Unit-One Chapter 1: Introduction To Management
Unit-One Chapter 1: Introduction To Management
Unit-One Chapter 1: Introduction To Management
Concept of Management
Management is the art of getting work done through others. It is the capacity to know what the
people want to do and search the best and cheapest way to do it. The word management is made up of
three word manage+men+t(tactfully) that means managing a man tactfully in a proper manger. From the
word management we know how to manage (money, men, material, machine, method) in a proper way to
achieve certain goal. In other words management is a set of activities including (planning, organizing,
controlling, decision making, leading) directed at an organizational resource ie. human, financial,
physical and informational with the aim of achieving organizational goal in an efficient and effective
manner.
The concept of management is continuously changing. However it is widely accepted that
management is a process of activities like planning, organizing and controlling to achieve an
accomplished objective with the use of human being and other resources. It is a vital part of business
organization which helps to accumulate, mobilize and optimum use of various resources to achieve an
organizational goal. The business cannot achieve its objective unless the human material, capital,
technique, different resources etc are used effectively and efficiently. In the sense management represents
a body of person determining the organizational objective and performing certain managerial function
like planning, organizing, staffing, directing, co-ordinating and controlling to achieve the objective.
Definition of management
According to Marry Parker Follet, “Management is the art of getting work done through
others”.
According to F.W.Taylor, “Management is the art of knowing what you want to do”.
According to James Stoonner, “Management is the process of planning, organizing, staffing,
leading and controlling the work of organizational member and using all resources to reach
organizational goal.”
According to Knoontz O’ Donnell, “management is the task of manager to establish and
maintain informal environment in which people work together in a group to perform work
effectively and efficiently towards achievement of group goal”.
In Conclusion, Management is the process of working together in group efficiently in order to
accomplish the particular goal. In short management may be defined as the agency that provide
leadership, guidance and control for the achievement of the objective set by administration. Thus
management may be understood as a process by which manager or executive in an organization gets
things done through the effort of other people.
Function/Process of management
Management is considered as a kind of activity of function. Different writers and experts have
given different function of management. Thus the various function of management visualized by different
writers and experts may be classified into various points which are as follows:
1. Planning/Decision making: Planning is the foundation stone of management. It is the function
of setting an organizational goal and deciding how best to achieve them. Decision making is a part
of planning process which involve selecting a course of action from a set of alternatives. Planning
and decision making helps managerial effectiveness by serving as a guide for future activities. All
other management function are followed by planning and decision making. Planning is conserved
with “what, how and when” to perform. It is deciding in the present about future objective and the
course of action for their achievement. It is the process of setting organizational goal and deciding
how best to achieve them. While planning we have to think about external and internal
requirement. In short planning includes:
a. Channel to be followed
b. Steps and methods to be used
c. Setting plan, policies, budgeting
2. Organizing (coordinating the activities): After setting the goal and developing a workable plan
the next function/process is to organize people and other resources necessary to carry out the plan.
It is the decision of work. It tells the way to the manager to decide the organization work. The
firm are run by different executives each of whom is given specific responsibilities for a manager
functional areas such as marketing, finance, manufacturing etc. Organization is a process of
dividing and combining effort of a working group for making such effort more productive,
effective and fruitful. Organizing includes division of work among different people whose effort
has to be co-ordinate to achieve specific objectives and to implement pre-determined strategies.
For achieving each goal manager hires his own employees and handle the business that relates to
his area of responsibilities. It is concerned with arranging and allocating work among the
organization member to achieve the organizational goal. Organizing includes
d. Grouping in section.
e. Getting right people
f. Defining their responsibility
g. Designing structure for reporting.
h. Delegating, authorizing.
3. Staffing (human resource): It is distinct, continuous and vital function of management. The
efficiency and effectiveness of organization significantly depends on the quality of its personal.
One of the primary function of management is to acquire qualified and trained people to fill
various qualified trained people to fill various position. Once the goal, objective, strategies,
policies, programme and rules has been formulated for their achievement, the next step is to
procure suitable personal for performing the job. It comprises of following sub division
i. Manpower
j. Recruitment
k. Selection
l. Placement and orientation
m. Transfer
n. Promotion
o. Training
4. Leading (managing people): Leading is a process used to get people to work together for the
interest of the organization. Leading means how to get best work from the employees. The
capacity of the leader is to lead their employees and also affect the working behavior. The
behavior of the leader should be such that it helps in directing, motivating and influencing to get
the best work from them to achieve the goal of an organization.
