1.

Notes on the Meaning of Management:

In today’s world of complex and fast internationalization of business, most companies are going
global. Unless they are effectively managed, they cannot survive in the fast changing
international business environment. Management helps in doing and getting things done through
others. It is the process that optimizes human, material and financial resources of the
organization for effective achievement of its goals.

The process involves a series of actions (functions) by managers, optimization refers to getting
maximum output (goods and services) out of minimum inputs (men, materials, money, machine
etc.) and goals are the results or ends that managers and other stakeholders (shareholders,
consumers, suppliers, workers etc.) wish to achieve.

Terry and Franklin:

“Management is a distinct process consisting of activities of planning, organizing, actuating and
controlling, performed to determine and accomplish stated objectives with the use of human
beings and other resources.”

Koontz and Weihrich:

“Management is the process of designing and maintaining an environment in which individuals,
working together in groups, efficiently accomplish selected aims.”

F. W. Taylor:
“Management is an art of knowing what is to be done and seeing that it is done in the best
possible manner.”

Henri Fayol:
Management is to forecast, to plan, to organise, to command, to co-ordinate and control activities
of others. Every organisation, at every level, needs management, be it an organisation as small as
a family, temple or church or big organisations such as Schools, Colleges, Universities, business
houses or even the Government. It is important for both profit and non-profit organisations and
also for manufacturing and service organisations.

Labour unions and research organisations, hospitals and armed services are also guided by
management principles. All these institutions (whether profit or service) consider management as
the effective organ which plans the activities, makes people responsible to carry out those
activities, co-ordinates and controls their activities through an effective system of feedback.
Management is the art of getting things done through others. It is an activity which co-ordinates
the human and non-human resources (men, material, machines etc.) for achieving the desired
results. Although different views are given on the functions of management, the most commonly
accepted functions are planning; organising; staffing; leading and controlling.

Though management is essential for both business and non-business organisations, it is primarily
linked with business management. The arguments in support are given by Peter F. Drucker.

1. Of all institutions in the modern society, business institutions were the first to be set up and
management was meant to be part of these institutions on a continuous basis.

2. Though management is important for non-profit organisations also, the main criterion for
testing the efficiency of management is economic surplus (though not accurate) and this criterion
is generally satisfied by business organisations.

3. With economic reforms initiated in 1991, business has become’ open in international
boundaries and the economy has become free and liberalised. The performance of business
houses is bringing the nations together and the focus on business management is, thus, evident.

“Without institution there is no management. But without management there is no institution.

Management is the specific organ of the modern institution. It is the organ on the performance of
which the performance and the survival of the institution depends.” — Peter F. Drucker

2. Notes on the Features of Management:

Management is characterised by the following features:
(i) An activity:
It is an activity of getting things done through others. It involves coordinated efforts of a group
of people towards a common end in highly structured organisations like Reliance or Infosys or
social organisations like a club or an NGO. Working with and through people establishes
superior-subordinate relationships where work is assigned to individuals and authority-
responsibility relationships are established amongst them.

(ii) A process:
Management gets things done through others by the management process. It helps to achieve
organisational goals through functions of management.

(iii)  Required for all organisations:

Both business and non-business organisations (such as Government or service organisations,
irrespective of their size; large or small) need effective management to achieve their objectives.

(iv) Required at all organisational levels:

Management is required at all the levels — top, middle and lower levels of the organisation,
though degree of management is different at different levels.

(v) Goal-oriented:
Success of an organisation is measured by achievement of its goals and management plays
significant role in goal achievement. Since organisations are deliberately created structures, they
exist for a purpose or goal. Objectives are the desired state of results that all organisational
members agree to achieve through coordinated efforts.

(vi) Intangible:
Management cannot be seen or felt. The result of management can be observed by comparing a
well-managed organisation with a poorly managed organisation. The difference in results can be
attributed to management concepts.

