CHAPTER 1

Notes prepared by Professor & Lawyer Puttu Guru Prasad

Nature and Significance of Management

1. Concept of Management
Management is a very popular term and has been used extensively for all types of activities
and mainly for taking charge of different activities in any enterprise.

As you have seen from the above example and case study (HCL & FABMART) that management
is an activity which is necessary wherever there is a group of people working in an organization.

People in organizations are performing diverse tasks but they are all working towards the same
goal. Management aims at guiding their efforts towards achieving a common objective — a
goal.

Thus, management must see that tasks are completed and goals are achieved (i.e.,
effectiveness) with the least amount of resources at a minimum cost (i.e., efficiency).

Management, has, therefore, been defined as a process of getting things done with the aim of
achieving goals effectively and efficiently. We need to analyze this definition.

There are certain terms which require elaboration. These are (a) process, (b) effectively, and
(c)efficiently.

Process in the definition means the primary functions or activities that management performs
to get things done. These functions are planning, organizing, staffing, directing and
controlling.

Being effective or doing work effectively basically means finishing the given task. Effectiveness
in management is concerned with doing the right task, completing activities, and achieving
goals.

In other words, it is concerned with the end result. But it is not enough to just complete the
tasks. There is another aspect also, i.e., being efficient or as we say doing work efficiently

Efficiency means doing the task correctly and with minimum cost.

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There is a kind of cost-benefit analysis involved and the relationship between inputs and
outputs.

If by using less resources (i.e., the inputs) more benefits are derived (i.e., the outputs) then
efficiency has increased.

Efficiency is also increased when for the same benefit or outputs, fewer resources are used and
less costs are incurred. Input resources are money, materials, equipment, and persons required
to do a particular task.

Obviously, management is concerned with the efficient use of these resources, because they
reduce costs and ultimately lead to higher profits.

2. Effectiveness versus Efficiency

These two terms are different but they are interrelated. For management, it is important to be
both effective and efficient. Effectiveness and efficiency are two sides of the same coin. But
these two aspects need to be balanced and management at times, has to compromise with
efficiency.

For example, it is easier to be effective and ignore efficiency i.e., complete the given task but
at a high cost. Suppose, a company’s target production is 5000 units in a year. To achieve this
target the manager has to operate on double shifts due to power failure most of the time.

The manager is able to produce 5000 units but at a higher production cost. In this case, the
manager was effective but not so efficient, since for the same output, more inputs (labor cost,
electricity costs) were used.

At times, a business may concentrate more on producing goods with fewer resources i.e.,
cutting down cost but not achieving the target production. Consequently, the goods do not
reach the market and hence the demand for them declines and competitors enter the market.
This is a case of being efficient but not effective since the goods did not reach the market.

Therefore, it is important for management to achieve goals (effectiveness) with minimum

resources i.e., as efficiently as possible while maintaining a balance between effectiveness
and efficiency.

Usually, high efficiency is associated with high effectiveness which is the aim of all managers.
But undue emphasis on high efficiency without being effective is also not desirable.

Poor management is due to both inefficiency and ineffectiveness.

3. Characteristics of Management
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After going through some of the definitions we find some elements that may be called the basic
characteristics of management:

(i) Management is a goal-oriented process: An organization has a set of basic

goals which are the basic reason for its existence. These should be simple and clearly stated.
Different organizations have different goals.

For example, the goal of a retail store may be to increase sales, but the goal of The Spastics
Society of India is to impart education to children with special needs. Management unites the
efforts of different individuals in the organization toward achieving these goals.

ii) Management is all pervasive: (Spreading or spreading throughout) The activities

involved in managing an enterprise are common to all organizations whether economic, social,
or political. A petrol pump needs to be managed as much as a hospital or a school.

What managers do in India, the USA, Germany or Japan is the same. How they do it may be
quite different.

This difference is due to differences in culture, tradition, and history.

(iii) Management is multidimensional: Management is a complex activity that has

three main dimensions. These are:

(a) Management of work: All organizations exist for the performance of some work. In a
factory, a product is manufactured, in a garment store a customer’s need is satisfied and, in a
hospital, a patient is treated.

Management translates this work in terms of goals to be achieved and assigns the means to
achieve them.

This is done in terms of problems to be solved, decisions to be made, plans to be established,

budgets to be prepared, responsibilities to be assigned and authority to be delegated.

