WHAT IS MANAGEMENT ?

Management is a universal phenomenon. It is a very popular and widely used term. All organizations - business, political, cultural or social are involved in management because it is the management which helps and directs the various efforts towards a definite purpose. 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”. According to F.W. Taylor, “Management is an art of knowing what to do, when to do and see that it is done in the best and cheapest way”.

Management is a purposive activity. It is something that directs group efforts towards the attainment of certain pre - determined goals. It is the process of working with and through others to effectively achieve the goals of the organization, by efficiently using limited resources in the changing world. Of course, these goals may vary from one enterprise to another. E.g.: For one enterprise it may be launching of new products by conducting market surveys and for other it may be profit maximization by minimizing cost.

Management involves creating an internal environment: - It is the management which puts into use the various factors of production. Therefore, it is the responsibility of management to create such conditions which are conducive to maximum efforts so that people are able to perform their task efficiently and effectively. It includes ensuring availability of raw materials, determination of wages and salaries, formulation of rules & regulations etc.

Therefore, we can say that good management includes both being effective and efficient. Being effective means doing the appropriate task i.e, fitting the square pegs in square holes and round pegs in round holes. Being efficient means doing the task correctly, at least possible cost with minimum wastage of resources.

Management can be defined in detail in following categories :

• Management as a Process
• Management as an Activity
• Management as a Discipline
• Management as a Group
• Management as a Science
• Management as an Art
• Management as a Profession

OBJECTIVES OF MANAGEMENT

The main objectives of management

1. Getting Maximum Results with Minimum Efforts - The main objective of management is to secure maximum outputs with minimum efforts & resources. Management is basically concerned with thinking & utilizing human, material & financial resources in such a manner that would result in best combination. This combination results in reduction of various costs.

2. Increasing the Efficiency of factors of Production - Through proper utilization of various factors of production, their efficiency can be increased to a great extent which can be obtained by reducing spoilage, wastages and breakage of all kinds, this in turn leads to saving of time, effort and money which is essential for the growth & prosperity of the enterprise.

3. Maximum Prosperity for Employer & Employees - Management ensures smooth and coordinated functioning of the enterprise. This in turn helps in providing maximum benefits to the employee in the shape of good working condition, suitable wage system, incentive plans on the one hand and higher profits to the employer on the other hand.

4. Human betterment & Social Justice - Management serves as a tool for the upliftment as well as betterment of the society. Through increased productivity & employment, management ensures better standards of living for the society. It provides justice through its uniform policies.

FEATURES OF MANAGEMENT

Management is an activity concerned with guiding human and physical resources such that organizational goals can be achieved. Nature of management can be highlighted as: -

1. Management is Goal-Oriented: The success of any management activity is assessed by its achievement of the predetermined goals or objective. Management is a purposeful activity. It is a tool which helps use of human & physical resources to fulfill the pre-determined goals. For example, the goal of an enterprise is maximum consumer satisfaction by producing quality goods and at reasonable prices. This can be achieved by employing efficient persons and making better use of scarce resources.

2. Management integrates Human, Physical and Financial Resources: In an organization, human beings work with non-human resources like machines. Materials, financial assets, buildings etc. Management integrates human efforts to those resources. It brings harmony among the human, physical and financial resources.

3. Management is Continuous: Management is an ongoing process. It involves continuous handling of problems and issues. It is concerned with identifying the problem and taking appropriate steps to solve it. E.g. the target of a company is maximum production. For achieving this target various policies have to be framed but this is not the end. Marketing and Advertising is also to be done. For this policies have to be again framed. Hence this is an ongoing process.

4. Management is all Pervasive: Management is required in all types of organizations whether it is political, social, cultural or business because it helps and directs various efforts towards a definite purpose. Thus clubs, hospitals, political parties, colleges, hospitals, business firms all require management. When ever more than one person is engaged in working for a common goal, management is necessary. Whether it is a small business firm which may be engaged in trading or a large firm like Tata Iron & Steel, management is required everywhere irrespective of size or type of activity.

5. Management is a Group Activity: Management is very much less concerned with individual’s efforts. It is more concerned with groups. It involves the use of group effort to achieve predetermined goal of management of ABC & Co. is good refers to a group of persons managing the enterprise.

