Management Nature , Significance

Introduction :

Management is universal in the modern industrial world and there is no substitute for good management. It
makes human effects more productive and brings better technology, products and services to our society. It is a
crucial economic resource and a life giving element in business. Without proper management, the resources of
production ( men, machines and materials, money ) can not be converted into production.

Thus management is a vital function concerned with all aspects of the working of an organization.
Management is a must to accomplish desired goals through group action. It is essential to convert the disorganized
resources of men, machines, materials and methods into a useful and effective enterprise. Thus management is the
function of getting things done through people and directing the efforts of individuals towards a common objective.
Meaning and Definitions of Management :

Management is the art of maximizing efficiency, as a social process, a method of getting things done
through others a plan of action and its direction by a co-operative group moving towards a common goal. Effective
utilisation of available resources to achieve same objective is management.

Management is a comprehensive function of Planning, Organising, Forecasting Co- ordinating, Leading,

Controlling, Motivating the efforts of others to achieve specific objectives. Management can precisely be called the
rule – making and rule – enforcing body.

Definitions :

According to Harold Koontz “ Management is the art of getting things done through and with formally
organized groups “.

According to Peter F. Drucker. “ A Multipurpose organ that manages a business and manages managers
and manages workers and works “.

According to J.Lundy “ Management is what management does. It is the task of planning executing and
controlling “.

According to Lawrence Appley “ Management is the development of people and not the direction of
things.
 According to F.W. Tylor “ Management is the art of knowing what you want to do in the best and cheapest
way “.

Meaning of Management

Management It is an art it is the art Deep co-ordination

is what of taking and science of of human resources
A manager work done decision making and and factors of
does through others leader ship production

Fig 1.1

Fig 1.2
 Characteristics of Management :
1- Management is a group activity :
It is a group activity. Nobody can satisfy all his desires himself. Therefore he unites which his fellow-
beings and works in an organized group to achieve what he cannot achieve individually. Massie has rightly called
management as a “ Co-operative group “.
2- Management is Goal - oriented :
According to Theo Haiman “ Effective management is always management by objectives." Group efforts
are directed towards the achievements of some predetermined goals. Mangement is concerned with establishment
and accomplishment of these objectives.
3-Management is a factor of Production :
Management is not an end in itself. It is a means to achieve the group objectives. It is a factor of production
that is required the co-ordinate with the other factors of production for the accomplishment of predetermined goals
and objectives.
4- It is a Universal Character :
Management is essential in all types of concerns. It somewhere there is some human activity, management
is must there. The basic principles of management are universal. These can be applied in all types of concerns i.e.
business, social, religious, cultural, sports, educational a International technology.
5- Management is needed at all levels of the enterprise :
On the basis of the nature of work or target and the scope of authority, management is needed at all levels
of the organisations e.g., top level, middle level and supervisor level.
6- It is a distinct function :
Management is a distinct function performed to fix and achieve stated objectives by the use of manpower
and other factors of production. Different from the activities, techniques and procedures, the process of management
consists of such functions as planning, organizing, staffing, directing, coordinating, motivating and controlling.
7- It is a Social Process :
Management is taken as a social process. It has a social responsibility to make reasonable use of scarce
resources keeping in view the benefit of the community as a whole.
8 - System of Authority :
Authority is the power to compel men to work in a specific manner. Management cannot work in the absence of
authority. There is a chain of authority and responsibility among people working at different levels of the
organization. There cannot be an efficient management without well defined lives of command a superior
subordinate relationship at the every levels of decision making.

9- It is a dynamic function :

Management has to be performed continuously, in a rapidly every changing business environment. It is

constantly engaged in the moulding of the enterprise. It is also concerned about the change of environment itself so
as to ensure the success of enterprise. Hence it is on-going function.
10 -Management is Intangible :

It can be seen in the form of results and could not be actually seen. For ex: when we are not able to produce
desired quantity, we say it is the result of poor management.
11- It is Art as well as Science :

Management is a science since its principles have universal application. Management is an art as the results
of management depends upon the personal skill of managers. The art of the
manager is essential to make the best use of management science. Thus management is both science and art.
 12- It is a Profession :

It has systematic and specialized body of knowledge consisting of principles, techniques, rules and laws. It
can be taught as a specialized subject.

