Management is concerned with achieving organisational goals through – Forecasting, Planning, Organising, Motivating, Co-coordinating, Controlling, Directing.
People who developed these technical skills and were delegated the authority to use them, became the ‘elite’ group in organisations known as management.
Management has a wide scope in every field. It is very difficult to precisely define the scope of management. Management is a purposeful action meant to convert resources into results.
The modern concepts mainly divide the resources into two types- ‘Material’ and ‘Human’. A resource itself can do nothing. It remains unproductive until it is managed. The management activity is the conversion of unproductive and inert resources into productive results.
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Learn about:- 1. Meaning of Management 2. Definitions of Management 3. Scope 4. Concept 5. Nature 6. Functions 7. Importance 8. Role 9. Challenges.
What is Management? – Meaning, Definitions, Scope, Concept, Nature, Functions, Importance, Role and Challenges
Contents:
- Meaning of Management
- Definitions of Management
- Scope of Management
- Concept of Management
- Nature of Management
- Functions of Management
- Importance of Management
- Role of Management
- Challenges of Management
What is Management – Meaning
We needed management in past and today also to get the desired result effectively and efficiently. The natures of management practices have varied area-to-area and jobs-to-jobs. At present there is need of management in each and every aspect of our lives including different activities in an organisation. The management practices are used in our personal life, family, social, economic, political and professional areas.
Where we consider the activity is less important than less time and focus is given on that activity. Management is a group of persons that is having control over business activities in an organisation. The main functions performed by management of the company are planning, organising, controlling, directing, motivating people and budgeting for activities. These functions take place in every organisation and are highly integrated with each other directly or indirectly.
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It can be said the management is the art of getting the work done from others by utilizing the available resources effectively and efficiently to achieve the pre-determined goals. The different types of activities are being performed in an organisation such as production, marketing, financial, human resource, logistic, research and development, storage, etc.
These jobs are performed by different persons because all jobs cannot be performed by one person or a team due to limitations of an individual. The each team is called a branch of management. In management also the people are working at lower, middle and top levels. Top level of management is mainly involved in planning and controlling activities.
Middle level of management is involved in direction and controlling more and less in planning work. The lower level of management is involved in execution of plans and involved in performing the tasks and getting work done from their subordinates.
In the present situation to perform a variety of functions a high degree of managerial skills is needed. It is to be developed timely so that the work is not affected adversely. The management enjoys the higher authority in an organisation and they delegate the authority to their subordinate as per requirement to get the jobs performed. The team of management is responsible for achieving the objectives of the organisation.
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They put their best efforts to get the work done from subordinates. During this they guide, instruct, counsel and motivate the people to get their high level of commitments towards accomplishment of the targets. The resources are being used as per the need of the business activities, these resources are used very effectively and efficiently.
The role of management in an organisation is very important. So there is strong need for development of the management team so that their efficiency can be improved in the competitive global markets and organisation gets the advantage along with the managerial staff also.
In a business organisations the coordination and direction of the efforts of others is a major part of the management job. The manager has to deal not only with the staff but also with others outside his own group, and has a decided influence on the organisation.
In any organisation, each supervisor, foreman, executive is a manager in the area of his responsibility. In the past, the emphasis has been on the technical or functional aspects of management. Early writers on classical management such as – Fayol described management in detail and systematic way.
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Management is concerned with achieving organisational goals through – Forecasting, Planning, Organising, Motivating, Co-coordinating, Controlling, Directing. People who developed these technical skills and were delegated the authority to use them, became the ‘elite’ group in organisations known as management.
Modern theories of management highlight the multidimensional role in different areas as under:
(a) Dealing competently with organisational policies.
(b) Successful managing change.
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(c) Confronting ethical issues and dilemmas.
(d) Ensuring personal ‘survival’ and career success in organisations.
(e) Safeguarding personal health in a stressful environment.
What is Management – Definitions Provided by Schutize, Plownan, Keith and Gubellini, Henri Fayol, Wheeler and Peter Drucker
Management is defined by many people in many ways.
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Schutize, J.N. says, “Management is the force which leads, guides and directs organisation in the accomplishment of a predetermined objective “.
Plownan and Peterson says, “It is a technique by means of which the purpose and objectives of a particular human group are determined, clarified and effectuated”.
Keith and Gubellini says, “It is the force that integrates men and physical plan into an effective operating unit”.
Henri Fayol says, “To manage is to forecast and plan, to organise, to command and to coordinate and to control”.
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Wheeler says, “It is centered in the administrators or managers of the firm who integrate men, material, and money into an effective operating unit”.
Peter Drucker says, “It is a multiplicative organ that manages a business and manages managers and manages workers and works”.
The two commonly accepted definitions of management are:
a. Management is an art of getting things done through others.
b. Management is a distinct process consisting of activities of planning, organising, actuating and controlling, performed to determine and accomplish stated objectives with the use of human beings and other resources.
What is Management – Scope (Subject Matter of Management, Functional Area of Management and Management as an Interdisciplinary Approach)
George has viewed managers’ job in a broader context, “Determining the collective objectives of an undertaking and generating an environment for their achievements is the total function of a manager.”
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This environment consists of two parts. First is the physical part which includes all the physical aspects of which it is compared i.e. light, noise, ventilation, the tools and materials that employees work with and the sequence of work performance. The second part is conceptual in nature and refers to the mental facet of the environment which affects an employee’s attitude towards his work and his work place.