IMPORTANACE OF MANAGEMENT

1. Helps in Achieving Group Goals - It arranges the factors of production, assembles and organizes the resources, integrates the resources in effective manner to achieve goals. It directs group efforts towards achievement of pre-determined goals. By defining objective of organization clearly there would be no wastage of time, money and effort. Management converts disorganized resources of men, machines, money etc. into useful enterprise. These resources are coordinated, directed and controlled in such a manner that enterprise work towards attainment of goals.

2. Optimum Utilization of Resources - Management utilizes all the physical & human resources productively. This leads to efficacy in management. Management provides maximum utilization of scarce resources by selecting its best possible alternate use in industry from out of various uses. It makes use of experts, professional and these services leads to use of their skills, knowledge, and proper utilization and avoids wastage. If employees and machines are producing its maximum there is no under employment of any resources.

3. Reduces Costs - It gets maximum results through minimum input by proper planning and by using minimum input & getting maximum output. Management uses physical, human and financial resources in such a manner which results in best combination. This helps in cost reduction.

4. Establishes Sound Organization - No overlapping of efforts (smooth and coordinated functions). To establish sound organizational structure is one of the objective of management which is in tune with objective of organization and for fulfillment of this, it establishes effective authority & responsibility relationship i.e. who is accountable to whom, who can give instructions to whom, who are superiors & who are subordinates. Management fills up various positions with right persons, having right skills, training and qualification. All jobs should be cleared to everyone.

5. Establishes Equilibrium - It enables the organization to survive in changing environment. It keeps in touch with the changing environment. With the change is external environment, the initial co-ordination of organization must be changed. So it adapts organization to changing demand of market / changing needs of societies. It is responsible for growth and survival of organization.

6. Essentials for Prosperity of Society - Efficient management leads to better economical production which helps in turn to increase the welfare of people. Good management makes a difficult task easier by avoiding wastage of scarce resource. It improves standard of living. It increases the profit which is beneficial to business and society will get maximum output at minimum cost by creating employment opportunities which generate income in hands. Organization comes with new products and researches beneficial for society.

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: -

• 1. Top level / Administrative level
• 2. Middle level / Executory
• 3. Low level / Supervisory / Operative / First-line managers.

FUNCTIONS OF MANAGEMENT

Management has been described as a social process involving responsibility for economical and effective planning & regulation of operation of an enterprise in the fulfillment of given purposes. It is a dynamic process consisting of various elements and activities. These activities are different from operative functions like marketing, finance, purchase etc. Rather these activities are common to each and every manger irrespective of his level or status.

Different experts have classified functions of management. According toGeorge & Jerry, “There are four fundamental functions of management i.e. planning, organizing, actuating and controlling”. According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to control”. Whereas Luther Gullick has given a keyword ’POSDCORB’ where P stands for Planning, O for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for reporting & B for Budgeting. But the most widely accepted are functions of management given by KOONTZ and O’DONNEL i.e.Planning, Organizing, Staffing, Directing and Controlling.

For theoretical purposes, it may be convenient to separate the function of management but practically these functions are overlapping in nature i.e. they are highly inseparable. Each function blends into the other & each affects the performance of others.

Planning function of management

Planning means looking ahead and chalking out future courses of action to be followed. It is a preparatory step. It is a systematic activity which determines when, how and who is going to perform a specific job. Planning is a detailed programme regarding future courses of action. It is rightly said “Well plan is half done”. Therefore planning takes into consideration available & prospective human and physical resources of the organization so as to get effective co-ordination, contribution & perfect adjustment. It is the basic management function which includes formulation of one or more detailed plans to achieve optimum balance of needs or demands with the available resources.

According to Urwick, “Planning is a mental predisposition to do things in orderly way, to think before acting and to act in the light of facts rather than guesses”. Planning is deciding best alternative among others to perform different managerial functions in order to achieve predetermined goals.

According to Koontz & O’Donell, “Planning is deciding in advance what to do, how to do and who is to do it. Planning bridges the gap between where we are to, where we want to go. It makes possible things to occur which would not otherwise occur”.

