NATURE AND SIGNIFICANCE OF MANAGEMENT NOTES

 Concept of Management

 

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

 

•  Effectiveness is concerned with doing the right task, completing activities and achieving goals.

 

•  Efficiency means doing the task correctly and with minimum cost.

 

Management must ensure that tasks are completed (effectiveness) at a minimum cost (efficiency).

 

Objectives of Management

 

1.  Organizational or Economic Objectives:

(i)   Survival-An organization must earn enough revenues for survival.

 

(ii)  Profit-Profit is essential to cover costs and risks of the business.

 

(iii)  Growth-Management must exploit fully the growth potential of the organization. Indicators of growth are increase in sales turnover, capital investment and number of products and employees.

 

2.  Social Objectives: Social objectives of management involve the creation of benefits for the society. This includes using environmental friendly methods of production, providing basic amenities like schools and creches to employees, giving employment opportunities to the disadvantaged sections of the society, etc.

 

3.  Personal Objectives: Personal objectives of management are concerned with satisfying diverse needs of the employees such as financial needs by giving them competitive salary and perks, social needs such as peer recognition, and higher level needs such as personal growth and development.

 

Importance of Management

1.  Management increases efficiency by reducing costs and increasing productivity through better planning, organizing, directing and controlling the activities of the organization.

 

2.  Management helps in the development of the society by providing good quality products, creating employment opportunities and adopting new technology, etc.

 

3.  Management helps in achieving group goals by giving a common direction to the individual efforts.

4.  Management creates a dynamic organization by adapting itself according to the changes in business environment.

 

5.  Management helps in achieving personal objectives through motivation and leadership.

 Nature of Management Management as an Art

Art refers to the skillful and personal application of knowledge to achieve desired results. Management is also an art because it satisfies all the features of an art:

 

1.  Existence of theoretical knowledge: There is a lot of literature available in various areas of management (like finance, marketing, human resource, etc.)

 

2.  Personalized application: A manager applies his knowledge of scientific methods to a given situation or a problem in a personalized and unique manner.

 

3.  Based on continuous practice and creativity: A manager gains experience through regular practice and becomes more effective.

 

Management as a Science

 

Science is a systematized body of knowledge that explains certain general truths. Management is a science but not an exact science. The reasons are:

 

1.  Systematized body of knowledge:

Like Science, management is a systematic body of knowledge with its own theories and principles that have developed over a period of time.

 

2.  Principles based on observation and experimentation:

Like Science, management principles are derived through observation and repeated experimentation. However, since management deals with human beings the outcomes of these experiments are not capable of being accurately predicted. Therefore, management can be called an inexact science, not a pure science like Physics or Chemistry.

 

 

3.  Universal validity:

Principles of management can be used in different situations. However, they have to be modified according to a given situation. Therefore, application of principles of management is not universal.

 

Management as a Profession

 

Management is not a full-fledged profession like legal, accounting or medical professions because it does not meet the exact criteria of a profession.

 

1.  Well-defined body of knowledge:

Management is a profession like Accounting, Medical and Legal professions as it has a well-defined body of knowledge comprising well-defined principles based on a variety of business situations.

2.  Restricted entry:

Entry to management institutes like IIMs, FMS is through an examination. However, unlike professions such as medicine or law there is no restriction on anyone being appointed as manager in any business.

 

3.  Professional association:

There are several associations of practicing managers in India, like All India Management Association (AIMA). But legally, it is not compulsory for managers to be members of such an association.

 

4.  Ethical code of conduct:

AIMA has laid down a code of conduct to regulate the activities of its members. But its membership is not compulsory for all managers.

 

5.  Service motive: The basic motive of management of an organization is profit maximization.

 

Levels of Management

1.  Top Level Management

 

Top management consists of the senior most executives of the organization and their team.

