Unit1 Management
Unit1 Management
Unit1 Management
Management is essential for organized life and necessary to run all types of management. Good
management is the backbone of successful organizations. Managing life means getting things
done to achieve life’s objectives and managing an organization means getting things done with
and through other people to achieve its objectives.
Whether management is an art or science will continue to be a subject of debate. However, most
management thinkers agree that some form of formal academic management background helps
in managing successfully. Practically, all CEO’s are university graduates. Hence, the reason for
including business degree programs in all academic institutions.
Management is a set of principles relating to the functions of planning, organizing, directing and
controlling, and the application of these principles in harnessing physical, financial, human and
informational resources efficiently and effectively to achieve organizational goals.
Definition Of Management?
Many management thinkers have defined management in their own ways. For example, Van
Fleet and Peterson define management, ‘as a set of activities directed at the efficient and
effective utilization of resources in the pursuit of one or more goals.’
Megginson, Mosley and Pietri define management as ‘working with human, financial and
physical resources to achieve organizational objectives by performing the planning,
organizing, leading and controlling functions‘.
According to Harold Koontz, ‘Management is an art of getting things done through and with
the people in formally organized groups. It is an art of creating an environment in which
people can perform and individuals and can co-operate towards attainment of group goals.‘
For example, let us look at the managerial role of a simple housewife and how she uses the
managerial ingredients in managing the home. First, she appraises her household and its needs.
She forecasts the needs of the household for a period of a week or a month or longer. She takes
stock of her resources and any constraints on these resources. She plans and organizes her
resources to obtain the maximum benefits out of these resources. She monitors and controls the
household budget and expenses and other activities. In a large household, she divides the work
among other members and coordinates their activities. She encourages and motivates them to do
their best in completing their activities. She is always in search for improve, mention goals,
resources and in means to attain these goals. These ingredients, generally, are the basic functions
of management.
• Management as a Process
• Management as an Activity
• Management as a Discipline
• Management as a Group
• Management as a Science1
• Management as an Art1
• Management as a Profession
Nature of Management
1) Universal process: Wherever there is human activity, there is management. Without
efficient management, objectives of the company can not be achieved.
2) Factor of production: Qualified and efficient managers are essential to utilization of
labor and capital.
3) Goal oriented: The most important goal of all management activity is to accomplish the
objectives of an enterprise. The goals should be realistic and attainable.
4) Supreme in thought and action: Managers set realizable objectives and then
mastermind action on all fronts to accomplish them. For this, they require full support
form middle and lower levels of management.
5) Group activity: All human and physical resources should be efficiently coordinated to
attain maximum levels of combined productivity. Without coordination, no work would
accomplish and there would be chaos and retention.
7) Social science: All individuals that a manager deals with, have different levels of
sensitivity, understanding and dynamism.
8) Important organ of society: Society influences managerial action and managerial
actions influence society. Its managers responsibility that they should also contribute
towards the society by organizing charity functions, sports competition, donation to
NGO’s etc.
10) Profession: Managers need to possess managerial knowledge and training, and have to
conform to a recognized code of conduct and remain conscious of their social and human
obligations.
11) Process: The management process comprises a series of actions or operations conducted
towards an end.
Objectives of Management
Levels of Management
The term “Levels of Management’ refers to a line of demarcation between various managerial
positions in an organization. The number of levels in management increases when the size of the
business and work force increases and vice versa. The level of management determines a chain
of command, the amount of authority & status enjoyed by any managerial position. The levels of
management can be classified in three broad categories:
Managers at all these levels perform different functions. The role of managers at all the three
levels is discussed below:
1. Top Level of Management
a. Top management lays down the objectives and broad policies of the enterprise.
b. It issues necessary instructions for preparation of department budgets, procedures,
schedules etc.
c. It prepares strategic plans & policies for the enterprise.
d. It appoints the executive for middle level i.e. departmental managers.
e. It controls & coordinates the activities of all the departments.
f. It is also responsible for maintaining a contact with the outside world.
g. It provides guidance and direction.
h. The top management is also responsible towards the shareholders for the
performance of the enterprise.
The branch managers and departmental managers constitute middle level. They are
responsible to the top management for the functioning of their department. They devote
more time to organizational and directional functions. In small organization, there is only
one layer of middle level of management but in big enterprises, there may be senior and
junior middle level management. Their role can be emphasized as -
a. They execute the plans of the organization in accordance with the policies and
directives of the top management.
b. They make plans for the sub-units of the organization.
c. They participate in employment & training of lower level management.
d. They interpret and explain policies from top level management to lower level.
e. They are responsible for coordinating the activities within the division or
department.
f. It also sends important reports and other important data to top level management.
g. They evaluate performance of junior managers.
h. They are also responsible for inspiring lower level managers towards better
performance.
