UNIT 1 - NATURE AND SIGNIFICANCE OF MANAGEMENT

Meaning/Concept

Management is a process of getting things done with efforts of others effectively and
efficiently.
 Process implies the primary functions or activities that management performs to get
things done.
 Effectively means completing the work/target.
 Efficiently means completing the work/task correctly with minimum cost.

Relationship between Effectively & Efficiency

 They are inter-related
 They are two sides of the same coin
 By using less resources, the output is more, it is said efficiency is increased.
 Management should focus on completion of target (effective) at minimum cost
(efficiency).
 Example: Target of company is 100 shirts at Rs. 150/-. If worker A produces 90 shirts at
Rs 120/- he is efficient but not effective. If worker B produces 100 shirts at Rs 160/- he is
effective but not efficient. Worker A is able to cut down the cost but could not achieve
the target. Worker B uses more resources to achieve the target.

BASIS EFFECTIVENESS EFFICIENCY

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

Characteristics of Management/Features:
1. Management is a goal oriented process:
 Every organization sets some goals to achieve
 Manager collects all the efforts of the different employees in his organization
 These efforts are focused on achieving the set goals.
2. Management is all pervasive
 Pervasive means universally applicable
 Managerial activities are performed in every organization
 Government companies, gym, clubs etc all require management.
3. Management is multidimensional:
 Management has 3 dimensions- work, people & operations.
 Management of work-
a) Organisations exist to do some work.
b) Management assigns this work to the employees of the organization.
c) example- production, marketing etc.
 Management of People-
a) Management gets work done through people.
b) These people are of different backgrounds and needs
c) Management collects their skills and efforts and combines them as a team to
achieve the organizational & their personal goals.
 Management of operations:
a) It is the process or activities which convert resources into final products.
b) Instructions and motivation to do the work is provided by the management.
4. Management is a continuous process:
 As long as the organization survives goals have to be achieved.
 Planning, organizing, staffing, directing & controlling are the functions
performed to achieve the goals
 Managers perform all these functions all the time.
5. Management is a group activity:
 Different individuals are working in the organization
 They are of different skill, knowledge and experience
 Manager collects them as a team and they all work towards achieving the goals.
6. Management is a dynamic function:
 Changes take place in the business according to the change in business
environment
 These changes are made in the organization by the management.
 The success of the organization depends upon the needs of the business
environment.
7. Management is an intangible force:
 Management cannot be seen, but its presence can be felt.
 The results/goals achievement is due to the effective management.`
 Satisfaction and happiness of the employees, orderliness in the organization are
the results of effective and efficient management.
Objectives of Management:
1. Organizational Objectives:
a) Survival:
 It is the basic objective of the organization.
 Management ensures the survival of the organization
 Organization should earn enough revenue so that the costs can be
covered.
b) Profit:
 It is the incentive for efforts
 It is essential for covering the cost and risks of the organization.
c) Growth:
 Every business needs to expand.
 Management collects and efficiently utilizes all the resources which will
help the organization to grow.
 Growth can be measured in increase in sale, increase in capital
investment, increase in number of employees etc.
2. Social Objective:
 They are further benefits to the society.
 It includes- (a) Employment generation, (b) Save environment from getting
polluted, (c) Providing amenities (d) adopting new technologies
3. Personal Objectives:
 They are related to the employees of the organization.
 This includes- (a) Competitive salary & perks, (b) peer recognition & (c) personal
development & growth

Importance of Management:
Without management resources will remain resources and will never become production.
1. Management helps in achieving group goals:
 Every organization has goals to achieve
 Employees are of various culture, values etc
 Management collects efforts of every employee
 It provides a common direction to all their efforts.
2. Management increases efficiency:
 It is achieving goals at least cost
 Management functions help to use the resources efficiently
 This leads to increased productivity at less cost
3. Management creates a dynamic organization:
 Business environment is constantly changing
 To be successful, organization has to meet its goals according to the need of the
environment.
 Management helps people to adapt to these changes and achieve its goals
efficiently and effectively.
4. Management helps in achieving personal objectives:
 
Employees have personal goals like competitive salary, peer recognition etc

Organization has goals to achieve

Management integrates and motivates employees to achieve their personal
goals by achieving organization objectives.
5. Management helps in the development of society:
 Every organization has to work for the upliftment of the society
 This is performed by providing- a) quality products at fair price
b) Providing basic amenities c) employment opportunities etc

