Вы находитесь на странице: 1из 12

Unit 1

Nature of Management

Unit Objectives:

After completion, students are expected to know the


following:

Concept and Meaning of Management


Characteristics of Management
Functions of Management
Management as Science,

Art

and

Profession
Levels of Management.
Management

and

Administration
Concept and Meaning of Management
Management is at the centre of all organized activities. Management
identifies and forms special group of people and directs its efforts towards
common objectives towards common objectives. Management is an essential
factor of organisation. It acquires, coordinates and activates resources viz.
human resources, material resources, financial resources etc. for the
achievement of well defined group objectives. Management determines the
objectives of the organization, brings material resources and motivates the
people to efficiently use them for the achievement of the set objectives.
Whenever and wherever people join together to attain common goals,
management is there. Hence, management is universal in nature.

BUSINESS STUDIES For Class XII (HSEB, Nepal)


Nature of Management

UNIT I:

Management is described and understood differently. According to Theo


Haimann the term management is used in three different senses:
i) As a noun,
ii) As a process,
iii) As a discipline.
Management as a Noun:
Management as a noun refers to the class of people in organizations who: a)
do not own a business but sells their skills to act on behalf of the owners;
and b) who do not produce personally but is indispensable for making others
produce, through motivation. Therefore, management as a noun refers to all
those persons at the top level of the organization who are responsible the
success and failure of the organization. Members of this class carry a high
status in society.
Management as a Process:
Management as a process refers to the activities or functions performed by
the managers in the organization. Management performs various functions
like planning, organizing, staffing, directing, coordinating and controlling.
They are essential to efficiently use the available material and human
resources to achieve the desired objectives.
Management as a Discipline:
Management is used as a subject of study or body of knowledge consisting of
principles and theories. These principles and theories explain about the
relationship between cause and effect by among variables related to the
problem or event. They help managers to understand what decision or action
will give what result. Based on the knowledge of those principles, managers
take effective decisions and successfully achieve organizations objectives.
Management is a multidisciplinary discipline because its principles and
theories are adopted from many other disciplines, e.g. mathematics, physics,
chemistry, sociology, psychology, economics, environmental sciences etc.
Combining these three concepts, we can conclude that having studied the
subject management, managers should set out and get involved in the
process of management.
Definition of Management:
Many authors have defined management differently giving emphasis on
different aspects of the terminology as mentioned below:
BUSINESS STUDIES For Class XII (HSEB, Nepal)
Nature of Management

UNIT I:

According to Harold Koontz and Cyril ODonnell Management is the task of


designing and maintaining an environment in which individuals, working
together in groups, cam accomplish preselected mission and objectives.
According to George Terry Management is a distinct process consisting of
planning, organising, activating and controlling performance to determine
and accomplish the objectives by the use of human beings and other
resources.
In the opinion of Herow Koonty Management is the art of getting things
done through and with people in formally organised groups. It is the art of
creating an environment in which people can perform and individuals could
co-operate towards attaining of group goals. It is an art of removing blocks to
such performance, a way of optimising efficiency in reaching goals.
From the point of view of productivity, John Mee has defined management as
the art of securing maximum prosperity with a minimum effort so as to
secure happiness both for the employer and the employee and providing the
best possible service to the public.
Characteristics of Management:
1. Management is a group activity Management is concerned with group
efforts. Wherever, there is an organised group of people working towards
a common goal, some type of management becomes essential.
Management makes the people realise the objective of the group and
directs their efforts towards the achievement of such objectives.
2. Management is goal oriented Management aims to achieve economic
and social objectives. Group efforts in management are always directed
towards the achievement of some pre-determined goals. As Theo Haimann
has put it Effective management is always management by objective.
3. Management is a factor of production Management is not an end by
itself but a means to achieve the group objectives. Land, labour and
capital are the factors of production and management as factor of
production is required to co-ordinate these other factors.
4. Management is universal in nature Thoughts of management are
applicable in all types of organisations. Wherever there is human activity,
there is management. The basic principles of management are of
universal application. They are applicable in all organisations whether
they are business, social, religious, cultural, educational, and political or
defence establishments. In the words of Henry Fayol, Be it a case of
commerce, politics, religion or war, in every concern there is management
function to be performed.
BUSINESS STUDIES For Class XII (HSEB, Nepal)
Nature of Management

