Introduction (1.

1)
Management emerged as a separate field of study when business enterprises developed to
meet the unlimited needs of people. In earlier times, the need for institutions or organisations
was not felt. The economy worked on barter system to satisfy people's needs. But as things
became complex and sophisticated,people felt the need for institutions or organisations.
They could not depend upon each other and had to rely on organisations. These organisations
worked as business enterprises and as these enterprises developed,there arose the need for
their effective management.
Most of us are members of one organisation or the other be it a college, sports organisation,
religious organisation or a business organisation.Each organisation, whether business or
non-business, has a goal and needs effective management to achieve that goal.

Concept of Management (1.2)

In today's world of complex and fast internationalisationof business, most companies are
going global. Unless,they are effectivelymanaged they cannot survive in the fast changing
international business environment. Management helps in doing and getting things done
through others. It is the process that optimiseshuman, material and financial resources of
the organisation for effective achievement of its goals. The process involves a series of actions
(functions)taken by managers, optimisationrefers to getting maximum output (goods and
services)out of minimum inputs (men, materials, money, machine etc.) and goals are the
results or ends that managers and other stakeholders (shareholders, consumers, suppliers,
workers etc.) wish to achieve.
Definitionsby some famous management thinkers are given below :
Terry and Franklin : "Management is a distinct process consisting of activities of planning,
organising,actuating and controlling, performed to determine and accomplish stated objectives
with the use of human beings and other resources."
1
 2 PHnciples of M
anage
Koontz and Weihrich : "Management is the process of designing and maintaining
efficiently
environment in which individuals, working together in groups, accom plish
aims." selected

F. W. Taylor : "Management is an art of knowing what is to be done and seeing that it is done
in the best possible manner."
Henri Fayol : "Management is to forecast, to plan, to organise, to command, to co-ordin
and control activities of others. ate
Every organisation,at every level, needs management, be it an organisation as small
family or a temple or a church or big organisationssuch as Schools, Colleges,
business houses or even the Government.It is important for both profit and non-profit
organisations and also for manufacturing and service organisations.
Labour unions and research organisations, hospitals and armed services are also guidedby
management principles.All these institutions,if they wish to achieve their goals (whether
profit or service) must think of management as the effective organ which plans the activities,
makes people responsible for carrying out those activities,co-ordinates and controlstheir
activities through a system of feedback.
Management is also viewed as the art of getting things done through other. It is an activity
which co-ordinates the human and non-human resources (men, material, machines etc.)for
achieving the desired results. Although different views have been given on the functionsof
management, the most commonly accepted functions are Planning; Organising;Staffing
Leading and Controlling.

Human Achievement
Functions
and of
non-human Objectives
Planning - Organising
resources
sta ffing-leading-controlling

Though management is essential for both business and non-business organisations,it is

primarily linked with business management. The arguments in support of this fact are given
by Peter F.Drucken
• Of all the institutions in the modern society, business institutions were the first to be
set up and management was meant to be a part of these institutions on a continuous
basis.
• Though management is important for non-profit organisations also, the main criterion
for testing the efficiency of management is economic efficiency or surplus (thoughnot
accurate) and this criterion is generally satisfied by business organisations.
• With the economic reforms initiated in 1991,the business has become openin
international boundaries and the economy has become free and liberalised.The
performance of these business houses is bringing the nations together and the focus
on business management is, thus, evident.
Peter E Drucker has very remarkably explained the importance of management in today's
context :
"Without institution there is no management. But without management there is no instituti0ß
Management is the specific organ of the modern institution. It is the organ on the performance
of which the performance and the survival of the institution depends."
In light of the above discussion, management can be viewed as a process where human and
non-human resources are integrated and directed towards achievement of the organisati0a
Management : Conæpt and Nature 3
goals.whether profit or service, through the various functions of management La, planning,
or-ganising,staffing, directing and controlling.

Features of Management (1.3)

Managementis characterised by the followingfeatures :
1. Management is an activity : It is an activity of getting things done through others. It involves
coordinatedefforts of a group of people towards a common end in highlystructured
organisations like Reliance or Infosys or social organisations like a club or an NGO.
working with and through people also establishes superior subordinate relationships where
work is assigned to each individualand their authority responsibilityrelationships are

2. Management is a process : Management gets things done through others by the management
process which helps to achieve organisational goals through functions of management.
3. Management is required for every type of organisation : Both business and non-business
organisations(such as Government or service organisations,irrespectiveof their size;large
or small) need effective management for achievement of their objectives.
4. Management is required at all organisational levels : Management is required at all the
levels — top, middle and lower levels of the organisation, though the degree of management
is different at different levels.
5. Management is goal-oriented : The success of organisation is measured by achievement of
its goals and management plays a significantrole in goal achievement. Objectives are the
desired state of results that all organisationalmembers agree to achieve through their
coordinated efforts.
6. Management is intangible : Management cannot be seen or felt. The result of management
can be observed by comparing a well managed organisation with a poorly managed
organisation- The difference in results can be attributed to management concept.
7. Management is dynamic : Management is an ever changing disciplineof knowledge.
Management was not very important during the early years of 1900seven in highly
institutionalised countries. The main decision-making authority used to be the Government.
The changing business scenario requires innovations, research and development in the business
sector and, thus, highlights the changing role that management has to play in this environment.
Effective management is situational ie-, managers assess the facts and circumstances of each
situation and use a managerialapproach that best appliesin the situation to attain the
individualand organisationalgoals.
8. Managementis a discipline: Though management seeks ideas and concepts from other
fields of study, such as psychology,behavioural sciences,sociologyetc., yet it is a complete
discipline in itself. Managers acquire specific managerial skills, knowledge and fundamentals
of management to practice management.
9. Management and society : Though management is a separate disciplinewhich aims at
accomplishment of pre-determined organisational goals, yet its impact on the society cannot
be overlooked. Management is governed by social values, culture and beliefs. It is a function
that transforms the society. It preserves the society and promotes its interests in future.
10. Management is a group effort : Managementas a function or activity or a process is not
undertaken by a single person. It is the co-ordinated effort of a group of people that envisions
future of the organisation, sets its goals, makes plans and policies, implements them and controls
its working through an effective feedback mechanism.
 is not confined to a
• Management
the present
admg wav With the
cultureorcounuy.lt busines is co market The m
boundaries,as far as economy, a single
the world is becoming a single in facc inæcapable-
in, e,ident and
management is, thus,

