NATURE AND SIGNIFICANCE OF MANAGEMENT

Ø KEY WORDS

• Process: means the primary functions or activities that management performs to get things done.
These functions are planning, organising, staffing, directing, and controlling.

• Effectively: 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. In other words, it is concerned with the END result.

• Efficiently: 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.

• Co-ordination - Coordination is the orderly synchronising of efforts of subordinates to provide

proper amount, timing, and quality of execution so that their united efforts lead to the stated objectives,
namely, the common purpose of the enterprise.

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Ø DEFINITION

Management has been defined as an ART of getting things done through others with the aim of
achieving goals effectively and efficiently.

Ø FEATURES/CHARACTERISTICS OF MANAGEMENT

1. Goal oriented process: goals should be simple and clearly stated. Management unites the efforts
of different individuals in the organization towards achieving these goals.

2. All pervasive: all types of organizations, all levels, and all departments.

3. Multi-dimensional: complex activity with 3 dimensions:

• Management of work: Management translates 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.

• Management of people: Has two dimensions - employees as individuals with diverse

needs and behavior + individuals as a group of people. Management makes people
work towards achieving the organisation’s goals, by making their strengths effective and
their weaknesses irrelevant.

• Management of operations: every organization has some basic product or service that
requires a production process →flow of input material + 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.

4. Continuous process: mgt. is an ongoing series of continuous, composite, but separate

functions (planning, organising, directing, staffing, and controlling) simultaneously performed.

5. Group activity: a firm is a collection of individuals with different needs, different purpose for
joining the organization but they work towards fulfilling the common organizational goal. Teamwork
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 and coordination of individual effort in a common direction enables all its members to grow and
develop as needs and opportunities change.

6. Dynamic function: Management adapts itself to the changing environment. External environment
consists of various social, economic, and political factors and, an organisation must change itself and
its goals according to the needs of the environment.

7. Intangible force: cannot be seen but its presence can be felt → targets are met according to plans,
employees are happy and satisfied, and there is orderliness instead of chaos.

Ø OBJECTIVES OF MANAGEMENT

Objectives are:
• Ends towards which activities of an organization are directed.
• Standards against which performance is assessed.

Organisational Obj Social Objectives Personal/ Individual Obj

Objectives seeking to reconcile
Setting and achieving It involves the creation of benefit for personal goals of employees with
objectives for the organisation. society. organisational objectives for harmony
in the organisation.
1. Survival (earn enough 1. Giving employment opportunities
1. Fair remuneration
revenue to cover costs) to disadvantaged sections of society.
2. Providing basic amenities like
2. Profit (covers
schools and crèches to for employee’s 2. Good working conditions
costs+risks)
children.
3. Growth (in the long run-
in terms of ↑in sales, no. of 3. Providing good quality goods at 3. Opportunities for training and
employees, variety of products, fair prices. development and personal growth
capital investment etc.)
4. Optimum utilization of
4. Participation in management
resources

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 Ø NATURE OF MANAGEMENT

I Management as an Art II Management as a Science III Management as a Profession

Science can be defined as a systematic

Art implies personal application of
body of knowledge pertaining to a Profession can be defined as an
knowledge with ingenuity, skill,
specific field of study. It contains occupation backed by specialized
and creativity to achieve desired
principles and facts which explain a knowledge and training.
results
phenomenon

Features of Art: Features of science: Features of a Profession

1. Systematic body of knowledge:
1. Existence of theoretical
(that establish cause and effect 1.Body of knowledge:
knowledge
relationship.)
2. Personalized Application: (use
2. Principles based on experiments: 2. Restricted entry (thro
of basic knowledge varies from
(under controlled conditions) examination or education)
individual to individual.)

3. Principles have universal

3. Professional association
3. Based on practice and validity.
Creativity:(involves creative
practice of existing theoretical
knowledge)
4. Ethical code of conduct (that
4. Principles establish cause and guides the behavior of its members)
effect relationship. 5. Service motive (by rendering
dedicated and committed services)

• Its principles are based on a

Art presupposes the existence of • All professions are based
cause and effect relationship.
certain theoretical knowledge. For on a well-defined body of
For example, the phenomenon
example, literature on dancing, knowledge that can be
of an apple falling from a tree
public speaking, acting or music is acquired through
towards the ground is explained
widely recognised. instruction.
by the law of gravity.