5. Controlling (monitoring and evaluating activities): Controlling is the final step of management
and it is the monitoring of organization process towards its goal. Actually it is the controlling of
standard. As an organization moves towards its goal, manager must perform in such a way as to
achieve its destination at appropriate time. Controlling helps to ensure the effectiveness and
efficiency needed for successful management. If the organization doesn’t achieve its goal than
rectification of some kind is needed.
Figure for process
Leading:
Controlling Motivating members of
Monitoring and controlling the organization to work
on going activities to in the best interest of the
facilitate goal attainment. organization.
Characteristics of Mgmt.
1) Goal oriented: Every orgn. has certain goals. Mgmt. is an instrument to achieve the pre-determined
goals. Mgmt. helps in or contributes use of different resources to achieve the goal.
2) Universal activity: Mgmt. is universal in nature. It is necessary and practiced in almost all types of
orgn. Mgmt. is required or essential where there is human activity. It means where ever there is a
human activity there is a mgmt.
3) Group activity: Mgmt. is a group activity. Mgmt. is a group activity as different people are involved
in carrying different function of mgmt. It is required where two or more individuals work together to
achieve the common goal. Mgmt. always attempts to coordinate the efforts of its group members.
4) Dynamic activity: Mgmt. is a dynamic process as it helps an orgn. to make adjustments according to
need, time and situation by modifying its objective, policies, strategies, procedure and programs.
Mgmt. involves adaption of an orgn. to change in its environment and modifying the environment for
the benefit of the orgn.
5) Multi-disciplinary: Mgmt. is a multi-disciplinary subject drawing knowledge from various
disciplines like mathematics, economics, psychology, sociology, political, science and other disciple.
Mgmt. integrates the knowledge and concept from different discipline in managing orgn.
6) Both Art and Science: Mgmt. consist of the element of both science and art. It is a science because
some of its principle has universal application like science. It is also an art because the degree of
success depends upon how manager apply their skills and abilities in managing human and other
resources.
7) Distinct process: Mgmt. is a distinct process in the sense that it uses different resources like physical,
capital and information through human resources. These resources have different functions and arre
inter-related with each other. So mgmt. is a distinct process of planning, organizing, leading and
controlling.
8) Social process: Mgmt. is a social process as the activities of mgmt. are performed by the use of
human. It utilize and mobilize the human resources for the achievement of organizational goals. So, it
has to fulfill the needs, wants and demands of employees along with fulfilling the organizational
objectives.
9) Intangible: Mgmt. cannot be seen but it ca be felt. It has no physical appearance. The function of
managers cannot be seen with our naked eye but the consequence or result of the mgmt. can be felt.
10) Coping with environment: Mgmt. is a social process. It operates as an open system. it is influenced
by general environmental forces like political, legal, economic, social, cultural, technological forces
etc. Mgmt. adapt the orgn. to the changing environmental force.
Principle of management
The practice of mgmt. is based on specific discipline which are known as principle of mgmt.
Mgmt. principles are the facts and truths gained through observation and experiment. The principle of
mgmt. are as follows:
1. Division of labour: This is the principle of specialization which is necessary to get efficiency in
the utilization of labour. Fayol tells that this principle is applied to all kind of work managerial as
well as technical to get best from his employees.
2. Principle of authority and responsibility: Authority and responsibility should be properly
passed so that we can function properly. Some authority can be passed to sub ordinate but
responsibility might not be passed. However responsibilities arise as authority is passed.
3. Principle of discipline: People in the organization must respect the rules that govern
organization. Without discipline no organization can achieve its goal.
4. Principle of unity of command: Each employee must receive instruction from only one
superior/supervisor/boss and report to only one superior in order to remove conflict in instruction
and confusion in authority.