(b) Management of people: Human resources or people are an organization’s greatest

asset. Despite all developments in technology “getting work done through people” is still a
major task for the manager. Managing people has two dimensions

(i) it implies dealing with employees as individuals with diverse needs and behavior;

(ii) it also means dealing with individuals as a group of people. The task of management is to
make people work towards achieving the organization’s goals, by making their strengths
effective and their weaknesses irrelevant.

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(c) Management of operations: No matter what the organization is, it has some basic
product or service to provide in order to survive. This requires a production process which
entails the flow of input material and the technology for transforming this input into the
desired output for consumption.

This is interlinked with both the management of work and the management of people.

(iv) Management is a continuous process: The process of management is a series

of continuous, composite, but separate functions (planning, organizing, directing, staffing,
and controlling).

These functions are simultaneously performed by all managers all the time. You may have
observed that Suhasini at Fabmart performs several different tasks in a single day. Some days
she may spend more time in planning a future exhibition and on another day she may spend
time in sorting out an employee’s problem. The task of a manager consists of an ongoing series
of functions.

(v) Management is a group activity: An organisation is a collection of diverse

individuals with different needs. Every member of the group has a different purpose for joining
the organisation but as members of the organisation they work towards fulfilling the common
organizational goal. This requires team work and coordination of individual effort in a common
direction. At the same time management should enable all its members to grow and develop as
needs and opportunities change.

vi) Management is a dynamic function: (Able to change and adapt) Management

is a dynamic function and has to adapt itself to the changing environment. An organisation
interacts with its external environment which consists of various social, economic, and political
factors. In order to be successful, an organisation must change itself and its goals according to
the needs of the environment.

You probably know that McDonalds, the fast-food giant made major changes in its menu to
be able to survive in the Indian market.

(vii) Management is an intangible force: Management is an intangible force that

cannot be seen but its presence can be felt in the way the organisation functions. The effect of
management is noticeable in an organisation where targets are met according to plans,
employees are happy and satisfied, and there is orderliness instead of chaos.

4. Objectives of Management

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Management seeks to achieve certain objectives which are the desired result of any activity.
They must be derived from the basic purpose of the business. In any organisation there are
different objectives and management has to achieve all objectives in an effective and efficient
manner. Objectives can be classified into organizational objectives, social objectives and
personal or individual objectives.

(i) Organizational Objectives: Management is responsible for setting and achieving

objectives for the organisation.

It has to achieve a variety of objectives in all areas considering the interest of all stakeholders
including, shareholders, employees, customers and the government.

The main objective of any organisation should be to utilize human and material resources to
the maximum possible advantage, i.e., to fulfill the economic objectives of a business.

These are survival, profit and growth.

Survival: The basic objectives of any business is survival. Management must strive to ensure the
survival of the organisation. In order to survive, an organisation must earn enough revenues
to cover costs.

Profit: Mere survival is not enough for business. Management has to ensure that the
organisation makes a profit. Profit provides a vital incentive for the continued successful
operation of the enterprise. Profit is essential for covering costs and risks of the business.

Growth: A business needs to add to its prospects in the long run, for this it is important for the
business to grow. To remain in the industry, management must exploit fully the growth
potential of the organisation.

Growth of a business can be measured in terms of sales volume increase in the number of
employees, the number of products or the increase in capital investment, etc. There can be
other indicators of growth.

(ii) Social objectives: It involves the creation of benefit for society. As a part of society,
every organisation whether it is business or non-business, has a social obligation to fulfill.

This refers to consistently creating economic value for various constituents of society. This
includes using environmental friendly methods of production, giving employment opportunities
to the disadvantaged sections of society and providing basic amenities like schools and crèches
to employees.

The box given below illustrates how a company can fulfill its social responsibility.

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(iii) Personal objectives: Organisations are made up of people who have different
personalities, backgrounds, experiences and objectives. They all become part of the
organisation to satisfy their diverse needs. These vary from financial needs such as competitive
salaries and perks, social needs such as peer recognition and higher level needs such as
personal growth and development. Management has to reconcile personal goals with
organizational objectives for harmony in the organisation.

5. Importance of Management
Having understood that management is a universal activity that is integral to any organisation
we now examine some of the reasons that have made management so important:

(i) Management helps in achieving group goals: Management is required not for itself but for
achieving the goals of the organisation. The task of a manager is to give a common direction to
the individual effort in achieving the overall goal of the organisation.

