Chapter-1

Nature and Significance of Management

Prepared by BINOY GEORGE

What is Management?
 Management- Definition
According to Mary Parker Follet “Management is the art
of getting things done through others”

1868 - 1933
Mary Parker Follet- Mother of Modern Management"
 Management- Definition
According to F W Taylor “Management is the art of knowing
exactly what you want , your men to do and then seeing that
they do it in the best and cheapest way”

1856 – 1915
F W Taylor- "Father of the Scientific management”
 Management- Definition
According to modern concept “Management is the process
of getting things done through others with the aim of
achieving desired common goals effectively and efficiently”

Definition says:-

➢
Management is goal Oriented
➢
The goal should be achieved efficiently and effectively
 What is Management?
Management is the process of
planning,organising,directing and controlling
activities of and using resources of an
organisation for accomplishing the
organisational goals efficiently and effectively
in an ever changing environment.
 Effectiveness Vs Efficiency
The two terms ‘Effectiveness’ and ‘Efficiency’ are
different but they are inter-related. Effectiveness
means accomplishment of goals whereas efficiency
means accomplishment of goals at minimum possible
cost through optimum utilization of resources.
Difference Effectiveness Efficiency
Meaning Achieving targets Targets are
on time achieved with
minimum resources
and cost
Focus Completion of work Optimum utilization
of resources
Purpose It is concerned with It is concerned with
end result cutting down the
cost
Effective Manager

Effectiveness is about accomplishing a task or

producing a desired result. Example a company’s
targeted production is 2000 units per year. The
manager is able to produce 2000 units but higher
production cost (more labour cost, material cost etc).
In this case manager is effective but not efficient.
Target 2000 achieved @ Rs. 250 per unit,he is
effective but not efficient.
Efficient Manager
A manager is said to be efficient if he
accomplishes the task with the optimum utilization
and less wastage of resources.

Produced 1800 @ Rs.175, he is efficient but

not effective.
Features of management
1.Management is a goal oriented process
2.Management is pervasive
3.Management is a continuous process
4.Management is a group activity
5.Management is a dynamic function
6.Management is an intangible force
7.Management is multidimensional

Dynamic pervasive
Group
Features of management
1. Goal oriented
Features of management
2. Pervasive
Management is required at:
-All levels of management (Top,middle and lower levels)
-All size of organisations (Big and small)
-All types of business (Manufacturing concern and trading
concern)
-All sectors (Public sector and private sector)
Features of management
3. Continuous process
Features of management
4. Group activity
Features of management
5. Dynamic Function

Environment changing day by day

Features of management
6. Intangible Force

Management functions can't be seen, but its presence can be felt

in the form of profit, disciplined staff etc.
Features of management
7. Multidimensional activity

Management of work Management of people/work force

Management of operations
Multi dimensional features of management
 Objectives of Management
Management objectives can be classified into three:
1.Organisational objectives-It aims maximum growth and
prosperity of the organisation
2.Social objectives-It deals with commitment of the firm
towards the society.
3.Personal objectives-Its aim is to improve the satisfaction
level of employees
 Objectives of Management
1. Organisational Objectives
The three important organizational objectives of a manager
are:
Survival–Survival is the basic objective of every
organization. It is possible only when it is able to cover its
cost and earn profit.
Profit – Mere survival is not enough for business.
Management must ensure that the organization makes a
decent profit. Profit is essential to cover cost and risk of the
business.
Growth – The success of any organization is measured by
the growth rate and growth is measured in terms of
sales,number of branches,number of products,number of
employees etc.
 Objectives of Management
2. Social Objective
It involves creation of benefit to the society. This includes
using environmental friendly methods of production,giving
employment opportunities etc.
 Objectives of Management
3. Personal Objective
Personal objectives are concerned with the employees of
the organization. Personal objectives includes financial
needs such as competitive salary and perks,social needs
such as peer recognition and higher level needs such as
personal growth and development.
 Importance of Management
1.Management helps in achieving group goals
2.Management creates a dynamic environment
3.Management helps in the development of the society
4.Management helps in achieving personal objectives
 Importance of Management
1. Helps in achieving group goals

Management gives a common direction to individual effort in

achieving group goals of an organisation.
 Importance of Management
2. Creates a dynamic environment to work
The employees in the organization are generally resists to
adapt changes. Efficient management motivates employees
to adopt changes by convincing them about the benefits of it.
 Importance of Management
3. Helps in the development of the society
Efficient management ensures the supply of quality goods at
reasonable price, decent salary to employees, employment
opportunities,ensures pollution free environment and pay
taxes honestly.
 Importance of Management
4. Helps in achieving personal objectives
Through motivation and leadership, management helps
individuals to develop team spirit, cooperation and
commitment to group success, thereby achieving personal
objectives. Employees can earn more by producing more.
 Nature of Management

Management is an art?
Is it a science?
Is it a profession?
Nature of Management-Is it an art, science or profession?