1 Objectives of Management its objectives

(profit or
organisation achieves
How effectively an Management senes the f0110%ing
effectively it is managed
its objectives : Management provides help
achieve objectives at minimum
1. Helps an organisation
organisations achieve their cost
managers to enable is, achieve outputs at minimum of r
that
1 managers to work efficiently, 'doing things right' and eff>
ess : Efficiencymeansmost appropriate organisational
the right things'. It means choosing the or choosing '.s-rong
'doing of effectiveness
of multiple objectives. Lack managers may work- Nlanagement, thus, enabl<
inefficiency, how so ever hard on those things
things to do and
find out should not only be skilled in
: Nlanagers
3. Develops the ability of managers problem-finding.They should anticipate
they should be equally skilled in
r find and take advantage of opportunities to make their
they arise. The should
Management deve10}xsthe analytical abilities of
competitive in the market.
the ability to find problems and exploit gainful business
solving) and
business organisation want to satisfy their
4. Human Welfare : Employees of a needs. Xlanagement helps in knov.ing
(food, clothing, shelter), social and security
and satisfies them through suitable motivators.
larger social s»tem- The performance
5. Social welfare : Organisations operate in a
and through it the welfare
organisations largely affects the welfare of a society acceptable
Management develops business organisations as socially
gainful employnent to people to earn their livelihood-
6. Interaction with environment : Business operates in the larger emironrnent
of economic and non-economic variables. Business firms secure inputs from the
transform them into outputs and give them back to the emironment- They -
adapt their plans and policies to the erraronmental requirements and change
operations according to changes in the environment- Management helps firms to
frame and alter their policiesto profitably interact '.sith the larger em,ironmetll

Importance of Management
Management plays an important role in shaping the culture of an oroanisatiQ
performance and sunival of a businessorganisation depends on its
Drucker, in this regard remarks :
'Management is the specific organ of the modern institution. It is the organ on the
of which the performance and the sunival of the institution depends.'
The modern society is dependent upon organisations for its survival. Oreanisations
society in the following ways :
1. They help in the attainment of individual goals.
Management: Conceptand Nature 5

2. They preserve knowledge by maintaining records of past achievements and provide

knowledge for future generations.
3. They provide career opportunities to individuals.
Awell managed organisation can effectively utilise its resources (human, physical and financial)
and achieve its objectives as well as meet the society's needs. Effectiveness (doing the right
things) rather than efficiency (doing things right) is the fundamental key to managerial success.
As Drucker puts it, the manager's need to make the most of opportunities "implies that
effectiveness rather than efficiency is essential to business. The pertinent question is not how
to do things right, but how to find the right things to do, and to concentrate resources and
efforts on them." It was the effectiveness of management that helped the economies restructure
themselves in the post World War Il period.
The interest in management is widely spreading in almost every country of the world. It is
evidenced by the fact that an increasingly large number of management institutes and schools
are offering management courses to a large number of students.
The importance of management can be explained through the following points:
1. Achievement of organisational goals : Management helps organisations to effectively design
their goals and frame plans and policies to achieve them efficiently.
2. Optimum utilisation of organisational resources : Management helps an organisation utilise
its scarce resources (human, physical and financial resources) efficiently.
Human resources are the people with their talent, skill, knowledge, experience and abilities
for effective conversion of inputs into outputs.
Materialor physical resourcesare the raw material or plant and machinery required for
producing goods and services.
Financial resources are the money or funds needed for meeting organisational short-term
and long-term requirements of raw material, labour, machinery and other current and fixed
assets.
3. Develop the analytical and conceptual ability of managers : Management helps managers
to analyse the organisational problems, link them with other organisational matters and arrive
at a solution for attainment of organisational goals.
4. Balance between multiple goals : At a point of time, managers face multiple goals, all of
which cannot be simultaneously achieved. Deciding about what is more important and what
is less important so that scarce organisational resources can be optimally allocated to different
organisational goals, is facilitated through management.
5. Economic and social development : Drucker asserts that "developingcountries are not
underdeveloped, they are undermanaged." If the knowledge«management is transferred
from developed to developing countries, the developing countries will develop their
entrepreneurial ability, managerial excellence, rate of savings, capital formation and ultimately
economic and social development. As Drucker puts it, "savings and capital investment do not
produce management and economic development. On the contrary, management produces
economic and social development, and with it savings and capital investment."
6. Coordination between individual and organisational goals : Effective management
coordinates individual goals of people with formal goals of the organisation. It motivates and
inspires employees to put their best efforts to contribute to organisational goals and through
it, achieve their personal goals.
 Principles
of
competition. Eff
7. Face competition : Today's world is the world of intense ectively
business firms outperform those which are not effectively managed and, thus
bigger share of the market. Management helps firms face competition in the
maa.tptuth
8. Social upliftment : Management brings social development by generating and
human energies towards the needs of the society such as health care, educatio dir
n
environment etc. cari
9. Management helps to reform Government and society : Management teaches m
respect the individual values, traditions and social culture. The more the
organisation believes in traditions, customs, values and beliefs of the society, the more
organisation is accepted by the society and the Government. As Drucker puts it,
"Managek
will increasingly be concerned as much with the expression of basic beliefs and
value
with the accomplishment of measurable results.'
'It will increasingly stand for the quality of life of a society as much as for its
living.'
10. Management helps in social innovation : The social and economic development is
result of social innovation than technical innovation. The needs of our society, educare,
care, clean environment, entrepreneurship,productivity etc. are fulfilled throughable
skilled managers. The knowledge of management, therefore, plays an important roleinthe
social upliftment of society. "Economic and social development are the result of managemen
Development is a matter of human energies rather than of economic wealth.And
th
generation and direction of human energies is the task of management.
mover and development is a consequence."
11. Foundation to organisation : Clearly defined tasks, their distribution to people alonguith
authority provides foundation to the organisation. It assigns right task to the lightpersonto
avoid duplication and confusion in organisational activities.
12. Environmental analysis : Management enables an organisation to analyse its strength
and weaknesses and relate them with the environmental threats and opportunities.(lhßi
done with the help of SWOTanalysis).This helps managers to minimise risks and
the environmental opportunities and business gains.