5. Principle of unity of direction/objective: The operation within the organization must have the
one objective should be directed by only one manager using only one plan
6. Principle of subordination of individual goal to the organizational goal/group goal:
Employees of the organization must not think about their interest rather they should think about
the interest of organization as a whole. In other words employees should dissolve their individual
goal towards the goal of the organization.
7. Principle of remunerations Compensation for work should be fair to both employees and
employer, so that it doesn’t affect the daily life of employees.
8. Principle of centralization: Although manager holds the final authority but he should give some
authority for his subordinate to do his work properly. The organization has to find proper degree
of centralization.
9. Principle of hierarchy/scalar chain: It tells that how authority should be given/ ranked
according to their post. A chain of authority should extend from the top to the bottom of the
organization and should be followed all the time.
10. Principle of order: Human and material resource should be coordinated so that they are in the
required place at the required time. This is essentially a principle of organization in the
arrangement of things and person.
11. Principle of equity: Manager should be kind and fair when dealing with sub-ordinates.
12. Principle of stability of tenure of personnel: Instability is both the cause and affect of bad
management. Fayol points out the danger and cause of unnecessary turnover.
13. Principle of initiative: Subordinate should be given the freedom to carry out their plan even
though some mistakes may result.
14. Espirit de corps: Team work, team spirit and a sense of unity and togetherness should be fostered
and maintained. If the group works together in cooperative manner, then it becomes easy to work
and production will increase.
Types of Manager
According to level: Level of manager means dividing the authority and responsibilities among the
various management position. There are mainly three level of management. They are
1. Top manager: This includes president, vice-president, chairman, directors, CEO and BOD, Their
main function is to manage the overall organization. Top managers are responsible for planning,
policy making, decision making, motivating, leading etc. They also represent their office in meeting
with different parties like government, executive of other organization and so on. The job of top
manager is very complex and variant. Top manager take decision about activities as acquiring other
companies, investing in research and development, entering in various market and building new plan
and facilities.
Function or role of top managers
• To determine goal of an organization
• To make plan and policies for the achievement of that goal.
• To collect the resource like man, machine, material, money for executive plan
• To provide overall direction in the organization
• To exercise effective control of an organization.
2. Middle level management/manager: Middle level manager mostly include plan manager, operation
manager, division head, section head etc who are responsible for implementing the plan and policies
made by top management to achieve the goal and objective of and organisaion. Middle managers are
also responsible for supervising and coordinating the activities of level managers. They act as link
between top managers and lover level managers.
Function/ role of middle managers
• To implement policies laid by top managers.
• To give training for employees in organization.
• To recruit and select suitable staff and manpower.
• To issue instruction to the supervisory staff.
• To motivate personnel to obtain higher productivity.
• To cooperate with other department for ensuring smooth functioning of organization.
3. Lower level manager/ first line manager: Lower level managers supervise and coordinate the
activities of operating employees. They include supervisor, coordinator and office manager. They
implement the policies made by top managers in contrast to top and middle managers. They spend a
large proportion of time in supervising sub-ordinates. They also work directly in organization.
Functions/ role of lower managers:
• To issue orders and instruction to workers and to control their work.
• Classify and assign job to the workers.
• To direct and guide the workers about work procedure.
• To inform the unsolved problems of workers to the management.
• To maintain good discipline and relation among the workers.
Level of management
According to function:
1. Marketing manager: Marketing manager works in area related to the marketing function like getting
consumer and clients to buy the organization product and services. As marketing managers look after
the market situations of the product so they help to change their plan and quality according to the
demand of the market.
2. Finance manager: Finance manager work in area related to the financial resources. They deal
primarily with an organisation’s financial matter. They are responsible for activities such as
accounting, cash management, investment etc. In business finance manager is very important because
they have to work in an adverse situation. They manage how to get profit by investing or expanding
amount of the organization.
3. Production manager: They look after the production process of an organization. They suggest how
to achieve their goal by producing best quality product by using less employees and less raw material.
4. Personnel or human resource manager: They look after the personnel part of the organization.
They also look after when to get employees, when to provide training and development. They also
formulate compensation and benefit system, performance appraisal system and discharging low
performing people.
5. Purchase manager: They look after purchasing part of organization like how to purchase, when to
purchase, how much stock has to be kept and at what price.