An effective mental environment makes the employee participate willingly in the endeavours of the organisation. “A manager’s prime task, therefore, is the creation of a healthy, physical and mental work climate which will induce other to willingly contribute their efforts to achieve the objectives of the undertaking. Without this, proper physical conceptual environment or work climate, the participants efforts be ineffective or even lacking.”
Management has a wide scope in every field. It is very difficult to precisely define the scope of management.
Yet the following may be considered to evaluate the scope of Management:
1. Subject matter of management
2. Functional area of management
Scope # 1. Subject Matter of Management:
In modern days, every activity of any organisation is basically looked after and managed by management. Whole of the management process is a chain of activities. Thus from starting with planning it has to go a long way to achieving objectives. All these activities assume the status of subject matter of management.
In nutshell planning, organising, directing, coordinating, motivating, staffing, leading, communicating and controlling areas becomes the subject matter of management. There is no area which remains untouched by the management. It can, therefore, be said that management has a very wide scope in any organisation.
Scope # 2. Functional Areas of Management:
All the activities added with others become total management. But different skills and knowledge are required to manage them. Secondly it becomes a hard task, for one person to handle all these properly. Need for specialisation is emerged out of this. Now-a-days a qualified manager tries to acquire specialised knowledge of one or two of the areas of management.
Such specialised areas are:
i. Finance
ii. Human resource
iii. Materials
iv. Marketing
v. Machines
i. Financial Management:
Money occupies prime importance in successful running organisation. Only applying or pouring money in organisation does not ensure success. Therefore, now-a-days, money is being taken as a part of finance. Finance includes cash and fund flow, application of different management tools to transcript the financial accounts in the form of management accounting which provides data of decision making. Cost of production occupies major portion in outflow of funds.
As such a financial manager must know the cost as well as financial accounting. As far as external finance is concerned, managing the creditors and investors along with government statues is also a major area where the management has a wide scope.
ii. Personnel or Human Resource Management:
Next “M” is men. It is not only a human but a resource also. Managing this human resource is much ticklish and thus intelligent, as it is a live resource and not a dead resource. A dead resource will not complain for any untoward handling, immediately. No doubt it will tell upon the profitability of the undertaking in long run. Whereas mismanagement of human resource immediately affects the organisation. Fortunately development of this human resource has gained a fast momentum.
It has resulted in efficiency and, in turn, profitability of any undertaking. This includes various functions right from recruitment to retirement of employees. A Japanese management scientist has rightly said that they take care of their employees from womb to tomb. Thus this area of management has a very wide scope and management skills are essential for this.
iii. Material / Purchase Management:
Raw material is the most important factor of production and thereby important element of production cost. Unless it is controlled, this cost will inflate and finally tells upon the profit of any organisation. There are ways and means to control it. But, again, it is a specialised job. Right from procurement of material to its utilization, that too, efficiently and conservatively is the area of material management.
It involves procurement of right material at right time and at right cost, stocking of material, its preservation, its issue to production department and finally its proper accounting. All these require management skills. Thus purchase / material management fall under the preview of scope of management.
iv. Marketing Management:
Marketing of the goods produced is equally important, in today’s competitive world. Unless your product is made known to its consumers, it is very difficult to market it. Marketing does not simply mean selling. On the other hand selling is a part of marketing.
It involves, market research, creating demand, good packaging, effective advertising, regular and continuous supply, transportation, selling, warehousing, allowing credit and finally post sales service which is most important as far as mechanical and electronic goods are concerned.
Functions and area of marketing are very vast. It also requires specialisation in management. Thus marketing has assumed a very specialised and expertise branch of management. Naturally scope of management is very vast in marketing.
v. Machine / Maintenance Management:
Just as bad workman creates a mess in production, bad and ill-maintained machines deteriorate quality of production. As the saying goes “one can be fooled once and not all the time.” Inferior quality of goods cannot be continuously marketed. Standardisation of production has become the need of the time. This standardisation can be maintained only of all five Ms. are of good quality.
Today’s consumer is more quality conscious, and purchases quality goods. This good quality, can be maintained by utilisation of modern machines and their quality maintenance. Managers have a wide scope in this also.
All the above are main areas where management has wide scope.
Following areas are also covered by management:
i. Office Management:
This includes the selection of office location, adopting appropriate office layout, staffing function, smooth flow of work, office forms design, control, office appliances and machines, giving best services from office to different parties or people.
ii. Development Management:
This is an area where in all-round development of managers and managerial skills is developed by way of experimentation and research. Thus training, orientation refreshers, conferences and seminars are arranged.
Scope # 3. Management as an Interdisciplinary Approach:
For correct application of the management principles, study of commerce, economics, sociology, psychology and mathematics is very essential. For better discipline in the whole organisation, management must adopt an inter-disciplinary approach which is very essential due to complexity of business organisation.
Scope # 4. Principles of Management are of Universal Application:
The principles of management have universal application. Business organisation, industry, trade, commerce, educational, religious, charitable, political and social institutions etc. can be run successfully and efficiently by applying modern principle and techniques of management everywhere.
Scope # 5. Essentials of Management are:
Following three are essentials of management:
i. Scientific methodology
ii. Human relationship
iii. Quantitative techniques
Scientific methodology must be adopted while applying management principles. Management must concentrate on human relation and follow quantitative technique for productivity as well.
Scope # 6. Modern Management is an Agent of Change:
The technique of management can be improved by proper research and development. Due to fast changes within and outside the business organisations, improved and appropriate techniques of management must be developed through research.
What is Management – Concept
Management is a purposeful action meant to convert resources into results. The modern concepts mainly divide the resources into two types- ‘Material’ and ‘Human’. A resource itself can do nothing. It remains unproductive until it is managed. The management activity is the conversion of unproductive and inert resources into productive results.