Different Aspects of Management

In order to derive the best results in creating corporate values and practices,achie \i
organisational objectives and meeting society's needs, managers make best use of managem
in different ways. They view management in different perspectives. Management i

multidisciplinary field of study and draws its concept and principles from variousdiscipli
such as economics, anthropoly, sociology,psychology, etc. Considering these diverse
management is viewed as :
1.6.1. An Activity
1.6.2. A Process
1.6.3.A Discipline
I .6.4. A Group
1.6.5.An Economic Resource
Management as an Activity
, an be undel
Activity means exercising some kind of action. Mana eme
in terms of actions performed by managers to achieve organisational objectives within the

constraintsof internal and external environment.

Managementas an activity is "the art of getting things done through people".
— Mary Parker Follett.
Management as an activity refers to what managers actually do rather than what they should
do to achieve organisational goals. What managers actually do defines the roles of managers.
Management as an activity, thus, defines the role of managers. Empirical evidence has proved
that managers perform ten roles which can be broadly classified into three. These are described
below :
1. Interpersonal roles or activities
2. Informational roles or activities
3. Decisional roles or activities
1.Interpersonal roles or activities : Management is defined as the art of getting things done
through others. In dealing with others, managers contact their superiors, peers, subordinates
visitors;
and outside parties. They greet people; attend a subordinate's function; receive official
and
hire,train and motivate employees; solve their psychologicaland work-related problems
contact people within (superiors, subordinates and peers) and outside (consumers, suppliers,
Government etc.) the organisation. Though these activities are routine in nature, they help
managers in running the organisation smoothly.
2. Informational roles or activities : In dealing with people within and outside the organisation,
managers communicate with stakeholders like consumers, creditors, employees, suppliers,
to
Government etc. They need information to make right decisions and communicate them
from
members. In this context, managers perform various activities like collect information
variousjournals and conducting tours; transmit information to members of the organisation to
through meetings, notices and circulars and interact with people outside the organisation
communicate them company's plans and policies.
3. Decisionalroles or activities : The information collectedby managersmaking in informational
decisions.
roles is not only communicated to others but also used by them as inputs for
launch a new
In this regard, managers perform the activities of using market information to resources
product, solve organisational disturbances like stlikes, lock outs etc., allocate scarce
(employees
over business activities in the order of priority and negotiate amongst parties within
and employers) and outside (organisationand suppliers or union representatives) the
organisation.
Managementas a Process (1.6.2)
This is the practitioner's view of management. Process means a course of action Or proceeding.
It involves a series of steps to carry out an activity. "Management is the process of planning,
organising, leading and controlling the efforts o/ organisation members and of using all other
organisational resources to achieve stated organisational goals." The process defines
management as a set of functions performed by managers regardless of their levels, aptitude
and skills.
Activitiesperformed by managers while they regard management as a process are briefly
explained below :
l. Planning : In planning, managers think in advance, the goals of the organisation and the
ways to achieve these goals.
 Management
2. Organising : In organising, managers
integrate and coordinate the financial and non-financial
resources of the organisation to achieve its goals.
3. Leading : It refers to activities
performed by managers to direct and influence the behaviour
of subordinates. This is done through
motivation, leadership and communication.
4. Controlling : It refers to measuring
actual organisational performance and ensuring that it
conforms to planned performance. It attempts
to find deviations and take measures to correct
them.
Since management continuously deals with people and
integrates the human resource with
non-human resources (men, money, material, machines), it is generally defined as :
(a) A social process
(b) A continuous process
(c) An integrating process
(a) Asa social process : Management deals with people.It makes the best use of its
resource to convert its inactive resources into productive output (goods and services).
It understands human needs and satisfies them through various motivational factors,
both financial (money) and non-financial (power, prestige, recognition etc.).
(b) As a continuous process : Managerscontinuouslyperform the basic functions of
management. Organisations strive to achieve their goals and, therefore, continuously
need management to integrate their resources.
(c) As an integrating process : Management coordinates the activities of its departments
(production, personnel, marketing and finance)and resources (human and non-human)
to achieve maximum output at minimum cost.
Management as a Discipline (1.6.3)
Management, as a discipline, is viewed as a distinct field of study.
Since importance of management is increasing, there is need for specialised institutions
to
impart the knowledge of management to people. Management is, thus, taken as a separate
field of study. In this context, today, all over the world, many institutions offer specialised
courses in management of business administration (MBA).
Though management practices ideas from other fields of study as psychology, sociology
it is a complete discipline in itself. etc.,
Management, which was introduced as a distinct field of study in the year 1886,has
an enormous size today. Some of the important characteristics of grown to
management as a discipline
are as follows :
l. The increasing importance of managemept is evidenced by the fact
students enrolling in management study is on a constant increase.that the number of
students today join management institutions. Around 20-3090of
2. The number of articles, journals, text-books and reference
on a constant increase, books on management is
3. Management is formally taught in Universities as
Administration (MBA)".In fact, "Management of Business
many institutes are named as Institutes o/ Management.
4. Though management still remains to be called a
profession in the true sense of the
term, as medicine and engineering, it is fast moving
towards professionalisation.
Management : Concept and Nature 9