6. Officer manager: They are those persons who look after official part of the organization which is the
centre of all the organization and organizational activities. Office manager helps the planner by
providing past report of the organization.
7. Administrative manager: Administrative or general manager are not associated with particular
management specialty. Probably the best example of an administrative is that of a hospital or clinic
administrator. Administrative managers have to be familiarized with all functional areas of
management rather than specialized training in any one area.
Regardless of level or area within an organization, a manager must play certain role and show
certain skill if they are to be successful. The concept of role is similar to the role of an actor in the theatre.
A person does certain things in organization has certain responsibilities. To fulfill these responsibilities,
Henry Mintz Berg has give role that managers play in the organization. Actually Mintz Berg concluded
that managers play ten different roles. They are categorized into 3 different sections which are as follows:
1. Inter personnel role: Managers assume inter personnel role in order to coordinate and interact with
organizational members. Through this role, manager provides direction and supervision to employee.
In inter personnel role manager develops contact and build relationship with people inside and outside
the organization. Inter personnel roles are characterized by three activities.
a. Figure head: First the manager should serve as a figure head. In this role he takes visit to
dinner, attend ribbon cutting ceremonies etc. These activities are more ceremonial and
symbolic than substansive.
b. Leader role: In a leader role, manager should give training, hiring, motivating, controlling the
activities of the employee. In this role he encourages employees to improve productivity.
c. Liaison role: Finally manager should perform as a liaison. In this role he co-ordinate the
activities of different groups. As a liaison person he maintains relation internally and
externally with different parties for building the image, gathering resources for the
organization.
2. Informational role: The role of monitor, disseminator and spoke person involves the processing of
information. Informational roles are closely related with the task necessary to obtain and transmit
information. Manager performs informational role in various ways. They handle a great deal of
information in connection with their work. In this role he develops a network of contact and relation
within and outside the organization. Informational roles are characterized by three activities. They
are:
a. Monitor: The first information role is that of monitor, in this role he actively seeks
information that may be of value. In this role he watches the activities taking place in and
around the organization.
b. Disseminator: As a disseminator he provides information to sub-ordinate and keep them
informed of what is going on around the organization related to their work. Here he emerge as
a vital link in the organization chair of communication.
c. Spoke person: The third informational role focuses on external communication. As a spoke
person he formally relays information to people outside the unit or outside the organization
about the related issues of their interest. Here he makes a speech to discuss the growth plan of
the organization.
3. Decisional role: Decision making is the vital function of every manager. Decision making involves
negotiating and compromising with conflicting interest. Here manager develops strategies to deal
with different parties and put them into action to achieve goal. Hence, decisional role are closely
related with the method manager used to plan strategies to utilize resource.
a. Entrepreneurship role: Entrepreneurship role is concerned with planning and initiating
change within the organization. Here he initiates changes in the organisation and develops the
new idea of innovation.
b. Disturbance handler: In a disturbance handler role he maintains good working environment
and organizational stability by resolving problems of disagreement and conflict.
c. Resource allocator: As a resource allocator he deals with the managerial function of
allocating resources (money, material, man, machine etc) to different units and subordinates.
d. Negotiator role: In a negotiator role he represents as well as protects organization interest in
dealing with outsiders and insiders regarding the important matter of the organization.
Skills of Manager:
To become a perfect manager he should possess some sort of skills Whatever may be the level of
manager, he needs different kinds of skill, some in large quantity some in less quantity if they are to
successful in their field. A manager should be perfect in every field of organizational work. As skill is an
individual ability to translate knowledge into action. Therefore in order to be successful a manager should
possess a wide variety of skills and ability. Basically, there are 3 kinds of skills with two supporting skill
which are necessary for successful manager. They are as follows:
1. Conceptual skill: Conceptual skill represent the managers ability to organize the overall working of
the organization and take a broad decision of the organization or insight view of the organization.
Here manager needs the mental capacity to understand the overall working of the organization and its
environment. Here manager’s ability helps the organization to take important decision of the
organization. Here manager’s ability helps to understand how different parts depend on one another
and a change in one part will have impact on other parts. Conceptual skill is necessary to see the
“Big” picture of the organization and make a broad base decision that will help the overall
organization. In this skill manager needs to look for opportunities in the environment and develop
strategic plan to capitalize these opportunities. Formal education and training are very important in
helping manager develop conceptual skill. This skill is needed by the top level management.