When we talk of result, usually think of a wide term. Hence, the result what we understand is in terms of predetermined objective. The consequence of any activity is not a result. A result is the outcome of purposeful activity, which is management. So it is a strategic result-oriented action.
To understand the predetermined objective of management, let us study the following example:
“Two students were going to appear at an examination.”
Student-A prepared well before the examination to acquire a better rank and pass the examination.
Student-B did not prepare for the examination and would take a chance.
Both the students appeared at the examination and they expected results. In the case of Student-A, under normal circumstances he would pass with rank, whereas student-B, under normal circumstances would fail.
‘A’ had prepared well for the examination, in other words, he had the predetermined objective of passing the examination with rank.
‘B’ did not prepare for the examination, so he never had predetermined objective of passing the examination. In his case, passing was only a chance.
It is imperative that Management activities are always predetermined for desired results. Result is not the outcome of ‘luck’ and ‘chance’. A result is the outcome of a purposeful activity, and it is always positive in nature in Management activity. In view of the fact that management is a vital concern to a Manager, who is supposed to have always certain resources in the form of money, material and men etc., under his disposal.
The way in which to utilise them help achieve the objective, is indeed a pre-determined action of management. A manager is responsible for the management actions. For achieving the goals, management is to be applied in creating the right conditions for right job. This is to be carried out in the right way and also at the right time to ensure that the results are as desired and pre-determined by the manager.
What is Management – Nature
Nature of any object, including a field of study, specifies ‘what exactly it is’. This is true for management too.
Nature of management specifies what management is which can be explained by the following points:
1. Multidisciplinary:
Management is multidisciplinary. This implies that, although management has been developed as a separate discipline, it draws knowledge and concepts from various disciplines- economics, psychology, sociology, political science, anthropology, ecology, statistics, operations research, history, etc.
Management integrates the ideas and concepts taken from these disciplines and presents newer concepts which can be put into practice for managing the organizations. In fact, the integration of knowledge of various disciplines is the major contribution of management and this integrated discipline is known as management.
Therefore, the contributions in the field can be expected from any discipline which deals with some aspects of human beings.
2. Management Both Science and Art:
Management is both science (though not like pure science) and art. It implies that a person, willing to become an effective manager, has to learn principles of management just like a would-be scientist does and to practice those principles on continuous basis to get perfection just like an artist does.
3. Management as Profession:
Management has been regarded as a profession by many while many have suggested that it has not achieved the status of a profession.
Management as Science and Art:
There are conflicting views about whether management is a science or an art. Some management experts say that management is a science, some say that management is an art; some say that management is both a science and an art. Resolving these conflicting views is important because learning process of science and art differs. Science is mostly learned through experimentation while art is learned mostly through practice. In the light of this, we have to identify features of both science and art and evaluate the extent to which management has these features.
Management as a Science:
Science is a body of systematized knowledge generated through logical consistency, critical evaluation, and experimental study.
Thus, science has the following features:
1. Systematized Body of Knowledge:
Science is a systematized body of knowledge. Principles of science are based on definite cause-effect relationship, that is, a particular factor has been caused by what factor can be explained in a definite way.
For example, if you throw a ball up, after going upward the ball will ultimately come back on the ground because of earth’s gravitational force. In management, there is lack of such a cause-effect relationship; cause-effect relationship is defined in flexible way, not in definite way. Thus, management is not a true science.
2. Principles Based on Experimentation:
In science, principles are evolved on the basis of experiments conducted in laboratories. Such principles are tested rigourously for final approval. In management, this is not done in all cases. In many cases, management principles are based on personal observations and experiences.
In some cases, experiments in management are conducted under controlled conditions but their findings are not tested like science. From this point of view, management is not a true science.
3. Verifiable Principles:
Principles of science can be verified by any one. Such verifications will give the same results again and again. Management principles are not verifiable in many cases. In fact, in many cases, it is difficult to appreciate the bases on which management principles have been evolved. Thus, management is not a true science.
4. Universal Application:
Principles of science have universal application, that is, they remain true irrespective of the conditions in which these are applied. As against this, management principles are situation bound. It implies that a management principle which works well in one country may not work equally well in another country.
This is because of situational differences between the two countries. Further, a management principle which works well in one organization may not work well in another organization of the same country. Similarly, a management principle which has worked well in an organization in the past may not work well in the present because of changed situations. Thus, management cannot be called ‘true science’.
The above discussion shows that management is not a true science. Therefore, management is called an ‘inexact science’ or ‘pseudo-science’.
Management as an Art:
Art is defined as the use of skills to bring a desired result. Skills refer to practical ability or expertness required for doing something.
Thus, art has the following features:
1. Practical Knowledge:
Knowledge refers to possession of facts and techniques of a particular field. Knowledge can be acquired through either study, practical experience or both. Generally, in art, more emphasis is given on acquiring knowledge through practical experience. In management, knowledge is acquired both through study and experience. Thus, management is an art.
2. Personalized Application of Knowledge:
In art, there is personalized application of knowledge to achieve the desired results. This is possible because the same set of results can be achieved through a number of alternative ways. This is done in management too; each manager has his own way of achieving results. Thus, management is an art.
3. Improvement through Continuous Practice:
In art, improvement is made through continuous practice. This practice eliminates those activities which are not relevant for achieving the desired results and improves those activities that are relevant. Through this way, the person engaged in any art tends to move towards perfection. This is also done in management. Thus, management is an art.