1. Division of Work - According to this principle the whole work is divided into small
tasks. The specialization of the workforce according to the skills of a person, creating
specific personal and professional development within the labour force and therefore
increasing productivity; leads to specialization which increases the efficiency of labour.
2. Authority and Responsibility - This is the issue of commands followed by
responsibility for their consequences. Authority means the right of a superior to give
enhance order to his subordinates; responsibility means obligation for performance.
3. Discipline - It is obedience, proper conduct in relation to others, respect of authority, etc.
It is essential for the smooth functioning of all organizations.
4. Unity of Command - This principle states that each subordinate should receive orders
and be accountable to one and only one superior. If an employee receives orders from
more than one superior, it is likely to create confusion and conflict.
5. Unity of Direction - All related activities should be put under one group, there should be
one plan of action for them, and they should be under the control of one manager.
6. Subordination of Individual Interest to Mutual Interest - The management must put
aside personal considerations and put company objectives firstly. Therefore the interests
of goals of the organization must prevail over the personal interests of individuals.
7. Remuneration - Workers must be paid sufficiently as this is a chief motivation of
employees and therefore greatly influences productivity. The quantum and methods of
remuneration payable should be fair, reasonable and rewarding of effort.
8. The Degree of Centralization & Decentralization - The amount of power wielded with
the central management depends on company size. Centralization implies the
concentration of decision making authority at the top management.
9. Line of Authority/Scalar Chain - This refers to the chain of superiors ranging from top
management to the lowest rank. The principle suggests that there should be a clear line
of authority from top to bottom linking all managers at all levels.
10. Order - Social order ensures the fluid operation of a company through authoritative
procedure. Material order ensures safety and efficiency in the workplace. Order should
be acceptable and under the rules of the company.
11. Equity - Employees must be treated kindly, and justice must be enacted to ensure a just
workplace. Managers should be fair and impartial when dealing with employees, giving
equal attention towards all employees.
12. Stability of Tenure of Personnel - Stability of tenure of personnel is a principle stating
that in order for an organization to run smoothly, personnel (especially managerial
personnel) must not frequently enter and exit the organization.
13. Initiative - Using the initiative of employees can add strength and new ideas to an
organization. Initiative on the part of employees is a source of strength for organization
because it provides new and better ideas. Employees are likely to take greater interest in
the functioning of the organization.
14. Esprit de Corps/Team Spirit - This refers to the need of managers to ensure and
develop morale in the workplace; individually and communally. Team spirit helps
develop an atmosphere of mutual trust and understanding. Team spirit helps to finish the
task on time.
The various approaches to the study of management as propounded by specialists from different
disciplines have come to be called the Schools of Management Thought.
3. Social School
Henry Fayol is known as the father of this school. According to this, school management can
best be studied in terms of the process that it involves.
Those subscribing to this school are of the view that management principles are of universal
application. This approach is also designated as the traditional approach, the universal approach
or the classical approach. The contributors and thinkers who belong to this school are William
Newman, Summers, McFarland, Henry, J.D. Mooney, A.C. Railey, lyndell Urwick and Harold
Koontz.
This school takes note of the psychological factors causing a change in the human behavior in
organized groups under a given situation. It is based upon the fact that management involves
getting things done through people and therefore management must be centered on interpersonal
relations.
This approach has been called the human relations, leadership or behavioral science approach.
The range of thought in this school ore (a) The study of human relations and how managers can
understand and use these relations; (b) The role of manager as a leader and how he should lead
others; (c) The study of group dynamics and inter-personal relationships.
This school of thought is closely related to the human behavior or the human relations school of
thought. It looks upon management as a social system, which refers to a system of cultural inter
relationships. These can be formal organizational relationships or any kind of human
relationships. This approach to management being heavily sociological in nature does what the
study of sociology does.
It identifies the nature of the cultural relationships of various social groups and attempts to show
them as an integrated system. The spiritual father of this school was the late Chester Barnard
who developed the theory of co-operation.
Decision Theory School
The decision theory approach concentrates on the rational decisions theory, which refers to the
selection of a suitable course of action from various possible alternatives. This approach may
deal with the decisions itself, with the person or organizational group who makes the decision or
with an analysis of the decision process.