(ii) Management increases efficiency: The aim of a manager is to reduce costs and increase
productivity through better planning, organizing, directing, staffing and controlling the activities
of the organisation.

(iii) Management creates a dynamic organisation: All organisations have to function in an

environment which is constantly changing. It is generally seen that individuals in an
organisation resist change as it often means moving from a familiar, secure environment into a
newer and more challenging one. Management helps people adapt to these changes so that
the organisation is able to maintain its competitive edge.

(iv) Management helps in achieving personal objectives: A manager motivates and leads his
team in such a manner that individual members are able to achieve personal goals while
contributing to the overall organizational objective. Through motivation and leadership, the
management helps individuals to develop team spirit, cooperation and commitment to group
success.

(v) Management helps in the development of society: An organisation has multiple objectives
to serve the purpose of the different groups that constitute it. In the process of fulfilling all
these, management helps in the development of the organisation and through that it helps in
the development of society. It helps to provide good quality products and services, creates
employment opportunities, adopts new technology for the greater good of the people and
leads the path towards growth and development.

6. Nature of Management

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Management is as old as civilization. Although modern organisations are of recent origin,
organized activity has existed since the time of the ancient civilizations. In fact, organisations
may be considered the distinguishing feature that separated civilized society from uncivilized
ones.

The earliest management practices were a set of rules and regulations that grew out of the
experiences of governmental and commercial activities. The development of trade and
commerce gradually led to the development of management principles and practices.

The term ‘management’ today has several different connotations that highlight the different
aspects of its nature. The study of management has evolved over a period of time along with
the modern organisations; based both on the experience and practice of managers and a set of
theoretical relationships.

Over a period of time, it has grown into a dynamic subject with its own special characteristics.
However, one question that needs to be addressed pertaining to the nature of management is
whether it is a science or an art or both?

In order to answer this, let us examine the features of both science and art to see how far
management fulfills them.

7. Management as an Art
What is art? Art is the skillful and personal application of existing knowledge to achieve
desired results. It can be acquired through study, observation and experience. Since art is
concerned with personal application of knowledge some kind of ingenuity and creativity is
required to practice the basic principles learnt. The basic features of an art are as follows:

(i) Existence of theoretical knowledge: Art presupposes the existence of certain theoretical
knowledge. Experts in their respective areas have derived certain basic principles which are
applicable to a particular form of art. For example, literature on dancing, public speaking,
acting, or music is widely recognized.

(ii) Personalized application: The use of this basic knowledge varies from individual to
individual. Art, therefore, is a very personalized concept. For example, two dancers, two
speakers, two actors, or two writers will always differ in demonstrating their art.

(iii) Based on practice and creativity: All art is practical. Art involves the creative practice of
existing theoretical knowledge. We know that all music is based on seven basic notes. However,
what makes the composition of a musician unique or different is his use of these notes in a
creative manner that is entirely his own interpretation.

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Management can be said to be an art since it satisfies the following criteria:

(i) A successful manager practices the art of management in the day-to-day job of managing an
enterprise based on study, observation and experience. There is a lot of literature available in
various areas of management like marketing, finance and human resources which the manager
has to specialize in. There is existence of theoretical knowledge.

(ii) There are various theories of management, as propounded by many management thinkers,
which prescribe certain universal principles. A manager applies these scientific methods and
body of knowledge to a given situation, an issue or a problem, in his own unique manner. A
good manager works through a combination of practice, creativity, imagination, initiative and
innovation. A manager achieves perfection after long practice. Students of management also
apply these principles differently depending on how creative they are.

(iii) A manager applies this acquired knowledge in a personalized and skillful manner in the
light of the realities of a given situation. He is involved in the activities of the organisation,
studies critical situations and formulates his own theories for use in a given situation. This gives
rise to different styles of management.

The best managers are committed and dedicated individuals; highly trained and educated,
with personal qualities such as ambition, self motivation, creativity and imagination, a desire for
development of the self and the organisation they belong to.

All management practices are based on the same set of principles; what distinguishes a
successful manager from a less successful one is the ability to put these principles into practice.

8. Management as a Science
Science is a systematized body of knowledge that explains certain general truths or the
operation of general laws. The basic features of science are as follows:

(i) Systematized body of knowledge: Science is a systematic body of knowledge. Its principles
are based on a cause-and-effect relationship. For example, the phenomenon of an apple falling
from a tree towards the ground is explained by the law of gravity.