Managementas a group (1.6.4)

Management is a group effort. An individual cannot manage the organisation alone. Nlanagers
at all levels — top, middle and low, coordinate their efforts to establish organisational goals
and frame policies to achieve them.
Theperformance of organisation depends upon collectiveperformance of its managers. Top
managers are responsible for overall management of the enterprise. They lay company's
plansand policies and integrate its working with the external environment. Top managers
are titled as chief executives, presidents or vice-presidents of a company.
Middlelevel managers mediate between top level and lower level managers. They integrate
company's plans and policies with the capacities of their subordinates, guide their subordinates
and motivate them to excel in organisational performance.
Lowerlevel managers are also known as first-line managers. They directly instruct the
employees to work according to company's plans and goals.
Management as a group is defined as performing organisational tasks with and through others.
aManagement is defined as the process by which a co-operativegroup directs actions towards
conzmon goals". —J.L. Massie
The group effort achieves efficiency in resource utilisation and effectiveness in achieving
goals.Efficiency means producing the same units of output with lesser number of inputs and
effectivenessmeans achieläng the organisational goals successfully. It amounts to doing the
right things.
This is also the sociologist's view of management. As the organisation becomes more and
more complex, there is need for a class of brains to handle these complexities. This can be
doneby a group of people who have specialisedknowledgeand education in the field of
management. Management is, thus, a separate class of people specialised knowledge
that deals with complexities of an organisation.
Managementas an Economic Resource (1.6.5)
Thisis the economist's view of management. Developmentof organisation depends upon the
availabilityand effective utilisation of resources like men, material, capital, entrepreneurial
abilityetc. Co-ordination of these resources is reflected in the end results of the organisation.
Asthe organisation moves from lower to higher levels of management, there is need for
research,development, innovation and invention. This can be done if the resources (human
and non-human) are effectively managed by the executives. The management is, thus, viewed
as a separate resource which largely determines the productivity of the organisation. It is
considered as one of the factors of production together with land, labour and capital. As Peter
EDruckerputs, "The greatest opportunity for increasing productivity is surely to be found in
knowledge,work itself, and especially in management."
Pr0ductivityimplies effectiveness and efficiency in individual and organisational performance.
Effectiveness is the achievement of objectives. Efficiency is the achievement of the ends with
the least amount of resources.
The progressing industries, thus, \iew management as a separate factor of production which
is increasingly required in industries which experience innovations and growth.
Onthe basis of above description of 'management' it can be asserted that "management is
with ideas, things and people".A brief description of how management is concerned
with ideas, things and people is given below :
 The scientific approach to management is depicted through the following diagram:

1
Theory

1
1 principle I Principle Principle I
1

1 SCIENTIFIC METHOD
Searching for facts and casual relationships
Testing the hypotheses
1

Concept Concept I

Particulars Particulars Particulars

The Scientific Approach

Source : Koontz and Weihrich : Management : A Global Perspective, Tenth Edition, P. 13.

Management as Art (1.7.2)

What is an Art : Art is know-how. It is a branch of knowledge that gives personal expression
to feelings, thoughts and ideas. It is a means to creative growth and does not depend on
scientific experiments and testing. It requires application of personal aptitude and skill in
assessing how best can one utilise his resources to gain maximum benefit out of them.
Features of Art : Art is characterised by the following features :
(a) Artist's vision : An artist must have clear vision of what he wants to make. He strives
to achieve a definite goal.
(b) Knowledge : Art requires practical knowledge. Applicationof theoretical knowledge
helps an artist in achieving his goal.
(c) Communication : An artist can fulfil his objectives if he is skilled in the art of
communication with his artists. He alone cannot attain his goal.
(d) Creativity : Art requires creativity. Since there are no defined procedures and methods
to achieve goals, the artist uses his imagination, skill and creativity to do so. Creativity
can be enhanced through motivation and training.
(e) Skilled performance : Art requires application of personal skill. It differs for each artist
and for each artistic situation. Every artist has his own way of performing the job.
(f) Practice : An artist can improve his performance through constant practice. His work
is not based on scientific methods.
Is management an Art : On the basis of above features of Art, let us try to analyse whether
management is art or not.
(a) Artist's vision : As an artist (while he composes a painting or a musical note) has clear
vision or picture of what he strives to achieve; a management theorist also has to envision
the future and frame the company's objectives and plans. "Management art involves
 Levels of Management organising, staffing, directing and controlling)
(planning,
Managers perform various managerial and marketing)
functions. Depending on the
and operative (production,personnel, financebe classifiedon the basis of levels. The levels
activitiesperformed by managers,they can structure. According to levels, managers
organisation
create a hierarchy ora scalar chain in the as follows:
(and, accordingly management) can be classified
1.11.1.Top level managers or Top Management
1.11.2.Middle level managers or Middle Management
1.11.3.Lower level managers or Lower Management.
This distinction is based on authority, responsibility and nature of functions performed by
managers.
Top Management (1.11.1)