The scientific approach to decision making involves some of the following factors:
3. Developing alternatives
According to the approach of the Mathematical school, decision-making is a logical process that
can be expressed in terms of mathematical symbols and relationships.
The modern managers may normally face some of the following problems:
3. Communication problems
4. The need for instantaneous management response in the decision-making areas, which
requires up-to date, accurate and comprehensive information
6. Increase in the number of people to be dealt with by government and business structures
This school is of recent origin having developed in the later 1960s. According to this approach,
attention must be paid to the overall effectiveness of a subsystem in isolation from the other
subsystems. The main emphasis is on the interdependence and inter-relatedness of the various
subsystems, from the point of view of the effectiveness of a large system. Its essential features
are as follows:
1. Closed system that has no environment. This part implies that no outside systems are to be
considered.
2. Open system that has an environment. This part implies that it possesses systems with which
it relates, exchanges and communicates.
FUNCTIONS OF MANAGEMENT
Effective management and leadership involve creative problem solving, motivating employees
and making sure the organization accomplishes objectives and goals. There are five functions of
management and leadership: planning, organizing, staffing, coordinating and controlling. These
functions separate the management process from other business functions such as marketing,
accounting and finance.
Planning
The planning function of management controls all the planning that allows the organization to
run smoothly. Planning involves defining a goal and determining the most effective course of
action needed to reach that goal. Typically, planning involves flexibility, as the planner must
coordinate with all levels of management and leadership in the organization. Planning also
involves knowledge of the company’s resources and the future objectives of the business.
Organizing
The organizing function of leadership controls the overall structure of the company. The
organizational structure is the foundation of a company; without this structure, the day-to-day
operation of the business becomes difficult and unsuccessful. Organizing involves designating
tasks and responsibilities to employees with the specific skill sets needed to complete the tasks.
Organizing also involves developing the organizational structure and chain of command within
the company.
Staffing
The staffing function of management controls all recruitment and personnel needs of the
organization. The main purpose of staffing is to hire the right people for the right jobs to achieve
the objectives of the organization. Staffing involves more than just recruitment; staffing also
encompasses training and development, performance appraisals, promotions and transfers.
Without the staffing function, the business would fail because the business would not be properly
staffed to meet its goals.
Coordinating
The coordinating function of leadership controls all the organizing, planning and staffing
activities of the company and ensures all activities function together for the good of the
organization. Coordinating typically takes place in meetings and other planning sessions with the
department heads of the company to ensure all departments are on the same page in terms of
objectives and goals. Coordinating involves communication, supervision, motivation and
direction or leadership by management.
Supervision- implies overseeing the work of subordinates by their superiors. It is the act of
watching & directing work & workers.
Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work.
Positive, negative, monetary, non-monetary incentives may be used for this purpose.
Leadership- may be defined as a process by which manager guides and influences the work of
subordinates in desired direction.
Communications- is the process of passing information, experience, opinion etc from one
person to another. It is a bridge of understanding.
Controlling
The controlling function of management is useful for ensuring all other functions of the
organization are in place and are operating successfully. Controlling involves establishing
performance standards and monitoring the output of employees to ensure each employee’s
performance meets those standards. The controlling process often leads to the identification of
situations and problems that need to be addressed by creating new performance standards. The
level of performance affects the success of all aspects of the organization.
MANAGEMENT VS ADMINISTRATION
BASIS FOR
MANAGEMENT ADMINISTRATION
COMPARISON
Decides Who will do the work? And What should be done? And
How will it be done? When is should be done?
The major differences between management and administration are given below:
1. Management is a systematic way of managing people and things within the
organization. The administration is defined as an act of administering the
whole organization by a group of people.
2. Management is an activity of business and functional level, whereas
Administration is a high-level activity.
3. While management focuses on policy implementation, policy formulation
is performed by the administration.
4. Functions of administration include legislation and determination.
Conversely, functions of management are executive and governing.
5. Administration takes all the important decisions of the organization while
management makes decisions under the boundaries set by
the administration.
6. A group of persons, who are employees of the organization is collectively
known as management. On the other hand, administration represents
the owners of the organization.
7. Management can be seen in the profit making organization like business
enterprises. Conversely, the Administration is found in government and
military offices, clubs, hospitals, religious organizations and all the non-
profit making enterprises.
8. Management is all about plans and actions, but the administration is
concerned with framing policies and setting objectives.
9. Management plays an executive role in the organization. Unlike
administration, whose role is decisive in nature.