(ii) Principles based on experimentation: Scientific principles are first developed through
observation and then tested through repeated experimentation under controlled conditions.

(iii) Universal validity: Scientific principles have universal validity and application. Based on the
above features, we can say that management has some characteristics of science.

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(iv) Management has a systematized body of knowledge. It has its own theory and principles
that have developed over a period of time, but it also draws on other disciplines such as
Economics, Sociology, Psychology and Mathematics.

Like all other organized activity, management has its own vocabulary of terms and concepts.

For example, all of us discuss sports like cricket and soccer using a common vocabulary.

The players also use these terms to communicate with each other.

Similarly, managers need to communicate with one another with the help of a common
vocabulary for a better understanding of their work situation.

(v) The principles of management have evolved over a period of time based on repeated
experimentation and observation in different types of organisations. However, since
management deals with human beings and human behavior, the outcomes of these
experiments are not capable of being accurately predicted or replicated.

Therefore, management can be called an inexact science. Despite these limitations,

management scholars have been able to identify general principles of management.

For example, scientific management principles by F.W. Taylor and Functional Management
principles by Henri Fayol.

(vi) Since the principles of management are not as exact as the principles of science, their
application and use is not universal. They have to be modified according to a given situation.
However, they provide managers with certain standardized techniques that can be used in
different situations. These principles are also used for training and development of managers.

You must have understood from the foregoing discussion that management has features of
both art and science. The practice of management is an art.

However, managers can work better if their practice is based on the principles of management.

These principles constitute the science of management. Management as an art and a science
are therefore not mutually exclusive, but complement each other.

9. Management as a Profession
You have understood so far that all forms of organized activity need to be managed. You would
also have observed that organisations look for individuals with specific qualifications and
experience to manage them.

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It has also been observed that there has been an increase in the corporate form of business on
the one hand and increasing emphasis on managed business concerns.

Does this imply that management is a profession? To answer this question let us examine the
salient features of a profession and see whether management satisfies them. A profession has
the following characteristics:

(i) Well-defined body of knowledge: All professions are based on a well-defined body of
knowledge that can be acquired through instruction.

(ii) Restricted entry: The entry to a profession is restricted through an examination or through
acquiring an educational degree. For example, to become a chartered accountant in India a
candidate has to clear a specified examination conducted by the Institute of Chartered
Accountants of India.

(iii) Professional association: All professions are affiliated to a professional association which
regulates entry, grants certificate of practice and formulates and enforces a code of conduct. To
be able to practice in India lawyers have to become members of the Bar Council which
regulates and controls their activities.

(iv) Ethical code of conduct: All professions are bound by a code of conduct which guides the
behavior of its members. All doctors, for example, take the oath of ethical practice at the time
they enter the profession.

(v) Service motive: The basic motive of a profession is to serve their client’s interests by
rendering dedicated and committed service. The task of a lawyer is to ensure that his client gets
justice.

Management does not meet the exact criteria of a profession. However, it does have some of
the features of a profession:

(i) All over the world there is marked growth in management as a discipline. It is based on a
systematic body of knowledge comprising well defined principles based on a variety of business
situations.

This knowledge can be acquired at different colleges and professional institutes and through a
number of books and journals.

The subject of management is taught at different institutions. Some of these have been set up
with the specific purpose of providing management education such as the Indian Institutes of
Management (IIMs) in India. Entry to different institutes is usually through an examination.

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(ii) There is no restriction on anyone being designated or appointed as manager in any
business enterprise. Anyone can be called a manager irrespective of the educational
qualifications possessed.

Unlike professions such as medicine or law which require a practicing doctor or lawyer to
possess valid degrees, nowhere in the world is it mandatory for a manager to possess any such
specific degree.

But professional knowledge and training is considered to be a desirable qualification, since

there is greater demand for those who possess degrees or diplomas from reputed institutions.
Therefore, as such the second criterion has not been strictly met.

(iii) There are several associations of practicing managers in India, like the AIMA (All India
Management Association) that has laid down a code of conduct to regulate the activities of
their members. There is, however, no compulsion for managers to be members of such an
association nor does it have any statutory backing.

