UNIT I

MANAGEMENT

Management is a process of getting things done with the aim of achieving goals effectively and
efficiently.

The concept of management consist of three terms :

1. Process - series or sequence of steps.

2. Effectiveness - completion of task or achievement of goal on time.

3. Efficiency - Completing the task or achieving the goal with minimum cost or optimum
utilization of resources or in cost effective manner.

Definitions of Management:

According to Harold Koontz, "Management is the art of getting things done through others and
with formally organised groups."

According to F.W. Taylor, "Management is the art of knowing what you want to do and then
seeing that they do it in the best and the cheapest may."

According to Peter Drucker, ―Management is a multipurpose organ that manage a business and
manages Managers and manages Workers and work.‖

According to Mary Parker Follett. Management, she says, is the "art of getting things done
through people."

Characteristics of management:

1. Management is Pervasive: Management is a universal phenomenon. The use of

management is not restricted to business firms only it is applicable in profit-making, non-
profit-making, business or non-business organizations; even a hospital, school, club and
house has to be managed properly.

2. Management is Goal Oriented Process: Management always aims at achieving the

organisational objectives. The functions and activities of manager lead to the
achievement of organisational objectives;

3. Management is Continuous Process: it is a never ending function. All the functions of

management are performed continuously.

4. Management is Multidimensional : Management includes three main activities

a. Management of work

b. Management of people

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c. Management of Operations

5. Management is Group Activity : Management always refers to a group of people involved in

managerial activities. The management functions cannot be performed in isolation. Each
individual performs his/her role at his/her status and department, and then only management
function can be executed.

6. Dynamic Function: Management has to make changes in goal, objectives and other activities
according to changes taking place in the environment.

7. Intangible: Management function cannot be physically seen but its presence can be felt by
seeing the orderliness and coordination in working environment

Functions of Management:

1. Planning
2. Organizing
3. Staffing
4. Directing
5. Controlling

1. Planning: According to KOONTZ, ―Planning is deciding in advance - what to do, when

to do & how to do. It bridges the gap from where we are & where we want to be‖. Thus,
planning is a systematic thinking about ways & means for accomplishment of pre-
determined goals. A plan is a future course of actions. It is an exercise in problem solving
& decision making. Planning is determination of courses of action to achieve desired
goals. Thus, planning is a systematic thinking about ways & means for accomplishment
of pre-determined goals. Planning is necessary to ensure proper utilization of human &
non-human resources. It is all pervasive, it is an intellectual activity and it also helps in
avoiding confusion, uncertainties, risks, wastages etc.

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2. Organizing: It is the process of bringing together physical, financial and human

resources and developing productive relationship amongst them for achievement of
organizational goals. Organizing as a process involves:
 Identification of activities.
 Classification of grouping of activities.
 Assignment of duties.
 Delegation of authority and creation of responsibility.
 Coordinating authority and responsibility relationships.
3. Staffing: The main purpose of staffing is to put right man on right job. According to
Kootz & O’Donell, ―Managerial function of staffing involves manning the organization
structure through proper and effective selection; appraisal & development of personnel to
fill the roles designed un the structure‖. Staffing involves:
 Manpower Planning (estimating man power in terms of searching, choose the
person and giving the right place).
 Recruitment, Selection & Placement.
 Training & Development.
 Remuneration.
 Performance Appraisal.
 Promotions & Transfer.
4. Directing: It refers to giving directions or instructions to employees for desired action.
Direction has following elements:
 Supervision- implies overseeing the work of subordinates by their superiors. It is
the act of watching & directing work & workers.
 Motivation- means inspiring, stimulating or encouraging the sub-ordinates with
zeal to work. Positive, negative, monetary, non-monetary incentives may be used
for this purpose.
 Leadership- may be defined as a process by which manager guides and
influences the work of subordinates in desired direction.
 Communications- is the process of passing information, experience, opinion etc
from one person to another. It is a bridge of understanding
5. Controlling: ―Controlling is the process of checking whether or not proper progress is
being made towards the objectives and goals and acting if necessary, to correct any
deviation‖.
It implies measurement of accomplishment against the standards and correction of
deviation if any to ensure achievement of organizational goals.

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Levels of Management:

1. Top level Management: They consist of the senior most executive of the organization.
Top management is a team consisting of managers from different function levels head.