4. Situational Application:
Art has situational application. This implies that an art which is appreciated in one situation may not be appreciated in another situation. This is true for management too; a particular management practice which is quite effective in an organization may not be effective in another organization because of change in situational context. Further, in the same organization, management practices may change over the period of time because of change in situational variables.
5. Emphasis on Creativity:
Art puts emphasis on creativity through which new things or ways of working are created. This is done in management too; managers create new products, adopts new ways of working, use new means of financing, practice new ways of marketing and so on.
The above discussion shows that management is an art.
Management- Both a Science and an Art:
If we combine the discussion of management as a science and an art, we find that management has some features of science though not in the same way as science has and it has all features of art.
Thus, management is both science and art. It implies that a person is likely to become an effective manager if he has knowledge of management principles and skills for applying correct principles in a given situation. While knowledge of management principles can be developed through the study of management discipline, knowledge of how management principles can be applied comes from practical experience.
Management as a Profession:
Profession is a specialized occupation which involves providing expert services to clients based on professional knowledge and skills. In management, there is a controversy whether management is a profession or not. This issue requires resolution because it will determine the type of persons who are eligible for occupying managerial positions.
For this purpose, we have to identify the features of profession and to evaluate the extent to which management has these features.
Features of profession are as follows:
1. Well-Defined Knowledge:
All professions have well-defined knowledge that can be acquired by the person who wishes to enter a profession. This acquisition of knowledge is in a formal way and the person who acquires the knowledge is given proof for this by the institution providing the knowledge.
2. Restricted Entry:
Only those persons are eligible to enter a profession who hold the prescribed qualification. Generally, this prescription is made by the concerned professional association. For example, in India, Medical Council of India prescribes qualification for medical practice; Bar Council of India prescribes qualification for legal practice and so on.
3. Professional Association:
All professionals of a field are affiliated to their concerned professional association. This association frames various rules and regulations for governing the profession. The association has right to expel a professional member who does not observe these rules and regulations in true spirit.
4. Ethical Code of Conduct:
A profession has ethical code of conduct which is framed by the concerned professional association and prescribes ‘what to do’ and ‘what not to do’ while providing professional services to clients. Any member found short on this code may be expelled from the profession.
5. Service Motive:
A profession has service motive which suggests that professionals should keep social interest in their mind while charging fee for their professional services. Thus, for professionals, clients’ interest should be first priority and not their fee.
If we apply the above features to denote whether management is a profession or not, we find two situations- on some features, management may be termed as a profession; on other features, it cannot be termed as a profession.
Management may be regarded as a profession because it has the following features:
a. There is a well-established body of knowledge in the field and acquiring this knowledge leads to a person to become an effective manager.
b. There are associations of managers which help the management professionals to develop their competence.
c. Various management associations have formulated ethical codes of conduct to be observed by their members.
d. Service motive is emphasized in management practices.
Management may not be regarded as a profession because of the following reasons:
a. There is no restriction on entry in the management profession. Anyone with any qualification is eligible to enter management profession.
b. There are many, management associations in a country including India. Thus, there is a lack of a representative association.
c. There is lack of well-accepted code of conduct in management. Even codes formulated by various management associations are not enforceable like established professions.
Thus, management is not like medical or legal profession. It can be termed as an emerging profession. An emerging profession is one which has some features of a well-established profession at the moment and is likely to acquire other features in future.
In order to give status of profession to management, many experts in management have suggested the new approach, also known as modern approach, of defining management as a profession without putting undue restriction of entry in management profession.
Professionalization of Management in India:
The term ‘professional management’ has become a glamorous expression in Indian corporate sector. Most of the companies feel pride in communicating to the general public through various means that they are professionally-managed companies. In many cases, this pronouncement is in total contrast with the reality.
As a result, many management experts feel that management in India is far away from professionalization. In contrast to this, many management experts feel that management in India has been professionalized to a great extent. Let us go through reality; the reality is that in terms of adoption of professional management approach, there are two sectors in India: traditionally-managed sector and professionally-managed sector. Both these sectors have different approaches.
Traditionally-Managed Sector:
Traditionally-managed sector consists of those companies (leave partnership firms and other smaller forms of business organizations) which mostly belong to family-managed business groups (though some public sector companies also fall in this category).
Management practices of these companies have the following features:
1. Both ownership and control of the companies are in the hands of family members.
2. Organizational objective is to maximize profit even if it necessitates exploitation of weaker sections of the society in spite of plethora of laws governing business practices.
3. Family hierarchy is followed in organizational hierarchy without giving due consideration to the competence of position holders.
4. Decision making is centralized at the top. Persons below this level are expected to carry out the instructions issued by the top management rigidly. Even those companies which employ professionals like MBAs follow this practice. This is the reason that turnover of MBAs in such companies is very significant.
About management pattern of such companies, Ghoshal and Mandal have observed, “Entrepreneurs have enjoyed the fastest growth so far but this is not sustainable because much of this growth has come at the cost of destroying values. The Indian corporate sector, largely dominated by family capitalism, must change and overhaul its governance structure. From feudal lordship, they must change to adopt the governance mechanism of modern corporations.”
Professionally-Managed Sector:
As against the traditionally-managed sector, there is professionally-managed sector in India too. This sector comprises most of the subsidiaries of multinationals operating in India, few companies of private sector and some companies of public sector. These companies have adopted the management practices as per modern approach of defining management as a profession.
Management of some of these companies has been recognized at the world level. In fact, Hindustan Unilever Limited, a subsidiary of Unilever Pic has become the good source of developing managers who may occupy or have occupied prestigious positions in subsidiaries located in other countries or headquarters of the multinational.