10. The manager looks after the management of the organization, whereas
administrator is responsible for the administration of the organization.
11. Management focuses on managing people and their work. On the other
hand, administration focuses on making the best possible utilization of
the organization’s resources.
Conclusion
Theoretically, it can be said that both are different terms, but practically, you will find that the
terms are more or less same. You would have noticed that a manager performs both
administrative and functional activities. Although the managers who are working on the topmost
level are said to be the part of administration whereas the managers working on the middle or
lower level represents management. So, we can say that administration is above management.
CO-ORDINATION
Once the activities of the organisation are broken into smaller units which are re-grouped into
departments (on the basis of similarity of features), managers need to coordinate the activities of
these departments by communicating organisational goals to each department, setting
departmental goals and linking the performance of each department with others so that all the
departments collectively contribute towards the organisational goals. Coordination is “the
process of linking the activities of various departments of the organisation.”
NEED OF CO-ORDINATION
1. Non-routine jobs:
Non-routine jobs need constant flow of information, both vertical and horizontal. Unless there is
proper coordination amongst these jobs, they cannot be performed efficiently. Coordination,
thus, helps in effectively carrying out non-routine jobs.
2. Dynamic activities:
Organisations operate in the dynamic(working) environment. Environmental changes have to be
adopted by organisations for their survival and growth. Coordination helps in completing the
activities which constantly change according to changes in the environment.
3. Standards of performance:
When standards of performance against which actual performance is to be measured are too
high, managers coordinate the various business activities to ensure that high performance
standards are achieved.
4. Interdependence of activities:
When different units of the organisation are dependent on each other for resources or
information, there is great need for coordination amongst them. Greater the interdependence,
greater is the need for coordination.
5. Specialisation:
Specialisation leads to concentration on very narrow areas of job activity. Individuals tend to
overlook overall perspective of the job. This requires coordination to direct all the activities
towards a common goal.
6. Growing organisation:
In growing organisations, number of people and divisions become so large that it becomes
difficult for top managers to coordinate the activities performed by all of them. Various
techniques of coordination (rules, procedures, plans, goals, etc.) help in unifying diverse and
multiple organisational/departmental activities towards the common goal.
Coordination aims to complete individual goals with organisational goals so that both are
satisfied. Satisfied employees work towards organisational goals with commitment, dedication
and loyalty than unsatisfied employees. Coordination complete individual goals with group goals
and group goals with organisational goals.
Coordination helps in promoting group effort rather than individual effort for optimally
achieving the organisational goals. It harmonizes individuals goals with organisational goals and
satisfies individual goals through satisfaction of organisational goals.
8. Unity of action:
Organisations have diverse work force, thoughts, resources, goals, activities and skills.
Coordination helps to unify these diverse set of actions towards a single goal and, thus, maximise
their use.
PRINCIPLES OF COORDINATION:
Principles refer to fundamental truths on which an action is based.
2. Scalar chain:
It refers to chain or link between top managers and lower managers. It is the hierarchy of levels
where information and instructions flow from top to bottom and suggestions and complaints flow
from bottom to top. This chain facilitates coordination as top managers pass orders and
instructions down the chain, necessary for subordinates to work efficiently.
Subordinates also pass upwards only those suggestions and complaints, which they feel should
be brought to the notice of top managers through middle level managers. Passing of only
necessary information facilitates coordination amongst various levels. Scalar chain, thus,
facilitates coordination.
3. Continuity:
Coordination is a continuous process. It must be continuously carried out at all levels in every
department. It starts the moment an organization comes into existence and continues till the
organization exists. Coordination is not an option. It is the inevitable force that binds
organizational members and resources together and, thus, is the backbone of organizational
success.
4. Span of management:
It refers to the number of subordinates that a manager can manage effectively. It is important to
place only as many subordinates under the direction of one manager as can be effectively
managed by him. It affects the manager’s ability to coordinate the activities of subordinates
working under him. Large number of subordinates under one manager can make coordination
difficult.
5. Direct contact:
Direct or personal contact between managers and subordinates can achieve better coordination
than indirect or impersonal contact. Face-to-face interaction amongst people of different levels or
same level in different departments promotes understanding of information and thoughts. This
facilitates effective communication and mutual understanding and through it, effective
coordination.
6. Reciprocity:
It refers to interdependence of activities. Production and sales department, for example, are inter-
dependent. The more one sells, the more one needs to produce. The more one produces, the more
one attempts to sell what is produced.