(vii)  Dynamic:
Management is an ever-changing discipline of knowledge. It was not very important during the
early years of 1900s even in highly institutionalized countries. The main decision-making
authority used to be the Government.

The changing business scenario requires innovations, research and development in the business
sector and, thus, highlights the changing role that management plays in this environment.
Effective management is situational i.e., managers assess the facts and circumstances of each
situation and use a managerial approach that best applies in the situation to attain the individual
and organisational goals.

(viii) A discipline:
Though management seeks ideas and concepts from other fields of study, such as psychology,
behavioural sciences, sociology etc., yet it is a complete discipline in itself. Managers acquire
specific managerial skills, knowledge and fundamentals to practice management.

(ix) Management and society:

Though management is a separate discipline which aims to accomplish pre-determined
organisational goals, yet its impact on society cannot be overlooked. Management is governed by
social values, culture and beliefs. It is a function that transforms the society. It preserves the
society and promotes its interests.

(x)  Group effort:

Management as a function, activity or a process is not undertaken by a single person. It is the co-
ordinated effort of a group of people that envisions future of the organisation, sets its goals,
makes plans and policies, implements them and controls its working through an effective
feedback mechanism. Management does not exist to achieve personal goals of people. Though,
however, personal objectives are important, they should contribute to objectives of the group and
the organisation.

(xi) Global function:

Management is not confined to a specific society, culture or country. It is a global phenomenon.
In the contemporary business environment, the concept of national boundaries, as far as business
is concerned, is fading away. With the kind of reforms coming in, the world has become a single
economy, a single market. The multinational character of management is, thus, evident and in
fact, inescapable.

3. Notes on the Objectives of Management:

How effectively an organisation achieves its objectives (profit or service) depends upon how
effectively it is managed.

Management serves the following objectives to help organisations meet their goals:
(i) Helps organisation achieve its objectives:
Management helps in managing the organisations to achieve their objectives at minimum cost. It
enables managers to work efficiently, that is, achieve maximum output at minimum cost. It also
aims to coordinate the organisational resources (physical, financial and human) so that human
knowledge and expertise can be geared towards optimum utilisation of non-human resources.

(ii) Promotes effectiveness:
Efficiency means ‘doing things right’ and effectiveness means ‘doing the right things’. It means
choosing the most appropriate organisational objectives out of multiple objectives. Lack of
effectiveness or choosing wrong objectives will result in inefficiency, howsoever hard managers
may work. Management, thus, helps to find out the right things to do and to concentrate on those
things efficiently.

(iii)  Develops the ability of managers:

Managers should not only be skilled in problem-solving, they should be equally skilled in
problem-finding. They should anticipate problems before they arise. They should take advantage
of opportunities to make their organisations competitive. Management develops analytical
abilities of managers (problem solving) and the ability to find problems and exploit gainful
business opportunities.

(iv) Human welfare:
Management helps in knowing the needs of employees and satisfies them through suitable
motivators.

(v) Social welfare:
Organisations operate in the larger social system. The performance of business organisations
largely affects the welfare of society and through it, the welfare of the nation. Management
develops business organisations as socially acceptable institutions which give gainful
employment to people.

(vi) Interaction with environment:

Business operates in the larger environment that consists of economic and non-economic
variables. Firms secure inputs from the environment, transform them into outputs and give them
back to the environment. They survive if they adapt their plans to the environmental
requirements and change their operations according to changes in the environment. Management
helps firms to successfully frame and alter their policies to profitably interact with the larger
environment.
4. Notes on the Nature of Management:
Management is viewed as:
1. Science,

2. Art, and

3. Profession.

1. Management as Science:
What is Science:
Science is a branch of knowledge that involves systematized observation and experiment with
phenomena. It involves “the systematic development and testing of theories based on observation
of behaviour”. It creates a general body of knowledge evolved through continuous testing and
experiments. Testing of hypothesis evolves principles which establish cause and effect
relationship amongst variables.

