Nature and Significance of Management

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1. Nature and Significance of Management

Introduction

This chapter is a description of management with its concept, objectives and importance. Is management a science, art or profession? Depicting top, middle and supervisory levels, it gives an insight into management functions-planning, organising, staffing, directing and controlling. It throws light on the coordination concept and its importance, being the essence of management.

Chapter at a glance

MANAGEMENT

Definition of Management

Management is a process of getting things done with the aim of achieving goals effectively and efficiently. To analyse this term we must know the following:

· Process in the definition, refers to primary functions or activities that management performs to get things done. These are functions like Planning, Organising Staffing Directing and Controlling.

· Effectively in the definition, refers to doing the right task, completing activities and achieving goals, i.e., it is concerned with the end result.

· Efficiency in definition refers to doing the task correctly with minimum cost.

Effectiveness Vs Efficiency

Effectiveness	Basis	Efficiency
It refers to achieving the goals on time.	Meaning	It refers to doing to task with minimum cost.
It focuses at the end result of the task	Focus	It focus at cost - benefit analysis, i.e., getting maximum benefit with minimum resources.

Characteristics of Management

(i) Management is a Goal Oriented Process.

(a) Management always aim at achieving the organisational goals. These should be simple and clearly stated.

(b) Different organisations have different goals. Management unites the efforts of all members towards achieving these goals.

(c) For example, a company decides to sell 5000 cars in a particular year. The manager will plan a course of action, motivate all the employees and organise all the resources keeping in mind the target of selling 5000 cars

(ii) Management is all Pervasive:

(a) Management is a universal, as it is required whether the organisation is small or large, business or non-business.

(b) The activities involved in managing an enterprise are common to all organisations whether economic, social or political.

(c) For example, A petrol pump needs to be managed as much as a hospital or a school. What managers do in India, the USA, Germany or Japan is the same. How they do it may be quite different.

(iii) Management is Multidimensional: Management is a complex activity that has three main dimensions. These are:

(a) Management of Work: Every organisation exists to perform some work. Management translates this work in terms of goals to be achieved and assign the means to achieve it.

(b) Management of People: Human resources or people are an organisations greatest asset. It involves getting work done through people. Managing people has two dimensions.

· It implies dealing with employees as individual with diverse needs and behaviour.

· It also means dealing with individuals as a group of people.

· In order to survive, every organisation has to produce goods and services.

· This requires a production process which transforms input into the desired output for consumption. It is interlinked with both management of work (what is to be done) and the management of people (Who is to do it).

(iv) Management is a Continuous Process:

(a) Management is a continuous process in the sense that various managerial activities cannot be performed once for all, but it a ongoing process. A manager should be focused on identifying the problems and solving them by taking favourable measures.

(b) All the functions of management (planning, organising, directing, staffing and controlling) are performed by the managers on continuous basis.

(v) Management as a Group Activity:

(a) An organisation is a collection of diverse individuals with different needs.

(b) Every member of the group has a different purpose for joining the organisation but as members of the organisation they work towards fulfilling the common organisational goal.

(d) Management should also enable all its members to grow and develop as needs and opportunities change.

(vi) Management is a Dynamic Function:

(a) Management is a dynamic function and has to adapt itself to the changing environment.

(b) An organisation interacts with its external environment which consists of various social, economic and political factors.

(c) In order to be successful, an organisation must change itself and its goals according to the needs of the environment. For example, McDonalds, the fast food giant made major changes in its menu to be able to survive in the Indian market.

(vii) Management is an Intangible Force:

(a) Management is intangible force that cannot be seen but its presence can be felt in the way the organization functions.

(b) The effect of management is noticeable in an organisation where targets are met according to plans, employees are happy and satisfied.

Objectives of Management

Objectives are the desired result of any activity. These are of 3 types.