Introduction : Top management consists of managers who work at the highest level of the
organisational hierarchy. The number of managers in this group is generally the least. It is
responsible for the overall management of the organisation. Managers in this level are generally
titled as 'chief executive officers', 'president', 'vice-president', 'managing director' etc. though
the exact title varies from organisation to organisation.
Functions performed by top managers : Top perform the following functions :
(a) They lay the plans, policies and procedures for the organisation.
(b) They co-ordinate activities of various departments of the
organisation.
(c) They integrate the internal activities of the organisation
with the external environment
(d) They remain aware of the changes taking place
in the external environment and change
their internal environment accordingly.
 (e) They carry out overall management of the organisation by performing the managerial
functions of planning, organising, staffing, directing and controlling.
(f) They cater to the demands of various groups of stakeholders who interact with the
organisation, like Government, consumers, creditors, suppliers, owners, employees etc.
and try to harmonise their goals with organisational goals.
Middle Management (1.11.2)
Introduction : Middle management consists of managers who are the departmental heads.
They serve as a link between top level and lower level managers. The organisation is divided
into different departments and middle level managers act as heads of their respective
departments. They are generally titled as 'departmental managers', 'plant managers', assistant
managers' etc„ the exact title, once again, differs from organisation to organisation.A large
sized organisation has a fairly large number of middle level managers.
Functions performed by middle level managers : Middle level managers perform the following
functions :
(a) They communicate policy decisions of top managers to lower level managers and guide
lower level managers to implement them.
(b) They lay the goals, plans and policies for their respective departments and ensure their
successful accomplishment.
(c) They spend major part of their time (about 7596)in managing company's day-to-day
operations. They do not actively interact with the outside parties (customers, suppliers
etc.).
(d) They direct the activities of lower level and operating employees.
(e) They balance the demands of their superiors with the capacities and capabilities of
their subordinates.
(f) They watch the activitiesof lower level managers and report them to top managers.
Lower Management (1.11.3)
Introduction : It consists of managers known as first-line managers or supervisors. They
serve as a link between middle level managers and non-managerial employees. They supervise
the activitiesof non-managerialemployees and co-ordinate their work with those operating
at higher level of hierarchy. They operate as the last level of management. These managers
are titled as 'foremen', 'supervisors', 'office managers', 'operating managers' etc. They may be
technical supervisors, production supervisors, financial supervisors or marketing supervisors.
An organisation has the largest number of managers at the lower-level.
Functions performed by lower level managers : Lower level managers perform the following
functions :
(a) They supervise the activities of employees, give them orders and instructions and help
them in executing those orders.
(b) They coordinate the work of employees with the organisation's financial and non-
financial resources.
(c) They not only supervise the activities of employees but also train them to perform
better to ensure smooth conduct of business operations.
(d) They evaluate the performance of employees and send their reports to higher level
managers.
(e) They plan day-to-day operations of the business and do not deal with the outside world.
 Diagrammatic Representation of Levels of Management (1.12)

intk

Top Board of Directors, President, Vice-

Management President. Chief Executive
Middle Departmental Manager, Plant Manager,
Management Assistant Manager
Lower or Supervisory Supervisor, Foreman. Office Manager
Management Operating Manager suk
the
Levels of Management
ManagerialSkills (1.13) wit
dor
Managerial skills has special reference to the levels of management.Managers at all levels of
top, middle and low, possess managerial skills;conceptual,human and technical in
degrees. 3.1
spe
The need to exercise these skills dependingon the organisationallevelscan be understood or (
through the following figure : or
giv

Top level

Middle level stk

07
prt
Low level 1.1
1.1

ManagerialSkills 1.1

As we move down the hierarchy, more technical skillsand less conceptual skillsare required
by managers as managers at lower levels deal with job techniquesmore than framing plans 1.1
and policies. At higher levels, the need for analysingthe organisationas a whole and
ordinating the organisational activities is more (conceptualskills)than technical skillsto w
perform a job. Human skill is equally important at all levelsof the organisationbecause 1.
managers at all levels deal with the work-force and must possesshuman skills to make workers th
contribute towards organisationalgoals. is
ac
These skills are discussed below : ot
J. Conceptual Skills
to
2. Human Skills
3. Technical Skills 2.
refer to mental abilityof managers to co-ordinate and
J. Conceptual Skills : These skillsenvironment with its external environment. It is manager'S
integrate the organisation's internal
a whole and integrate its parts each other and the
ability to analyse the organisation as at top levels must have conceptual skills to
analyse
organisation as a whole. Managersthem gainfullyand correlate them the organisation•s
environmental opportunities, exploit
Management : Concept and Nature 23
frame
internal system. Managers must be knowledgeable and imaginative to use these skills to
and implement organisational plans and policies.
Adding a new product line, deleting an existing product or entering into international markets,
requires application of conceptual skills.
2. Human Skills : Nlanagers at all levels possess human skills to deal with people as individuals,
group or team. These skills comprise the ability of managers to work with and understand
people in the organisation. Managers at different levels pass orders and instructions to the
subordinates keeping in view their ability to carry out those orders. They also interact with
their superiors and peers and therefore. apply these skills to understand and analyse their
behaviour. They also help to gain confidence of others, to work as a team and to co-operate
with each other. Management is the art of getting things done through others. This can be
done when one understands the needs, beha\iour and desires of others through application
of human skills.
of
3. Technical Skills : These skills require the ability to use tools and techniques in one's area
specialisation. It requires specialised knowledge to perform a task, be it computer operation
operations
or operating a machine. Manager-spossess technical skills to perform manufacturing
various jobs and
or public administration. It requires knowledge of procedures to perform lower levels
give instructions to subordinates for carrying out the procedures. Managers at
possess highest degree of technical skills.

