Management Concepts Chapter 01 – Management Basics - I

Management Basics - I

01-01. Introduction:

 Every human being has several needs and desires. But no individual can
satisfy all his wants. Therefore, people work together to meet their mutual
needs which they cannot fulfil individually.

 Moreover, man is a social being as he likes to live together with other people.
It is by working and living together in organised groups and institutions that
people satisfy their economic and social needs.

 As a result there are several types of groups, eg., family, school, government,
army, a business firm, a cricket team and the like. Such formal groups can
achieve their goals effectively only when the efforts of the people working in
these groups are properly coordinated and controlled.

 The task of getting results through others by coordinating their efforts is

known as management. Just as the mind coordinates and regulates all the
activities of a person, management coordinates and regulates the activities of
various members of an organisation.

01-02. Meaning of Management:

 Management is the integrating force in all organised activity.

 Managing is essential in all organized co-operation, as well as at all levels of

organization in an enterprise.

 It is the function performed not only by corporation President and the army
general but also of the shop supervisors and the company commander.

 Managing is equally important in business as well as non business

organizations.

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01-03. Definition of Management:

 It is very difficult to give a precise definition to the term ― Management‖.

 Management has drawn concepts and Principles from economics, sociology,

psychology, anthropology, history, and statistics and so on. The result is that
each group of contributors has treated Management differently.

 Management is invariably defined as the process of ― getting things done

through the effort of others, getting from where we are to where we want to
be with the least expenditure of time, money and efforts, or co-ordinating
individual and group efforts, or co-ordinating individual and group efforts
towards super-ordinate goals.

Henry L. Sisk: Management is the coordination of all resources through the process
of planning, organising, directing and controlling in order to attain stated objectives.

Harold Koontz: Management is the art of getting things done through and with the
people in formally organized groups‖.

Dalton E. McFarland: Management is defined for conceptual, theoretical and

analytical purposes as that process by which Managers create direct, maintain and
operate purposive organization through systematic co-ordinated co-operative
human effort.‖

Accordingly of F.W.Taylor, “Management is an art of knowing what to do, when to do

and see that it is done in the best and cheapest way”.

Therefore we can say

 Management is a purposive activity. It is something that directs group efforts

towards the attainment of certain pre-determined goals.

 It is the process of working with and through others to effectively achieve the
goals of the organization, by efficiently using limited resources in the changing
world.

 To sum up, we can say that management is the process of designing and
maintaining an environment in which individuals, working together in groups,
efficiently accomplish selected aims.

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Each definition emphasises only a particular aspect of the term 'Management'. So,
one can get a complete view of the total concept of management only by combining
the various views. In short we can say, 'From planning to control whatever functions
are there all these functions together is called 'Management' i. e. 'POSDCORB' + 'C'

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01.04. Features / Characteristics of Management:

1) Management is an objective oriented activity: Management is not an accidental

outcome / activity it always requires a certain objectives. It is the economic function
of manager to make efficient use of available resources to earn profits.

2) Management is a functional concept: Management implies the skill in getting

things done through people. It gives life to materials, machinery and money. It is a
rational and intellectual process that needs to be performed continuously. Hence, we
can say management is a functional concept.

3) Management is related with efforts of a group: When there is a one man show it
does not require management. But whenever and whenever more persons come
together to achieve some common objectives; management plays a vital role.
Management co-ordinates individual efforts into a team.

4) Management is universal: The principles of management are universal and not

confined to any particular industry or area. The basic principles of management are
universally applicable in any sphere; where group efforts are require. Management is
applicable to all forms of human organisation whether it is profit-making or non-
profit making.

5) Management is a system of an authority: Authority is the power to make others

active in a predetermined manner. Since management is a process of executing work
from others. It enjoys an authority to extract the required work from others.

6) Management is not necessarily related with owners: Due to complexity and

largeness, present business management is separated from ownership. At present in
most of the concerns managers are professional men, possessing education,
knowledge, skill and ability require for carrying out the job of manager efficiently.
Thus, now-a-days, management is growing as a distinct discipline and a profession.

7) Management is a social science: Now-a-days, the science of management is

universally accepted as a wide and distinct discipline. There are certain fundamental
concepts, theories, tools and techniques which constitute the subject matter of the
social-science. To get things done from the people manager has to establish inter-
personal relations with them. He has to understand the behaviour of all as individual
members as well as members of a group.

8) Management is an integrated process: Management integrates men, machine,

material and money to carry out the operations of the organisation.

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9) Working with and through subordinates: Management involves working with

subordinates for getting organisational objectives to achieve through them.

10) Management is a continuous process: Management is a dynamic and life giving

process the cycle of management continues to operate so long as there is organised
action for the achievement of common goals / target or so long the organizations
continue to exist.

11) Management is an art as well as a science: Management is a science as it is a

systematic body of theoretical knowledge. Management is an art because the
managers have to make the use of their skills and experiences, while applying these
principles of management.

