Nature And Significance Of Management Flashcards
Define management and key words in the defination and what is more important for the organisation being effective or efficient
Management is the process of working with and through others to effectively achieve
organisational objectives by efficiently using limited resources in the changing environment.
”There
are certain terms which require
elaboration. These are (a) process, (b)
effectively, and (c) efficiently.
Process in the definition means the
primary functions or activities that
management performs to get things
done. These functions are planning,
organising, staffing, directing and
controlling .
Being effective or doing work
effectively basically means finishing
the given task. Effectiveness in
management is concerned with doing
the right task, completing activities
and achieving goals.
But it is not enough to just
complete the tasks. There is another
aspect also, i.e., being efficient or as
we say doing work efficiently.
Efficiency means doing the task
correctly and with minimum cost.
There is a kind of cost-benefit
analysis involved and the relationship
between inputs and outputs. If
by using less resources (i.e., the
inputs) more benefits are derived
(i.e., the outputs) then efficiency has
increased. Efficiency is also increased
when for the same benefit or outputs,
fewer resources are used and less
costs are incurred.
These two terms are different but they
are interrelated. For management,
it is important to be both effective
and efficient. Effectiveness and
efficiency are two sides of the same
coin. But these two aspects need
to be balanced and management
at times, has to compromise with
efficiency. For example, it is easier
to be effective and ignore efficiency
i.e., complete the given task but at
a high cost. Suppose, a company’s
target production is 5000 units in
a year. To achieve this target the
manager has to operate on double
shifts due to power failure most of the
time. The manager is able to produce
5000 units but at a higher production
cost. In this case, the manager was
effective but not so efficient, since for
the same output, more inputs (labour
cost, electricity costs) were used.
At times, a business may concentrate more on producing goods
with fewer resources i.e., cutting
down cost but not achieving the
target production. Consequently, the
goods do not reach the market and
hence the demand for them declines
and competitors enter the market.
This is a case of being efficient but
not effective since the goods did not
reach the market.
Therefore, it is important for
management to achieve goals
(effectiveness) with minimum
resources i.e., as efficiently as possible
while maintaining a balance between
effectiveness and efficiency. Usually
high efficiency is associated with
high effectiveness which is the aim of
all managers. But undue emphasis
on high efficiency without being
effective is also not desirable. Poor
management is due to both inefficiency and ineffectiveness.
Objectives of management
) Organisational Objectives:
Management is responsible for
setting and achieving objectives
for the organisation. It has to
achieve a variety of objectives in
all areas considering the interest
of all stakeholders including,
shareholders, employees, customers and the government. The
main objective of any organisation
should be to utilise human
and material resources to the
maximum possible advantage,
i.e., to fulfill the economic
objectives of a business. These
are survival, profit and growth.
Survival: The basic objectives
of any business is survival.
Management must strive to
ensure the survival of the
organisation. In order to survive,
an organisation must earn
enough revenues to cover costs.
Profit: Mere survival is not enough
for business. Management has
to ensure that the organisation
makes a profit. Profit provides a
vital incentive for the continued
successful operation of the
enterprise. Profit is essential for
covering costs and risks of the
business
Growth: A business needs to add
to its prospects in the long run,
for this it is important for the
business to grow. To remain in
the industry, management must
exploit fully the growth potential
of the organisation. Growth of
a business can be measured in
terms of sales volume increase
in the number of employees the number of products or the
increase in capital investment,
etc. There can be other indicators
of growth.
(ii) Social objectives: It involves
the creation of benefit for
society. As a part of society,
every organisation whether it is
business or non-business, has
a social obligation to fulfill. This refers to consistently creating
economic value for various
constituents of society. This
includes using environmental
friendly methods of production,
giving employment opportunities
to the underpreviledged sections
of society and providing basic
amenities like schools and
healthcare, etc., for community.
The box given below illustrates
how a company can fulfill its
social responsibility.
