FE CHAPTER NATURE AND SIGNIFICANCE OF MANAGEMENT ‘Meaning of Management — Management is the art of getting things hhieve specific organizational objectives] done through and with the help of others, in order to Definition of Management According to Robert. L. Trewelly and M. Gene Newport, “Management is defined as the process of planning, organizing, actuating and controlling an organization’s operations in order to achieve coordination of the iuman and material resources essential in the effective and efficient attainment of objectives.” _ Effectiveness and Efficiency Effectiveness in management is concerned with doing the right task, completing act and achieving goals. In other words, it is concerned with the.end result. Efficiency means doing the task correctly and with minimum cost. It is important for the management to maintain a balance between effectiveness and efficiency - iy faracteristics or Features of Management + | Management is a goal oriented process:every organisation is established to achieve certain goals. Every organisation has different set of goals depending on the nature of the organisation. Goals should be clearly stated. Every organisation has a set at least basic goals which are the bases for its existences. «2-Mlonagement is all pervasive (Universal): Management is a universal phenomenon. The uuse of Management is not restricted to firms only. It is applicable to profit-making, non- profit-making, non business organisations as well, such as schools, hospitals, clubs, etc. Management is a continuous process: Management is a continuous or never ending function, All the functions of Management are performed continuously. The functions of ‘management, Planning, Organising, Staffing, Directing and Controlling are carried out by all managers as long as an organisation lasts. 4. Management is a group activity: each and every organisation consists of number of persons with different needs. Every member lias a different purpose to join the organisation, As members of group they have to initiate, communicate, coordinate and join their hands to attain common goals of the organisation : : e:. 5. Management is a ayhatte Airion: Management has to change as per the requirement of the environment, both internal as well as extemal. There may be a need to change goals, objectives, policies and other activities according to the changes in thei hhnical, iti omical and tec! ‘The external factors such as politcal, social, econ environment. The Slso have a great influence on the managem iakba efleore aansapailes Management isan intangible force UMA TATA traps, 6 Management is inter iy the way the organisation functio its presence can ganisat Example profits achieved employee satisfaction & 7, Management is multidimensional: ee A. aeaoes ‘of work: Every organisation a Pr cents i hospital. I 0 it mel Fe ion of goods in a factory, trea pal Farman pion of 2 He nea aE Te done in terms of problem solving, decision making, delegation, Duce pr ete. B. Management of People: This has two dimensions dealing with employees as individuals with diveiSe needs and behaviour and dealing with employes as & Te of people. Management helps utilize the strengths of the people to achiev! goals. C. Management of Operations: This dimension isthe link between management of work and people. IT involves the activities in transforming the input into the desire output. Example: implementation of a production process or introducing a new technology. Objectives of Management The objectives of management can be classified into the following categories: 1. Organisational objectives: Organisational objectives aim at the growth and prosperity of business. Profit maximisation is not the only objective of the business. Every business also aims to achieve increased efficiency, reduce cost and bring profitability and prosperity to the organisation. Ithas to achieve a varity of objectives in all areas considering the interest of shareholders, employees customers and government. Its main objective is to utilise human and material resource to its maximum level. a. Survival competi Every organisation will first aim to survive in the market in the face of nn, It should try to cover costs and earn reasonable profit for survival. b. Profit: Profit is the reward for risk bearing by a businessman. Profit is also essential for growth and expansion. Reasonable profits should always be aimed by an organisation for meeting its expenses and successful continuity. ¢. Growth: The growth of an organization may be measured by the increase in volume of sales, number of branches, addition of new products, increase in number of employees, increase in: profits, ete. Socia! Objectives: every organisation is part of the society. uses resources of the society and carns profit out of it. It is therefore duty of the business to contribute in return to the society. Organisation can use environmental friendly methods of production, provide basic amenities, participate in social service projects .Few examples are: a. Svplying quatity goods at reasonable price.s Generation of economic wealth. Creating employment opportunities. Financial support to community. Contribution towards civil amenities. Organising educational, health and vocational camp. Using environmental friendly methods of production. fh. Participating in social welfare activities of the government and NGO's / n are made up of people who have different personalities, ves, Motivated and satisfied employees always perform ays to ensure this are: wpmeac 3.Personal Objectives: organisatio background, experience and objecti better and contribute maximum to the organisation. Some w. a. Competitive salary b. Avenues for personal development(promotion, ©. Personal recognition (self-respect and recognition incentives, training, etc) by management) 4. Social recognition e. Better and healthy working conditions Importance of Management Management is necessary to run every organisation successfully. Management is important for the following reasons. ‘Helps in achieving group goals: Management helps individuals in the organisation to achieve its goals by directing their energies in that direction. It brings human and material resources together and mobilises them to achieve goals. 