teams should be regulated to improve the performance of the whole organisation. The systems should be devised in such a way that performance of all persons is properly assessed and necessary changes are suggested whenever required.
Management by systems can be effective only when employees are assured of the following:
(i) Ensuring that employees understand the importance of their contribution to organisation objectives.
(ii) The employees understand what is expected of them. It should also be seen whether employees possess required skills and training to fulfill the tasks assigned to them.
(iii) Linking of objectives and facilitating effective communication throughout the organisation.
(iv) Facilitating a cordial and a harmonious relationship between an individual employee and the line manager based on trust and empowerment.
What is Management – Management and Resources
Every business or non-business organisation has to assess itself about the various assets available to manager and the institution. It should also know as to how these assets are to be effectively used. The assets or resources include both human and non-human factors. These organisational resources may be explained as labour, capital, land and entrepreneurial skills. These resources are coordinated and final products or services are produced.
Of the two main resources-human and non-human, human factor plays a key role. It is the human element that can coordinate other human work in the firm such as the equipment and other resources. Human resources possess skills and knowledge. These are to be effectively used by human element, otherwise called managers. Managers have to effectively utilise capital, labour and other resources to bring out final output. Waste of resources lead to increase in cost of production. This finally reduces the profit. Therefore, cost effectiveness will be a focal point in good management.
The companies like Infosys, Wipro, etc. which are run on sound lines will have the following managing techniques:
(i) Sound Decisions – Well managed companies take sound decisions. Their decisions will be such that the operations have to be more cost-effective and avoid wastage in the production process.
(ii) Customer Relation – The excellent companies like Tata Group, Toyota-Kirloskar, TVS and various other companies which are run on excellent lines, learn from customer feedback. They care for the opinion of customers. Many innovative companies got their best product ideas from customers. Companies close to the customer do well.
(iii) Freedom to Workers – Excellently run companies allow their workers try and try on operation, allow them to commit more mistakes, take risks to improve the quality of product or operations. These companies foster many innovators throughout the organisation. These organisations do not look like corporations. They will be a sort of loose network of laboratories in which restless inventors and dauntless entrepreneurs work to convert their imagination into reality. The management supports these innovators to invent new things, in spite of many mistakes they commit in the process of inventing. This freedom to innovators is given to see that company becomes an excellent one.
(iv) Using Human Potential to the Core – Excellent companies make their human resources to give out their best to the company. Each worker will be respected to extract his potential to the core for increasing the overall productivity of the organisation. The good management will consider each individual as a “Source of ideas and not just a pair of hands”
(v) Result Orientation – Best managed companies look to their achievements, rather than various other inputs such as technology and other resources. Although these are provided, their aim is to get best results through quality, service, cleanliness and value.
(vi) Managing the Fundamentals – Well managed companies never forget their base. They do the business that they know. They never run the business that they do not know. The fundamental principle here is that they should stick to the business they should know.
(vii) Flat and Simple Organisational Structure – Managing a company on sound lines, need an effort which will be cost-effective. This means the organisations should appoint less number of staff who are highly skilled. It should be a flat organisation with minimum managerial levels.
(viii) Decentralisation and Delegation – Better management lies in decentralisation. There may be centralised organisations which are excellent one. But most of the well-managed companies decentralise their activities and delegate authority with accountability and responsibility to make sure that workers develop organisational identity.
This information provides a base as how an organisation has to use its resources to run “effectively” and “efficiently”.
“Effectiveness” implies the extent to which the management achieves its organisational objectives. Managerial effectiveness measures the degree of organisation’s resource utilisation to achieve the goals of the firm. It also measures the strength of the manager in achieving the goals. (To do right things)
Efficiency, measures the extent to which organisational resources are used in production process. (To do things right). This indicates the contribution of resources to the production.
What is Management – Administration and Management According to Drucker, Fayol, Newman, Oliver Sheldon, William R. Spriegel and G.E. Milward
The terms ‘administration’ and ‘management’ are used in different senses by different writers.
Broadly, there are three different types of views expressed by different schools of thought which are given below:
According to some writers (like Drucker, Fayol and Newman), there is no distinction between the terms ‘administration’ and ‘management’ and both of them are synonymous and used interchangeably. According to these writers, running of a business or social institution, or a government office requires specialised skill and this specialised skill is called ‘management’ in business and ‘administration’ in government and other social institutions.
In other words, executive functions in business are referred to as ‘management’ whereas the executive functions of other institutions like government and public bodies are termed ‘administration.’