(iii) Personnel objectives: Organisations are made up of people
who have different personalities,
backgrounds, experiences and
objectives. They all become part
of the organisation to satisfy
their diverse needs. These vary
from financial needs such as
competitive salaries and perks,
social needs such as peer
recognition and higher level
needs such as personal growth
and development. Management
has to reconcile personal goals
with organisational objectives for
harmony in the organisation
Importance of management
(i) Management helps in achieving
group goals: Management
is required not for itself but
for achieving the goals of the
organisation. The task of a manager
is to give a common direction to
the individual effort in achieving
the overall goal of the organisation.
(ii) Management increases efficiency: The aim of a manager is
to reduce costs and increase
productivity through better
planning, organising, directing,
staffing and controlling the
activities of the organisation.
(iii) Management creates a dynamic
organisation: All organisations
have to function in an environment
which is constantly changing. It
is generally seen that individuals
in an organisation resist change
as it often means moving from a
familiar, secure environment into
a newer and more challenging
one. Management helps people
adapt to these changes so that
the organisation is able to
maintain its competitive edge.
(iv) Management helps in achieving
personal objectives: A manager
motivates and leads his team in
such a manner that individual
members are able to achieve
personal goals while contributing
to the overall organisational
objective. Through motivation
and leadership the management
helps individuals to develop
team spirit, cooperation and
commitment to group success.
(v) Management helps in the
development of society: An organisation has multiple objectives
to serve the purpose of the
different groups that constitute it.
In the process of fulfilling all
these, management helps in the
development of the organisation
and through that it helps in the
development of society. It helps to
provide good quality products
and services, creates employment
opportunities, adopts new
techno-logy for the greater good
of the people and leads the path
towards growth and development.
Define art and is management art
Art is the skillful and
personal application of existing
knowledge to achieve desired
results. It can be acquired through
study, observation and experience.
The basic features of an art are
as follows:
(i) Existence of theoretical
knowledge: Art presupposes the
existence of certain theoretical
knowledge. Experts in their
respective areas have derived
certain basic principles which
are applicable to a particular
form of art. For example,
literature on dancing, public
speaking, acting or music is
widely recognised.
(ii) Personalised application: The
use of this basic knowledge varies
from individual to individual.
Art, therefore, is a very personalised concept. For example, two
dancers, two speakers, two actors,
or two writers will always differ
in demonstrating their art.
(iii) Based on practice and
creativity: All art is practical. Art
involves the creative practice of
existing theoretical knowledge.
We know that all music is based
on seven basic notes. However,
what makes the composition of
a musician unique or different
is his use of these notes in a
creative manner that is entirely
his own interpretation.
Management can be said to be
an art since it satisfies the following
criteria:
(i) A successful manager practices
the art of management in the
day-to-day job of managing
an enterprise based on study,
observation and experience.
There is a lot of literature
available in various areas of
management like marketing,
finance and human resources
which the manager has to
specialise in. There is existence
of theoretical knowledge.
(ii) There are various theories of
management, as propounded
by many management thinkers,
which prescribe certain
universal principles. A manager
applies these scientific methods
and body of knowledge to a
given situation, an issue or a
problem, in his own unique
manner. A good manager works
through a combination of
practice, creativity, imagination,
initiative and innovation. A
manager achieves perfection
after long practice. Students of
management also apply these
principles differently depending
on how creative they are.
(iii) A manager applies this acquired
knowledge in a personalised
and skillful manner in the light
of the realities of a given situation.
He is involved in the activities of
the organisation, studies critical
situations and formulates his
own theories for use in a given
situation. This gives rise to
different styles of management
The best managers are committed
and dedicated individuals; highly
trained and educated, with personal
qualities such as ambition, selfmotivation, creativity and
imagination, a desire for development
of the self and the organisation
they belong to. All management
practices are based on the same set
of principles; what distinguishes
a successful manager from a less
successful one is the ability to put
these principles into practice.
Define science and is management a science
Science is a systematised body of
knowledge that explains certain
general truths or the operation of
general laws. The basic features of
science are as follows: Systematised body of knowledge:
Science is a systematic body
of knowledge. Its principles are
based on a cause and effect
relationship. For example, the
phenomenon of an apple falling
from a tree towards the ground
is explained by the law of gravity.