2. Middle level Management: It is the link between top and lower level managers.

3. Supervisory, Operational or Lower level Management: Foreman and supervisors

comprise the lower level in the hierarchy of the organisation.

Managerial Skills:

Managerial skills are the knowledge and ability of the individuals in a managerial position to
fulfill some specific management activities or tasks.

Three Types of Managerial Skills Robert Katz identifies three types of skills that are essential for
a successful management process:

 Technical skills,
 Conceptual skills and
 Human or interpersonal management skills.
 Technical Skills: They give the manager’s knowledge and ability to use different
techniques to achieve what they want to achieve. Technical skills are not related only for
machines, production tools or other equipment, but also they are skills that will be
required to increase sales, design different types of products and services, market the
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products and services, etc Technical skills are most important for the first-level managers.
As we go through a hierarchy from the bottom to higher levels, the technical skills lose
their importance.
 Conceptual Skills: Conceptual skills present knowledge or ability of a manager for
more abstract thinking. That means he can easily see the whole through analysis and
diagnosis of different states. In such a way they can predict the future of the business or
department as a whole. Why managers need these skills? As a first, a company includes
more business elements or functions as selling, marketing, finance, production, etc. All
these business elements have different goals even completely opposed goals. The
conceptual skills will help managers to look outside their department’s goals. So, they
will make decisions that will satisfy overall business goals. Conceptual skills are vital for
top managers, less critical for mid-level managers, and not required for first level
managers. As we go from a bottom of the managerial hierarchy to the top, the importance
of these skills will rise.
 Human or Interpersonal Managerial Skills : Human or interpersonal management
skills present a manager’s knowledge and ability to work with people. One of the most
critical management tasks is to work with people. Without people, there will not be a
need for the existence of management and managers. These skills will enable managers to
become leaders and motivate employees for better accomplishments. Also, they will help
them to make more effective use of human potential in the company. Simply, they are the
essential skills for managers. Interpersonal management skills are essential for all
hierarchical levels in the company.

Evolution Of Management Through Theories

Management theories help to study an organization, its corporate designs, structures and
behavior of individuals or groups. By studying the impact of internal and external business
environments, these theories provide a lens to address critical questions about how a business
works or operates. Management theories can be grouped under three categories—classical
theory, neoclassical theory and modern management theory. Let’s take a look at the individual
theories in detail:
1. Classical Theory Of Management
During the classical period, management thought was focused on job content,
standardization, the division of labor, and a scientific approach towards the organization. It
also was closely related to the industrial revolution as well as the rise of large-scale
enterprises. The theories that emerged under the classical evolution of management
thought are:

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Traditional or
Neo- Classical theory Modern Theory
Classical Theory

Human Relation
Scientific System
Approach
Management Approach

Behaviour
Process science Contengency
Management Approach approach

Operational
Research
Approach

a. Scientific Management
Fredrick Winslow Taylor, an engineer, proposed and developed the Scientific
Management Theory. He is also known as the Father of Scientific Management. He
introduced a scientific approach to productivity, which meant that an increase in
efficiency can lead to higher productivity and profits. He believed that research-
backed and standardized procedures were necessary for effective management. This
theory focuses on to identify one best way to get the job done. By studying time
study, motion study and method study he find the best way to enhance the
efficiency. He also provides four principle of scientific management:

 Science not the Rule of Thumb

 Harmony, Not Discord
 Mental Revolution
 Cooperation, not Individualism
b. Administrative Management/ Process Management
Henry Fayol, a French mining engineer, laid down six activities and 14 principles of
management under the theory of Fayolism. This gave way to the school of
administrative management. He believed that these functions and principles can
guide managers to fulfill their responsibilities effectively and they should have the
liberty to determine how to use them. According to this theory there are six activities
in organization:

 Commercial skills – buying, selling and exchange

 Financial skills- search for capital and its optimum use
 Security skills- protection of property and person

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 Accounting skills- including statistics