Nature of Management
Management as an Art:
Art is the skillful application of the knowledge. Managers are not born but are made. Following
are the features of Art:
1. Existence of theoretical knowledge: Art consist of theoretical knowledge. Eg. Music has
various ragas and gharanas etc
2. Personalized application: Art can be used differently by different individuals
3. Based on practice and creativity: Regular practice of art leads to new forms and styles
Comparing Management with Art:
1. Lot of literature is available like Marketing, Finance, Human Resources etc
2. Managers apply the acquired knowledge according to situations, problems, issues etc
3. Through continuous managerial activities, a manager learns new skills and gains
experience
Therefore to conclude in management also a huge volume of literature and books are available
on different aspects of management. Every manager has his own unique style of managing
things and people. He uses his creativity in applying management techniques and his skills
improve with regular application. Since all the features of art are present in management so it
can be called an Art.

Management as a Science:
Science consists of principles. Following are the features of Science:
1. Systematized body of knowledge: Science consists of a proper syllabus like Physics etc
2. Principles based on experimentation: Science principles can be tested in the laboratory
and will give the same result in every condition/situation
3. Universal validity: Science principles can be applied in any situation and the results will
be the same
Comparing Management with Science:
1. Management consist of a systematized body of knowledge like Economics, Maths
etc
2. These principles cannot be verified in the laboratory as it deals with human behavior
3. Management principles have to be modified according to the situation before
application. Therefore they are not universally applicable
Therefore to conclude as management does not satisfy all the features of Science. It deals with
human behavior which is unpredictable it is not a pure science but a social science or a soft
science or inexact science
Management is both a Science as well as an Art:
1. As a Science- Systematised body of knowledge (to explain)
2. As an Art- Existence of theoretical knowledge ( “ “ )
3. As an Art- Personalised application ( “ “ )
4. As an Art- Based on practice and creativity ( “ “ )
Therefore to conclude management is a combination of knowledge (Science) and the skillful
application of this knowledge (Art). Management has principles but the continuous application
of these principles is done in a personalised manner by the manager. This is because manager
deals with human behavior which is unpredictable. They are not mutually exclusive but
complement each other.

Management as a Profession:
Profession consists of specialized knowledge and training. Following are the features of
profession:
1. Well-defined body of knowledge: Every profession has a specialized syllabus like
Chartered Accountancy, Medicine etc
2. Restricted entry: A written examination has to be written and cleared for entry into any
profession like CPT for CA, CPMT for Medicine etc
3. Professional association: All professions are affiliated to a professional association like
ICAI for CA, IMA for Doctors etc
4. Ethical code of conduct: The rules and regulations framed by the professional
association have to be followed by each professional.
5. Service motive: Every professional has to used his specialized knowledge for the
betterment of the society like a doctor distributing free medicines to the poor etc
Comparing Management with Profession:
1. Management has a proper syllabus like MBA- finance, marketing, Law etc
2. There are not restrictions for the entry in Management courses. Any person can
become/appoint as a Manager
3. Except for AIMA for IIM’s, there is no professional association for managers
4. As there is no affiliated association there are no rules framed for managers
5. Management is serving the society by providing good quality products at fair prices.
Therefore to conclude Management does not fulfill all the features of a profession and thus it is
not a full-fledged profession because anybody can proclaim to be a manager; prescribed
compulsory educational degree or license is not required. Besides there are not any formal
ethical codes which are required to be observed.

Functions of Management/Elements of Management:

1. Planning:
 It is the primary function of Management
 It helps to set objectives and then how to achieve them effectively and efficiently
 It is deciding in the present what has to be achieved in future.
2. Organizing
 It decides what activities have to be performed to achieve the objectives
  It decides authority and responsibility relationship of each employee
 It assigns duties and creates departments.
3. Staffing
 Finding and placing the right person with the right skill at the right job
 It recruits, selects and trains employees
 It is also called the human resource function
4. Directing
 It gives instructions to employees what to do and how to do
 It supervises their actions and influences their behavior
 It motivates the employees regularly and communicates with them
5. Controlling
 It helps to measure the actual performance with the standards or target set.
 Through this process the deviations are found.
 Corrective actions is taken so that standards and actual performance are equal

Levels of Management
Levels of Management, means different categories of managers, the lowest to the highest on
the basis of their relative responsibilities, authority and status.
Authority flows from top to bottom and responsibility and accountability flows from bottom to
top.