What is Management – Functions (Planning, Organising, Staffing, Co-Ordination and Controlling)
The functions of managers (management) provide a useful structure for organising management knowledge.
The various functions of a manager (management) are given below:
Function # 1. Planning:
Planning is the process of thinking and deciding in advance for the future course of action. Without proper planning, the activities of an organisation may become ineffective.
Planning is a decision making process to decide in advance what is to be done, when it is to be done, where it is to be done, how it is to be done and by whom it is to be done.
i. To forecast the future course of action
ii. To adjust the changes and uncertainties in the system
iii. To utilise the available resources effectively
iv. To determine the quality of products
v. To take correct decision making
vi. To facilitate effective control in the management
vii. To avoid bottlenecks in the production
viii. To help the firm to remain more competitive and secure good name.
Steps Involved in Planning / Hierarchy of Plans:
The various steps in planning function (Purpose or missions, objective, strategies etc.) are discussed below:
i. Purpose or Missions:
Generally the purpose of any industry is to produce and distribute more number of goods. Like that, each business will have their own purpose. Therefore a clear definition of purpose is necessary in order to formulate the objectives.
ii. Objectives:
Objectives or goals are the end results to be achieved. Managers at the top level formulate the objectives for the organisation as a whole. These over-all goals are broken down into number of specific targets and each target is assigned for each department.
For example, the goals of production department is to produce more number of units with lowest costs at the right time. In any organisation management objectives and each departments objectives should be same.
Strategies are defined as a course of action in order to attain the objectives. The general plans of action or programmes of action are called strategies.
Policies are general guide lines in the decision making process. Policies are the rules for action and it should not be confused with objectives. For example, decision about running one shift or two shifts, giving over time to the workers, wage incentives etc. are policies.
Procedure is the sequence of steps involved for completing any task. This gives guide lines for action. Procedure tells how and in what order, the job is to be done, e.g. Procedure for placing a purchase order.
It is a simple type of plan. A rule clearly tells what action one should do and what action one should not.
A programme is a sum total of goals, policies, procedures, rules etc. which is designed to carry out a course of action. It may be a major programme or a supporting programme. Good programming leads to better co-ordination among the different departments.
viii. Budgets:
A budget is a numerical programme and it is referred in “financial terms.” A budget is defined as a statement of anticipated results. A plan always has a budget which is essentially a control device.
To achieve the objectives of the company, the following resources are used. They are men, machines, materials, etc. The financial statement which is to be used for the utilisation of the above resources is called budget.
Function # 2. Organising:
Organising is defined as the process of “identifying and grouping of activities required to attain the objectives, defining and delegating authority, creating responsibility and establishing relationship for the people to work effectively.”
The process of organising involves the following steps:
i. Establishment of objectives
ii. Departmentation
iii. Defining authority and responsibility
iv. Delegation of authority
v. Establishment of structural relationship
i. Establishment of Objectives:
The nature of any organisation mainly depends upon the objectives. Hence it should be very clear. Therefore, it is very essential for a manager to be familiar with the objectives and plans of the organisation.
Grouping of activities is called as departmentation Grouping is done on the basis of- (1) functions (2) processes (3) location (4) products (5) customers etc., most generally, grouping is done on the basis of functions. This consists of grouping of all similar activities into major department in a manufacturing industry. Production, sales, marketing, purchase, accounting, finance, inspection etc., are the examples of departmentation by function.
iii. Defining Authority and Responsibility:
Authority and responsibility of any person should be clearly described in writing so that he can do his work efficiently. If a manager has to work efficiently, he must know what type of job he has and how much authority he has.
iv. Delegation of Authority:
Delegation is the distribution of work to another person with necessary rights and responsibility. A manager cannot do all the work by himself. He needs help from others. So he should delegate sufficient authority to the subordinates in order to carryout work.
v. Establishing Structural Relationship:
The relationship between different departments and different individuals must be clearly established. The structural relationship in the organisation must be clearly shown with the help of organisation charts and manuals. An organisation structure will clarify the position, role and relationship of all personnel’s.
Principles of Organising:
The principles of organising are:
i. Principle of objective
ii. Principle of efficiency
iii. Principle of span of control
iv. Principle of unity of command
v. Principle of unity of direction
vi. Principle of scalar chain
vii. Principle of division of work
vii. Principle of authority and responsibility
ix. Principle of flexibility and continuity
x. Principle of stability.
i. Principle of Objective – In any organisation, the action and aim of every individual in the department and the aim of management both must be same to attain the final objective. The organisation structure should help better co-operation among the employees.
ii. Principle of efficiency – The organisation structure will be efficient when it achieves its final objective with minimum cost. It should provide job satisfaction and work facilities for the individuals.
iii. Principle of span of control – Span of control means the number of subordinates can be controlled by a superior. At top level management, the span will be narrow whereas the lower level management, the span can be broad. The span depends upon- (1) the nature of work (2) level of management (3) type of organisation and (4) type of subordinates.
iv. Principle of unity of command
v. Principle of unity of direction
vi. Principle of Scalar chain
vii. Principle of division of work
viii. Principle of authority and responsibility – (For all the above, Refer Henri Fayol’s principles of management.)
ix. Principle of flexibility and continuity – An organisation structure should be made flexible in such a way that it can be changed easily. After changes, the organisation can be able to work efficiently.
x. Principle of stability – Management should not depend only on a few individuals. If it is so, if any one leaves from the factory will lead to instability. Therefore management should train the subordinates in order to take over the superior’s work at short notice. This will lead to stable management.