(iv) The basic purpose of management is to help the organisation achieve its stated goal. This
may be profit maximization for a business enterprise and service for a hospital. However, profit
maximization as the objective of management does not hold true and is fast changing.

Therefore, if an organisation has a good management team that is efficient and effective it
automatically serves society by providing good quality products at reasonable prices.

10. Levels of Management

Shiv Nadar and Suhasini are both managers of an enterprise. Shiv Nadar is the CEO of HCL and
Suhasini is a branch manager at Fabmart. They manage their enterprise at different levels.
Management is a universal term used for certain functions performed by individuals in an
enterprise who are bound together in a hierarchy of relationships.

Every individual in the hierarchy is responsible for successful completion of a particular task. To
be able to fulfill that responsibility he is assigned a certain amount of authority or the right to
take a decision.

This authority-responsibility relationship binds individuals as superiors and subordinates and

gives rise to different levels in an organisation. Generally speaking, there are three levels in the
hierarchy of an organisation.

(i) Top Management: They consists of the senior-most executives of the organisation by
whatever name they are called. They are usually referred to as the chairman, the chief
executive officer, chief operating officer, president and vice-president.

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Top management is a team consisting of managers from different functional levels. Their basic
task is to integrate diverse elements and coordinate the activities of different departments
according to the overall objectives of the organisation.

These top level managers are responsible for the welfare and survival of the organisation. They
analyses the business environment and its implications for the survival of the firm. They
formulate overall organizational goals and strategies for their achievement. They are
responsible for all the activities of the business and for its impact on society.

The job of the top manager is complex and stressful, demanding long hours and commitment to
the organisation.

(ii) Middle Management is the link between top and lower level managers. They are
subordinate to top managers and superior to the first-line managers.

They are usually known as division heads, operations managers, or plant superintendents.
Middle management is responsible for implementing and controlling plans and strategies
developed by top management.

At the same time, they are responsible for all the activities of first-line managers. Their main
task is to carry out the plans formulated by the top managers. For this they need to:

(i) interpret the policies framed by top management,

(ii) ensure that their department has the necessary personnel,

(iii) assign necessary duties and responsibilities to them,

(iv) motivate them to achieve desired objectives, and

(v) co-operate with other departments for the smooth functioning of the organization.

At the same time they are responsible for all the activities of first-line managers.

(iii) Supervisory or Operational Management: Foremen and supervisors comprise the lower
level in the hierarchy of the organization. Supervisors directly oversee the efforts of the
workforce. Their authority and responsibility is limited according to the plans drawn by the top
management.

Supervisory management plays a very important role in the organization since they interact
with the actual workforce and pass on instructions of the middle management to the workers.

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Through their efforts quality of output is maintained, wastage of materials is minimized and
safety standards are maintained. The quality of workmanship and the quantity of output
depends on the hard work, discipline and loyalty of the workers.

11. Functions of Management

Management is described as the process of planning, organizing, directing and controlling the
efforts of organizational members and of using organizational resources to achieve specific
goals.

1. Planning is the function of determining in advance what is to be done and who is to do it.
This implies setting goals in advance and developing a way of achieving them efficiently and
effectively.

In Subhashini’s organization, the objective is the procurement and sale of traditional Indian
handloom and handicraft items. They sell fabrics, furnishings, and ready-mades and household
items made out of traditional Indian fabrics.

Suhasini has to decide the quantities, variety, color and texture of all the above and then
allocate resources for their purchase from different suppliers or for their inhouse development.

Planning cannot prevent problems, but it can predict them and prepare contingency plans to
deal with them if and when they occur.

2. Organizing is the management function of assigning duties, grouping tasks, establishing

authority and allocating resources required to carry out a specific plan.

Once a specific plan has been established for the accomplishment of an organizational goal, the
organizing function examines the activities and resources required to implement the plan.

It determines what activities and resources are required. It decides who will do a particular
task, where it will be done, and when it will be done.

Organizing involves the grouping of the required tasks into manageable departments or work
units and the establishment of authority and reporting relationships within the organizational
hierarchy.

Proper organizational techniques help in the accomplishment of work and promote both the
efficiency of operations and the effectiveness of results. Different kinds of business require
different structures according to the nature of work.

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3. Staffing simply stated, is finding the right people for the right job. A very important aspect of
management is to make sure that the right people with the right qualifications are available at
the right places and times to accomplish the goals of the organisation.