Management as a system works like this -

Significance of Management :
Management plays a unique role modern society. Peter F.Drucker has summarised the essence of
management as “ under developed countries are under managed, it denotes the multi- dimensional significance of
management. The significance of management can be broadly classified into the groups.

1. Advantages to the organization.

2. Advantages to the society.

14.1 Advantages to the Organisation :

(i) Determination of Objectives :

The success of various operations of an organisation mainly depends on the identification of its
objectives. Objectives are identified and laid down by the management.They should be the writing
and communicated to all others in the management.

(ii) Achieving of objectives :

It is the management which directs the group effort towards the achievement of various objectives.
It brings the human and non- human resources together.
( iii ) Meeting challenges :

All the policy decisions of an enterprise are taken by the management. It keeps in touch with the
current environment and predicts what is going to happen in future. Through better planning and
control, management steers a concern to meet the demands of the changing environment.
( iv) Provides innovation :

Management infuses an enterprise with new ideals, imaginations and vision.

( v) Smooth running of business :

Management helps in smooth running of business through better planning and control.

1.4.2 Advantages to the Society :

(i) Optimum utilisation of Resources :
 It is the management which makes optimum utilisation of various resources such as land, labour,
capital and enterprise. “ No ideology, no ism, no political theory can win greater output with less
efforts, only sound management”, says Urwick and Brech.

( ii) Social Benifits:

Management raises the standared of living of the people by providing good quality products at the
lowest prices. It also promotes peace and prosperity in the society through optimum use of scarce
resources.

( iii ) Role in national economic development :

“Management is the crucial factor in economic and social development”, says Peter F.Druker. The
development of a nation mainly depends on the quality of management of its resources. It is all the
more true in a developing country like India, where productivity is low and the resources are
limited.

( iv ) Employment :

The expansion and diversification activites of the managers in organisations create more
employement to the society. This is very essential for our country.

Importance of Management :
Management is overall the most important factor because no business runs on itself, even no momentum.
Every business needs repeated stimulus which can only be provided by management. Thus, management is
dynamic, life giving element without which the “ factors of production “ will remain as were factors not become “
Production “.

The following points bring out the importance of management.

1. Accomplishment of group goals.

2. Efficient operations of business.
3. Sound organization structure.
1.5.1 Accomplishment of group goals :

Success of a business enterprise depends on three important factors, viz

( a ) how economically and efficiently the organization has used its man power and physical resources.

( b ) how effectively it has adapted the enterprise to the prevailing business environment
e.g. needs and expectations of the customers, policies of rivals and

( c ) how far the existing business policies have succeeded in realising the goals and objectives of
the organisations.
 This ensures efficiency the every sphere of activity and also enables quick modifications or alteration of a
specific strategy or programme if any deficiency is noticed any where.

1.5.2 Efficient operation of business :

Efficient of an organisation depends on ability, experience, skills, co-operation zeal and enthusiasm to its
employees. This, inturn, depends on proper motivation of there employee which can be accomplished only by an
inspiring leadership provided by management. Management makes sure that the workers know their jobs, helps them
in improving their skills and abilities in doing their jobs.

15.3 Sound organisation structure :

Management establishes a sound organisation that is in accordance with the desired objectives and goals
and the weak to be done of accomplish them. Management establishes a system of authority and responsibility
relationships, who will command whom, who will be responsible for what, and who shall be accountable to whom.
 Management Vs Administration :
Administration is a thinking function and where as management is a doing function.
Sheldon opines, "Administration is concerned with determination of the corporate policy, the coordination
of finance, production and distribution the settlement of the compass of the organisation and the ultimate control of
executive ".
Administration is generally regarded as a top level activity which is mainly concerned with laying down
broad goals and objectives. Management on the other hand, is concerned with the accomplishment of those goals
and policies.

On the other hand, management, is concerned with the execution of policy, within the limits set up by the
administration and the employment of the organization for the particular object set before it. It is shown in the
following figure.

Workers ( Core group)

Fig 1.5 Levels of Organisation

 Several authors have raised controversies between management and administrations.
Now let us see the basic differences between Management and Administration.

Distinction between Administration and Management

Administration Management

1. It is concerned with the formation of 1. It means getting things done through and with
objectives, plans and policies. people.