The nature and extent to which organizational activities are dependent on each other are
considered by managers when they initiate to coordinate the organizational activities. More the
inter-dependence amongst organizational activities more is the need for coordination amongst
them.
7. Dynamism:
There are no fixed and rigid rules for coordination. Changes in organizational environment
necessitate changes in the techniques of coordination.
TECHNIQUES OF CO-ORDINATION
Managers use a variety of techniques for achieving coordination. The main techniques for
effective coordination are as follows:
1. Sound Planning
Coordination facilitates sound planning in the organization. The plan, policies, and comprehen-
sive programs prefer coordination of activities and individuals. Standard procedures and rules
create uniformity in repetitive operations. Thus, coordination is regarded as an essential element
for sound planning
2. Sound Organizational Structure
A sound organizational structure contributes to effective coordination. It clearly defines the
authority relationship which provides an effective means of integrating the activities of different
departments. It clearly defines the authority relationships which provide an effective means of
integrating the activities of different units. A sound organizational structure has the clear
meaning of authority.
3. Clearly defined Objectives
The goal of the organization must be clearly defined. The individual in the organization should
understand the overall objectives. The contribution of their jobs helps to attain the overall
objectives. For achieving proper coordination, there must be unity of purpose.
4. Maintaining Co-operation
Co-operation is the result of maintaining good relationship among the people in the organization.
It depends on sound policies and procedures. Informal contacts should be encouraged to
supplement formal communication. The coordination is more effective and long lasting when the
organization achieves the voluntary co-operation of employees.
5. Formation of Committees
A committee is a group of a person entrusted with functions collectively as a group. The
decisions of committee are easy to be implemented as all who are represented are bound to
follow committee decisions. It promotes coordination through better and free interchange of
ideas, feelings, and opinions.
6. Comprehensive Policies and Programs
Coordination becomes very easy if there are well-defined and comprehensive policies and
programs. This brings uniformity in action because everyone understands the policies and
programs in the same sense. These are also good tools for coordination as they provide the
timetable, schedules etc.
7. Voluntary Cooperation
Coordination is more effective and long lasting when it is achieved through the voluntary
cooperation of employees. Cooperation is the result of harmonious relations among the people of
the organizations. Informal contacts should be encouraged to supplement formal communication.
Voluntary co-operation can be developed among the employees by encouraging them through
contacts and communications.
8. Effective Communication
A good communication system contributes to effective coordination by promoting mutual
understanding and cooperation among various individuals. The communication should be direct
as far as possible to avoid any misunderstanding through misinterpretations. When the different
functional groups are represented in the decision-making process the coordination becomes
easier. Coordination is impossible without effective communication.
9. Simplified Organization
A simple and sound organization is an important means of coordination. The organization
structure of a line of authority and responsibility from top to the bottom should be clearly
defined. The definition of authority and responsibility of each department and individual helps to
avoid conflicts.
10. Effective Leadership and Supervision
Effective leadership facilitates coordination efforts in the planning and the execution stage. The
activities of the subordinates can be continuously guided by a good leader in the right direction.
It can inspire to pull them together for the accomplishment of the common objectives. Sound
leadership can persuade subordinates to have an identity of interests. It also helps to adopt a
common outlook. The effective leadership reduces the dependence on such formal means of
coordination.
11. Staff Meetings or Conferences
The Meeting and conference provided to the staffs is a platform for discussion and solution of
various problems faced by the departments. Staff meetings and conferences may be highly
effective in the promotion of coordination. It helps to learn new things. It provides the
subordinates an opportunity to bring up the problems.
12. Chain of Command
The Chain of command is one of the most important methods of coordination. The supreme
coordinating power in an organization is the authority. The exercise of authority through the
chain of command or hierarchy is the traditional means of coordination. The different parts of an
organization are brought together through the chain of command. It also relates them to a central
authority.
13. Incentives
Incentives refer to something that encourages someone to do something. In the coordination,
incentives may be used to rebate the interest and to reduce conflicts. For instance, profit helps in
promoting team spirit and cooperation between employers and workers.
CO-ORDINATION VS C-OPERATION
Co-ordination is an effort to integrate effectively energies of different groups whereas co-
operation is sort to achieve general objectives of business.
Though these two are synonymous but they are different as below:
Freedom It is planned and entrusted by the central It depends upon the sweet will of the
authority & it is essential. individuals and therefore it is not necessary.
Judging by the six qualities listed above, it can be seen that achieving excellent management
training requires a lot of work. In order to accomplish this, it is important for managers to first
acknowledge the fact that there is always room for improvement and scope for self-growth.