2. Human skill: Human skills are ability to work, understand and motivate other people. It is needed to
get along with other people and to get work done through other people. Human skills include
interpersonal skill such as directing, motivating, communicating, negotiating, bargaining, leading. A
manager must have human skill because they spend more time interacting with other people both
inside and outside the organization. A manager who has good human skill is likely to be more
successful. This skill is mostly needed by middle managers.
3. Technical skill: Technical skill are the skill necessary to accomplish or understand the specific kind
of work done in the organization. These skills are the ability to use the procedure technique and
knowledge of a specialized field. These skills are specially important for first line manager/ lower
lever managers. These managers spent most of the time in training subordinate and answering
questions about work related matter. They must know how to perform the talk assigned to them if
they are to be successful manager. For example accountant must be expert in accounting, A
production manager must have the skill to plan, operate, repair, maintain machines and equipment.
Evaluation/ criticism of theory: Social scientists describe administrative theory as an idle (inactive)
theory. It plays heavy emphasis on power and authority structure of organization. It enjoys all the
advantages of centralization and authority. It identifies important management process, function and skill.
It proposes the most complex system of organizing and managing work. This theory was supported by
Lyndall Urwrik, Mark Weber and Chester Barnard.
It also suffers from a demerit such as
1. It is rigid/ strict rules and regulation, impersonality and excessive categorization
2. It is institutionally power center and cannot give greater scope for individualism.
3. It cannot provide democratic organization.
4. It is a way to achieve bureaucracy.
5. It has focused mainly towards management, as it doesn’t pay adequate attention to workers.
6. This theory is superficial.
7. The principle which is considered universal by the function doesn’t stand the test of scrutiny in all
situations.
Environment
End of chapter
Chapter 3 Environmental Context
a. Socio cultural environment: This environment affects the behavior of people and organization.
People are influenced by the traditions, customs, believes and values that are influenced by society
and complex culture. As society change the cultural dimension also get changed. Thus the element
of life style, social values and cultural forces change over a time. So organization must be culture
sensitive.
b. Economic environment: General economic conditions are critical to the success of an organization.
It shows overall health of the economic system in the environment it operates. Important economic
factor for business are inflation, interest rate, unemployment, saving etc. All of which affect on
demand for different products. All these factors vary over a time and manager devotes much of the
organisation’s time and resources to manage this factor.
c. Political and legal environment: This environment contain those rules and regulations which
regulate the operations of an organization. It is designed for overall common good of the society. It
is important for three basic reasons. Firstly the legal system defines what an organization can or
cannot do. Secondly the business sentiment of government influence business activities. Finally
political stability has huge influence on planning of organization. The stability of the organization
depends on the stability to face the challenge arising out of political and legal forces.
e. International environment: Another component of the general environment for many organizations
is the international environment. That means the extent to which the organization is affected by
business activities of other countries. As a result of globalization, advancement in transportation
and communication in the host country has made every part of the world related to other part.
Almost every organization is affected by the international factor.
ii) Task environment: Task environment consists of specific organization or groups that influence an
organization. The impact of general environment is often huge, imprecise and long term. So, most of
the organizations tend to focus attention on task environment than general environment. Task
environment is quite complex but it provides useful information more rapidly than general
environment which are as follows:
a. Competition: An organization that fails to meet the need of the customers as effectively as their
competitors can’t survive for long. In many cases, it is not the customer who determine the price of
the product but is determined by the competitor product. Organisation must be innovative, efficient
and effective in order to cope with change.
b. Customer: Customer exchange resource usually in the form of money for an organization goods
services. Organisation can’t survive in an open market without customer. Customer may be an
institution, another firm or an individual. There should be good relation between customer and
organization. Customers influence all organization as they reject or accept organizations goods and
service. Customer determine the nature quality and price of goods and services.
c. Supplier: An organization must acquire raw materials, equipment in order to produce and supply
goods. Thus the supplier support and co-operation is essential for smooth functioning of an
organization.
d. Government: Government creates many regulations of agencies that are usually given the task of
protecting the public interest from the undesirable practices. The policies, rules, regulations,
attitude of the government either promote or restrict organisational activities. They have great
influence on corporate policies, procedures and business practices of modern organization.
e. Labour union: Personal specialist generally deals with the labour supply, sometime supplemented
by other manager with specific hiring and negotiating activities. But now a days labour union
greatly influence the functioning of an organization from the different factor relating to the labour.