The debate on whether management is an art or science

or profession is very old. Some authors advocates that
management is a science because there are well tested
and experimented principles of management, some authors
describe management as an art because more practice is
required in management and some authors consider that
management is going towards the path of profession.
Nature of Management-Is it an art ?
Features of Art
1.Systematic body of knowledge
2.Personalised application
3.Perfection through constant practice
Comparison of management with art
1.Systematic body of knowledge
As like in art, in the field of management also, there is
systematic and organized study materials available to
acquire theoretical knowledge.
Nature of Management-Is it an art ?
Comparison of management with art
2. Personalised application- Like in art personal skill
is important in management also. all managers learn
the same theories and principles, but their efficiency
depends on how well they use these principles under
different situations by applying their creativity and skill.
Nature of Management-Is it an art ?
Comparison of management with art
3.Perfection through constant practice- Just an
artist gains perfection through constant practice, the
managers become more perfect from their experience
by applying their own personal creativity and skill.
Nature of Management-Is it an art ?
Features of Art
1.Systematic body of knowledge
2.Personalised application
3.Perfection through constant practice

All the features of art are present in management

so we can call management as an art of getting the
things done by others.
Nature of Management

Management is a science?
Nature of Management-Is it a science ?
The basic features of science are as follows:
1.Systematised body of knowledge
2.Universal validity
3.Principles based on experimentation
Nature of Management-Is it a science ?
Comparison of management with science
1. Systematised body of knowledge
Scientific principles are universal truth and it can be tested
anywhere in the world at any time. Scientific principles applied in
materials but management principles are applied in human
beings. We cannot expect same result from different persons. So
management cannot be considered as pure science.
Nature of Management-Is it a science ?
Comparison of management with science
2. Universal validity
Scientific principles have universal application and validity.
Management principles are not exact like scientific principles
because they can’t be blindly applied in all situations. They have
to be modified according to persons and situations.

Science Management

Same
Nature of Management-Is it a science ?
Comparison of management with science
3.Principles based on observation and experimentation
Like science, management principles are derived through
observation and repeated experimentation. So, this feature of
science is present in management.

HENRI FAYOL developed 14

principles of management from
his 30 years experience in Coal
Mining Company.
Nature of Management-Is it a science ?
No doubt, management is a science, but being a
social science its results are not definite and exact
as that of physics and Chemistry. In case of Physics
or chemistry, scientific principles are applied in
physical materials; they will respond identically and
get the identical result in all situations. So we can
say management is a science, but not a pure
science, it is a social science.
Nature of Management-Is it a profession ?

Features of profession-
1.Well defined body of knowledge
2.Restricted entry
3.Professional association
4.Code of conduct
Nature of Management-Is it a profession ?
Comparison of management with profession
1.Well defined body of knowledge-
All professions are based on well defined body of knowledge that can
be acquired through instruction. In management also there is a
systematic body of knowledge involving formal methods of training.
There are many institutions that provide education and training in the
field of management. This feature of profession is present in
management also.
Nature of Management-Is it a profession ?
Comparison of management with profession
2.Restricted Entry-
To become a professional one must pass the prescribed
examination such as CA, MBBS, LLB etc. But in
management there is no such strict restriction till now.
Anyone can be appointed as a manager. So the second
criterion has not been strictly met in case management.
Nature of Management-Is it a profession ?
Comparison of management with profession
3.Professional Association-
All professions are affiliated to a professional association which
regulates entry, grants certificate of practice, and formulates and
enforces a code of conduct. There are several associations like
All India Management Association that has laid down a code of
conduct to regulate the activities of their members. However,
there is no compulsion for managers to be members of such an
association.
Nature of Management-Is it a profession ?
Comparison of management with profession
3.Code of conduct-
All professionals should follow the code of conduct laid down by
the concerned professional body. In management All India
Management Association (AIMA) has laid down code of conduct
to regulate the activities of their members. But there is no
compulsion for the managers to follow the same. Therefore, this
feature is not present in management.
 Levels of management
Levels of management mean the hierarchy of organization
representing the relationships among managers and
subordinates on the basis of their relative authority status and
responsibility. It is the arrangement of managerial position in
an organisation.There are three levels in the hierarchy of an
organization. They are:-