12) Management is a profession: Management is a profession because professional

attributes are applicable to management. It can be taught as a separate discipline.
The rapid development of business and the separation of ownership from
management have contributed to the emergency of management as a distinct
profession.

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01.05. Concept of Management:

The concept of management can be discussed in the following categories:

1. Management as a Process
2. Management as an Activity
3. Management as a Discipline
4. Management as a Group

01.05-01. Management as a Process:

As a process, management refers to a series of inter-related functions. It is the

process by which management creates, operates and directs purposive organization
through systematic, coordinated and co-operated human efforts.

As a process, management consists of three aspects:

1. Management is a social process - Since human factor is most important among

the other factors, therefore management is concerned with developing relationship
among people. It is the duty of management to make interaction between people -
productive and useful for obtaining organizational goals.

2. Management is an integrating process - Management undertakes the job of

bringing together human physical and financial resources so as to achieve
organizational purpose. Therefore, is an important function to bring harmony
between various factors.

3. Management is a continuous process - It is a never ending process. It is concerned

with constantly identifying the problem and solving them by taking adequate steps. It
is an on-going process.

01.05-02. Management as an Activity:

Management is an activity just like playing, studying, teaching etc. As an activity

management has been defined as the art of getting things done through the efforts
of other people. Management is a group activity wherein managers do to achieve the
objectives of the group.

The activities of management are:

1. Interpersonal activities
2. Decisional activities
3. Informative activities

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01.05-03. Management as Discipline:

Management has emerged as a specialised branch of knowledge. It comprises

principles and practices for effective management of organisations. Any branch of
knowledge that fulfils following two requirements is known as discipline:

1. There must be scholars & thinkers who communicate relevant knowledge

through research and publications.
2. The knowledge should be formally imparted by education and training
programmes.

Since management satisfies both these requirements, therefore it qualifies to be a

discipline. Though it is comparatively a new discipline but it is growing at a faster
pace. Management offers a very rewarding and challenging career.

01.05-04. Management as a Group:

Management means the group of persons occupying managerial positions. It refers

to all those individuals who perform managerial functions. But in common practice
management includes only top management i.e. Chief Executive, Chairman, General
Manager, Board of Directors etc. In other words, those who are concerned with
making important decisions, these persons enjoy the authorities to use resources to
accomplish organizational objectives & also responsibility to for their efficient
utilization.

Management as a group may be looked upon in 2 different ways:

1. All managers taken together.

2. Only the top management.

Broadly speaking, there are 3 types of managers -

1. Patrimonial / Family Manager: Those who have become managers by virtue

of their being owners or relatives of the owners of company.
2. Professional Managers: Those who have been appointed on account of their
specialized knowledge and degree.
3. Political Managers / Civil Servants: Those who manage public sector
undertakings.
Managers have become a part of elite group of society as they enjoy higher
standard of living in the society.

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01.06. Nature of Management:

The term management is very comprehensive. Its use is wide-spread and no

organised effort can be successful without proper management. As a result, some
form of management is found to exist in every type of human organisation.

Encyclopaedia of the Social Sciences states that there are three dimensions of the
nature of management:
(i) Methods, through which some pre-determined objectives can be reached,
(ii) Combined effect of human efforts and
(iii) Sum total of all those managers and employees who are associated with these
efforts.

Management is an Art, a Science and a Profession:

Management as a Science:

Science has been defined as a body of systematised knowledge, which establishes a

relationship between cause and effect. Such systematised knowledge contains
concepts, hypotheses, theories, experimentation and principles. Mere knowledge or
collection of facts is not science. The knowledge so gathered should be verifiable.
Now management has been given the shape of an organized body of knowledge. Its
study helps in gaining a rational approach to the development of means for
accomplishing certain goals. That is why, management is called a Science. Although
management has been recognized as a science, it is not exact like the biological and
physical sciences. It falls in the area of ‘Social Science’ as it is a social process and
deals with complex human beings.
The theories and principles of management are situation bound. It may produce
different results in different situations. That is why Ernest Dale has called
management a ‘Soft Science’.

Management as an Art:

Art may be defined as “the technique of applying the principles to actual practice so
as to achieve the desired results with efficiency.” It is concerned with the
application of knowledge and skills. If science is learnt, an art is practiced.
Management can be considered as an art because, it is creative, it involves use of
skill and technical knowhow, it is directed towards getting results, it is personalised.

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Management is both art & science:

From the above discussion, it is clear that management is both a science and an art.
It is considered a science because it has an organized body of knowledge. It is called
an art because managing requires certain skills. Science teaches one ‘to know’ and
an art ‘to do’ hence science and art are complementary.

Management as a Profession:
 The word profession may perhaps be defined as an occupation based upon
specialized intellectual study and training, the purpose of which is to supply
skilled service or advice to others for a definite fee or salary.