Management Process (1.14)

of the management
Steven J. Carrolland Dennis J. Gillen have identified the following elements
process:
1.14.1.Work agenda
1.14.2.Work methods and managerial roles
1.143. Management functions
1.14.4.Knowledge base and key management skills
1.14.5.Performance (goal achievement)
Work Agenda
(1.14.1)
companies and concluded
1. Meaning : Kotterundertook a study of general managers of nine
work agenda
that managers contribute towards organisational output through work agendas. A
is a "looselyconnected set of tentative goals and tasks that a manager is attempting to
accomplish. It is the broad outline within which managers guide their actions and those of
others. These agendas are prepared for both short-ru_nand long-runjob responsibilities.
Managers perform various managerial roles (as described by Hen O' Mintzberg, see para 1.18)
to put the work agendas into practice, for example, managers act as monitors, spokespersons,
negotiators and figurehead to work according to work agendas.
2. Factors Affecting Work Agendas : Rosentary Stewart identifies three factors that affect
work agenda. These are :
(a) Job demands
(b) Job constraints
(c) Job choices
 24 P'*ncp
(a) Job Demands : These are demands of the job that a manager must fulfil. The
requirements or demands of thejob require different skills to be possessed by managers
(see para 1.6)in varying degrees and are related to the overall goals and plans of the
organisation.
(b) Job Constraints : These are the factors that limit managers' capacity to work on the
job as defined under job demands. While working on a job, managers are constrained
by factors intemaJ and external to the organisation. The internal constraints are
managers' abilities, availability of resources, industrial relations etc. and external
constraints are legal. political, technological, economic and social factors which limit
their capacity to work according to work agendas.
(c) Job Choices : Work agendas are also reflected by the job choices that managers wish
or do not wish to undertake. Within the framework of job demands and job constraints,
managers often exercise their discretion to carry out certain jobs on their own and
delegate the rest to their subordinates. They may even take up additional responsibilities
with respect to the jobs they retain and delete some of the activities related to their
present jobs.
Work Methods and Managerial Roles (1.14.2)
Henry Mintzbergundertook a study to find out what managers actually do on the job. He
drew some conclusions about their:
l. Workmethods, and
2. Managerial roles
I. Work Methods : Work methods describe the way managers work.
The commonly held
notion is that managers spend considerable time in planning and organising
solving the organisational problems patiently and calmly while the activities and
actually this is not the case.
The following observations were made by Mintzbergregarding
the work methods of managers
(a) Unrelenting pace
(b) Brevity, variety and fragmentation
(c) Verbal contacts and networks
(a) Unrelenting Pace : It was observed that
managers do not spend as much time on
planning as is normally expected of them.
Rather, they are, most of the times,
at such a fast pace, either attending working
meetings/conferences or addressing
that they do not even have time to enjoy subordinates
a proper lunch break.
(b) Brevity, Variety and Fragmentation
:
of tasks (from receiving a routine Managers have to perform such a wide varietv
telephone call to deciding
corporate issues) that they tend to about multinational
be brief over each of the
They are often activities.
interrupted by other issues before they solve the
Organisational matters are, prior ones.
therefore, sorted out after
(c) Verbal working hours of the office.
ContactsandNetworks:Managetsalvassumed
with (heir supenojs, peers communication
and
than written communication subordinates (telephonic conversation or
(through formal reports meetings) rather
is facilitated through and letters). This communication
networks. A network is
individuals whose help is •a set of co-operative
needed in order for a relationships with
helpingthe can manager to function
internal to the organisationbe internal and
effectively. • People
are superiors, peers to the organisation. Individuals
to the organisation and
are subordinates and those external
suppliets, friends,
lawyejs, consultants
etc.
Management: Concept and Nature 25