i. Top Level
ii. Middle Level
iii. Lower Level
 Levels of management
1. Top level
The first level of management is called top-level management. Top level
management consists of managers at the highest level in the management
hierarchy. Top level management consists of Chairman, Board of Directors,
Managing Director,CEO,Chief Financial Officer (CFO), General Manager,
President, Vice President etc. Important decisions are made at this level. Top
level management performs administrative functions more than the
managerial functions.
Functions of Top Level Management
➢
Determining the objectives
of business
➢
Framing the plans and policies
➢
Coordinating the activities of different
departments
➢
Assembling the required resources like
fiancé, fixed assets etc.
➢
Maintains relationship with outside parties
like government,competitors,media etc.
➢
Analysing the business environment and its
implications for the survival of the firm.
➢
Issues instructions to departments
 Levels of management
2. Middle level
Middle level management consists of departmental
heads like production manager, purchase manager, sales
manager etc. They are responsible for implementing the
plans and strategies developed by top level managers.
They receive orders and instructions from top managers
and get the work done through lower managers. They act
as a link between top management and supervisory
management.
Functions of Middle Level Management
Department heads like
➔
Organizing the activities Production,marketing
managers
of their concerned department.
➔
Implement the policy decision taken by the top
management
➔
Middle level management selects and appoints
employees of their own departments.
➔
Motivating employees based on their
performance.
➔
Middle level managers keep a watch on the
activities of lower level managers and they
prepare their performance appraisal reports.
 Levels of management
3. Lower level
This level consists of supervisors, foreman, inspectors;
clerk etc.These managers are directly related to workers.
They pass on the instructions to workers and they attend and
solve the problems of workers. They act as a link between
middle level managers and workers. They are also
responsible for maintaining discipline among the workers.
They are responsible for timely completion of work.
Functions of Lower Level Management
Supervisors,foreman,
➔
Planning of day to day work inspectors etc
➔
Assigning duties to individual workers.
➔
Ensuring safety of workers, machines, tools,
and equipments.
➔
Supervising the workers and assisting them by
explaining work procedures.
➔
Evaluating the operating performance.
➔
Preventing wastage and misuse of raw
material, machines, etc.
➔
Ensuring standard of quality and steady flow of
output.
➔
Providing on-the-job training to workers.
 Functions of Management

1. Planning
2. Organising
3. Staffing
4. Directing
5. Controlling
 Functions of Management

1. Planning
Planning:- Planning means deciding in advance what to do
and how to do it. Planning bridges the gap between where
we stand today and where we want to reach. Planning is a
process of thinking before doing.
 Functions of Management
2. Organising
Organising refers to identification and grouping of activities to
be undertaken in the organization and establishing an
organizational structure to execute the plan. It includes
decisions about how many units or departments are needed,
how many posts or designations are needed in each
departments, how to distribute the authority and
responsibility among different people.
 Functions of Management
3. Staffing
Staffing refers to procure suitable employees to fill various
jobs in the enterprise. Its aim is to place the right person for
the right job and at the right time. Staffing includes
recruitment of employees, their selection, placement,
training, promotion, transfer, remuneration etc.
 Functions of Management
4. Directing
Directing is the process of instructing, guiding, motivating
and leading people in the organization to achieve its
objectives. Directing is said to be the heart of management
process. Supervision, motivation, leadership and
communication are the four major activities related to
directing.
 Functions of Management
5. Controlling
This is the last function of management. The task of
controlling involves establishing standards of performance,
measuring the current performance, comparing this with the
established standards and taking corrective action where any
deviation is found.
Functions of Management
Functions of Activities to be decided
Management

Planning Planning refers to”deciding in advance what to do,when to do,how to do

and who is going to do it”.

Organising Identify,classify and assign activities. Delegate authority and fix

responsibility.

Staffing Manpower planning,recruitment,selection and their training

Promotion,transfer,appraisal and employees remuneration. It is the
function of finding the right person for the right job.

Directing Management in action. It involves leadership,communication,motivation

and supervision.

Controlling It involves establishing standards,evaluate actual performance with

standards and take corrective action if necessary.

Coordinating Orderly arrangement of group efforts to provide unity of action to achieve

common objectives,
Coordination- The essence of Management
Coordination is the base or primary function of every
manager because various departments of an organization
are working independently and there is need to coordinate
their activities. Coordination is the process by which
managers synchronize the activities of different departments
to ensure unity of action.
Coordination-Essence of management
Coordination is the orderly arrangement of group
efforts to provide unity of action to achieve
common goals. Coordination is needed at all
levels of management and for all functions of
management. It is considered as the essence of
management because it is the force that connects
all other managerial functions. Coordination is just
like a cement in a concrete mix.
Features of Coordination
➔
Co-ordination is the responsibility of each and every
manager.
➔
Co-ordination is a continuous and an on going
process.
➔
Co-ordination is required in group efforts not in
individual effort.
➔
Co-ordination is not a distinct function but the very
essence of management.
➔
Co-ordination ensures unity of action.
➔
Co-ordination integrate group efforts.
Importance of Co-ordination
➔
Co-ordination helps to improve the efficiency of
operation by avoiding duplication of work.
➔
It helps unity of action and to achieve
organisational goal.
➔
Co-ordination helps to improve team spirit and
morale of employees.
➔
Co-ordination helps to reconcile the employee's
with organisational goals.
Wish you all success

Prepared by,
BINOY GEORGE,HSST
MKNM HSS,Kumaramangalam
Thodupuzha
12-06-20