1. Organisational/Economic objectives

(a) Objectives which are needed to achieve the economic or organizational goals of the organisation is known as organizational objectives. Management is responsible for setting and achieving objectives for the organisation. It has to achieve a variety of objectives in all areas considering the interest of all stakeholders including, shareholders, employees, customers and the government.

(b) The main objective of any organisation should be to utilise human and material resources to the maximum possible advantage, i.e., to fulfill the economic objectives of a business. These are survival, profit and growth.

· Survival: In order to survive, an organisation must earn enough revenues to cover costs. It is the basic objective of any organisation.

· Profit: Mere survival is not enough for business. Profit provides a vital incentive for the continued successful operation of the enterprise. Profit is essential covering costs and risks of the business.

· Growth: A business needs to add to its prospects in the long run, for this, it is important for the business to grow. Growth of a business can be measured in terms of sales volume increase in the number of employees, the number of products or the increase in capital investment, etc.

2. Social objectives

(a) Objectives which are desired to be achieved for the benefit of the society is known as social objectives.

(b) As a part of society, every organisation whether it is business or non-business, has a social obligation to fulfill. This refers to consistently creating economic value for various constituents of society.

(c) For example, using environmental friendly methods of production, giving employment opportunities to the disadvantaged sections of society and providing basic amenities like schools and crèches to employees.

3. Personal/ human/ individual Objectives:

(a) Objectives which are related to individual needs of the employees of an organisation is known as personal objectives.

(b) Organisations are made up of people who have different personalities, backgrounds, experiences and objectives. They all become part of the organisation to satisfy their diverse needs.

(c) These needs can be financial needs such as competitive salaries 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:

(a) Management is required not for itself but for achieving the goals of the organisation.

(b)The task of a manager is to give a common direction to the individual effort in achieving the overall goal of the organisation.

2. Management increases efficiency:

(a) The aim of a manager is to reduce costs and increase productivity through better planning, organising, directing, staffing and controlling the activities of the organisation.

(b) A manager increase efficiency also through the optimum utilization of all the resources such as man, machine, material and money (i.e., 4 M).

3. Management creates a dynamic organisation:

(a) Organizations have to survive in dynamic environment so managers keep making changes in the organisation to match the environmental changes.

(b) It is generally seen that individuals in an organisation resist change. Efficient management helps people adapt to these changes so that the organisation is able to maintain its competitive edge.

4. Management helps in achieving personal objectives:

(a) A manager motivates and leads his team in such a manner that individual members are able to achieve personal goals while contributing to the overall organisational objective.

(b) Through motivation and leadership, the management helps individuals to develop team spirit, cooperation and commitment to group success.

5. Management helps in the development of society:

(a) An organisation has multiple objectives to serve the purpose of the different Groups.

(b) In the process of fulfilling all these objectives, management helps in the development of the organisation and through that it helps in the development of society.

(c) It helps to provide good quality products and services, creates employment opportunities, adopts new technology for the greater good of the people and leads the path towards growth and development.

NATURE OF MANAGEMENT

Management as an Art

Art is the skillful and personal application of existing knowledge to achieve desired results. It can be acquired through study observation and experience.

Management can be said to be an art:

(a) Existence of theoretical knowledge: Art comprises of some theoretical knowledge in the form of some basic principles and theories of pure art.

This feature of art is present in management as there is lot of literature available in various areas of management like marketing, finance and human resources which the manager has to specialise in. So, there is existence of theoretical knowledge.

(b) Personalised application: A pure art involves personalization since the use of this basic knowledge varies from one individual to another. An artist will always make use of his skills in different way.

This feature of art is also present in management as every manager has his own unique way of managing things and people. Managers are concerned with achieving of organisational targets of profit, sales etc. Managers put their knowledge into practical use and attempt to achieve business goals.

(c) Based on practice and creativity: A pure art involves the creative practice of the given theoretical knowledge. The creativity and practice of an artists makes him called an artist in real sense. It is true his long years of practice and creative approach that an artist makes use of his given skills most effectively.