2. It is a thinking function. 2. It is a doing function

3. It is a top- level management function. 3. It is a lower –level management functions.

4. It makes major policy decisions. 4. It makes decisions with the frame work of
administration.

5. Decisions are influenced by external 5. Decisions are influenced by internal factors factors
such as social, political, legal etc. such as values, beliefs, and opinions.

6. Administration is often associated with 6. Management is widely used in the business.

government policies. world
 Role of Managers
Managerial Skills :

A skill is an acquired and learned ability to translate knowledge into performance. It is the competency of a
person that allows his performance to be superior. All managers need to possess various skills which are necessary
to carry at their jobs successfully.

(i) Technical skills : Technical skills are necessary to accomplish or understand the specific kind of
working done in an organisation. The persons who are working with tools and techniques are needed
such skill. Ex: Engineers, Scientists , Computer programmers etc. Technical skills are essential for
first line managers who spend their time in training their subordinates and clear their doubts regarding
were.

(ii) Human skills : Human skill is the ability to work with other people in a cooperative manner. Human
skill are essential to hence effective team work in the organisation. It involves patience, understanding
trust and genuine involvement in interpersonal relationship.

(iii) Analytical skills : These skills are essential to identify key factors and to understand the interrelate
roles they play in a given situation. Analytical skills help a manager to establish cause and effect
relationship. These skills also help a manager for problem identifying, solving and decisicu making.

(iv) Conceptual skills : Such skills are essential to the managers to understand the overall working of the
organisation and harmonise the working of the sub- systems for reaching the organisational objectives.

(v) Communication skills : Communication skills are an important element of interpersonal skills.
Communication is essential for proper implementation of orders. The best ideas of manager may not
be of any use if these are not properly communicated to subordinates.

(vi) Decision-making skills : Decision making is the process of reaching a point. It is choosing the best
alternative of doing a thing from various choices available. Manager may make use of various
techniques available for taking decisions.

Different Roles -
Managers are the primary force in an organization's growth and expansion. Larger organizations are particularly complex due
to their size, process, people and nature of business. However, organizations need to be a cohesive whole encompassing every
employee and their talent, directing them towards achieving the set business goals. This is an extremely challenging endeavor,
and requires highly effective managers having evolved people management and communication skills.

The Top Management -

The top level executives direct the organization to achieve its objectives and are instrumental in creating the vision and
mission of the organization. They are the strategic think-tank of the organization.

Senior Management -
The General Manager is responsible for all aspects of a company. He is accountable for managing the P&L (Profit & Loss)
statement of the company. General managers usually report to the company board or top executives and take directions from
them to direct the business.

The Functional Manager is responsible for a single organizational unit or department within a company or organization. He in
turn is assisted by a Supervisor or groups of managers within his unit/department. He is responsible for the department’s
profitability and success.

Line and Staff Managers -

Line Managers are directly responsible for managing a single employee or a group of employees. They are also directly
accountable for the service or product line of the company. For example, a line manager at Toyota is responsible for the
manufacturing, stocking, marketing, and profitability of the Corolla product line.
Staff Managers often oversee other employees or subordinates in an organization and generally head revenue consuming or
support departments to provide the line managers with information and advice.

Project Managers -
Every organization has multiple projects running simultaneously through its life cycle. A project manager is primarily
accountable for leading a project from its inception to completion. He plans and organizes the resources required to complete
the project. He will also define the project goals and objectives and decide how and at what intervals the project deliverables
will be completed.
 Management As an Art , Science & Profession
Introduction :
The controversy with regard to the nature of management as to whether it is an art or science is very old and has created a lot
of confusion. It is necessary to understand the real nature of management. The learning of art involves its continuous practice
while learning of science involves assimilation of principles. The earlier captains of industry and managers used intvition,
commonsense, hunches and experience in man1aging organizations. They were brilliant and hard working but still were not
professionally trained managers. This was the main reason of controversy about the management.

Management as an Art :
An art is often regarded as the systematic application of skill or knowledge in effecting accomplishment of results. It
represents the methods or ways of doing specific things and indicates how an objective is to be achieved. The function of art
is to effect change and accomplish results through deliberate efforts. Art is a personalised process and every artist has his own
style. It is practice – based and perfection in it requires continuous practice over a long period of time.