2. ManagerialRoles : "A role is an organised set of behaviours that is associated with a

particularoffice or position." Managers perform multiple roles which are broadly categorised
intothree main categories. (For detailed discussion on managerial roles, see para 1.18).
Management Functions (1.14.3)
Themanagement process involves achieving organisational goals by carrying out important
managerialfunctions of planning, organising, leading and controlling. These functions form
thefoundation of the basic management process. These functions are explained in para 1.15.
KnowledgeBase and Key ManagementSkills (1.14.4)
Managershave a strong knowledge base and managerial skills to effectively set out the work
agenda,work methods and managerial roles for carrying out the managerial functions.
1.KnowledgeBase : It refers to managers' knowledge about company's objectives, plans,
policies,organisation structure and other environmental factors (internal and external to the
organisation).This knowledge base enables the managers to analyse the company's internal
functioningand relate it with the external environment so that quick and effective decisions
canbe taken in the light of whatever information is gathered by them.
2.Management Skills : Skill is the "ability to engage in a set of behaviours that are functionally
relatedto one another and that lead to a desired performance level in a given area." Skills are
requiredto perform the functions of management. The skills of managers at different levels
is explained in para 1.13.
Performance (1.14.5)
Performanceis the result of various organisational activities. The management process is
saidto be complete when effective performance is achieved. Drucker defines performance
as a combinationof effectiveness and efficiency. Together,it refers to achieving the right
goalsin the right manner. While effectiveness is choosing the right goals, efficiency is to
optimallyutilise the resources to achieve those goals. An effective management process aims
atachievingthe organisational goals efficiently through well laid work agenda, work methods
androlesand application of knowledge base and management skills on various managerial
functionsof planning, organising, leading and controlling.
Themanagement process, as discussed above can be diagrammatically represented as follows:
Knowledge base and
key management
skills

Work Work methods Management Performance

agenda and roles functions . (goal achievement)
* Planning
Organising
* Leading
Controlling

Source: Stephen J. Carroll and Dennis J. Gillen, "Are Classical Management Functions Useful in
DescribingManagerial-work ?"Academy of Management Review, Vol. 12, 1987, Pp. 38-51.
However,when one talks of management process, it largely refers 'to management functions.
 Principles of Mana
Mannoomont Proc038/Management
Functions=:-- (1.1

process is identified as a set of functions performed by managers to accompli:

otb'anisational goals, that is, management functions explain the process Of managemet
Managetnent ['unctions provide structure to management service, theory and practice.
knowledge of Inanagement revolves around management functions Functions mean activit
and management functions mean activities performed by managers•There are two types c
functions performed by managers.
Operative functions are the operations performed by managers.Four basicoperative function:
performed in any organisation are production, finance, personnel and sales•The exact
nature
above
of these functions vary from organisation to organisation. The functions discussed
functions are
performed in a manufacturing organisation.In a trading organisation, these
borrowing.
buying and selling. In a banking organisation, these are lendingand
be the nature of
Managerial functions, on the other hand, are universalin nature. Whatever
operative function. (These
organisation, manufacturing or trading, they are performed for each
functions are discussed in the followingparagraphs).
management.According to George
Different authors have held different views on functions of Luther Gullick explains
controlling.
R. Terry, these are planning, organising,actuating andwhere P stands for Planning, O for
these functions through the keyword — PODSCORB Coordinating, R for Reporting, and B for
Organising, D for Directing,S for Staffing,COfor
Budgeting.
the basic functionsperformed by all
Though different views are held by different authors,
managers can be classified as follows:
1. Planning
2. Organising
3. Staffing
4. Directing
5. Controlling
They are performed by managers at all levels in all organisations — business and non-business.
They are, thus, called pervasivefunctionsof management.
I. Planning : "Planning is selecting information and making assumptions regarding the future
to formulate the activities necessary to achieve organisationalobjectives."
— Terryand Franklin
"Planning involves selecting missions and objectives and the actions to achieve them; it requires
decision-making, that is, choosing from among alternative future courses of action."
— Koontz and Weihrich
Planning is the first and basic function of management that involves determination of
objectives and devising ways and means to achieve those objectives. It fills the gap
where we are and where we want to go. In the course of doing so, it answers between
questions of what to do, when to do, how to do and the basic
who is to do.
It is required for both business and non-businessorganisations. In
required at all levels (top, middle and low),all sizes (large, business organisations, it is
(profit or non-profit). However, top managers spend medium and small) and all purposes
managers. Lower levelmanagers generallyimplement more time in planning than lower level
plans framed by top managers,
though
Management : Concept and Nature 27

planning is, thus, an all pervasive, primary function of management. that aims at determination
and successful achievement of objectives. It is an intellectual process where managers use
their mental and conceptual ability to analyse the organisational(external and internal)
environment and optimally utilise resources to make various decisions. (Optimum refers to
deriving maximum output out of minimum inputs.).
Planningis future-oriented and done in advance to achieve a goal in future. It has to be
carefully done so that future uncertainties do not fail the plans.
2. Organising : 'Organisation is the structure and process by which a co-operative group of
human beings allocates its tasks among its members, identifies relationships, and integrates
its actixities towards common objectives.' — J.L Massie
Organising means creating a structure of relationships and assigning work to people doxsn
the hierarchy along with authority and responsibilityto achieve goals. It is
division of work into units, assignment of duties/ work to each member, defining their
relationships each other so that all members co-ordinate their \vork the
goals.
Organising is :
(a) identification and classification of required objectives,
(b) grouping of activities necessary to attain objectives,
(c) assignment of each grouping to a manager authority (delegation)necessarv to
superöse it, and
(a) provisions for co-ordination horizontally (at the same or a similar level)
and vertically (for example, corporate headquarter, dixision and department) in the
organisation structure.
appropriate jobs. It
3. Staffing : Staffing means appointing people and placing them at the
identifies human resource (manpower) needs, fills the organisation structure mth required
number of people and keeps it filled with those people.
competence, training
It is a managerial function of hiring people, placing them on jobs of their
and developing them so that they perform their best at the tæspectivejobs.
and control organisational
A properly conducted staffing function helps managers to lead
actfiities.
person is placed in the right
'The staffing function includes the process by which the right
organisational position.'
Placingthe right person, with the right at the right place and the right time to
perform organisational acti\ities increases efficiency of the organisation.
Recruiting and selecting people the best potential, training and compensating them
vsithin the organisation.
develops future managers and promotes people to higher levels from
structure is
4. Directing: Directing means activating. After plans are made, organisation
designed and people are appointed at various posts, managers direct, guide, motivate and
lead the employees to positively contribute towards organisational goals It is a function that
deals mth people. It brings plans into action by the process of motivation, communication,
leadership, supervision and team building amongst all those working in the oreanisation.
Whileplanning and organising lay foundation of the organisation, directing initiates action
on the part of workforce. People work to achieve organisational goals. Directing is •a
 28 Principles o/ Ma