Steps in Planning Function

Planning function of management involves following steps:-

1. Establishment of objectives

• a. Planning requires a systematic approach.
• b. Planning starts with the setting of goals and objectives to be achieved.
• c. Objectives provide a rationale for undertaking various activities as well as indicate direction of efforts.
• d. Moreover objectives focus the attention of managers on the end results to be achieved.
• e. As a matter of fact, objectives provide nucleus to the planning process. Therefore, objectives should be stated in a clear, precise and unambiguous language. Otherwise the activities undertaken are bound to be ineffective.
• f. As far as possible, objectives should be stated in quantitative terms. For example, Number of men working, wages given, units produced, etc. But such an objective cannot be stated in quantitative terms like performance of quality control manager, effectiveness of personnel manager.
• g. Such goals should be specified in qualitative terms.
• h. Hence objectives should be practical, acceptable, workable and achievable.

2. Establishment of Planning Premises

• a. Planning premises are the assumptions about the lively shape of events in future.
• b. They serve as a basis of planning.
• c. Establishment of planning premises is concerned with determining where one tends to deviate from the actual plans and causes of such deviations.
• d. It is to find out what obstacles are there in the way of business during the course of operations.
• e. Establishment of planning premises is concerned to take such steps that avoids these obstacles to a great extent.
• f. Planning premises may be internal or external. Internal includes capital investment policy, management labour relations, philosophy of management, etc. Whereas external includes socio- economic, political and economical changes.
• g. Internal premises are controllable whereas external are non- controllable.

3. Choice of alternative course of action

• a. When forecast are available and premises are established, a number of alternative course of actions have to be considered.
• b. For this purpose, each and every alternative will be evaluated by weighing its pros and cons in the light of resources available and requirements of the organization.
• c. The merits, demerits as well as the consequences of each alternative must be examined before the choice is being made.
• d. After objective and scientific evaluation, the best alternative is chosen.
• e. The planners should take help of various quantitative techniques to judge the stability of an alternative.

4. Formulation of derivative plans

• a. Derivative plans are the sub plans or secondary plans which help in the achievement of main plan.
• b. Secondary plans will flow from the basic plan. These are meant to support and expediate the achievement of basic plans.
• c. These detail plans include policies, procedures, rules, programmes, budgets, schedules, etc. For example, if profit maximization is the main aim of the enterprise, derivative plans will include sales maximization, production maximization, and cost minimization.
• d. Derivative plans indicate time schedule and sequence of accomplishing various tasks.

5. Securing Co-operation

• a. After the plans have been determined, it is necessary rather advisable to take subordinates or those who have to implement these plans into confidence.
• b. The purposes behind taking them into confidence are :-
• a. Subordinates may feel motivated since they are involved in decision making process.
• b. The organization may be able to get valuable suggestions and improvement in formulation as well as implementation of plans.
• c. Also the employees will be more interested in the execution of these plans.

6. Follow up/Appraisal of plans

• a. After choosing a particular course of action, it is put into action.
• b. After the selected plan is implemented, it is important to appraise its effectiveness.
• c. This is done on the basis of feedback or information received from departments or persons concerned.
• d. This enables the management to correct deviations or modify the plan.
• e. This step establishes a link between planning and controlling function.
• f. The follow up must go side by side the implementation of plans so that in the light of observations made, future plans can be made more realistic.

HENRY FAYOL AND 14 PRINCIPLE OF MANAGEMENT

There are 14 Principles of Management described by Henri Fayol.

1. Division of Labor

• a. Henry Fayol has stressed on the specialization of jobs.
• b. He recommended that work of all kinds must be divided & subdivided and allotted to various persons according to their expertise in a particular area.
• c. Subdivision of work makes it simpler and results in efficiency.
• d. It also helps the individual in acquiring speed, accuracy in his performance.
• e. Specialization leads to efficiency & economy in spheres of business.