Features of Science:
Science is characterised by the following features:
(a) Clarity of concepts:
Science is characterised by universal concepts evolved through experiments.

(b) Scientific methods:
Scientific methods involve study of phenomena through systematic procedure of observation,
formulation of hypothesis and experiment. Repeated observation of similar facts leads to
generalisations as to what will happen in similar situations. Scientific methods, thus, help in
predictions.

(c) Clarity of theory:
Grouping of interdependent concepts and principles that evolve an area of acknowledge is
known as theory. Theory is a generalized set of principles and concepts.

(d) Causal relationship:
It explains relationship between two forces: one, the cause and other, the effect. It explains
relationship between application of principles and its end result.

(e) Systematized theory of knowledge:

Science is not just a theory of knowledge. It is a systematized theory of knowledge. Scientific
principles are applied in a systematic and scientific manner.

(f) Universal application:

Scientific principles are universally applicable. They apply in all situations, all countries and all
cultures. They do not change according to situations.

Is Management a Science?
(a) Clarity of concepts:
Concept is a “mental image of anything formed by generalization from particulars.”
Management, as a discipline, has a number of concepts (management, administration, levels of
management, functional areas of management, managerial planning, organisation charts and
manuals etc.) evolved through the experience of managers in various organisations.

Management, therefore, can aptly be called a management science. Concepts like organisation
charts, organisation manuals, managerial planning etc. have gained widespread popularity and
management can, thus, be called a science.

(b) Scientific methods:
The study of scientific problem through systematic multistep procedure of observation,
formulation of hypothesis, experiment and development of a theory is known as scientific
method. “A scientific method involves the determination of facts through observation.” Repeated
observation of similar facts and situations leads to certain generalizations which help in making
predictions about what will happen in similar situations.

While dealing with people, managers repeatedly observe human behaviour, analyze their
physiological and psychological needs and frame policies to satisfy those needs. Financial
incentives, for example, can satisfy physiological needs and non-financial incentives satisfy
psychological needs of human beings, is an aspect of motivation that has evolved through
constant observation of human behaviour. Management can, therefore, be described as a
‘Science’.

(c) Clarity of theory:
When scientific methods are tested for their accuracy, they result into principles. “Theory is a
systematic grouping of interdependent concepts and principles that gives a framework to, or ties
together, a significant area of knowledge.” Management has evolved over a period of years as a
theory with generalized set of principles and concepts that support the organisation structure.
The principles of management are a universally accepted set of knowledge which have evolved
through constant observation and experimentation (case studies on management) for dealing with
managerial resources. They can be applied to different organisations. The principles of unity of
command, unity of direction, scalar chain, esprit de corps, for example, have made management
a universally accepted science or theory. Management can, thus, be called a science.

(d) Causal relationship:
The principles of science usually explain relationship between two forces; the cause and the
effect. There is some evidence of causal relationship (as in Science) between managerial
practices and their end results. Financial management, for example, invests in assets (long-term
and short-term) for wealth maximisation.

The principle of unity of command results in loyalty towards superiors is a management

principle that holds good in almost all organisations. Though not universally true (a subordinate
may, at times, have to report to more than one boss), it is a generally accepted principle.
Management, thus, satisfies this principle of science.

(e) Systematized theory of knowledge:

Science is not just a set of principles (theory). It applies principles in a systematic and scientific
manner to attain certain goals. Management is “a field of knowledge that seeks to systematically
understand why and how men work together to accomplish objectives and to make these co-
operative systems more useful to mankind.”

Management concepts and principles have evolved over a period of time and have systematized
into well-defined management theories being practiced in all successful organisations.
Management can, therefore, be rightly called a systematized body of knowledge. “Management
science is a body of systematized knowledge accumulated and accepted with reference to the
understanding of general truths concerning management.”

(f) Universal application:
Though not always true, management principles are universally applicable. The principles of
‘Esprit de Corps’ — unity is strength is applied in almost every organisation and every situation.
On this basis also management can be called a science.