LEVELS DESIGNATION FUNCTIONS PERFORMED

Top Level Chairperson, 1. Taking key decisions
Presidents, Vice- 2. Welfare and survival of the organization
Presidents, Chief 3. Policies & objectives formation
Executive Officer, Chief 4. Appointment of Middle Level Managers
Operative Officer, 5. Coordinating the activities of the
Board of Directors, organization
Managing Directors 6. Building the goodwill of the organization

Middle Level Departmental heads, 1. Carry down policies of the top level
Divisional heads, Plant 2. Appointment of the lower level
Superintendents, 3. Assign duties and responsibilities to
Operational Managers lower level
4. Motivate the lower level
5. Coordination at all the levels
6. Take decisions on results given by lower
level
Lower/Supervisory/ Foreman, Supervisors, 1. Act as a link between workers and top
Operational Level Leaders, level
Superintendents, 2. Pass instructions to workers
Clerks, Officers 3. Provide training to workers
4. Motivates the workers regularly
5. Prepare reports for middle level to take
decisions.
6. Appointment of the workers
7. Bring workers’ grievances before the
management
8. Maintain discipline among workers

COORDINATION (aspect of management)

Meaning- It is the synchronization of efforts of the employees, integrating them in a sequence
so that the goals can be achieved effectively and efficiently.
It is the process of integrating efforts of employees of all departments so that objectives can be
achieved effectively and efficiently. Lack of coordination results in overlapping, duplication,
delay and chaos.
Essence of Management- It is required at all levels of management or it is not a separate
function of management.
1. Planning- Coordination is required between the main plan and the sub-plans made by
various departments
2. Organizing-Coordination is required between activities and resources available and
between authorities granted, their responsibilities and accountability.
3. Staffing-Coordination is required between skills of workers and job given to them and
between works done and the compensation paid.
4. Directing-Coordination is required between instructions communicated and motivation
given to employees.
5. Controlling-Coordination is required between standards set and actual performance and
between deviations and corrective actions taken.

Needed at all levels of management

Top level
 Coordination is needed to integrate activities of the organisation for accomplishing the
organisational goals.
Middle level
 Coordination of the efforts of different sections and sub-sections
Lower level
 Coordination in the activities of workers to ensure work progresses as per plans
Nature of Coordination
1. Coordination integrates group efforts:
  Different employees have different interests
 Managers integrate the efforts by collecting their interests
 The main focus is to achieve the objectives effectively and efficiently
2. Coordination ensures unity of action:
 Employees perform activities
 These activities should be unified
 Managers ensure all actions are done to achieve the goals effectively and
efficiently
3. Coordination is a continuous process:
 It starts with planning and ends with controlling
 Top level plans and organizes
 Staff is appointed, directions are given and the actions are controlled on a
regular basis so that objectives can be achieved effectively and efficiently
4. Coordination is an all pervasive function:
 It is required at all levels of management
 All departments perform interdependent activities
 Managers coordinate the efforts of all departments in one common direction, so
that the goals can be achieved
5. Coordination is the responsibility of all managers:
 Top level managers coordinate with middle level to see that policies are carried
out
 Middle level coordinates with lower level and top level
 Lower level coordinates with workers to see that the plans are carried out.
6. Coordination is a deliberate function:
 Different employees in a department work with cooperation with each other
 Managers coordinates these efforts of different departments so that the
objectives can be achieved
Importance of Coordination:
1. Growth in size:
 When an organization expands, the number of employees also increase
 This may lead to violation of unity of command
 Managers integrate their actions with the goals of the organization
2. Functional differentiation:
 There are many departments in an organization
 Each department frames its own rules and policies
 Coordination is required to create a harmony between the activities of various
departments to avoid conflicts
3. Specialization:
 Organization employ specialists to use the modern or advanced technology
 These specialists do not take advice from other employees
 This leads to conflicts between these specialists and employees
 Coordination is required to avoid these conflicts between them.