The main elements of Art are :

( a ) Personal Skill.
( b ) Practical Knowledge.
( c ) Result – oriented approach. ( d ) Regular Practice.
( e ) Creativity.
( a ) Personal Skill :
Like any other artist, a manager also uses his knowledge and skill in co – ordinating the activities of people in the
organisation. Management is an art of dealing with people to accomplish desired results.
( b ) Practical Knowledge :
Management is concerned with the application of knowledge and skill, unless managerial principles are used for making the
things effective and better, these will not be covered in art.
( c) Result – oriented approach :
Management is result oriented because it is concerned with accomplishment of objectives.
It aims at achieving maximum productivity at lowest costs.
( d ) Regular Practice :
Like an artist, management always tries to attain higher and higher goals in order to reach the state of absolute perfection.
This efficiency and effectiveness is attained through regular practice.
( e ) Creativity :
Every art has an element of creativity and in this sense also management is one of the most creative art as it is concerned with
getting work done through others by motivating them to work and co-ordinating their activities.

Management As a Science :
The word science literally means knowledge. It is a systematised body of knowledge acquired by mankind through
observation and experimentation and which is capable of verification. The basic difference between Art and Science is that
Art implies knowing, how the application, where as Science is concerned with knowing why? In the words of Keynes “
Science is a systematised body of knowledge which establishes relationship between cause and effect “.
The essential features of Science :

1. It is a systemalised body of knowledge that uses scientific methods for observation.

2. The Principles are evolved on the basis of continued observation.
3. The principles are exact and have universal applicability without any limitation.
4. The principles establish a cause and effect relationship between various factors.
5. The validity of scientific principles can be verified and they provide a reliable basis for
predicting future events.
Let us now apply these features of science to management to determine whether it qualifies as science ?
1-Systematized Body of Knowledge :
Management is viewed as a science as it is an organised body of knowledge built up by management practioners, thinkers and
philosophers over a period of time. “ Management science is body of systematised knowledge accumulated and accepted with
reference to the understanding of general truths concerning management “. The principles of management make use of
scientific methods for observation. Frederick W. Taylor, the Father of Scientific Management applied scientific techniques
to studies of planning, organising, staffing, motivating etc.
2- Continued Observation : As applied to management, the principles of management have been developed after
continued observation. The knowledge of management has been acquired through continuous and vigorous effects of many
theorists and practitioners over a period of years.
3-Universal Application: In the field of management, this knowledge has been accumulated and accepted with reference to
general truths. There are certain fundamental principles of management which can
be universally approved. In the words of Taylor “ The fundamental principles of management are applicable to all human
activities from our simplest individual acts to the working of our great corporations “.
4- - Cause and effect Relation ship : Scientific principles establish cause and e1ffect relationship between various
factors. When applied to management the principles of management also establish cause and effect relationship.
e.g. : Poor planning and plant layout cause low productivity.
5- Validity and predictability : More knowledge or collection of facts is not science. It is only when the knowledge
so gathered can be verified, it becomes science. The principles of management also be verified for their validity.
The principles of management have been put to several tests and found to be valid. For Ex: a subordinate put under
one boss will show better results, than a subordinate who has to follow two or more bosses. Further, the principles
of management by finding cause and effect relationship can serve reliable basis for predicting further events.