2. Party of Authority & Responsibility

• a. Authority & responsibility are co-existing.
• b. If authority is given to a person, he should also be made responsible.
• c. In a same way, if anyone is made responsible for any job, he should also have concerned authority.
• d. Authority refers to the right of superiors to get exactness from their sub-ordinates whereas responsibility means obligation for the performance of the job assigned.
• e. There should be a balance between the two i.e. they must go hand in hand.
• f. Authority without responsibility leads to irresponsible behavior whereas responsibility without authority makes the person ineffective.

3. Principle of One Boss

• a. A sub-ordinate should receive orders and be accountable to one and only one boss at a time.
• b. In other words, a sub-ordinate should not receive instructions from more than one person because -
• -  It undermines authority
• -  Weakens discipline
• -  Divides loyalty
• -  Creates confusion
• -  Delays and chaos
• -  Escaping responsibilities
• -  Duplication of work
• -  Overlapping of efforts
• c. Therefore, dual sub-ordination should be avoided unless and until it is absolutely essential.
• d. Unity of command provides the enterprise a disciplined, stable & orderly existence.
• e. It creates harmonious relationship between superiors and sub-ordinates.

4. Unity of Direction

• a. Fayol advocates one head one plan which means that there should be one plan for a group of activities having similar objectives.
• b. Related activities should be grouped together. There should be one plan of action for them and they should be under the charge of a particular manager.
• c. According to this principle, efforts of all the members of the organization should be directed towards common goal.
• d. Without unity of direction, unity of action cannot be achieved.
• e. In fact, unity of command is not possible without unity of direction.

Basis Unity of command Unity of direction:

Meaning It implies that a sub-ordinate should receive orders & instructions from only one boss. It means one head, one plan for a group of activities having similar objectives.

Nature It is related to the functioning of personnel’s. It is related to the functioning of departments, or organization as a whole.

Necessity It is necessary for fixing responsibility of each subordinates. It is necessary for sound organization.

Advantage It avoids conflicts, confusion & chaos. It avoids duplication of efforts and wastage of resources.

Result It leads to better superior sub-ordinate relationship. It leads to smooth running of the enterprise.

Therefore it is obvious that they are different from each other but they are dependent on each other i.e. unity of direction is a pre-requisite for unity of command. But it does not automatically comes from the unity of direction.

5. Equity

• a. Equity means combination of fairness, kindness & justice.
• b. The employees should be treated with kindness & equity if devotion is expected of them.
• c. It implies that managers should be fair and impartial while dealing with the subordinates.
• d. They should give similar treatment to people of similar position.
• e. They should not discriminate with respect to age, caste, sex, religion, relation etc.
• f. Equity is essential to create and maintain cordial relations between the managers and sub-ordinate.
• g. But equity does not mean total absence of harshness.
• h. Fayol was of opinion that, “at times force and harshness might become necessary for the sake of equity”.

6. Order

• a. This principle is concerned with proper & systematic arrangement of things and people.
• b. Arrangement of things is called material order and placement of people is called social order.
• c. Material order- There should be safe, appropriate and specific place for every article and every place to be effectively used for specific activity and commodity.
• d. Social order- Selection and appointment of most suitable person on the suitable job. There should be a specific place for every one and everyone should have a specific place so that they can easily be contacted whenever need arises.

7. Discipline

• a. According to Fayol, “Discipline means sincerity, obedience, respect of authority & observance of rules and regulations of the enterprise”.
• b. This principle applies that subordinate should respect their superiors and obey their order.
• c. It is an important requisite for smooth running of the enterprise.
• d. Discipline is not only required on path of subordinates but also on the part of management.
• e. Discipline can be enforced if -
• -  There are good superiors at all levels. 
• -  There are clear & fair agreements with workers. 
• -  Sanctions (punishments) are judiciously applied.

8. Initiative

• a. Workers should be encouraged to take initiative in the work assigned to them.
• b. It means eagerness to initiate actions without being asked to do so.
• c. Fayol advised that management should provide opportunity to its employees to suggest ideas, experiences& new method of work.
• d. It helps in developing an atmosphere of trust and understanding.
• e. People then enjoy working in the organization because it adds to their zeal and energy.
• f. To suggest improvement in formulation & implementation of place.
• g. They can be encouraged with the help of monetary & non-monetary incentives.