This is also known as the human resource function and it involves activities such as
recruitment, selection, placement and training of personnel.

Infosys Technologies which develop software needs systems analysts and programmers,
whereas Fabmart needs a team of designers and craftspeople.

4. Directing involves leading, influencing and motivating employees to perform the tasks
assigned to them. This requires establishing an atmosphere that encourages employees to do
their best.

Motivation and leadership are two key components of direction. Motivating workers means
simply creating an environment that makes them want to work.

Leadership is influencing others to do what the leader wants them to do. A good manager
directs through praise and criticism in such a way that it brings out the best in the employee.

Subhashini’s design team developed some prints for bedcovers in bright colors on silk.
Although they looked very impressive, the use of silk made the product too expensive for the
average customer.

Praising their effort, Suhasini suggested that they keep the silk bedcovers for special occasions
like Diwali and Christmas and offer the cotton bedcovers on a regular basis.

5. Controlling is the management function of monitoring organizational performance towards

the attainment of organizational goals. The task of controlling involves establishing standards
of performance, measuring current performance, comparing this with established standards
and taking corrective action where any deviation is found.

Here management must determine what activities and outputs are critical to success, how and
where they can be measured and who should have the authority to take corrective action.

When Suhasini discovered that her team of designers had produced bedcovers that were more
expensive than they had planned to sell, she decided to change the fabric to keep costs in
check.

The various functions of a manager are usually discussed in the order given above, suggesting
that a manager first plans, then organizes, puts staff in position, then directs, and finally
controls.

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In reality, managers are rarely able to carry out these functions in isolation. The activities of a
manager are interrelated and it is often difficult to pinpoint where one ended and the other
began.

12. Coordination — The Essence of Management

You have understood by now that a manager has to perform five interrelated functions in the
process of managing an organisation which is a system made up of different interlinked and
interdependent subsystems.

A manager has to link these diverse groups towards the achievement of a common goal. The
process by which a manager synchronizes the activities of different departments is known as
coordination.

Coordination is the force that binds all the other functions of management. It is the common
thread that runs through all activities such as purchase, production, sales, and finance to ensure
continuity in the working of the organisation.

Coordination is sometimes considered a separate function of management. It is however, the

essence of management, for achieving harmony among individual efforts towards the
accomplishment of group goals. Each managerial function is an exercise contributing
individually to coordination. Coordination is implicit and inherent in all functions of an
organisation.

The process of coordinating the activities of an organisation begins at the planning stage
itself. Top management plans for the entire organisation.

According to these plans the organizational structure is developed and staffed. In order to
ensure that these plans are executed according to plans directing is required.

Any discrepancies between actual and realized activities are then taken care of at the stage of
controlling. It is through the process of coordination that a manager ensures the orderly
arrangement of individual and group efforts to ensure unity of action in the realization of
common objectives.

Coordination therefore involves synchronization of the different actions or efforts of the

various units of an organisation. This provides the requisite amount, quality, timing and
sequence of efforts which ensures that planned objectives are achieved with a minimum of
conflict.

13. Nature of Coordination

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The definitions given above highlight the following features of coordination:

(i) Coordination integrates group efforts: Coordination unifies unrelated or diverse interests
into purposeful work activity. It gives a common focus to group effort to ensure that
performance is as it was planned and scheduled.

(ii) Coordination ensures unity of action: The purpose of coordination is to secure unity of
action in the realization of a common purpose. It acts as the binding force between
departments and ensures that all action is aimed at achieving the goals of the organisation.

You have observed that at Fabmart, the production and sales department have to coordinate
their work, so that production takes place according to the demand in the market.

(iii) Coordination is a continuous process: Coordination is not a one-time function but a

continuous process. It begins at the planning stage and continues till controlling. Suhasini plans
her winter collection in the month of June itself.

She has to then ensure that there is adequate workforce and continuously monitor whether
production is proceeding according to plans. Her marketing department also has to be briefed
in time to prepare their promotional and advertising campaigns.

(iv) Coordination is an all-pervasive function: Coordination is required at all levels of

management due to the interdependent nature of activities of various departments. It
integrates the efforts of different departments and different levels.

The purchase, production and sales departmental efforts have to be coordinated by Suhasini for
achieving organizational objectives harmoniously.

The purchase department is responsible for procuring fabric. This then becomes the basis of the
activities of the production department and finally sales can take place.