(ii) Principles based on experimentation: Scientific principles are
first developed through observation
and then tested through
repeated experimentation under
controlled conditions.
(iii) Universal validity: Scientific
principles have universal validity
and application.
Based on the above features, we
can say that management has some
characteristics of science.
(i) Management has a systematised
body of knowledge. It has its
own theory and principles that
have developed over a period
of time, but it also draws on
other disciplines such as
Economics, Sociology,
Psychology and Mathematics.
Like all other organised
activity, management has its
own vocabulary of terms and
concepts. For example, all of
us discuss sports like cricket
and soccer using a common
vocabulary. The players also
use these terms to communicate
with each other. Similarly
managers need to communicate
with one another with the help
of a common vocabulary for a
better understanding of their
work situation.
(ii) The principles of management
have evolved over a period
of time based on repeated
experimentation and observation
in different types of organisations.
However, since management
deals with human beings and
human behaviour, the outcomes
of these experiments are not
capable of being accurately
predicted or replicated. Therefore,
management can be called an
inexact science. Despite these
limitations, management scholars
have been able to identify general
principles of management. For
example, scientific management
principles by F.W. Taylor
and Functional Management
principles by Henri Fayol which
you will study in the next chapter.
(iii) Since the principles of management are not as exact as
the principles of science, their
application and use is not universal.
They have to be modified according
to a given situation. However, they
provide managers with certain
standardised techniques that
can be used in different
situations. These principles
are also used for training and
development of managers.
You must have understood from the
foregoing discussion that management has features of both art and science. The practice of management
is an art. However, managers can
work better if their practice is based on
the principles of management. These
principles constitute the science of
management. Management as an
art and a science are therefore not
mutually exclusive, but complement
each other
What is profession and is management a profession
A profession has the following
characteristics:
(i) Well-defined body of knowledge: All professions are based
on a well-defined body of
knowledge that can be acquired
through instruction.
(ii) Restricted entry: The entry to a
profession is restricted through
an examination or through
acquiring an educational
degree. For example, to become
a chartered accountant in
India a candidate has to
clear a specified examination
conducted by the Institute of
Chartered Accountants of India.
(iii) Professional association: All
professions are affiliated to a
professional association which
regulates entry, grants certificate
of practice and formulates and
enforces a code of conduct. To be
able to practice in India lawyers
have to become members of the
Bar Council which regulates
and controls their activities.
(iv) Ethical code of conduct: All
professions are bound by a code
of conduct which guides the
behaviour of its members. All
doctors, for example, take the
oath of ethical practice at the
time they enter the profession.
(v) Service motive: The basic
motive of a profession is to
serve their client’s interests
by rendering dedicated and
committed service. The task of
a lawyer is to ensure that his
client gets justice.
Management does not meet
the exact criteria of a profession.
However, it does have some of the
features of a profession:
(i) All over the world there is
marked growth in management
as a discipline. It is based on a
systematic body of knowledge
comprising well-defined principles based on a variety
of business situations. This
knowledge can be acquired
at different colleges and professional
institutes and through a number
of books and journals. The
subject of management is taught
at different institutions. Some
of these have been set up with
the specific purpose of providing
management education such
as the Indian Institutes of
Management (IIMs) in India.
Entry to different institutes is
usually through an examination.
(ii) There is no restriction on anyone
being designated or appointed
as manager in any business
enterprise. Anyone can be
called a manager irrespective of
the educational qualifications
possessed.
Unlike professions such as
medicine or law which require
a practicing doctor or lawyer to
possess valid degrees, nowhere
in the world is it mandatory
for a manager to possess any
such specific degree. But
professional knowledge and
training is considered to be a
desirable qualification, since
there is greater demand for those
who possess degrees or diplomas
from reputed institutions.
Therefore, as such the second
criterion has not been strictly met.