Management is not an exact science:

Though management can be described as science of applying scientific concepts and methods in
a systematized manner, with specific rules and regulations to achieve organisational goals, it is
not an exact science. It is not as exact as physical science (Physics or Chemistry). Physical
science has no direct or practical application in studying human welfare. It is studied only for
understanding the natural phenomenon.

Management is not as pure as physical science. It is applied science. It deals with problems and
finds solutions to these problems to maximise human welfare. Management is social science
(study of human beings) based on accumulation of data, past experience, tradition and reasoning.
It deals with human behaviour which changes in different situations.

It is a social science that maximises human welfare in specific situations. Management principles
change with change in situations and human behaviour. These principles are, thus, flexible and
change according to situations. Management, therefore, can be called a behavioural science,
social science or soft science.

“The field of management would truly become a science, when theory would be able to guide
managers by telling them what to do in a particular situation and enabling them to predict the
consequences of their actions”.

2. Management as an Art:
What is Art: Art is know-how. It is a branch of knowledge that gives personal expression to
feelings, thoughts and ideas. It is a means to creative growth and does not depend on scientific
experiments and testing. It applies personal aptitude and skill in assessing how best can one
utilise resources to get maximum benefit out of them.

Features of Art: Art is characterised by the following features:

(a) Vision:
An artist has clear vision of what he wants to make. He strives to achieve a definite goal.

(b) Knowledge:
Art requires practical knowledge. It applies theoretical knowledge to achieve the goal.

(c) Communication:
An artist can fulfill his objectives by communicating with his artists. He alone cannot attain his
goal.
(d) Creativity:
Art requires creativity. Since there are no defined procedures and methods to achieve goals, the
artist uses imagination, skill and creativity to do so. Creativity can be enhanced through
motivation and training.

(e) Skilled performance:

Art requires application of personal skill. It differs for each artist and for each artistic situation.
Every artist has his own way of performing the job.

(f) Practice:
Artist can improve his performance through constant practice. His work is not based on scientific
methods.

Is Management an Art?
(a) Artist’s vision:
As an artist (while he composes a painting or a musical note) has clear vision or picture of what
he strives to achieve; management theorist also has to envision the future and frame the
objectives and plans. “Management art involves envisioning an orderly whole from chaotic parts,
communicating the vision and achieving the goal. It is the ‘art of arts’ because it organises and
uses human talent.”

(b) Knowledge:
As in Art, managers must clearly know their objectives and how they wish to achieve them. This
results in optimum allocation of scarce resources over varied organisational objectives.

(c) Communication:
Similar to Art, successful managers need to effectively communicate the objectives, plans,
procedures, orders and instructions to the subordinates (top-down communication) and listen to
their grievances and complaints patiently (bottom-up communication). This helps to achieve the
objectives efficiently.

(d) Creativity:
Management is a behavioural science. It deals with people. Managers, therefore, must have the
art of knowing human needs and devise motivational plans to satisfy them. Art is always
creative. Artist’s creativity can be enhanced through training and motivation. Management is
also creative. It requires managerial skills to forecast opportunities in the environment and
exploit them gainfully. Managers need to be creative to coordinate the resources (human and
non-human) for achieving the practical results.

(e) Skilled performance:

As ‘Art’ applies personal aptitude and skills for different artistic situations, managers also
possess managerial skills to deal with different problem-solving situations. This helps to
optimally utilise the scarce organisational resources over different managerial activities.

Experience, observation and study of results, all contribute to skilled performance. “In that art
requires a personal aptitude or skill, managers who must make organisational decisions about
how best to position their resources in certain future markets are surely involved in an artistic
process.”

(f) Practice:
Managers expertise in the art of management through constant practice. The more they practice,
the more they learn and become successful business entrepreneurs. One may, thus, conclude that
management is an art of applying skill, knowledge, creativity, personal judgement and
innovativeness to understand the behaviour of subordinates and application of suitable devices to
allocate scarce resources over organisational objectives. Scientific principles and theories cannot
always solve organisational problems.