If fabric purchased is of an inferior quality or is not according to the specifications of the

production department, further sales will also decline. In the absence of coordination there is
overlapping and chaos instead of harmony and integration of activities.

(v) Coordination is the responsibility of all managers: Coordination is the function of every
manager in the organisation.

Top level managers need to coordinate with their subordinates to ensure that the overall
policies for the organisation are duly carried out.

Middle level management coordinates with both the top level and first line managers.

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Operational level management coordinates the activities of its workers to ensure that work
proceeds according to plans.

(vi) Coordination is a deliberate function: A manager has to coordinate the efforts of different
people in a conscious and deliberate manner. Even where members of a department willingly
cooperate and work, coordination gives a direction to that willing spirit.

Cooperation in the absence of coordination may lead to wasted effort and coordination
without cooperation may lead to dissatisfaction among employees.

Coordination, therefore, is not a separate function of management, but its very essence. For an
organisation to effectively and efficiently achieve its objectives coordination is required. Like a
thread in a garland, coordination is a part of all management functions.

14. Management in the Twenty-first Century

Even as you read this chapter, the organisation and its management are changing.

As boundaries between cultures and nations get blurred and new communication technology
makes it possible to think of the world as a ‘global village’, the scope of international and
intercultural relationships is rapidly expanding.

The modern organisation is a global organisation that has to be managed in a global

perspective. What does this imply?

Summary
Concept: - Management is the process of planning, organizing, staffing, directing and controlling the
enterprise resources efficiently and effectively for achieving the goals of the organization. Effectiveness
in management is concerned with doing the right task, completing activities and achieving goals.
Efficiency means doing the task correctly and with minimum cost.

Characteristics: - The key features of management are: (i) goal oriented process (ii) all pervasive (iii)
multidimensional (iv) continuous process (v) group activity (vi) dynamic function (vii) tangible force.

Objectives: - Management fulfills three basic objectives: organizational, social and personal.

Importance Management:- is important because it helps in achieving group goals, increases efficiency,
creates a dynamic organisation, helps achieve personal objectives and contributes to the development
of society.

Nature Management:- is a combination of an organised body of knowledge (science) and its skillful
application (art). Although it does not satisfy all the requirements of a profession, it is to a large extent
professional in character.

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Levels Management: - is considered a three-tier activity. The top management focuses on the
determination of objectives and policies, middle management attempts to achieve these objectives
through the effort of other managers and supervisory or operational management directly oversees the
efforts of the workforce.

Functions All managers perform the following interrelated functions: Planning, Organising, Staffing,
Directing and Controlling.
Coordination: - Coordination is the essence of management. It is the process of achieving unity of action
among interdependent activities and departments of an organisation.

Case Problems
1.Company X is facing a lot of problems these days. It manufactures white goods like washing machines,
microwave ovens, refrigerators and air conditioners. The company’s margins are under pressure and the
profits and market share are declining. The production department blames marketing for not meeting
sales targets and marketing blames the production department for producing goods, which are not of
good quality meeting customer’s expectations. The finance department blames both production and
marketing for declining return on investment and bad marketing.

What quality of management do you think the company is lacking? Explain briefly. What steps should
the company management take to bring the company back on track?

2.A company wants to modify its existing product in the market due to decreasing sales. You can
imagine any product about which you are familiar. What decisions/steps should each level of
management take to give effect to this decision?

3.A firm plans in advance and has a sound organisation structure with efficient supervisory staff and
control system. On several occasion it finds that plans are not being adhered to. It leads to confusion
and duplication of work. Advise remedy. These activities are meant to reinforce concepts and to make
the learning joyful. They also aim to give pupils simulated experiences of the managerial activities
relevant to their level of understanding.

These activities are meant to reinforce concepts and to make the learning joyful. They also aim to give
pupils simulated experiences of the managerial activities relevant to their level of understanding.

1. Management at HCL
2. Suhasini is the branch manager of Fabmart,
3. Definitions of Management
4. The Management Mantra from GE
5. ITC – Empowering Rural India
6. Some interesting Cross-disciplinary Perspectives
7. Definitions of Coordination
8. ‘DABBAWALLAS’ – Excellence through Coordination
9. The Challenge of Being a Global Manager The Challenge of Being a Global Manager
10. Key Terms- Management- Process- Efficiency- Effectiveness- POSDCORB.

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