(iii) There are several associations of
practising managers in India, like
the AIMA (All India Management
Association) that has laid down a code
of conduct to regulate the activities
of their members. There is, however,
no compulsion for managers to be
members of such an association nor
does it have any statutory backing.
(iv) The basic purpose of management is to help the organisation
achieve its stated goal. This may
be profit maximisation for a
business enterprise and service
for a hospital. However, profit
maximisation as the objective
of management does not hold
true and is fast changing.
Therefore, if an organisation
has a good management team
that is efficient and effective it
automatically serves society by
providing good quality products
at reasonable prices.
Different levels of management
)Top Management: They consist
of the senior-most executives of the
organisation by whatever name
they are called. They are usually
referred to as the chairman,
the chief executive officer, chief
operating officer, president and
vice-president. Top management
is a team consisting of managers
from different functional levels,
heading finance, marketing etc.
For example chief finance officer,
vice president (marketing). Their
basic task is to integrate diverse
elements and coordinate the
activities of different departments
according to the overall objectives
of the organisation. These top
level managers are responsible
for the welfare and survival of
the organisation. They analyse
the business environment and
its implications for the survival of
the firm. They formulate overall
organisational goals and strategies
for their achievement. They are
responsible for all the activities of
the business and for its impact
on society. The job of the top
manager is complex and stressful,
demanding long hours and
commitment to the organisation.
(ii) Middle Management: is the
link between top and lower level
managers. They are subordinate
to top managers and superior
to the first line managers.
They are usually known as
division heads, for example
production manager. Middle
management is responsible for
implementing and controlling
plans and strategies developed
by top management. At the
same time they are responsible
for all the activities of first line
managers. Their main task is to
carry out the plans formulated
by the top managers. For this they
need to: (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 to achieve
desired objectives, and (v) cooperate with other departments
for smooth functioning of the organisation. At the same time
they are responsible for all the
activities of first line managers.
(iii) Supervisory or Operational
Management: Foremen and
supervisors comprise the lower
level in the hierarchy of the
organisation. Supervisors
directly oversee the efforts of
the workforce. Their authority
and responsibility is limited
according to the plans drawn
by the top management.
Supervisory management plays
a very important role in the
organisation since they interact
with the actual work force and pass
on instructions of the middle
management to the workers.
Through their efforts quality of
output is maintained, wastage
of materials is minimised and
safety standards are maintained.
The quality of workmanship and
the quantity of output depends
on the hard work, discipline and
loyalty of the workers.
Functions of management
Management is described as the
process of planning, organising,
directing and controlling the efforts
of organisational members and of
using organisational resources to
achieve specific goals.
1.Planning is the function of
determining in advance what is to
be done and who is to do it. This
implies setting goals in advance
and developing a way of achieving
them efficiently and effectively. In
Smita’s organisation the objective
is production and sale of candles.
Smita has to decide quantities, variety and colour and then allocate resources
for their purchase from different
suppliers. Planning cannot prevent
problems, but it can predict them
and prepare contingency plans to
deal with them if and when they
occur.
2.Organising is the management
function of assigning duties,
grouping tasks, establishing
authority and allocating resources
required to carry out a specific
plan. Once a specific plan has been
established for the accomplishment
of an organisational goal, the
organising function examines the
activities and resources required to
implement the plan. It determines
what activities and resources are
required. It decides who will do a
particular task, where it will be
done, and when it will be done.
Organising involves the grouping of
the required tasks into manageable
departments or work units and the
establishment of authority and
reporting relationships within the
organisational hierarchy. Proper
organisational techniques help
in the accomplishment of work
and promote both the efficiency of
operations and the effectiveness of
results. Different kinds of business
require different structures
according to the nature of work.
You will read more about this in a
later chapter.
3.Staffing simply stated, is finding the
right people for the right job. A very
important aspect of management is
to make sure that the right people
with the right qualifications are
available at the right places and
times to accomplish the goals of
the organisation. This is also known
as the human resource function
and it involves activities such as
recruitment, selection, placement
and training of personnel. Infosys
Technologies which develops
software needs systems analysts and
programmers.