Management — Both A Science and Art:

Management is both, Science and Art. It cannot, however, be clearly defined as to when it is
science and when art. As science, it has principles and theories on the basis of which managers
act, and as Art, it deals with decision-making processes through application of practical and
personal skills.

The art of management begins where the science of management ends. Science provides
knowledge and art helps in application of knowledge. Science provides the knowledge of
management principles and art helps in skillfully applying those principles to solve managerial
problems.

While science explains ‘why’ of a situation, art explains ‘how’ of it. Art explains how the
problem can be solved once it is known why it has occurred. There is no best way to solve that
problem. Every manager has individual approach and solves it to the best of his experience,
knowledge, skill and creativity.
A successful manager has knowledge and skill of applying management principles in specific
situations. The power of management lies in application of management science. Success in
management comes not from knowledge of management but from how well that knowledge is
applied in business situations.

3. Management as Profession:
What is a Profession?
Profession means occupation in some branch of advanced learning or science (for example,
medical profession). It refers to application of specialised knowledge acquired after formal
education and training programmes.

Features of Profession:
A profession is characterised by the following features:
(a) General principles or specialised knowledge:
Professionals base their decisions on certain principles. These principles grow out of specialised
knowledge that a person acquires through formal education and training programmes.

(b) Professional status through performance:

A person becomes a professional by continuously rendering services of specialised nature.
Professionals acquire their status through work and not favouritism.

(c) Code of ethics:
A specific code of ethics governs the functions of professionals. Professionals work within the
rules and regulations of that code. This ensures fair and honest dealings on their part. Ethical
code ensures that professionals are committed to their work in the best interest of society.
Violation of this code is subject to punitive actions.

(d) Dedication:
Though professionals practice for financial gains, they are guided by the service motive also.
True professionals work with complete dedication, commitment and loyalty.

(e) Association:
Every professional is guided by the norms of the association or council under which he exercises
his profession. After attaining formal education in medicine, for example, a doctor is registered
under the Medical Council of India. The association or council establishes the standards of
performance for the professionals.
(f) Professional qualification:
A person can exercise profession only after acquiring formal qualification and training.
Chartered accountants, doctors, lawyers etc. exercise their professions after acquiring formal
education in their respective fields.

Is Management a Profession?
(a) General principles or specialized knowledge:
As management is a separate discipline, there are management principles and theories formally
taught in management schools. These principles and theories help in efficiently discharging
organizational duties, though application of these principles and theories changes according to
situations. Management can, thus, be called a profession.

(b) Professional status through performance:

In this regard management is not truly considered to be a profession, though gradually it is
moving towards professionalism Though management is formally taught in management
schools, one can find people who hold managerial positions not by virtue of their performance
but through favoritism.

People attain managerial positions through personal and political links. In today’s world where
competition is intense, we are moving towards the end where management will become a full-
fledged profession, that is, only those holding formal degree in management will acquire
managerial positions.

(c) Code of ethics:
Although code of ethics has been established by the All India Management Association, there is
no strict adherence to it. Non-compliance to the code is not followed by punitive action. Though
managers should look after the interests of the owners and other stakeholders, there is no
universally accepted code of ethics for managers.

There is no controlling body which ensures that ethical code in management is strictly observed.
The All India Management Association does not fully represent the professional managers.
Management cannot, therefore, strictly be termed as a profession on this ground. Though not
compulsory, managers follow this code and perform ethical business practices to prosper in the
competitive business world.

(d) Dedication:
In almost every organization, managers practice principles and theories with complete dedication
and commitment. They constantly integrate organizational resources to harmonies organizational
goals with goals of individuals. They dedicatedly work towards the attainment of organizational
and individual goals. Management is, thus, a profession on this basis.