9. Fair Remuneration

• a. The quantum and method of remuneration to be paid to the workers should be fair, reasonable, satisfactory & rewarding of the efforts.
• b. As far as possible it should accord satisfaction to both employer and the employees.
• c. Wages should be determined on the basis of cost of living, work assigned, financial position of the business, wage rate prevailing etc.
• d. Logical & appropriate wage rates and methods of their payment reduce tension & differences between workers & management creates harmonious relationship and pleasing atmosphere of work.
• e. Fayol also recommended provision of other benefits such as free education, medical & residential facilities to workers.

10. Stability of Tenure

• a. Fayol emphasized that employees should not be moved frequently from one job position to another i.e. the period of service in a job should be fixed.
• b. Therefore employees should be appointed after keeping in view principles of recruitment & selection but once they are appointed their services should be served.
• c. According to Fayol. “Time is required for an employee to get used to a new work & succeed to doing it well but if he is removed before that he will not be able to render worthwhile services”.
• d. As a result, the time, effort and money spent on training the worker will go waste.
• e. Stability of job creates team spirit and a sense of belongingness among workers which ultimately increase the quality as well as quantity of work.

11. Scalar Chain

• a. Fayol defines scalar chain as ’The chain of superiors ranging from the ultimate authority to the lowest”.
• b. Every orders, instructions, messages, requests, explanation etc. has to pass through Scalar chain.
• c. But, for the sake of convenience & urgency, this path can be cut shirt and this short cut is known as Gang Plank.
• d. A Gang Plank is a temporary arrangement between two different points to facilitate quick & easy communication as explained below:

In the figure given, if D has to communicate with G he will first send the communication upwards with the help of C, B to A and then downwards with the help of E and F to G which will take quite some time and by that time, it may not be worth therefore a gang plank has been developed between the two.

• e. Gang Plank clarifies that management principles are not rigid rather they are very flexible. They can be moulded and modified as per the requirements of situations

12. Sub-Ordination of Individual Interest to General Interest

• a. An organization is much bigger than the individual it constitutes therefore interest of the undertaking should prevail in all circumstances.
• b. As far as possible, reconciliation should be achieved between individual and group interests.
• c. But in case of conflict, individual must sacrifice for bigger interests.
• d. In order to achieve this attitude, it is essential that -
• -  Employees should be honest & sincere. 
• -  Proper & regular supervision of work. 
• -  Reconciliation of mutual differences and clashes by mutual agreement. For example, for change of location of plant, for change of profit sharing ratio, etc.

13. Espirit De’ Corps (can be achieved through unity of command)

• a. It refers to team spirit i.e. harmony in the work groups and mutual understanding among the members.
• b. Spirit De’ Corps inspires workers to work harder.
• c. Fayol cautioned the managers against dividing the employees into competing groups because it might damage the moral of the workers and interest of the undertaking in the long run.
• d. To inculcate Espirit De’ Corps following steps should be undertaken -
• ? There should be proper co-ordination of work at all levels
• ? Subordinates should be encouraged to develop informal relations among themselves.
• ? Efforts should be made to create enthusiasm and keenness among subordinates so that they can work to the maximum ability.
• ? Efficient employees should be rewarded and those who are not up to the mark should be given a chance to improve their performance.
• ? Subordinates should be made conscious of that whatever they are doing is of great importance to the business & society.
• e. He also cautioned against the more use of Britain communication to the subordinates i.e. face to face communication should be developed. The managers should infuse team spirit & belongingness. There should be no place for misunderstanding. People then enjoy working in the organization & offer their best towards the organization.

14. Centralization & De-Centralization

• a. Centralization means concentration of authority at the top level. In other words, centralization is a situation in which top management retains most of the decision making authority.
• b. Decentralization means disposal of decision making authority to all the levels of the organization. In other words, sharing authority downwards is decentralization.
• c. According to Fayol, “Degree of centralization or decentralization depends on no. of factors like size of business, experience of superiors, dependability & ability of subordinates etc.
• d. Anything which increases the role of subordinate is decentralization & anything which decreases it is centralization.
• e. Fayol suggested that absolute centralization or decentralization is not feasible. An organization should strike to achieve a lot between the two.