4.Directing involves leading, influencing and motivating employees
to perform the tasks assigned to
them. This requires establishing
an atmosphere that encourages
employees to do their best. Motivation
and leadership are two key
components of direction. Directing
also involves communicating
effectively as well as supervising
employees at work. Motivating
workers means simply creating an
environment that makes them want
to work. Leadership is influencing
others to do what the leader wants
them to do. A good manager directs
through praise and criticism in
such a way that it brings out the
best in the employee.
4.Controlling is the management
function of monitoring organisational
performance towards the attainment
of organisational goals. The task
of controlling involves establishing
standards of performance, measuring
current performance, comparing
this with established standards and taking corrective action where any
deviation is found. Here management
must determine what activities and
outputs are critical to success, how
and where they can be measured
and who should have the authority
to take corrective action.
Characteristics of management.
(i) Management is a goal-oriented
process: An organisation has a
set of basic goals which are the
basic reason for its existence.
These should be simple and
clearly stated. Different organisations have different goals. For
example, the goal of a retail store
may be to increase sales, but the
goal of The Spastics Society of
India is to impart education to
children with special needs.
Management unites the efforts
of different individuals in the
organisation towards achieving
these goals.(ii) Management is all pervasive:
The activities involved in managing
an enterprise are common to all
organisations whether economic,
social or political. A petrol pump
needs to be managed as much
as a hospital or a school. What
managers do in India, the USA,
Germany or Japan is the same.
How they do it may be quite
different. This difference is due
to the differences in culture,
tradition and history.
(iii) Management is multidimensional: Management is a
complex activity that has three
main dimensions. These are:
(a) Management of work: All
organisations exist for the
performance of some work. In
a factory, a product is
manufactured, in a garment
store a customer’s need is
satisfied and in a hospital a
patient is treated. Management
translates this work in terms of goals to be achieved and
assigns the means to achieve
it. This is done in terms of
problems to be solved,
decisions to be made, plans to
be established, budgets to be
prepared, responsibilities to
be assigned and authority to
be delegated.
(b) Management of people: Human
resources or people are an
organisation’s greatest asset.
Despite all developments in
technology “getting work done
through people” is still a major
task for the manager. Managing
people has two dimensions
(i) it implies dealing with
employees as individuals with
diverse needs and behavior;
(ii) it also means dealing with
individuals as a group of people.
The task of management is to
make people work towards
achieving the organisation’s
goals, by making their
strengths effective and their
weaknesses irrelevant.
(c) Management of operations: No
matter what the organisation,
it has some basic product or
service to provide in order to
survive. This requires a production process which entailsthe flow of input material and
the technology for transforming this input into the desired
output for consumption. This
is interlinked with both the
management of work and the
management of people.
(iv) Management is a continuous
process: The process of management is a series of continuous,
composite, but separate functions
(planning, organising, directing,
staffing and controlling). These
functions are simultaneously
performed by all managers
all the time. You may have
observed that Smita at Namchi
Designer Candles performs
several different tasks in a single day. Some days she may spend
more time in planning a future
exhibition and on another day,
she may spend time in sorting
out an employee’s problem. The
task of a manager consists of an
ongoing series of functions.
(v) Management is a group activity:
An organisation is a collection of
diverse individuals with different
needs. Every member of the
group has a different purpose
for joining the organisation but
as members of the organisation
they work towards fulfilling
the common organisational
goal. This requires team work
and coordination of individual
effort in a common direction.At the same time management
should enable all its members to
grow and develop as needs and
opportunities change.
(vi) Management is a dynamic
function: Management is a
dynamic function and has to
adapt itself to the changing
environment. An organisation
interacts with its external environment which consists of
various social, economic and
political factors. In order to be
successful, an organisation must
change itself and its goals
according to the needs of the
environment. You probably know
that McDonalds, the fast food
giant made major changes in its
menu to be able to survive in the
Indian market.