Management – As a profession :
A profession is an “ occupation backed by organized knowledge and training and to which entry
is regulated by a representative body “.
Thus, all professions are occupations in the sense that they provide means of livelihood.
However, all occupations are not professions because some of them lack certain features of a
profession.
Features of Profession :
(i) Organised body of knowledge, principles and techniques.
(ii) Formal training and education.
(iii) Restriction on entrance.
(iv) Existence of a representative body.
(v) Prevalence of a code of conduct.
(vi) Spirit of service to the society.
Application of the features to the management :
(i) Organised body of knowledge :
Management has its own body of systemalised knowledge which contains the principles
and techniques. These principles established cause and effect relationships and are capable of
universal application. A.P.M. Fleming has rightly remarked that management has ”. a technique
quite a part from the technology of the particular works concerned.
( ii) Formal training and Education :
Management is not merely theory. Here the person is prepared to take practical decision
in business. To import management education and training, there are a large number of formal
institutes in various countries, including India. Several tools of management such as business,
Psychology, Business law, Statistics, Data- processing, operations research and cost accounting
etc. have been developed. The business houses today prefer to employ those managerial personal
who have obtained a professional degree in management from some recognised institutes.
 (iii) Restriction on Entrance :
Entrance into a profession is restricted by standards established by it. But management does not
restrict the entry of people into managerial jobs with only a special academic degree.
(iv) Existence of an organisation :
1
Various management organisations have come into existence in India to guide the managers in
(i) To regulate the behaviours of members.
(ii) To create a code of conduct for guiding the activities of the Profession.
(iii) To promote and build up the image of management as a Profession.
In India, All India Management Association and Indian Association for Management
Development were established to train the managers.
Function of Association is to manage and co- ordinate the research work in the various areas of
management. It is, however, true that norms of managerial behaviour have not yet been established and
we do not have uniform methods of entry.
( v) Prevalence of a Code of Conduct :
Every profession formulates its own ethical codes for the conduct of its members. But there is no
uniform code of conduct for the practicing managers. In spite of it, managers are socially responsible.
They have to protect the interest of the owners, workers, suppliers, consumers and the government
(vi) Spirit of Service to the Society :
Though professionals charge fee for the service rendered, they give priority to service over the
desire for monetary reward.
For Ex: a doctor earns his livelihood from his profession of medicine but service to society is
upper most in his mind. As managers enjoy the respect of society, they should also fulfill their social
obligation.
 Scientific Management by F.W. Taylor
Frederick Winslow Taylor has made the major attempt to systematize the management theory
through the publication of “ The Principles of Scientific Management “ in 1911. Eventually, he is known
as the Father of Scientific Management. He wrote Scientific Management with his long experience as an
engineer at various levels of functioning from an apprentice to the Chief Engineer of a steel company. His
philosophy is also known as Taylorism.
According to F.W.Taylor, it is not proper to find just a way for doing something, a manager has
to find the one right way. His major concern was to increase efficiency in production, it includes not only
to lower costs and raise profits, but also to increase pay for workers through their higher productivity.
Further he emphasized that managers should be responsible for analysis and planning of work in advance,
whereas workers should be responsible for the performance of the work as per plans.
Principles of Scientific Management :
Taylor has endeavored to introduce scientific approach in business and management and wanted
to make it as exact as possible. The basic principles are stated as follows.
a. Replacing rules of thumb with science.
b. Harmony in group action than discord.
c. Cooperation than individualism.
d. Working for maximum output than restricted output.
e. Developing workers to the fullest extent.

1. Science, not the Rule of Thumb-

This rule focuses on increasing the efficiency of an organisation through scientific analysis of work and not with the
‘Rule of Thumb’ method. Taylor believed that even a small activity like loading paper sheets into boxcars can be planned
scientifically. This will save time and also human energy. This decision should be based on scientific analysis and cause
and effect relationships rather than ‘Rule of Thumb’ where the decision is taken according to the manager’s personal
judgement.

2. Harmony, Not Discord-

Taylor indicated and believed that the relationship between the workers and management should be cordial and
completely harmonious. Difference between the two will never be beneficial to either side. Management and workers
should acknowledge and understand each other’s importance. Taylor also suggested the mental revolution for both
management and workers to achieve total harmony.

3. Mental Revolution/ Working for maximum output -

This technique involves a shift of attitude of management and workers towards each other. Both should understand the
value of each other and work with full participation and cooperation. The aim of both should be to improve and boost the
profits of the organisation. Mental Revolution demands a complete change in the outlook of both the workers and
management; both should have a sense of togetherness.

4. Cooperation, not Individualism-

It is similar to ‘Harmony, not discord’ and believes in mutual collaboration between workers and the management.
Managers and workers should have mutual cooperation and confidence and a sense of goodwill. The main purpose is to
substitute internal competition with cooperation.