2. Management increases efficiency: The aim of every manager is to increase efficiency to maximise output with minimum cost. This can be done by better planning, organising, staffing and directing activities. 3. Management creates a dynamic organisation: Every organisation operates in the changing environment. It is necessary to make the adjustments as per the requirements and changes. Management motivates its employees to adopt changes as per the requirements of time. 4. Management helps in achieving personal objectives: Management helps in integrating personal objectives with that of the organisational objectives. Through motivation and other efforts provided by the managers employees are able to achieve one’s as well as the organisations goals 5. Management helps in the development of society:it helps by providing good quality products and services, creats employment opportunities, adopts new technology for the greater good of the people and leads the path towards growth and development. Management as a Science Itis a systematised body of knowledge acquired through experimentation and observation which is capable of verification.‘1 s: 4 Features of science are as follows senoe ig systematic body of Knowledge its : a i ip. Simil it principles ee eee ance disciplines like economics, sociology etc. inci -d through b. Principles based on experimentsciemific principles have oan Cae pes it ; [sonins and experimentations under controlled conditions. " : : ee rinciples are developed through experiments and practical experiences of # nany Inanagerial personnel but outcomes may not be accurate since managemen! human beings who's behaviours keep changing a Universal Validity Scientific principles have universal application and valisiy. However, since management deals with human behaviour, its principles have to be modified according to given situations its applications and use are not universal at times. Corhu-Thus, management is an inaccurate science. Management as an Art An art may be defined as personalised application of general theoretical principles for attaining the best possible results. It has the following features: 4. Existence of theoretical knowledge:Art has the existence of certain theoretical knowledge. Experts in respective areas have derived certain basic principles applicable to a particular art. Similarly successful managers practices the art of management in the day to day work based on the study, observations and experiences. 4. Personalised application of knowledge: Any act becomes an art only when one applies the acquired knowledge, using one’s own skills and creativity. This feature is applicable to management because, although managerial theories are the same, each manager has his own style and approach towards his job. © Based on Practice and creativity: Every art requires practical knowledge.Learning theory is not just enough. It is important to know practical application of theoretical, similarly managers must know how to apply theoretical principles in real situations. Art aims at producing something new that has never been existed before. Management is creative in nature like any other art. Conclusion: Management has features of both art and science. Science teaches to know and art to do. Art without science has no direction and Science without art leads to wastage of knowledge. Art is descriptive and science is prescriptive Management as a Profession:AA profession refers to an occupation backed by specialized knowledge and training, and entry into it is regulated by a representative body. &. Well defined body of knowledge, Every profession has a systematic body of knowledge which helps professionals to gain proper expertise of that profession. This feature is present in management where management practitioners are building systems by studying different problems and developing new principles to deal with them. b. Professional associations: these are representative bodies that lay down the standards of education and training for those entering that profession. Ex- ICAI, Medical Council of India, For management, there are associations like All India Management Association, National Institute of Personnel Management ete, whose membership is mot mandatory for managers. In accordance to this feature management cannot be called a profession. Restricted Entry: Generally, entry into a profession is controlled by an examination or acquiring an educational qualification. At present, there is no specific qualification. prescribed to become a manager. 