Function # 3. Staffing:
In organising function, all the activities are determined and assigned to different personnel. For this, the man power is required at various levels of the organisation. The main motto of staffing is to recruit “Right man for the right job”. Staffing includes recruitment, selection, placement, training, promotion, demotion, transfer and termination etc., during expansion and growth, additional manpower is required.
For this, employees can be recruited and also the subordinates can be trained. To achieve the organisational goals, every manager should ensure that high quality personnel’s are available in an organisation at all levels.
Function # 4. Co-Ordination:
Co-ordination may be defined as “the process of uniting and synchronizing all activities of an organisation to achieve harmony of individual efforts towards the achievements of objectives.”
Co-ordination is not co-operation as often confused. Co-operation means employees should work together in order to achieve the common objective. Co-ordination means putting things and actions in proper order (ie) deciding who has to do, what and when. It is the duty of a manager to see that the individuals in the organisation should work as team.
The process of co-ordination can be explained by the following example:
Take the case of cricket team. Players are placed in different positions when they are fielding. Depending upon the opponent team, batsman’s style of batting, the players must move to the correct position. There is a captain to co-ordinate the fielders’ activities with good understanding in order to win the match.
In an industry, there are many activities like production, purchase, sales, finance etc., all these activities should take place at right sequence and at right place for achievement of objectives. Therefore, the manager has to co-ordinate the above activities of individuals in order to achieve the required results.
The following factors must be considered for achieving better co-ordination:
I. Unity of direction.
ii. Effective co-ordination among the employees and also between the manager and his subordinates.
iii. Good industrial relationship.
iv. Harmonising employees goals with organisation goals.
Co-ordination may be external co-ordination or internal co-ordination in an organisation.
i. External Co-Ordination:
The management has to co-ordinate the activities to be carried out by the various persons outside the factory such as suppliers, customers, government, community and other related agencies.
Co-ordination existing between the group of employees of the same department, managers level and the personnel from various departments inside the factory is called internal co-ordination.
Function # 5. Directing:
Directing is another function of management. It is defined as the process of guiding and supervising the subordinates towards the achievement of organisational goals. Directing is the inter-personnel aspect of managing. By directing, the manager makes the subordinates to perform clearly with their work as per the plan.
The directing function can be successfully carried out through the following:
i. Effective communication
ii. Proper motivation
iii. Good leadership.
Function # 6. Controlling:
Controlling means to check whether the things are done as per the plan or not. Planning and controlling should go together. It is a performance and correction of activities in order to achieve the desired plans.
Controlling function consists of the following steps:
i. Establishing standards
ii. Measuring the actual
iii. Comparing the actual with the standard
iv. Analysing the deviation
v. Taking corrective action.
To measure the actual performance, it is necessary to establish the standards.
The types of standard are:
a. Quantity standard – Defining the volume of production, sales volume are the examples of quantity standards.
b. Quality standards – Defining the surface finish, tolerances of a product, dimension and life of the product etc.
c. Cost standard – This is a monetary based standard. It defines the amount of money to be spent for raw material, advertisement, labour and other expenses.
d. Time standard – Setting up a schedule to be followed in order to complete the work is time standard.
ii. Measuring the Actual Performance:
After establishing the standards, the performance must be measured actually. Measurement can be done by personal observation at regular intervals or at random intervals.
iii. Comparing the Actuals with the Standards:
The actual performance measurement should be compared with the established standards to improve the performance.
The difference of actual performance with the established standard is called deviation. The reason for this should be analysed for further development.
Once the reason is found out, then corrective action should be taken immediately to avoid losses. Action should be taken in such a way that the same should not come in future. Corrective action may be rescheduling the plan, change the standards etc.
The various types of controls are:
1. Production control
2. Budgetary control
3. Inventory control
4. Cost control
5. Labour control
6. Quality control, and
7. Material control.
What is Management – Importance (Determination of Objectives, Achievement of Objectives, Effective use of Resources and Economic Development)
Management is the art of securing maximum prosperity with minimum effort. Management has been significant to the daily lives of people in groups. Wherever there is an organised group of people working towards some common goals, some type of management becomes essential.
In the words of Koontz and O’Donnell. “There is no more important area of human activity than management since its task is that of getting things done through others.” There is no substitute for management in modern organisations.
The importance of management will be more clear by going through the following points:
1. Determination of objectives – The management determines the objectives of an organisation and communicates them to all its employees. An organisation cannot succeed in its mission unless its objectives are identified and well- defined.
2. Achievement of objectives – Management provides efficient leadership to the organisation to achieve its objectives. Managing is not a mere exercise of authority. It involves scientific thinking, direction and control to ensure better results.
3. Effective use of resources – Management tries to make effective use of resources. The resources are scarce in nature. The effective use of resources increases the productivity which can lead the business towards growth and prosperity.
4. Development of resources – Management develops various resources. This is true with human as well as non-human factors. Management improves the quality of lives of people in the society through development of resources.
5. Incorporating innovations – Changes occur very fast in both technology and social process. These changes need to be incorporated to keep the organisations alive and efficient.
6. Integrating various interest groups – In the case of a business organisation, there are various pressure groups like shareholders, employees, government, etc. Management has to balance the pressure from various interest groups.
7. Stability in the society – Management provides stability in the society, by changing and modifying the resources in accordance with the changing environment of the society.
8. Co-ordination of human efforts – Management provides leadership and guidance to the workers. It reconciles their personal interests with the organisational objectives. This leads to better co-ordination among human efforts.
9. Meeting challenges of changes – Management keeps itself in touch with the current environment. It takes necessary steps to ensure that the enterprise is able to meet the demands of changing environment.