(e) Association:
Although All India Management Association exists to govern the smooth conduct of managerial
practices, it is not compulsory for managers to become members of this Association. On the
basis of an association establishing the standards of performance for managers to exercise
managerial activities, management cannot be completely called a profession.

(f) Professional qualification:

Though there are many institutions providing formal education and training in management
programmes, yet it is not rare to find practicing managers who have not acquired formal degree
in the management courses but still prove to be successful managers. This is because of the
experience they gained by holding various managerial positions. No formal code of ethics is,
therefore, followed by all successful managers. In this sense of the term, management may not
qualify to be termed as a profession.

It may be concluded that management is a profession on the basis of features like general
principles or specialized knowledge and dedication, but it cannot truly be termed as a profession
on the grounds of professional status, code of ethics and management association. Nevertheless,
management being a distinct field of study is moving towards a full-fledged profession.

In this regard, Peter F. Drucker remarks:

“Management is professional — Management is a function, a discipline, a task to be done; and
managers are the professionals who practice this discipline, carry out the functions, and
discharge these tasks.”

Management is fast moving towards professional status as is evidenced by:

(i) Growing body of systematized knowledge.

(ii) Growing number of professional institutes providing knowledge of management.

(iii) Growing awareness of ethical practices followed by business organizations.

(iv) Growing emphasis on management being practiced by management experts or consultants.

Professionalization of Management:
The society of 1900s had few, small-sized institutions managed by the family heads.
Government looked after the needs of the society. There were almost no or very few business
institutions. Small workshops, small educational and health centers and professions (medicine,
law or engineering) were practiced at the individual level.

Institutions were owned by individuals who fulfilled their financial and non-financial needs.
These individuals, as heads and owners of the institutions were also the managers of the
institutions. Development, at that time, was a function of savings and capital investment.

Management was primarily family-managed as:

(i) Both ownership and control of business were in the hands of the family heads, and

(ii) The focus was an profit than social values.

As control was in the hands of family heads with delegated positions to other members of the
family, they managed the business according to value system of the family, and since different
families had different value systems, the organizations headed by different families were
managed differently.

Though professional services like those of accountants, engineers and lawyers were hired, these
professional were paid for their services. They did not have the decision-making authority as that
was centralized with the head of the family who managed the business on the basis of his
knowledge and judgment rather than professionalism.

Even in the public sector, management was more or less non-professional. Bureaucracy prevailed
and the top-level managers represented the voice of the bureaucrats. The professional
competence was, thus, lacking which largely contributed to low performance at the micro level
and economic development at the macro level. Though resources were not scarce, they were not
optimally utilized for lack of professional competence.

1. Competition was not intense and organizations were not very large in size. Profit was the
major yardstick used to measure organizational success which was often achieved even without
professionalization of management. This developed a belief that family heads and bureaucrats
could achieve organizational success even without professionalization of management.
2. Being small in size, ownership and management remained in the same hands. Even in large
organizations, though the Board was legally constituted, control was in the hands of few
influential people who were the owner entrepreneurs. While the flavor of professionalization was
missing, the centralized approach to management proved successful. This did not encourage
professionalization of management.

3. Public sector organizations were managed by civil servants appointed by the Government.
These civil servants were better technocrats than managers. Though, however, they managed the
business enterprises, they did not adopt professional managerial practices.

Professional management was, thus, almost unknown to most of the business enterprises until
after the outbreak of World War I. After the First World War, management came to be
recognized as a distinct field of study. Herbert Hoover (1874-1964) and Thomas J. Masaryk
(1850-1937) were amongst the pioneers who felt the need for principles of management to
restore the economies destroyed during the war.

With emergence of large scale business and non-business organizations (schools, hospitals,
research organizations etc.) during mid 1900s, our society became a society of institutions. It
became a pluralist society in the sense that people relied on a number of institutions to satisfy
their varied needs, like economic goods, health care, social and security needs, education,
research etc. These institutions became so large in size that owners could neither meet their
financial requirements nor manage them effectively. There was, thus, diversion of ownership
from management.