 Technical skills- relating to production
 Managerial skills- planning, organizing, command , coordination and
control
2. Neoclassical Theory Of Management
This period of evolution of management thought is an improvement of the classical theory.
In other words, it modified and improved upon the classical theory. This theory focus on
social system, democratic leadership, motivation, two way communication and
employee development, The theories that emerged under the neoclassical evolution of
management practices are:

a. Human Relations Management

Developed by Elton Mayo, an Australian psychologist, the Human Relations Theory
of Management was proposed after a series of experiments, also known as
Hawthorne Studies or Hawthorne Experiments. The main contribution of this theory
is the social and psychological site of human behavior. Human relation expert
believe that the management should recognized the needs of employees for
recognition and social acceptance.

b. Behavioral Management
Behavioral approaches to management set the pace for how modern workplaces
build an employee-friendly culture. Abraham Maslow, an American psychologist,
proposed the hierarchy of need, where employee need and expectations were
prioritized. The theory suggests that human relations and behavior are essential in
driving efficiency in teams and managing the workforce successfully. This approach
has lead to a more systematic and objective understanding of the human factor. This
approach has provided many new areas and techniques in managing organization,
such as informal leadership, open communication.

3. Modern Theory Of Management

The theories that emerged with the modern evolution of management needs are:

a. Systems Approach
Systems Theory allows for an understanding of the connections between various
parts of the organization and how they interact with one another. A system is a set of
interconnected and interrelated element which operate together to achieve certain
goals. According to this approach organization is a system which is interrelated to
each other and any problem occur in one part may affect the other subpart.

b. Contingency Approach
The Contingency Management Theory suggests that there is not any perfect way to
organize a business or corporation. The optimal solution lies in the situation that an
organization operates in. A business is contingent (depends) upon internal or
external environments. It involves identifying the important contingency variable in

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different situations. By evaluating these variables can apply the appropriate

management principle.

c. Operational Research Approach

It is defined as the application of scientific method. Problem arising in the
operation of a system which may be represent by mathematical model. The
solving of the problems by resolves the equations and represents the system.
Ex- CPM and PERT, Assignment, Game theory etc.

Fayol’s Principles:

1. Division of Work-
Henri believed that segregating work in the workforce amongst the worker will enhance the
quality of the product. Similarly, he also concluded that the division of work improves the
productivity, efficiency, accuracy and speed of the workers. This principle is appropriate for both
the managerial as well as a technical work level.
2. Authority and Responsibility-
These are the two key aspects of management. Authority facilitates the management to work
efficiently, and responsibility makes them responsible for the work done under their guidance or
leadership.
3. Discipline-
Without discipline, nothing can be accomplished. It is the core value for any project or any
management. Good performance and sensible interrelation make the management job easy and
comprehensive. Employees good behaviour also helps them smoothly build and progress in their
professional careers.
4. Unity of Command-
This means an employee should have only one boss and follow his command. If an employee has
to follow more than one boss, there begins a conflict of interest and can create confusion.
5. Unity of Direction-
Whoever is engaged in the same activity should have a unified goal. This means all the person
working in a company should have one goal and motive which will make the work easier and
achieve the set goal easily.
6. Subordination of Individual Interest-
This indicates a company should work unitedly towards the interest of a company rather than
personal interest. Be subordinate to the purposes of an organization. This refers to the whole
chain of command in a company.

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7. Remuneration-
This plays an important role in motivating the workers of a company. Remuneration can be
monetary or non-monetary. However, it should be according to an individual’s efforts they have
made.
8. Centralization-
In any company, the management or any authority responsible for the decision-making process
should be neutral. However, this depends on the size of an organization. Henri Fayol stressed on
the point that there should be a balance between the hierarchy and division of power.
9. Scalar Chain-
Fayol on this principle highlights that the hierarchy steps should be from the top to the lowest.
This is necessary so that every employee knows their immediate senior also they should be able
to contact any, if needed.
10. Order-
A company should maintain a well-defined work order to have a favourable work culture. The
positive atmosphere in the workplace will boost more positive productivity.
11. Equity-
All employees should be treated equally and respectfully. It’s the responsibility of a manager that
no employees face discrimination.
12. Stability-
An employee delivers the best if they feel secure in their job. It is the duty of the management to
offer job security to their employees.
13. Initiative-
The management should support and encourage the employees to take initiatives in an
organization. It will help them to increase their interest and make then worth.
14. Esprit de Corps-
It is the responsibility of the management to motivate their employees and be supportive of each
other regularly. Developing trust and mutual understanding will lead to a positive outcome and
work environment.

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