(vii) Management is an intangible
force: Management is an intangible force that cannot be seen but
its presence can be felt in the
way the organisation functions.
The effect of management is
noticeable in an organisation
where targets are met according to
plans, employees are happy and
satisfied, and there is orderliness
instead of chaos
Define coordination
Characteristics and importance of it
Coordination is balancing and keeping together the team by ensuring suitable allocation of Tasks to the various members and seeing that the tasks are performed with harmony among the members themselves.
coordination:
(i) Coordination integrates group efforts: Coordination unifies unrelated or diverse interests into purposeful work activity.
It gives a common focus to group effort to ensure that performance is as it was planned and scheduled.
(ii) Coordination ensures unity of action: The purpose of coordination is to secure unity of action in the realisation of a common purpose. It acts as the binding force between departments and ensures that all action is aimed at achieving the goals of the organisation.
Coordination is a continuous process: Coordination is not one-time function but a continuous process. It begins at the planning stage and continues till controlling. Smita plans her dewali collection in the month of June itself. She has to then ensure that there is adequate workforce and continuously monitor whether production is proceeding according to plans.
Her marketing department also has to be briefed in time to prepare their promotional and advertising campaigns.
(iv) Coordination is an all pervasive function: Coordination is required at all levels of management due to the interdependent nature of activities of various departments.
It integrates the efforts of different departments and different levels.
The purchase, production and sales departmental efforts have to be coordinated by Smita for achieving organisational objectives harmoniously. The purchase department is responsible for procuring fabric. This then becomes the basis of the activities of the production department.
and finally sales can take place. If fabric purchased is of an inferior quality or is not according to the specifications of the production department, further sales will also decline. In the absence of coordination there is overlapping and chaos instead of harmony and integration of activities.
(v) Coordination is the responsibility of all managers: Coordination is the function of every manager in the organisation. Top level managers need to coordinate with their subordinates to ensure that the overall policies for the organisation are duly carried out. Middle level management coordinates with both the top level and first line managers.
Operational level management coordinates the activities of its workers to ensure that work proceeds according to plans. d(vi) Coordination is a deliberate function:
A manager has to coordinate the efforts of different people in conscious
and
deliberate
manner.
Even where members of a department willingly cooperate and work, coordination gives a direction to that willing spirit.
f
Cooperation in the absence of coordination may lead to wasted effort and coordination without cooperation may lead to dissatisfaction among
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(1) Growth in size: As organisations grow in size, the number of people employed by the organisation also increases. At times, it may become difficult to integrate their efforts and activities. All individuals differ in
their habits of work, background, approaches to situations and relationships with others.
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becomes necessary to ensure that all individuals work towards the common goals of the organisation.
But employees may have their own individual goals also. Therefore, for organisational efficiency, it is important to harmonise individual goals and organisational goals through coordination.
(ii) Functional differentiation:
Functions of an organisation are divided into departments, divisions
and sections. In an organisation there may be separate departments of finance, production, marketing or human resources. All these departments may have their own objectives, policies and their own style of working. For example, the marketing department’s objective may be to increase sales by 10 per cent by offering discounts. But, the finance department may not approve of such discounts as it means loss of revenue. These kinds of conflict arise in organisations because each unit/ department is performing activities in isolation from others and barriers between departments are becoming more rigid.
However, all departments and individuals are interdependent and they have to depend on each other for information to perform their activities. The activity of each department needs to be focused on attainment of common organisational goals. The process of linking the activities of various departments is accomplished by coordination.
(iii) Specialisation: Modern organisations are characterised by a high degree of specialisation.
Specialisation arises out of the complexities of modern technology and the diversity of tasks to be performed. Organisations, therefore,
employees.
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need to employ a number of specialists. Specialists usually think that they only are qualified to evaluate, judge and decide according to their professional criteria. They do not take advice or suggestions from others in matters pertaining to their area of specialisation. This often leads to conflict amongst different specialists as well as others in the organisation. Therefore, some coordination is required by an independent person to reconcile the differences in approach, interest or opinion of the specialists.