 Profession is an occupation for which specialized knowledge, skills and

training are required and the use of these skills is not meant for self
satisfaction, but these are used for the larger interests of the society and the
success of these skills is measured not in terms of money alone.
 Management possess certain characteristics of profession, while others are
missing. Therefore, it cannot be said to be a profession, though it is emerging
as a profession and the move is towards management as a profession.

01.07. Scope of Management:

The operational areas of management may be classified into the following
categories:

(i) Production Management:

Production management implies planning, organising, directing and controlling the
production function so as to produce the right goods, in right quantity, at the right
time and at the right cost.
It includes the following activities:
(a) designing the product
(b) location and layout of plant and building
(c) planning and control of factory operations
(d) operation of purchase and storage of materials
(e) repairs and maintenance
(f) inventory cost and quality control
(g) research and development etc.

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(ii) Marketing Management:

Marketing management refers to the identification of consumer needs and supplying
them the goods and services which can satisfy these wants.
It involves the following activities:
(a) marketing research to determine the needs and expectation of consumers
(b) planning and developing suitable products
(c) setting appropriate prices
(d) selecting the right channel of distribution, and
(e) promotional activities like advertising and salesmanship to communicate with the
customers

(iii) Financial Management:

Financial management seeks to ensure the right amount and type of funds to
business at the right time and at reasonable cost. It comprises the following
activities:
(a) estimating the volume of funds required for both long-term and short-term needs
of business
(b) selecting the appropriate source of funds
(c) raising the required funds at the right time
(d) ensuring proper utilisation and allocation of raised funds so as to maintain safety
and liquidity of funds and the creditworthiness and profitability of business, and
(e) administration of earnings

Thus, financial management involves the planning, organising and controlling of the
financial resources.

(iv) Personnel Management:

Personnel management involves planning, organising and controlling the
procurement, development, compensation, maintenance and integration of human
resources of an organisation.
It consists of the following activities:
(a) manpower planning (b) recruitments, (c) selection,
(d) training (e) appraisal, (f) compensation,
(g) promotions and transfers,
(h) employee welfare services, (i) personnel records and research, etc.

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01.08. Objectives of Management:

(i) Organisational objectives:

Management is expected to work for the achievement of the objectives of the

particular organisation in which it exists. Organisational objectives include:

(a) Reasonable profits so as to give a fair return on the capital invested in business
(b) Survival and solvency of the business, i.e., continuity.
(c) Growth and expansion of the enterprise
(d) Improving the goodwill or reputation of the enterprise.

(ii) Personal objectives:

An organisation consists of several persons who have their own objectives. These
objectives are as follows:

(a) Fair remuneration for work performed

(b) Reasonable working conditions
(c) Opportunities for training and development
(d) Participation in management and prosperity of the enterprise
(e) Reasonable security of service.

(iii) Social objectives:

Management is not only a representative of the owners and workers, but is also
responsible to the various groups outside the organisation. It is expected to fulfil the
objectives of the society which are given below:

(a) Quality of goods and services at fair price to consumers.

(b) Honest and prompt payment of taxes to the Government.
(c) Conservation of environment and natural resources.
(d) Fair dealings with suppliers, dealers and competitors.
(e) Preservation of ethical values of the society.

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01.09. Importance of Management:

The importance of management in a modern society is very great, because of various

advantages derived from the efficient management. Having better management
existing resources can be fully utilised, productivity can be increased and as a whole
it helps to the development of the society.

It is therefore rightly said that.

1) Full Utilisation of factors of production:

In the absence of management four M's i.e. money, machine, material and men
would have been wasted. Management makes use of its skill and knowledge to
make economical use of factors of production avoiding wastage to increase labour
efficiency and to extract what is best in them and to channelize the process of
production in a right manner.

2) Management meet the challenges of change:

Now - a - days the rate of change is accelerating. Change is inevitable; change
requires new adjustments and new equilibrium. This can be carried out with the help
of management.

3) Adoption of new technology:

To survive in a cut-throat competition, it is necessary for an enterprise to give quality
products at competitive prices. For this purpose management makes use of new
technology of production. Management always keeps itself equipped with upto date
knowledge.

4) Management creates cordial relations in organisation:

Now - a - days workers are aware of their rights and they are having their unions to
deal with workers problem. To handle workers tactfully and to get work done
satisfactory from workers management is must to create cordial relationship with
them.

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5) Maintain flow of work:

An efficient management plans the work programme of each department in such a
manner that there is a constant and smooth flow of work and there should not be
any interruption at any stage of production management get it through co-ordination
in between levels of management as well as sectional co-ordination.

6) Management creates stability:

An efficient management increases overall efficiency of business as result efficiency
increases the profit of a business. This makes business economical sound and stable.
Also it adds to its reputation at large. Fluctuations in supply of goods and services to
the society can be stabilized by the management.

7) Accomplishment of various interest of different groups:

Management has to strike a balance between customers' satisfaction, shareholders'
interest, welfare of workers and public interest and social responsibility of business.
Management thus is a key to higher productivity, better services to consumers and
higher standard of living for the community.

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