2) Internal environment
Internal environment is sum total of all forces and condition within an organization which
influence its approach plan and behavior. Some of the internal environments are as follows:
a) Employees: Organizations hire employees and they become the major forces within the internal
environment. They tend to differ in terms of belief, attitude, education and capabilities. They have to adopt
with the organisational culture to achieve the goal and smooth functioning of the organization.
b) Owners/share holders: The owners or share holders are the people who invest the money and have a legal
property right to that business. Nowadays more and more share holders are taking active role in
influencing the management of company.
c) BOD: The management of organization is concerned with BOD who retains the right of ownership,
management and power of functioning of organization. The actual management of organization is in the
hand of elected BOD. It has great influence on mission, objective and strategies of the organization.
2. Strategic response: Another way that an organization adopts to its environment is through a strategic
response. Options include maintaining the status quo, altering strategy or adopting an entirely new
strategy.
3. Merger, Take over, Aquision and alliance: Organisation adopts to its environment by doing following
things i.e. a merger occurs when two or more firm combine to form a new firm. A Take over occurs when
one firm buys another firm, sometime against their will. An acquision is nationalization by government
and the acquired firm continues to operate. In an alliance, the firm undertakes a new venture with another
firm. A company engage in this kind of strategies for variety of reason.
4. Organisation design and flexibility: An organization may also adopt to their environmental condition by
designing flexible structure. If it is flexible and permit the organization to respond quickly to
environmental change. An organization can adopt to the different changes easily and quickly. So rules and
regulation must be changeable and flexible according to the situation.
5. Direct influence of the environment: Many organization are able to directly influence their environment
in different way like the firm can influence their supplier by signing long term contract with fixed price.
b) Competitive forces: Michael E.Porter, a Harvard University professor, an expert in strategic management
has proposed a more developed form of accessing environment. In particular he suggested that manager
view about the environment of their organizations in term of five competitive forces. They are:
b. Competitive rivalry
c. Threat of substitute product.
d. Power of buyer
e. Power of supplier.
c) Environmental turbulence (unexpected problem): Some organizations also face the possibility of
unexpected environmental change or turbulence sometime comes without warning. The most common
form of organizational turbulence is the crisis of some sort, that you don’t think of happening. The effect
of this crisis can be devastating to an organization specially if manager are unprepared to deal with them.
2. Free enterprise (market) system: The reform programs have offered huge scape for free market
activities in the country. Many oppurtunities have been created with the hange in business environment
arising from freedom of reform. The Nepalese entrepreneurs have thus started exercising new freedom in
market. This has resulted in rapid change in the industrial scene of the country.
3. Growing private investment in core industries: The open door policy of the government has made a big
change in core industries like power, telecom, road etc has remained with the exclusive control of the
public sector of the country for a long time. Now these industries are open to private sector and foreign
investment.
4. Growth of the private sector: The change in environment has boosted the role of private sector in the
economy. The new system totally reverse the earlier policy and philosophy. Private and public sector are
now in an one seat exchanging their information. Some of the example of areas which are newly open to
private sector are hydropower, open sky, telecom, road, water supply etc.
5. Shift towards the service sector: It has been observed over the past few years that the service sectors are
growing very fast in the country. There has been shift from manufacturing to service sector. Service
sectors like tourism, radio, cinema, courier, newspaper, entertainment, printing services are growing very
rapidly.
6. Emergence of information technology (IT): Remarkable growth has been achieved in the application of
IT resources in a number of activities specially in private business. The application and use of IT services
are increasing at a very fast rate.
7.Development of market scenario (environment): The consumer goods market has changed every
dramatically during a period of 15 years. The market is flooded with wide range of product imported from
foreign countries which was not available in the market few years ago.
End of chapter