managerial function that the resm»nsibilityof managers for comm unicating to ot

what their roles are in • — Pearce and Robinson
the company plan.
•Directing is telling people what to do and seeing that they do it to the best of their ability.
includes making assignments,correspondingprocedures, seeing that mistakes are correcte(
•
providing on-the-job instructions and. of course, issuing orders.
Directing is, thus, working uith and through people and non-human resources to accomplish
organisational goals It is an on-goingprocess of understanding the behaviour of peopleas
individuals and groups and ensuring their participation in vanous organisational activities.
Motivation. leadership and communication are the basic components of directing.
5. Controlling : 'Controlling is determining what is being accomplished, that is, evaluating the
performance and, if necessary applying corrective measures so that the performance takes
place according to plans.'
It is a process of ensuring that objectives laid in the planning function are successfully achieved
It involves setting standards of performance, measuring actual performance, comparing it
with planned performance, finding deviations between actual and planned and taking action
to remove those deviations.
It is closely associated with planning. Monitoring the actual performance ensures effective
implementation of plans. Though more closely associated soth planning, it is related to other
managerial functions also. It ensures that organising, staffing and directing functions are
effectively carried out.
It is a corrective device that prevents and corrects deviations in plans and is performed at
every level (top, middle and low) of the organisation.
Though managerial functions are classified as five functions, they are not independent of
each other. They are so closely related to each other that it is difficult to perform one without
the other. Plans are made keeping in mind the organisation structure and ability of people to
carry out work according to plans. Organising distributes authority and responsibility according
to planned activities, staffing appoints people who can best perform the planned activities,
directing motivates, guides and leads people to achieve the planned targets and controlling
ensures there are no deviations in actual performance vis-a-vis planned performance.
Allthese functions are inter-related. They affect and are affected by other functions. Managers
must, therefore, carry out these functions in a manner that best serves the interest of
organisations for achieving organisational goals.

Management Principles (1.16)

Principle refers to fundamental truth about a concept that provides guide to action. Principles
evolve in every field of knowledge — medicine, engineering, accountancy etc. Management
principles tell about administration of a business, that is, the way a business should run.
Principles underlying the field of management help in evolving management theories and
making successful managers. Principles serve as guide for management thought
Management principles have evolved ove •years of experience and testing in organisations 111
both public and private sectors. They enable managers to carry their tasks effectively and
achieve organisational objectives successfully.
Management principles are not absolute. As study of management is advancing, new
principles
emerge and old principles are discarded or modified.
Management : Concept and Nature 29

Nature of Management Principles (1.16.1)

The following features of management principles characterise their nature :

1. They are basic and not absolute : Though management principles have evolved through
experience and testing, they are not absolute in nature. The list of principles is not exhaustive
though Fayol's management principles are accepted as basic principles of management. New
principles emerge as a result of research in the field of management.
2. Practical : Management principles are practical in nature. They can be applied in almost
every organisation, big or small, in public or private sector. They.are based on genuine
observations of human behaviour and, therefore, apply in almost all situations at all levels in
the organisation. This accounts for universality of management principles.
This view of universality of management principles does not hold good for modern
organisations operating in different countries. Differences in social, cultural and economic
backgrounds of different nations makes it difficult for these principlesto be universally
applicable.
3. Flexible : Management principles are flexible in nature. As they are based more on experience
than scientific testing, they are flexible and not exhaustive. They can be changed according
to situations. Fayol also accepts this fact.
4. Consistent : Though flexible in nature, they are consistent. It means they produce similar
results in similar situations.
5. Cause and effect relationship : Management is a behavioural science and management
principles deal with human behaviour. Since human behaviour is unpredictable, these
principles are not exact as pure science. Cause and effect relationship may or may not be
established in application of these principles and their end results. Unity of command, for
example, results in higher obedience, efficiency and productivity but this principle does not
hold good in functional organisations where multiple command system prevails, that is, one
person is accountable to more than one boss.
Significance of Principles of Management (1.16.2)
Principles of management are significant because of the following reasons :
1. Simplification of managerial work : Management principles make the work easy and simple.
Managers can perform complex managerial tasks on the basis of these principles and make
sound business decisions. Actions in different situations are facilitated through management
principles.
2. Development of management thought : Management is a full-fledged field of study taught
in schools and universities. Management teachings on the basis of management principles
develop management theories and thoughts which become the basis for managers to carry
out the managerial functions effectively in business and non-business organisations.
3. Managerial training : Management as a disciplineis taught to manage large-sized business
houses. Teaching and training managers on the basis of sound management principles helps
them perform better in all the functional areas (production, finance, personnel and sales).
4. Understanding of human behaviour : Management is a behavioural science. It deals with
people and tasks performed by them. Management principles help to understand the human
behaviour and ways to satisfy their neecls (physiologicaland psychological)that lead to
excellence in their behaviour. Excellent or high performance behaviour leads positively
towards accomplishment of organisational goals.