5. Development of Every Person to his Greatest Efficiency-

The effectiveness of a company also relies on the abilities and skills of its employees. Thus, implementing training,
learning best practices and technology, is the scientific approach to brush up the employee skill. To assure that the
training is given to the right employee, the right steps should be taken at the time of selection and recruiting candidates
based on a scientific selection.
 Elements of Scientific Management :
F.W.Taylor opined ‘ Management is the art of knowing exactly what you want men to do and
seeing that they do it in the best and cheapest way. He advocated the following elements of Scientific
Management.
Work Study :
Work Study is related to analyzing work to be performed by eliminating unnecessary operations
and finding out the quicker way of doing it. Works study eliminates wasteful and unnecessary operations,
and increases production through scientific principles such as.
1. Time study : To determine the time required performing the job in the best possible
way.
2. Method Study : To keep the cost of production at the minimum level.
3. Motion Study : Objects of motion study are.
i. Studying the movements of operations and machines.
ii. Identifying and eliminating unnecessary and wasteful motions.
4. Fatigue study : The object of this study is to examine how long a person can perform
the standard task without causing any adverse effect on his health and efficiency.

4.4.3 STANDARDISATION OF TOOLS AND EQUIPMENT :

According to this principle proper tools and equipment are essential for increasing the speed of
work.

4.4.4 SCIENTIFIC SELECTION, PLACEMENT AND TRAINING :

Taylor wanted a radical change in the methods and procedures of selecting workers. Workers
should be selected by considering their education, experience and attitude towards work. The placement
of workers should be such that only the most suitable persons are assigned the work. Placement should be
on the basis of merit rating. Workers should be given training to make them suitable for the jobs.
 Henry Fayol 14 principles of Management / Administration theory / process
management

Henry Fayol, also known as the Father of Modern Management Theory, gave a new perception on the concept of
management. He introduced a general theory that can be applied to all levels of management and every department. He
envisioned maximising managerial efficiency. Today, Fayol’s theory is practised by the management to organise and regulate
the internal activities of an organisation.

The fourteen principles of management created by Henri Fayol are explained below.
1. Division of Work
Henri believed that segregating work in the workforce amongst the workers will enhance the quality of the product. Similarly,
he also concluded that the division of work improves the productivity, efficiency, accuracy and speed of the workers. This
principle is appropriate for both the managerial as well as a technical work level.
2. Authority and Responsibility
These are the two key aspects of management. Authority facilitates the management to work efficiently, and responsibility
makes them responsible for the work done under their guidance or leadership.
3. Discipline
Without discipline, nothing can be accomplished. It is the core value for any project or any management. Good performance
and sensible interrelation make the management job easy and comprehensive. Employees’ good behaviour also helps them
smoothly build and progress in their professional careers.
4. Unity of Command
This means an employee should have only one boss and follow his command. If an employee has to follow more than one
boss, there begins a conflict of interest and can create confusion.
5. Unity of Direction
Whoever is engaged in the same activity should have a unified goal. This means all the people working in a company should
have one goal and motive which will make the work easier and achieve the set goal easily.
6. Subordination of Individual Interest
This indicates a company should work unitedly towards the interest of a company rather than personal interest. Be
subordinate to the purposes of an organisation. This refers to the whole chain of command in a company.
7. Remuneration
This plays an important role in motivating the workers of a company. Remuneration can be monetary or non-monetary.
Ideally, it should be according to an individual’s efforts they have put forth.
8. Centralization
In any company, the management or any authority responsible for the decision-making process should be neutral. However,
this depends on the size of an organisation. Henri Fayol stressed on the point that there should be a balance between the
hierarchy and division of power.
9. Scalar Chain
Fayol, on this principle, highlights that the hierarchy steps should be from the top to the lowest. This is necessary so that
every employee knows their immediate senior also they should be able to contact any, if needed.
10. Order
A company should maintain a well-defined work order to have a favourable work culture. The positive atmosphere in the
workplace will boost more positive productivity.
11. Equity
All employees should be treated equally and respectfully. It’s the responsibility of a manager that no employees face
discrimination.
12. Stability
An employee delivers the best if they feel secure in their job. It is the duty of the management to offer job security to their
employees.
13. Initiative
The management should support and encourage the employees to take initiatives in an organisation. It will help them to
increase their motivation and morale.
14. Esprit de Corps
It is the responsibility of the management to motivate their employees and be supportive of each other regularly. Developing
trust and mutual understanding will lead to a positive outcome and work environment.