Managers were appointed who helped these enterprises by:

1. Increasing their productivity.

2. Analyzing the impact of organizational activities on social values, culture and beliefs.

3. Creating new business opportunities rather than optimizing the existing ones. This created
manager-entrepreneurs.

4. Improving the performance in the field of economic tasks, health care, education or
environment.
5. Producing economic and social development along with savings and capital investment.

In the era of globalization, management is viewed as a:

1. Force to bring economic, organizational and social reforms.

2. Work with its own tools, skills and techniques.

3. Discipline with an organized body of knowledge which can be applied in almost every
situation and every organization — business or non-business.

4. Culture with a set of traditional values, customs and beliefs. This helps in moulding cultural
aspects of the society.

5. Practice where management as a discipline is not just a codified set of knowledge.

Management is practiced, performed and is result-oriented.

6. Multi-institutional force, where the need for management is felt in all institutions, business as
well as non-business.

7. Multinational discipline. The world today is a single market and management cannot be
confined within the boundaries of the country. Management is becoming an institution of a
global economy.

“Management is independent of ownership, rank or power. It is an objective function and ought

to be grounded in the responsibility for performance. Professional-management is a function, a
discipline, a task to be done; and mangers are the professionals who practice this discipline, carry
out the functions, and discharge these tasks. It is no longer relevant whether the manager is also
an owner; if he is, it is incidental to his main function, which is to be a manager.” — Peter F.
Drucker

Management is becoming a professional discipline because of the following reasons:

1. As business firms grew in size, it became difficult to manage them in the traditional way. The
management policies were re-examined and sophisticated management techniques were applied
which required professionalization of management.

2. Initially the public sector was managed by non-professional managers. With increase in their
complexity and growing internationalization, the market did not remain protective and free from
competition. Ownership and management got separated and professionally qualified managers
were appointed to manage these enterprises.

3. Trained, skilled and educated managers also led to professionalization of management.

Management education is imparted on full-time and part-time basis. Short-term management
development courses are offered by many institutes.

Many business organizations in the private and public sector have management development
centres to train the managers. Even small companies prefer their managers to attend the short-
term management development programmes. The entire viewpoint is changing from owner-
managers to professional managers.

5. Notes on the Importance of Management:

Management plays important role in shaping the culture of organization. The performance and
survival of organization depends on its management.

Peter F. Drucker, in this regard remarks:

“Management is the specific organ of the modern institution. It is the organ on the performance
of which the performance and the survival of the institution depends.”

The modern society is dependent upon organizations for its survival. Organizations help
the society in the following ways:
1. They help in the attainment of individual goals.

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

knowledge for future generations.

3. They provide career opportunities to individuals.

A well-managed organisation can effectively utilise its resources (human, physical and financial)
and achieve its objectives as well as meet the society’s needs. Effectiveness (doing the right
things) along with efficiency (doing things right) is the fundamental key to managerial success.

As Drucker puts it, the manager’s need to make the most of opportunities “implies that
effectiveness rather than efficiency is essential to business. The pertinent question is not how to
do things right, but how to find the right things to do, and to concentrate resources and efforts on
them.” It was the effectiveness of management that helped the economies restructure their
operations in the post World War II period.

The importance of management is as follows:

(i) Achievement of organisational goals:
Management helps to effectively design the goals and frame plans to achieve them efficiently.

(ii) Optimum utilisation of organisational resources:

Management helps the organisation utilise its scarce resources (human, physical and financial
resources) efficiently.

Human resources are the people with their talent, skill, knowledge, experience and abilities for
effective conversion of inputs into outputs.

Material or physical resources are the raw material or plant and machinery for producing goods
and services.

Financial resources are the funds needed to meet organisational short-term and long-term
requirements of current and fixed assets.

(iii)  Develop analytical and conceptual ability of managers:

Management helps to analyse the organisational problems, link them with other organisational
matters and arrive at solutions geared towards organisational goals.