• Principles of management are

Managers apply these management based on repeated experiments • No restriction on
theories in their unique manner and observations. But since appointment of managers.
depending on their practice, management deals with human But professional
imagination, initiative and behavior, outcomes may not knowledge and training is
innovation. always be accurately desirable
predicted/replicated.

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 Ø There are associations such
as AIMA and they lay down
a code of conduct, but
Ø Manager applies this membership is not
acquired knowledge in a compulsory.
Ø Principles ≠ exact so not
personalized and skillful
universal. They must be
manner in the light of the
modified according to
realities of a given situation
situations.
giving rise to different styles Ø Stated goal of oganisations
of management. and management is profit
maximization but effective
and efficient management
also serve society by
providing quality gds at
reasonable prices.
Conclusion: Conclusion: Conclusion:
All the features of art are present in
management and are broadly
Management satisfies some of the Management satisfies some of the
fulfilled, so we can say that
features of science but not all. features of profession but not all.
management is an art.

• So, management is not

· It is the art of getting work • Inexact/social/soft/behavioral regarded as a full-fledged
done by others. science. profession like
medicine/law etc.
• Concerned with human
behavior which can’t be studied
· It is, however, not a Fine Art • But management is fast
under controlled experiments
like painting or music moving in that direction
and can’t be predicted with
absolute accuracy.

Ø LEVELS OF MANAGEMENT

• The Chain of superiors and subordinates from the highest level to the lowest is known as chain of
command or management hierarchy or scalar chain.
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 • It is an authority-responsibility relationship that binds individuals as superiors and subordinates and
gives rise to different levels in an organization.

• Generally this chain is divided into three categories. These are called ‘levels of management’
Top Level Middle Level Lower Level
Functions: Functions: Functions:
1. Integrate diverse elements 1. Link between top and lower levels 1. Interact with actual workforce
and coordinate activities of of management. and develop healthy relations
different departments in one 2. Implementing and controlling plans with the workers
direction. and strategies formulated by top 2. Pass on instructions of middle
2. Responsible for welfare and management. level management to the
survival of the organization. 3. Interpretation of the policies of the workers.
3. Determining overall top level management. 3. Maintain standards of quality,
objectives and strategies for 4. Ensure that their department has minimize wastage and ensure
their achievements. necessary personnel. steady flow of output.
4. Responsible for business 5. Assign duties andresponsibilities to 4. Maintain safety standards.
activities and its impact on the personnel in theirdepartments. 5. Motivate the employees.
society. 6. Motivating persons to achieve 6. Represent problems/grievances
5. Organizing activities to be desired objectives. of workers before middle level
performed by persons 7. Co-operate with other departments. management.
working at the middle level. 8. Responsible for first line managers. 7. Help middle level
6. Liaison with the outside management in recruiting,
world. selecting and appointing the
workers.

Ø IMPORTANCE OF MANAGEMENT

1. Management helps in achieving group goals: The task of a manager is to give a commondirection
to the individual effort in achieving the overall goal of the organisation.

2. 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.

3. Management creates a dynamic organisation: Environment is constantly changing. Individuals

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 →organisation →maintain its
competitive edge.

4. Management helps in achieving personal objectives: So that individual members are able to
achieve personal goals while contributing to the overall organisational objective. Motivation and
leadership → individuals to develop team spirit, cooperation and commitment to group success.

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5. Management helps in the development of society: It helps to provide good quality products and
services, creates employment opportunities, adopts new technology for the greater good of the
people and leads the path towards growth and development.

Ø MANAGEMENT FUNCTIONS OR STEPS IN THE PROCESS OF

MANAGEMENT

Management is described as the process of planning, organizing, directing and controlling the efforts
of organizational members and of using organizational resources to achieve specific goals. The
functions of management are as follows:

1. Planning

• It refers to “deciding in advance what to do, how to do, when to do and who is going to do it. It
bridges the gap between where we are and where we want to go.”
• Cannot prevent problems but can predict it and prepare contingency plans to deal with them.