4d. Existence of Code of Conductzall professions are bound by code of conduct which guides the behaviour of its members. Example ethical behaviour of doctors. Management too has certain code of conduct laid by several associations for practicing managers , example like AIMA(all India Management Association) e. Service Motivesthe basic motive in profession is to serve the clients interests. An organisation with good management serves society by providing good quality products at reasonable prices. Levels of Management (pret ak gut Wout ) In an organisation, a number of people are employed, who are assigned different duties. In order to carry on various activities the persons at different levels are assigned authority and respons ity. A chain of authority is ereated from top to the bottom of the organisation, The main levels of Management are 1. Top Level Management Top management consists of persons working at the highest level of management. They take all important and critical decisions influencing the working of the whole Organisation, like determining objectives, formulating policies and providing overall ‘Some examples are, Chairman, Board of Directors, Managing Director, and Caief Executive Officer. Middle Level Management Middle level Management acts as a link between Top level and Supervisory level. These departmental heads are responsible for implementing and controlling policies and plans decided at the top level. They interpret the policies of top level management, and ensure cooperation between departments, Some examples are, Production Manager, Marketing manager, and Finance Manager. Supervisory/ Low level management ‘This is the lowest level in the hierarchy of management and is responsible for actual operations of the organization. The quality and the quantity of output depend on thislevel of management. Some examples are, Supervisors, Superintendents, Inspectors and Team leaders. MANAGERIAL HIERARCHY roe SMD, CEO evel Drie mow Miobte ss Barone saat HR mowases LEVEL Arnone | ! Lower , reo, FOr ae ae Functions of Management Every management, irrespective of the nature, type and size of the organisation, has to perform the following managerial functions: 1. Planning: Planning is basic managerial function. It is a decision in advance, what to do, when to do, how to do and who will do a particular task. Planning is process which involves selection of organisational objectives and developing policies to implement them: 2. Organising: The function of organising is to arrange, and co-ordinate the activities of Various persons working to achieve organisational goals. The process of organising involves: identifying the work to be performed, classifying the work, assigning the groups for activities to be performed, delegating authority and fixing responsibility, and co-ordinating authority-responsibility relationship. 3. Staffing: Staffing is related to recruiting, selecting, appointing the employees and assigning them duties. It is also responsible to maintain cordial relationship between employees and take care of their grievances. Training and development of employees, fixing remuneration, evaluating their performance, ete. also form part of duties of staffing function, 4. Directing: Once the staff are recruited there is need to guide them to do the activities. Directing is concerned with giving instructions to the employees, and motivating them to improve their performance, supervising various activities, and communicating with them. 5. Controlling: Controlling enables management to get its policies implemented and take corrective actions, if performance is not according to predetermined standards. The main Purpose of control is to see that the desired results are achieved,ee Co-ordination Coordination is the essence of management because integrates different acti force that binds all other functions of management. According to Mooney and Relay, “Coordination is orderly management of group efforts to provide unity of action in pursuit of common goals.” ies. It is the . Features of Co-ordination 1. It integrates group efforts:Coordination brings together diverse interests into a Purposeful activity. It gives a common focus to these groups to ensure that the performance is as per the plans. 2. Itensures unity of action: Co-ordination stresses unity of efforts of different individuals for achieving organisational goals. It acts as the binding force between departments and ‘ensures that all action is aimed at achieving the organisational goals. 3. It is @ continuous Process: Co-ordination is done continuously and may be called a never ending function. Any lapse in Co-ordination may disturb the work of the organisation. 4. Its all pervasive: Coordination is required at all levels of management and in all kinds of organisation, whether small or large, profit or non-profit. 5. It és the responsibility of all managers: Co-ordination is the responsibility of all managers at different levels of management. At the top level, managers are responsible . for coordinating plans and policies. Middle level managers coordinate the activities at departmental level and lower level managers coordinate the activities of workers. s 6. Co-ordination is a deliberate function: Co-ordination does not happen by chance. Itisa = function which is performed deliberately, for achieving group goals. In the absence of coordination, the efforts of different persons will go in different directions. Therefore it is essential for every organization. Importance of Co-ordination : 1. Size of the organization: The need of coordination increases with the increase in the size of the organization. Coordination plays the most important role of integrating the efforts and activities of various employees of the business. 2. Functional differentiation: Various departments are interdependent for information, to perform their activities. This process of lin| ig the activities of various departments is accomplished better with coordination. 3. Specialisation: In modern business, there is a high aegree of specialisation, The specialists or experts tend to be of the opinion that only they are the persons to take the right decision. They may not take suggestions from others seriously. In order to reconcile such differences in opinions, coordination is crucial.