UNIT I:

5. Management is needed at all levels of the organisation Management is


needed at all levels of the organisation, top level, middle level and
supervisory level. The only difference is of the nature of the task and the
scope of authority.
6. Management is a distinct social process Management is a distinct
process performed to determine and accomplish stated objectives by the
use of human beings and other resources. It deals with human beings to
achieve the desired results through co-ordination and motivation. In this
sense, that management is regarded as a social process. Moreover,
management has a social obligation to make optimum use of scarce
resources for the benefit of the society as a whole.
7. Management is dynamic in nature Management is a dynamic function
and it is subject to changes according to the ever-changing business
environment. It is concerned not only with molding of the enterprise but
also the alteration of environment itself so as to ensure the success of the
enterprise.
8. Management is an art as well as science Management is a science
because it has developed certain principles, which are of universal
application.
Such
principles
have
been
developed
through
experimentation. But the results of management depend upon the skill of
manager and in this sense management is an art. The art of manager is
essential to make the best use of management science. Thus,
management is both science and art.
Functions of Management:
Functions of management refer to the basic managerial activities performed
by the managers at all levels of the organizations and in all types of
organizations. Different authors have offered different sets of activities.
However, there is a general consensus on: Planning, Organizing, Staffing,
Directing, Coordinating and controlling as the core functions of Management:
1. Planning: It is the process of preparing a road-map for organizations
future activities based on an assessment of future changes in the
business environment. It determines requirement of different resources
and their effective utilization for achieving defined goals.
2. Organizing: It is the process of creating the structure of positions and
their relationships so that works can be allocated among employees for
achieving goals of the enterprise.

BUSINESS STUDIES For Class XII (HSEB, Nepal)


Nature of Management

UNIT I:

3. Staffing: It is the process of selecting, training the right individuals for


different jobs and motivating them to perform assigned activities for
achieving organizational goals.
4. Directing: It is activating individuals for performing activities.
Leadership, communication, supervision and motivation are the key
elements of directing.
5. Coordinating: This is establishing supportive relationships among
different individuals and group activities to work together towards the
achievement of the set goals.
6. Controlling: It is the process of measuring current performance against
planned standards and taking corrective measures to ensure achievement
of predetermined goals.
Management as Science, Art and Profession:
Management as Science:
Science is systematically organized body of knowledge or a field of study.
It has following important features:
-

Scientific knowledge is derived through observation, experimentation


and research.
Scientific knowledge is expressed in the form of theories, principles
and laws.
They explain phenomena, a problem, a thing or an incidence.
Explanations give knowledge about variables and how they are related
to one another.
It cause and effect relationships and tell what variables cause what
result and how.
Science helps to understand an action and predict its possible results.
Knowledge of science helps one to understand problem better, take
right decision, perform efficient activities and solve them.

Management is a science because is a body of knowledge which is


systematized through the application of scientific method. It is a scientific
field of study consisting of systematic knowledge with many principles
and theories viz. principles of organization and management, theories of
leadership, motivation etc. Those principles and theories explain
phenomena or problems of organizations or group activities. They help
managers to understand organizational problems and guide to take right

BUSINESS STUDIES For Class XII (HSEB, Nepal)


Nature of Management

UNIT I:

decisions to ensure effective achievement of its goals. Thus management


is science.
Management as an Art:
Art is practice. It is doings things efficiently and effectively in the light of
the situation to achieve goals. It has following important features:
-

Art is about applying knowledge, talent, and intelligence in taking right


decisions.
It is intelligent application of knowledge and skills in performing
activities.
Efficient performances of activities are essential to achieve goals
effectively.
Efficiency and effectiveness of performance requires sound knowledge
about a problem (science) and skill to intelligently apply that
knowledge according to the need of the situation (art).
Situational differences require the application of scientific knowledge
differently in different degrees.