Henry Fayol who is regarded as the real originator of management has pointed out that there is only one administration or management science which can be applied equally well to the public and private affairs. He has stated – “All undertakings require planning, organising, command, coordination and control and in order to function properly. All must observe the same general principles. We are no longer confronted with several administrative sciences, but with one which can be applied equally well to public and private affairs.” (Thus, according to him, both the terms are synonymous and any distinction between them is misleading.)
According to another school of thought, administration and management are different functions. According to this school, administration is a top level function, which centres round the determination of major policies and objectives of a business enterprise (i.e., thinking function), while management is a lower level function involving the execution of policies and directing the operations to attain the objectives laid down by the administration (i.e., doing function). This view is supported by eminent writers like Oliver Sheldon, William R. Spriegel, G.W. Milward and others and we quote here the concepts of these writers.
Oliver Sheldon:
Administration is the function in industry concerned with the determination of the corporate policy, the co-ordination of finance, production and distribution, the settlement of the compass (structure) of the organisation under the ultimate control of the executive. Management, according to him, “is the function in industry concerned with the execution of policy within the limit set by the administration and the employment of the organisation for the particular objects set before it.”
William R. Spriegel:
“Administration is that phase of business enterprise that concerns itself with the overall determination of institutional objectives and the policies necessary to be followed in achieving those objectives. Administration predetermines the specific goals and lays down the broad areas within which those goals are to be attained. Administration is a determinative function; management, on the other hand, is an executive function more which is primarily concerned with the carrying out of the broad policies laid down by the administration.”
G.E. Milward:
“Administration is primarily the process and the agency used to establish the object or purpose which an undertaking and its staff are to achieve; secondarily, administration has to plan and stabilize the broad lines or principles which will govern action. These broad lines are in their turn usually called policies. Management is the process and the agency through which the execution of policy is planned and supervised.”
Thus, according to this school of thought, administration and management are not synonymous and they have different functions to perform.
If we accept this view, the differences between ‘administration’ and ‘management’ are as follows:
1. Administration is concerned with policy-making while management is concerned with the implementation of policy.
2. Functions of administration are legislative and largely, determinative, whereas functions of management are executive and largely, governing.
3. Administration is a thinking function and management is a doing function.
4. Administration relates to the apex and top level management whereas management relates to middle and lower level management.
5. Administration needs administrative rather than technical ability but management requires technical ability more than administrative ability.
Another viewpoint which has been expressed by E.F.L. Brech and others interprets management as a comprehensive generic term which includes administration. Brech, the renowned management expert, regards management as a comprehensive generic function, embracing the entire process of planning, policy-making, co-ordination of activities, maintaining of moral and discipline as well as controlling the operations so as to attain the best possible results.
Administration, according to him, signifies certain aspects of management functions (viz., planning and control) and it is interpreted as a branch of management. On the basis of this concept, the management function has been divided into two categories – (1) administrative management and (2) operative management. The upper level of management is usually called administrative management and the lower level is known as operative management
We may sum up our discussion by stating that different interpretations of the terms ‘administration’ and ‘management’ have been given by different schools of thought. Fortunately, this controversy of the meaning of these two terms is not to be seen nowadays and the term ‘management’ is generally used for the whole process of managing.
What is Management – Universal Application of Management in Future
Management principles are universal in nature. They can be applied to all types of organisations. In an ever changing world, many new types of organisations emerge. But the basic principles of management; viz., planning, organising, staffing and controlling are to be adapted for the success of the organisation. But all these principles are not implicitly applied. Every organisation is guided by the philosophy of the promoters and accordingly management principles are adapted. Basic management process is observed in all types of organisations. But they are driven by personal qualities of the top management.
Business organisations today have their own culture called “corporate culture”. Each organisation has its own language, history, heroes and villains. Society’s demands are exceeding supply and a permanent avenue is created to new organisations to emerge, whether, it is old or new national or global, the cultural aspects of these entities are changing.
Quality, ethics and global environment are dominating the corporate scene. Customers are more demanding than ever before. They decide the fate of the business organisations. It is not the command of managers nor the loyalty of workers in the organisation that provides security, stability and continuity for the organisation. But the loyalty of the customer that does.
As satisfaction of the customer is the key factor for organisational growth, tomorrow’s managers and employees, besides working hard, should stay close to the customer, be flexible in operations, reduce non-value-adding overhead and respond quickly to new situations. Management should have an integrated approach for growth and sustainability.