Chapter II

BUMA 020
Management Science
Chapter II
SCOPE OF MANAGEMENT
SCOPE OF MANAGEMENT
Generally, the scope of management hovers around the following functional areas.
1. Production management
2. Marketing management
3. Financial and accounting management
4. Personnel management
Production management
Production means creation of utilities by converting raw material into final product by various
scientific methods and regulations. It is a very important field of management. Various sub-
areas of the production department are as follows:
 Plant layout and location: this area deals with designing of plant layout, decide about
the plant location for various products and providing various plant utilities.
 Production planning: Managers have to plan about various production policies and
production methods.
 Material management: this area deals with purchase, storage, issue and control of the
material required for the production department.
 Research and Development: this area deals with research and developmental activities
of the manufacturing department. Refinements in existing product lines or developing a
new product are the major activities.
 Quality Control: quality control department works for production of quality products by
doing various tests which ensure customer satisfaction.
Marketing management
Marketing management involves distribution of the product to the buyers. It may need a number
of steps. Sub areas are as follows:
1. Advertising: this area deals with advertising of products, introducing new products in
the market by various means and encouraging the customer to buy these products.
2. Sales management: sales management deals with fixation of prices, actual transfer of
products to the customer after fulfilling certain formalities and after sales services.
3. Market research: It involves the collection of data related to product demand and
performance by research and analysis of the market.
Financial and accounting management

Financial and accounting management deals with managerial activities related to procurement
and utilization of funds for business purposes. Its sub-areas are as follows:
1. Financial accounting: It relates to record keeping of various financial transactions, their
classification and preparation of financial statements to show the financial position of the
organization.
2. Management accounting: It deals with analysis and interpretation of financial record so
that management can take certain decisions on investment plans, return to investors and
dividend policy.
3. Taxation: this area deals with various direct and indirect taxes which an organization
has to pay.
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BUMA 020: Management Science
Reference: MALLA REDDY COLLEGE OF ENGINEERING AND TECHNOLOGY (MRCET)
BUMA 020
Management Science
4. Costing: costing deals with recording of costs, their classification, and analysis and cost
control.
Personnel Management
Personnel management is the phase of management which deals with effective use and control
of manpower. Following are the sub areas of personnel management:
1. Personnel planning: this deals with preparation inventory of available manpower and
actual requirement of workers in organization.
2. Recruitment and selection: this deals with hiring and employing human beings for
various positions as required.
3. Training and development: training and development deals with the process of making
the employees more efficient and effective by arranging training programs. It helps in
making a team of competent employees which work for the growth of an organization.
4. Wage administration: It deals in Job evaluation, merit rating of Jobs and making wage
and incentive policy for employees.
5. Industrial relation: It deals with maintenance of overall employee relation.
Functions of Management
To achieve the organizational objectives managers at all levels of organization should perform
different functions. A function is a group of similar activities.
The list of management functions varies from author to author with the number of functions
varying from three to seven.
Writers Management Functions

Henry Fayol Planning, Organizing, Commanding, Coordinating, & Controlling.
Luther Guillick Planning, Organizing, Staffing, Directing, Coordinating, Reporting, and

Budgeting.
R. Davis Planning, Organizing, and Controlling.
E.F.L. Breech Planning, Organizing, Motivating, Coordinating, and Controlling.
Koontz Planning, Organizing, Staffing, Leading, and Controlling.
Different authors presented different variations. By combining some of the functions, these are
broadly grouped into Planning, Organizing, Staffing, Directing, and Controlling.
1. Planning: Planning is the conscious determination of the future course of action.

This involves why an action, what action, how to take action, and when to take action.
Thus, planning includes determination of specific objectives, determining projects and
programs, setting policies and strategies, setting rules and procedures and preparing
budgets.
2. Organizing: Organizing is the process of dividing work into convenient tasks or
duties, grouping of such duties in the form of positions, grouping of various positions into
departments and sections, assigning duties to individual positions, and delegating
authority to each position so that the work is carried out as planned. It is viewed as a
bridge connecting the conceptual idea developed in creating and planning to the specific
means for accomplishing these ideas.
3. Staffing: Staffing involves manning the various positions created by the
organizing process. It includes preparing an inventory of personnel available and
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BUMA 020
Management Science
identifying the sources of people, selecting people, training and developing them, fixing
financial compensation, appraising them periodically etc.
4. Directing: when people are available in the organization, they must know what
they are expected to do in the organization. Superior managers fulfill this requirement by
communicating to subordinates about their expected behavior. Once subordinates are
oriented, the superiors have continuous responsibility of guiding and leading them for
better work performance and motivating them to work with zeal and enthusiasm. Thus,
directing includes communicating, motivating and leading.
5. Controlling: Controlling involves identification of actual results, comparison of
actual results with expected results as set by planning process, identification of
deviations between the two, if any, and taking of corrective and preventive actions so
that actual results match with expected results.
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BUMA 020

Financial and accounting management

Writers Management Functions

Luther Guillick Planning, Organizing, Staffing, Directing, Coordinating, Reporting, and

1. Planning: Planning is the conscious determination of the future course of action.

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