 

·       Chief Operating Officer

·       Chief Executive Officer (CEO)

·       Chief Marketing Officer

·       Chief Financial Officer

·       Managing Director

·        Chairman

·       President

·       Vice-President

 

Functions:

(i)   To formulate organizational goals and strategies.

 

(ii)  To coordinate the activities of different departments.

 

(iii)To be responsible for welfare and survival of the organization.

 

(iv)  To analyze the business environment and its implications.

 

2.  Middle Level Management

Middle management consists of divisional/departmental heads. Human Resource (HR) Manager

 

·       Human Resource (HR) Manager

·       Production Manager

·       Finance Manager

·       Operations Manager

·       Regional Manager

·       Divisional Manager

·       Marketing Manager

·       Plant Superintendent

 

Functions:

 

(i)   Interpret the policies framed by top management.

 

(ii)  Ensure that their department has the necessary personnel.

 

(iii)  Assign necessary duties and responsibilities to them.

 

(iv)  Motivate them for higher productivity.

 

(v)  Cooperate with other departments for smooth functioning of the organization.

 

3.  Operational or Supervisory Management or Lower Level

 

Supervisors, Foremen

 

Functions:

 

(i)   Supervisors oversee the efforts of the workforce.

 

(ii)  Supervisory management passes on instructions of the middle management to the workers.

 

(iii)Through their efforts quality of output is maintained, wastage of materials is minimized and safety standards are maintained.

Functions of Management

 

(i)   Planning: It involves establishing organizational goals, setting business targets and planning the process to achieve the same most effectively and efficiently.

 

(ii)  Organizing: It involves organizing human and physical resources to implement decisions taken at planning stage.

 

(iii)   Staffing: It involves recruiting and selecting people with right qualification and experience for the right job at the right time.

 

(iv)  Directing: It involves leading, motivating, instructing the staff to perform the tasks assigned to them.

 

(v)   Controlling: It involves monitoring and comparing the performance of employees at all critical levels.

 

Concept of Coordination

 

Coordination is the process by which activities of different departments are synchronized to ensure unity of action.

 

Nature/Characteristics/Features of Coordination

 

1.  Coordination integrates group effort by unifying diverse interests and by giving a common focus to group effort.

 

2.  Coordination ensures unity of action by acting as a binding force between departments

 

3.  Coordination is a continuous process as it starts at the planning stage and continues till controlling.

 

4.  Coordination is a pervasive function as it is required at all levels of management and in all departments 5 . Coordination is the responsibility of all managers at the top, middle and lower level.

 

Need and Importance of Coordination

 

1.  Growth in size: As organizations grow in size, number of people in the organization also increases. Coordination is needed to integrate their efforts.

 

2.  Functional differentiation: In an organization, there are different departments like production, marketing, finance, etc. All departments have their own objectives, policies, strategies, etc. So, there may arise conflict among them. Coordination is needed to ensure unity of action among them and to avoid inter-departmental conflicts.

 

3.  Specialization: In modern organizations, there is high degree of specialization.

So, organizations employ a number of specialists. Coordination is needed to avoid conflict between the specialists and the other members of the organization.

 

Key words with meaning:

 

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

2 Effectiveness : Effectiveness in management is concerned with doing the right task and achieving the goals on time.

 

3.  Efficiency : Efficiency means doing the task correctly and with minimum cost.

 

4.    Pervasive : Spreading through all types of organization.

 

5.  Art : Art refers to skillful and personal application of systematic knowledge to bring desired results

 

6.  Science : Science is a systematized body of knowledge acquired through observation and experimentation that explains certain general truths.

 

7.  Profession : It refers to an occupation backed by specialized knowledge and training in which entry is restricted.

 

8.  Code of conduct : It is a defined set of rules, principles, values, employee expectations, behaviours and relationships that a business considers important and believes necessary for its success.

 

9.  Coordination: It is the process by which the manager synchronizes the activities of different departments towards the achievement of a common goal.

 

10.      Specialization: Becoming an expert in a particular area of knowledge.