This feature of art is also present in management, a manager applies this acquired knowledge in a personalised and skillful manner with regular practice of management principles.

Conclusion

From above discussion we may conclude that management satisfies the features of an art. Therefore, we may conclude that management is an art in real sense.

Management as a Science

Science is a systematically organised body of knowledge that explains certain general truths acquired through observation and experimentation which is capable of verification.

Management cannot be said to be science:

(i) Existence of systematised body of knowledge: Science is systematised body of knowledge in a sense that it is based on cause and effect relationship which is developed through years of research and experimentation.

This feature of science is present in management, as it has its own theory and principles that have developed over a period of time.

(ii) Principles based on experimentation: Scientific principles are first developed through observation and then tested by repeated experimentation.

This feature are not cent percent applicable, since the management deals with the human beings whose behaviour cannot be predicted on the basis of absolute laws an sex permutation.

(iii) Universal Validity of principles: Scientific principles have universal validity and application.

This feature are not cent percent applicable, since their application and use has to be modified according to given situations.

Conclusion

From above, we may conclude that management does not satisfy all the features of a pure science which makes it being called an inexact science or soft science.

Management as a Profession

A profession is an occupation backed by specialised knowledge and training.

(i) Well- defined body of knowledge: Every profession has a well- defined body of knowledge which can be learnt through instructions.

This feature is applicable to management, as it is based on a well-defined body of knowledge, which can be acquired at different colleges and professional institutes and through a number of books and journals.

(ii) Restricted entry: The entry to a profession is restricted through examination or through acquiring an educational degree. For example, to become a chartered accountant in India, a candidate has to clear a specified exam conducted by the Institute of Chartered Accountant of India.

This feature is not applicable to management, as there is no restriction on anyone being designated as manager in any business enterprise. Anyone can be called manager irrespective of the educational qualifications.

(iii) Professional Association: For the regulation of any profession, there should be representative body which regulates entry, grants certificate of practice. For example India, Indian Institute of Chartered Accountants regulates the entry into this professional. This feature is not applicable to management as it is not compulsory for a manager to be a member of any management association. Management has also got an association that is AIMA (All India Management Association) that regulate the activities of the managers but there is no legal support for it.

(iv) Ethical code of conduct: All profession are bound by a code of conduct which guides the behaviour of its members. For example, all doctors take the oath of ethical practice at the time they enter the profession.

This feature is not applicable in management as there no uniform code of conducted for the managers. There are several associations of practising managers like AIMA (All India Management Association) that has laid down a code of conduct to regulate the activities of their members, but there is no legal support for it.

(v) Service Motive: The basic motive of a profession is to serve their clients interests by rendering committed services in exchanges of professional fees. The task of a lawyer is to ensure that his client gets justice.

This feature is not applicable in management as the basic purpose of management is to help the organisation to achieve organisational goal, which is generally profit maximisation.

Conclusion

Management is not a full-fledged profession like legal, accounting or medical profession because it does not fulfil all the characteristics of a profession.

Levels of Management

Top Level Management

They consists of the senior most executives of the organisation like CEO, CFO, President, Vice- President, etc.

Functions of Top Management

(i) Determining objectives of the organisation: Their basis task is to integrate diverse elements and coordinate the activities of different departments according to the overall organisational objectives.

(ii) Welfare and survival of organisation: These top level managers are responsible for welfare and survival of organisation.

(iii) Analyse business environment: They analyse business environment and its implication for the survival of the firm.

(iv) Formulate Organisational goals and strategies: They formulate overall organisational goals and strategies for their achievement.

(v) Responsible for all activities: They are responsible for all activities of the business and for its impact on society.

Middle Level Management

Middle management is the link between the top level and lower level manager e.g.; division heads, department heads, and regional heads.

Functions of Middle Management

(i) Interpreting policies: At this level, policies framed by top level managers are interpreted. Middle management is responsible for implementing and controlling plans and strategic developed by top managers.