10. Economic development – According to Peter Drucker, “Management is the crucial factor in economic and social development.” India is the best example for this point. There was no lack of human and material resources in India, but certainly there was lack of managerial personnel to exploit the resources properly for development.
What is Management – Role
Management is the activating factor of any organisation for getting things done through people. The main activity of the management is to provide efficient leadership to convert the passive resource into productive result. Every organisation requires methods for making decisions, ways to coordinate and directing of the undertaking, efficient communication system for collection and transmission of information and ideas etc.
It must be able to evaluate the success of an enterprise in meeting its objectives. Management acts as a creative force in the organisation. It provides new, ideas and vision to the group of people working and integrates efforts in such a manner that will lead to better goal orientation.
The active role of managers in any organisation becomes clear from the importance of productivity concept. Productivity is the balance among all factors in such a way that maximum results are obtained from optimum resources.
The following are some of the salient points in the role of management:
1. It has the role to surpass the challenges against any moral and social norms.
2. Role of management is the main functional element of any enterprise for getting things done through employees.
3. Management must provide dynamic leadership to convert passive resources into productive ones.
4. Management must have the proper scientific and rational method of decision making system.
5. It must have a vision about the future and must integrate its efforts for successful planning of human and material resources.
6. Modern management must have a different outlook. Its interests must be the development of personnel than a mere profit motive.
7. Management must inculcate creative thinking amongst the personnel for search of new ideas and innovations.
8. Management must adhere to the principles of productivity concept of ‘Minimum input and maximum output’.
9. Management must realise the needs and aspirations of the people working in the organisation.
10. Management must be a profession with ethics rather than a livelihood.
What is Management – Challenges (Conflicting Demands of Various Parties, Increased Complexity of Decisions and Renewal of Management)
Contemporary Issues and Challenges of Management/Emerging Horizons of Management in Changing Environment:
The modern age is called an era of managerial revolution. Managerial revolution means the increasingly important role of management in all the fields, both the business and non-business. Some years ago the owner of a business used to himself perform the job of the manager also.
However, these days there has been a divorce between the owner and the manager. It means that the owners invest their money in business and independent professional managers manage the business. The managers serve as a link between the owners and the workers.
The only reason for the increasing importance of the managers is the changing environment. Constant changes are taking place in business environment. It is not an easy job to run business successfully in the changing environment. So long as we do not adjust ourselves with the changing environment, we cannot succeed. This job can be done only by the professional managers.
In other words, today the role of a manager is continuously changing. The changing roles of manager can also be called ‘challenges before future managers’.
The main challenges before future a managers are the following:
(1) Conflicting Demands of Various Parties:
Many people are benefited through business and mainly among them are: owner, employee, supplier, consumer, government and community. Today, every person is well aware about his interests. Owner expects maximum profits, employees crave for the maximum salary and other incentives, suppliers want payment well in time and customer demands good quality products at reasonable price.
On the same line, government wants people to abide by the Acts and pay their taxes genuinely and community expects business involvement in providing employment, clean environment and working for community development.
To fulfill the expectation of all the groups is a great challenge for managers. This challenge becomes even more serious when the demand of two or more groups is contradictory. For example- the owner wants the maximum profit and the employee wants the maximum salary. To fulfill the demand of both at the same time is very difficult. The reason is obvious, because if to make employees happy more salaries are given to them, profits will automatically decline.
As a result, grievance of the owner is but natural and vis-a-vis the other decision will be opposed by employees. So to satisfy all the groups managers have to establish a balance among their demands.
(2) Increased Complexity of Decisions:
The second challenge in front of the manager is the increased complexity of decisions.
To take decision is becoming difficult for the managers day by day mainly because of two reasons:
(i) Increased Number of Participating Groups:
Today, either inside or outside the organisation many such groups are emerging that feel there should be their involvement in decision making. For example- inside the organization employee section wants to be a part of decision-making and outside the organization the pressure of consumer organizations is continuously increasing. This is a big challenge for managers.
(ii) Availability of More Information:
Sometime earlier when limited amount of information was available, it was not very difficult to take decision. The reason is obvious, because there were a few alternatives available and one has to choose from them only which can be easily done. Today the use of computerised Management Information System is increasing and also modern equipment are available to gather data and for its analysis.
In this situation, when adequate information is available many alternatives exist. As a result, decision-making becomes difficult (arduous). This problem is becoming complex every day.
To face this challenge managers have to acquaint themselves with modern decision-making techniques and also they have to develop new (novel) techniques.
(3) Renewal of Management:
Today, renewal of management is taking place. The significance of renewal of management is in shunning the conventional outlook and adopting the contemporary outlook. Under the conventional outlook of management, managers used to take decisions on the basis of their education, training and experience. They achieved success based on these decisions and felt contended.
For future managers this policy will not be satisfactory because now education, training and experience become obsolete in no time. For example- if a manager has taken a decision on some set criterion and gets success it does not guarantee that the same criterion / formula will lead to success for future. This is because of Volatile Managerial Climate. So, for managers to keep their knowledge up-dated is like a challenge in front of them.
To face this challenge an increase in degree of professionalisation is must. Hence, managers have to keep themselves well informed with the latest information by attending seminars and educational programmes. Educational institutes will also have to modernise their curriculum.
(4) Diversity in Workforce:
Workforce implies the total strength of employees of any organization. Sometime, earlier the employees working for an organization were related to a particular place. They shared common culture and language and also almost all the employees were male. So, it can be said that diversity in workforce was missing. In such a situation it was easy to manage the workforce. Today cut throat competition exists and also it has taken international shape.