Science and art both are complementary to one another. Science gives
organized knowledge about a problem and art results in efficient
application of those knowledge in performing activities for effectively
achieving goals. Management principles and theories, as science, provide
knowledge about how organizational problems emerge and how they can
be solved. Managers use such knowledge in the light of the situational
reality and take right decisions to solve them.
Management as a Profession:
A profession is an economic activity performed on the basis of specialized
knowledge to provide services to the clients and charge fees from them. It
has following important features:
- It provides services of a specialized nature.
- It requires completion of academic and practical training.
- Knowledge and skills are used to provide services to the clients.
- Professionals charge fees from the clients for their services.
- It requires certificate of public practice from the professional
organization or associations viz. Medical Association, Management
Association, Medical Council etc.
Management is a profession, because managers need to obtain
professional degree viz. BBA, MBA etc. They need to obtain membership
from Management Association to provide independent services to the
BUSINESS STUDIES For Class XII (HSEB, Nepal)
Nature of Management

UNIT I:

organizations. They charge consultation and counselling fees from their


clients.
From the above description it is obvious that management is a science,
an art and a profession as well.
Management and administration:
The term Administration is thinking and formulating function performed by
authorities at the top level of the organization structure. Its function is
confined to a small group to make broad and long term policies of the
organisation. According to Oliver Sheldon Administration is concerned with
determination of corporate policy, the coordination of function, production
and distribution, the settlement of compass of the organisation and the
ultimate control of executives
Management refers to the executive function of the organization. The
middle and lower level managers are responsible to execute organizations
policies and strategies prepared at the top level of the organization.
Managers execute them through planning, implementing the plans and
controlling the performance of activities for achieving desired goals.
At the top level of organizational hierarchy, administrative function
dominates over managerial functions. At the medium level, administrative
and management are given equal importance whereas, at the bottom level
management is more significant than administration. The fact can be
diagrammatically expressed as under:
Administration
Top Level
Level

of

Management
Middle Level
Bottom Level
Management

Differences between Management and Administration:


Basis
Nature

Administration
It
is
determinative
in
nature, i.e. concerned with
determination of over all
policies of the organisation.

Management
It is an executors function,
i.e. concerned with directing
the efforts of others towards
the
execution
of
pre-

BUSINESS STUDIES For Class XII (HSEB, Nepal)


Nature of Management

UNIT I:

Level
Environme
nt
Nature of
Involveme
nt
Terminolog
y

It is a function of top level


management.
External factors influence
the
decisions
e.g.
governmental
policies,
social, values, etc.
It refers to the owners who
get return on their capital.

determined objectives and


policies.
It is a function of middle and
lower level management.
Internal factors like personal
whims, values objective and
policies of the organization
influence the decisions.
It refers to the employees
who get salaries.

This term is mostly used in This term is mostly used in


governmental and other business organisation.
non-profit organisation.

Levels of Management:
In organizations management performs different tasks at different levels. The
different tasks are related to: money management (finance), people
management (human resource) etc. They are organized in different levels,
which are generally classified as: top level, middle level, and bottom level.
Top Level:
A small group of executives who manage the overall organization are the
top level managers. The different titles found in this group are Chairman,
Managing Directors, and Chief Executive Officer (CEO). They establish
organizations goals, overall strategy and operating Policy. They are
responsible for a firms total performance. They manage to link the
organization with the external environment in various ways: monitoring
the environmental changes and accordingly adjusting internal policies and
activities, representing the organization to the society through their
participation in the social ceremonies or events, meeting with the
government officials or other organizations etc.
Middle Level:
Middle level managers supervise groups of units. The common titles are:
plant manager, operations manager, divisional head etc. They are
primarily responsible to implement the policies and plans developed by
top managers. They also coordinate and supervise the activities of the
lower level managers and report performance to the top level managers.
Bottom Level or First-Line Managers:
BUSINESS STUDIES For Class XII (HSEB, Nepal)
Nature of Management

UNIT I:

Bottom level managers manage a work unit. They coordinate, supervise


and control the activities of operating employees. The common titles are:
Foremen, supervisor, coordinator, office manager, quality inspector etc.
They are responsible to supervise work performance their subordinates
and report progress and problems to the concerned middle level manager.