(ii) Organising Activities: Middle level managers organise the activities of their department for executing the plans and policies. Middle level managers are the head of some department. Like, they are responsible for the activities of first line managers.

(iii) Necessary personnel: Middle level management ensure that their department has necessary personnel. For this, they recruit and select suitable employees for their department.

(iv) Motivate subordinate: The middle level management motivate the subordinate to perform to their best ability. The middle level managers offer various incentives to employees so that they get motivated and perform to their best ability.

(v) Creating Cooperation: Cooperation among different divisions is required to achieve the organisational objectives and this is done by middle level managers.

Supervisory or Operational Management

Foreman supervisors comprise the lower level in hierarchy of the organisation.

Functions of Supervisory Level

(i) Submitting Worker's Grievances: Lower level managers are in direct contact with the workmen who are directly engaged in the completion of work. They themselves sort out the ordinary problems of the workmen and submit workers serious grievances to the middle level managers.

(ii) Proper working Environment: Lower level managers ensure that proper arrangement of electricity, ventilation, water, cleanliness etc. is made at the workplace. This increases efficiency.

(iii) Efforts of workforce: Lower level managers directly oversee the efforts of the workforce. The quality and quantity of output depends upon their efforts.

(iv) Helping Middle level management: They help middle level management in selection, training, placement and promotion of workers.

FUNCTIONS OF MANAGEMENT

1. Planning:

(i) Planning is the function of determining in advance what is to be done and who is to do it.

(ii) This implies setting goals in advance and developing a way of achieving them efficiently and effectively.

2. Organising:

(i) Organising is the management function of assigning duties, grouping tasks, establishing, authority and allocation of resources required to carry out a specific plan.

(ii) Once a specific plan has been established for the accomplishment of an organisational goal, the organising function examines the activities and resources required to implement the plan.

3. Staffing:

(i) Staffing is the process of finding right people for right job.

(ii) A very important aspect of management is to make sure that the right people with the right qualifications are available at the right places and times to accomplish the goals of the organisation.

4. Directing:

(i) Directing involves leading, influencing and motivating employees to perform the tasks assigned to them.

(ii) This requires establishing an atmosphere that encourages employees to do their best. Motivation and leadership are two key components of direction.

5. Controlling:

(i) Controlling is the management function of monitoring organisational performance towards the attainment of organisational goals.

(ii) The task of controlling involves establishing standards of performance, measuring current performance, comparing this with established standards and taking corrective action where any deviation is found.

COORDINATION - THE ESSENCE OF MANAGEMENT

Coordination is the process by which a manager synchronizes the activities of different departments. It is not a separate function, but the essence of management due to following reasons:

1. Coordination Needed to perform, all functions: Managerial functions are performed in a better way with the help of coordination. Koontz and O'donnel, rightly said, Like a thread in garland, coordination is part of all management functions.

(i) Planning needs coordination among main plans and sub plans. The plans of different departments will be coordinated to prepare a plan for whole organization.

(ii) While performing organizing function, there is a need to have coordination between authority, responsibility and accountability at different levels.

(iii) Coordination in staffing function is needed between nature of job and qualification of employees and nature of work and compensation fixed.

(iv) In directing function, coordination is required between superior and subordinate between orders, instructions, guidelines etc.

(v) In controlling function, coordination is required between standard set and actual performance.

Characteristics of Coordination

1. Coordination integrates group efforts:

(i) Coordination always applies to group efforts, rather than individual effort. There is no need for coordination when only single individual is working.

(ii) Its needs for orderliness, integration arises only when more individuals are working. Coordination unifies their diverse activities and gives a common focus to group efforts.

2. Coordination ensures unity of action:

(i) The purpose of coordination is to secure unity of action in the realisation of a common purpose. It acts as the binding force between departments and ensures that all action is aimed at achieving the goals of the organisation.

(ii) For example, at Fabmart, the production and sales department have to coordinate their work, so that production takes place according to the demand in the market.