To face this situation every organization is in search of employees with best brains, irrespective of their caste, religion, place, culture or sex. Hence, the scope of selection has widened. While selecting employees their caste, religion, place, culture, sex, language, etc. are ignored and their ability is noticed. So, it is but natural that employees with varied abilities will be recruited which will lead to diversity in workforce.
The main significance of diversity in workforce is that today the number of female employees is on a continuous rise which is a new challenge for managers. Today, female employees have entered every field. Earlier managers had just to manage / look after male employees but today because of diversity in workforce the condition has changed.
Managers have to deeply study the personal problems of female employees, the way to motivate them, their attachment for organization and the dual responsibility (office and home), which they have to manage. Otherwise diversity in workforce will lead managers towards failure.
(5) Innovations in Organisational Design:
Today the need to change the organizational design of business is gaining momentum. There are many reasons as to why changes in organizational designs are taking place: like-growing size of business, complex business activities, diversity in workforce, modern information technology, subtle decision making process, etc.
In such a situation there is no significance left for traditional organizational design. The strong challenge in front of managers is to develop organization design, which proves right in modern climate. To survive in the fast changing business environment doing this is inevitable.
Today the traditional basis of organizational design, like – on the basis of functions, on the basis of product, on the basis of regions, on the basis of process and on the basis of customers are obsolete. Instead of these many other organizational designs are developed on the basis of matrix and of the same kinds.
In these there is also a scope for more development. In the form of the latest organizational design Contingency Approach is being advocated. This means that in place of Standardized Design according to the situation any suitable organisational Design can be adopted.
(6) Increased Mobility of Professionals:
Increased mobility of professionals means when specialised employees frequently switch over the companies. Today, the number of professionals is on a continuous rise. On the other hand companies are also in a constant search of better professionals. This is the reason why the market rate of able employees is increasing day by day.
In the lure of increased salary and better perks employees change the company but to adjust in the new climate is like a new challenge for them. So either the mangers have to put a control on themselves or they have to learn the way to adjust quickly.
Increased mobility of professionals has commenced a new type of competition among the companies. Earlier companies used to compete just only for their products but now they all are in a mad race to attract competent employees. In such a situation employees have to choose the company very wisely otherwise their market rate will fall instead of showing an increase.
(7) Technological Changes:
Under technological changes new methods of production and invention of automatic equipment are included. Fast rate of technological changes are posing a challenge in front of managers. Technological changes provide both the opportunities and threats to business. If any manager understands its implication well in time he is able to fulfil his objective otherwise his identity can be in danger.
For example- keeping into consideration the continuous rising of petrol prices, if the Automobile Industry manufactures vehicles which use less oil is an example of technological change. Only that company will survive which can maintain pace with the changing technology. So managers have to keep in touch with technological changes so that business opportunities can be exploited.
Today this slogan seems to be true that ‘Modern Technology is the secret of success’. Hence, those companies which are able to understand modern technology can only survive in the market.
Many Indian companies are just only collaborating with foreign companies to get modern technology.
(8) Changing Scenario of Economic Environment:
Since July, 1991, to meet economic crisis of the nation and to increase the pace of development, the chain of economic reforms was started. The centre of economic reforms was liberalisation, privatisation and globalisation, modernisation of economy posed a great challenge before the managers. In this process many economic reforms were made and to understand and act according to them is a difficult task in itself.
The main steps taken by the government in the direction of economic reforms are as follows – New Industrial Policy, New Trade Policy, Fiscal Reforms, Monetary Reforms, Capital Market Reforms, etc. Entry of multinational companies (MNCs) in the Indian market is only the result of economic reforms. The advent of MNCs is posing a great challenge to Indian companies. Now every company is struggling hard to survive in the market.
In such a situation, great onus lies on the managers. Only by predicting this situation today manager is attracted towards Brand Building, Focus on Customers, New Technology, etc.
(9) Development of Business Ethics:
The growing importance of ethics in business has bound managers to think something novel. Ethics means the ideals which are to be adopted in life. When while doing some activity we contemplate what is wrong and what is right in Public Interest, it will be said that we are following ethics otherwise not. Ethics can be related to different professions / fields like-Medical, Law, Business, etc. By business ethics we mean those ideals which we have to follow in business.
Ethics in relation to business means to fulfill the moral responsibility towards every related person; like – shareholder, consumer, supplier, competitor, society and government. For example- to provide consumer with good quality products at reasonable price is to fulfil moral responsibility towards consumers.
Therefore, it can be said that those managers who overlook responsibility and keep profit earning as their sole motive should shun the dream to be successful. In future, moral responsibility will become most important and managers will have to understand its importance.
(10) Business-Government Relations:
Today, the intervention of Government is increasing to save the interests of labour, consumer and community. This is also the moral responsibility of the Government to secure the interest of all the groups from the exploitation done through business. To control illicit business activities many rights have been provided to Government under various Acts. Through Import-Export Policy, Monetary Policy, Industrial Policy etc. proper control can be exercised over business.
On the basis of the given rights and fixed policies government can compel the business to provide better services. Especially, business is made conscious about water, air and noise pollution. In this way, the growing intervention of government is posing a great challenge in front of business. With this government intervention now managers have to take every step cautiously.
The developed countries have understood the importance of the new form of management and that is why they are successfully coping with the changing environment. Other countries have also started gradually to understand the importance of the role of management in the changing environment.
Therefore, in conclusion, it can be said that – (i) changes are necessary in business environment, (ii) adjustment with the changes is necessary for success, and (iii) this work can be done only by the professional managers.