Board of
Directors

CEO/President
/ Chairman
VicePresident
(Production)

VicePresident
(Finance)

VicePresident
(Marketing)

Foreman

Cash
Manager

District
Sales
Manager

Foremen

District
Supervisor of

District
Sales

Legend:

Top Level

Middle Level

Bottom Level

UNIT SUMMARY
Assess yourself. You ought to remember that:
Concept and Meaning of Management:
Management is at the centre of all organized activities. Management
determines the objectives of the organization, brings material resources and
motivates the people to efficiently use them for achieving the determined
objectives.

BUSINESS STUDIES For Class XII (HSEB, Nepal)


Nature of Management

UNIT I:

Management is described and understood differently. According to Theo


Haimann the term management is used in three different senses:
Management, as a noun, refers to all those persons at the top level of the
organization who are responsible the success and failure of the organization.
Management as a process refers to the various functions like planning,
organizing, staffing, directing, coordinating and controlling the activities of
the organization.
Management as a discipline refers to the body of knowledge consisting of
principles and theories. They help managers to take effective decisions and
successfully achieve organizations objectives.
Management is defined differently by different writers. In simple terms
management may be defined as getting things done by working with others
through the process of planning, organizing, staffing, directing, coordinating
and controlling the activities for achieving defined objectives.
Characteristics of Management:
The important characteristics of management can be described in the
following points:
Management is dynamic in nature, Management is a distinct social process,
Management is needed at all levels of the organisation. Management is
universal in nature. Management is a factor of production, Management is
goal oriented, Management is a group activity, and Management is an art as
well as science.
Functions of Management:
Important functions of management are: Planning, Organizing, Staffing,
Directing, Coordinating and Controlling.
Planning is about determining organizations goals and future activities
necessarty for achieving them.
Organizing is the process of creating a structure of positions and determining
relationships among individuals to facilitate smooth performance of activities
among them.
Staffing is the process of finding and selecting suitable persons for different
positions of the organization.

BUSINESS STUDIES For Class XII (HSEB, Nepal)


Nature of Management

UNIT I:

10

Directing is the process of activating individuals to work together towards


goal the leading direction.
Coordinating is establishing supportive relationships among different
individuals and group activities to work together towards the achievement of
the set goals.
Controlling is the process of initiating corrective measures in case
performance of activities deviates from the planned activities.
Management as Science, Art and Profession:
Management is a science because is a body of knowledge which is
systematized through the application of scientific method. Management is
art because managers apply judgement based on scientific knowledge in the
light of the situational reality and take right decisions to solve them.
Management is a profession, because managers need to obtain professional
degree viz. BBA, MBA etc., membership from Management Association to
provide independent services to the organizations, and charge consultation
and counselling fees from their clients.
Levels of Management:
Management is hierarchically classified as: top level, middle level, and
bottom level.
Top Level: A small group of executives who manage the overall organization
are the top level managers. The different titles found in this group are
Chairman, Managing Directors, and Chief Executive Officer (CEO).
Middle level: Middle level managers supervise groups of units. The common
titles are: plant manager, operations manager, divisional head etc.
Bottom level: Bottom level managers manage a work unit. They coordinate,
supervise and control the activities of operating employees. The common
titles are: Foremen, supervisor, coordinator, office manager, quality inspector
etc.
Management and Administration:
Administration is concerned with the determination of overall corporate
objectives policies and master strategies. It acts as central controlling
authority inn the organization,

BUSINESS STUDIES For Class XII (HSEB, Nepal)


Nature of Management

UNIT I:

11

Management is concerned with the execution of plans and policies laid down
by the administration.
Review Questions:

BUSINESS STUDIES For Class XII (HSEB, Nepal)


Nature of Management

UNIT I:

12