3. Coordination is a continuous process:

(i) Coordination is not a one-time function but a continuous process. It begins at the planning stage and continues till controlling.

(ii) Kapil plans her winter collection in the month of June itself. He has to then ensure that there is adequate workforce and continuously monitor whether production is proceeding according to plans. His marketing department also has to be briefed in time to prepare their promotional and advertising campaigns.

4. Coordination is an all pervasive function:

(i) Coordination is required at all levels of management due to the interdependent nature of activities of various departments. It integrates the efforts of different departments and different levels.

(ii) Lack of coordination in any department leads to overlapping of activities. So, to attain harmony and integration of activities, coordination is required.

5. Coordination is the responsibility of all managers:

(i) Coordination is the function of every manager in the organisation.

(ii) Top level managers need to coordinate with their subordinates to ensure that the overall policies for the organisation are duly carried out. Middle level management coordinates with both the top level and first line managers. Operational level management coordinates the activities of its workers to ensure that work proceeds according to plans.

6. Coordination is a deliberate function:

(i) A manager has to coordinate the efforts of different people in a conscious and deliberate manner. Even where members of a department willingly cooperate and work, coordination gives a direction to that willing spirit.

(ii) Cooperation in the absence of coordination may lead to wasted effort and coordination without cooperation may lead to dissatisfaction among employees.

Importance of Coordination

1. Growth in size:

(i) As organisation growth in size the number of people employed by the organization also increase.

(ii) Thus, it becomes necessary for organisational efficiency to harmonise individual goals and organisational goals through coordination.

2. Functional Differentiation:

(i) Functions of an organisation are divided into departments, divisions and sections. All departments may have their own objectives, policies and their own style of working.

(ii) The process of linking the activities of various departments accomplishes organisational goals.

3. Specialisation:

(i) Modern organisations are characterised by a degree of specialisation. Specialists usually think that they only are qualified to evaluate, judge and decide according to their professional criteria.

(ii)Therefore, some coordination is required by an in dependent person to reconcile the difference in approach interest or opinion of the specialist.

MANAGEMENT IN THE TWENTY-FIRST CENTURY

1. The management in twenty-first century is a global management. As boundaries between cultures and nations gets blurred and new communication technology makes it possible to think of the world as a global village, the scope of international and inter-cultural relationships is rapidly expanding. The modern organisation is a global organisation that has to be managed in a global perspective.

2. The global manager has to play multidimensional role by combining his technical skill, people skill and soft skill. He must be able to organise, analyse and motivate people at international level.

3. The global manager has to select rights techniques. Right resources, software projects and has to make appropriate changes in organisation keeping in mind the trend of world and requirement of outsourcing.

WORDS THAT MATTER

1. Management: Management is a process of getting things done with the aim of achieving goals effectively and efficiently.

2. Organizational objectives: Objectives which are needed to achieve the economic or organizational goals of the organization is known as organizational objectives.

3. Social objectives: Objectives which are desired to be achieved for the benefit of the society is known as social objectives.

4. Personal objectives: Objectives which are related to individual needs of the employees of an organisation is known as personal objectives.

5. Art: Art is the skilful and personal application of existing knowledge to achieve desired results.

6. Science: Science is a systematically organised body of knowledge that explains certain general truths acquired through observations and experimentation which is capable of verification.

7. Profession: A profession is an occupation backed by specialised knowledge and training.

8. Top level management: They consist of the senior most executives of the organic like CEO, CFO, President, Vice- President, etc.

9. Middle management: Middle management is the link between the top level and lower level manager e.g.; division heads, department heads, and regional heads.

10. Supervisory or Operational management: It consist of foreman supervisors comprise the lower level in hierarchy of the organisation.

11. Coordination: Coordination is the process by which a manager synchronizes the activities of different departments. It is not a separate function, but the essence of management due to following reasons.

Notes - Time and Clocks

Nature and Significance of Management

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