2. Organising
• Organizing the activities and resources and establish the organization structure to execute the
plan.
• It involves assigning duties, grouping tasks, establishing authority and allocating resourcesrequired
to carry out a specific plan.
• Proper organizational techniques help in the accomplishment of work and promote both the
efficiency of operations and the effectiveness of results.

3. Staffing

• Staffing refers to the manning of the organization and aims at putting the right person at the right
job.
• It also refers to human resource function of management.

4. Directing

• Once the employees are appointed, there is need to instruct them and get the work done.
• Directing refers to giving directions or instructions to employees. Managers act as friends,
counselors, leaders to guide the employees.

5. Controlling
• Controlling involves monitoring organizational performance and comparing it with the
organizational objectives.
• It involves finding out the deviations if any and finding out corrective measures to come on the
path of the plan.

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 Ø CO-ORDINATION

• According to Mooney,” Co-ordination may be defined as the orderly arrangement of group effort
to provide unity of action in pursuit of a common purpose.”
• Force that binds all other forces of management.
• Runs through all activities such as production, sales finance etc to ensure continuity in the working
of the firm.
• Implicit and inherent in all management functions.

Ø CHARACTERISTICS OF COORDINATION:

1. Coordination integrates group efforts: unifies unrelated or diverse interests into purposeful work
activity +gives a common focus to group effort +ensure that performance is as it was scheduled.
2. Coordination ensures unity of action: binding force between departments and ensures that
all action is aimed at achieving the goals of the organisation.
3. Coordination is a continuous process begins at the planning stage and continues till controlling.
4. Coordination is an all pervasive function: all levels, all departments, in all the organisation.
5. Coordination is the responsibility of all managers:
• Top level managers →coordinate with their subordinates to ensure that the overall policies for
the organisation are duly carried out.
• Middle level management →with both the top level and first line managers.
• Operational level management →activities of its workers to ensure that work proceeds
according to plans.
6. Coordination is a deliberate function: coordination must be a conscious and deliberate effort.
Cooperation in the absence of coordination may lead to wasted effort and coordination without
cooperation may lead to dissatisfaction among employees. Coordination, therefore, is not a separate
function of management, but it’s very essence.

Ø NEED FOR COORDINATION

1. Growth in size: The need of co-ordination increases with the size of the organization, because in
large organizations there are more number of people working, each individual having his own needs,
objectives, beliefs and style of working. Co-ordination therefore brings harmony.
2. Functional differentiation: Generally, functions of an organization are divided into different
departments, sections or divisions and each department has its own objectives, policies, style of
working and may try to work in isolation and independently.
• So, there is more need to relate and bring together activities of different sections as they area part
of one organization only as all depts.
3. Specialization: Specialists tend to focus on their area of specialization and may tend to overlook the
overall picture of the organization. Therefore, co-ordination is required between efforts of various
specialists as also between specialists and others in the organization.
• This will help reconcile the differences in approach, interest or opinions of experts.
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 Ø IMPORTANCE OF COORDINATION

Ø Ensures unity of action

Ø Erases interdepartmental conflicts
Ø Promotes harmonious implementation of plans
Ø Helps in maintaining a high degree of morale amongst employees

Ø CO-ORDINATION AS THE ESSENCE OF MANAGEMENT

Co-ordination plays a vital role in all the functions of management. It is not a separate function rather it
is the essence of management. It is required in all the functions of management.

Co-ordination and Planning Co-ordination and Organizing

In ‘planning’ co-ordination is required between In ‘Organizing’ co-ordination is required between
• Master plan of the enterprise and the plans • Authority, responsibility and
of different departments or divisions Accountability of an individual
• Objectives and the available resources • Different resources of an organization and
activities to be performed
• Different functional managers
Co-ordination and Staffing Co-ordination and Directing
In ‘Staffing’ co-ordination is required between: In ‘Directing’ co-ordination is required between:
• Skills and abilities of employees and jobs • Superiors and subordinates
assigned to them. • Among orders, instructions, guidelines,
• Performance and rewards and suggestions
• Technique of production and training • Situations and leadership styles,
communication media etc.
Co-ordination and Controlling
In ‘Controlling’ co-ordination is required between:
• Standards fixed and actual performance.
• Type of deviation and corrective measures
• Correction of deviation and achievement of objectives.

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