(iv) Balance between multiple goals:

At a point of time, managers face multiple goals. Deciding about what is more important so that
scarce organisational resources can be optimally allocated to different organisational goals, is
facilitated through management.

(v) Economic and social development:

Drucker asserts that “developing countries are not underdeveloped, they are undermanaged.” If
knowledge of management is transferred from developed to developing countries, developing
countries will develop their entrepreneurial ability, managerial excellence, rate of savings, capital
formation and, thus, economic and social development.
“Savings and capital investment do not produce management and economic development. On the
contrary, management produces economic and social development, and with it savings and
capital investment.” — Drucker

(vi) Coordination between individual and organisational goals:

Effective management coordinates individual goals with formal goals of the organisation. It
motivates employees to put their best efforts to contribute to organisational goals and through it,
achieve their personal goals.

(vii)  Face competition:

Management helps to face tough competition in the contemporary business environment.
Effectively managed firms outperform those which are not effectively managed and, thus,
capture bigger share of the market.

Management promotes innovation as fast changing technology, social processes and organisation
structures have become inevitable part of organisational working. It helps to adopt the complex
environmental changes and promote their level of competence.

(viii) Social upliftment:
Management promotes social development by generating and directing human energies towards
the needs of the society such as health care, education, clean environment etc.

(ix) Reform Government and society:

Management teaches respect for individual values, tradition and social culture. “It will
increasingly stand for the quality of life of a society as much as for its standard of living.”

“Management will increasingly be concerned as much with the expression of basic beliefs and
values as with the accomplishment of measurable results.” — Drucker

(x)  Social innovation:

The social and economic development is more a result of social innovation than technical
innovation. The needs of our society, educare, health care, clean environment, entrepreneurship,
productivity etc. are fulfilled through able and skilled managers.

Management, therefore, plays important role in the social upliftment of society. “Economic and
social development are the result of management. Development is a matter of human energies
rather than of economic wealth. And the generation and direction of human energies is the task
of management. Management is the mover and development is a consequence.”

(xi) Foundation to organisation:
Clearly defined tasks, their distribution to people with authority provides foundation to the
organisation. It assigns right task to the right person to avoid duplication and confusion in
organisational activities.

(xii) Environmental analysis:
Management enables an organisation to analyse its strengths and weaknesses and relate them
with environmental threats and opportunities. (This is done with the help of SWOT analysis). It
helps to minimize risks and maximise environmental opportunities and business gains.

6. Notes on the Functions of Management:

“Management is the coordination of all the resources through the process of planning,
organising, directing and controlling in order to attain stated objectives.”

“Management is principally the task of planning, coordinating, motivating and controlling the
efforts of others towards specific objectives.”

Management is a process because it involves a series of inter-related functions. The management

process includes planning, organising, staffing, directing and controlling functions.

Management as a process has the following implications:

1.  Management as social process:
Management process involves interaction amongst people. Goals can be achieved only when
relations between people are productive.

2.  Management as integrated process:

Management process brings together human, physical and financial resources. Management
process also integrates human efforts to maintain harmony.

3.  Management as iterative process:

All managerial functions are contained within each other for example, when a manager prepares
plans, he is also making standards for control.
4.  Management as continuous process:
Management involves continuously identifying and solving problems. It is performed again and
again. Management process is identified as a set of functions performed by managers to
accomplish organisational goals, that is, management functions explain the process of
management.

Management functions provide structure to management service, theory and practice. The
knowledge of management revolves around management functions. Functions mean activity and
management functions mean activities performed by managers.

There are two types of functions performed by managers:

(i) Operative functions are the operations performed by managers:
Four basic operative functions performed in a manufacturing organisation are production,
finance, personnel and sales. The nature of functions varies from organisation to organisation. In
a trading organisation, these functions are buying and selling. In a banking organisation, these
are lending and borrowing.

(ii) Managerial functions are universal in nature:

Whatever be the nature of organisation, manufacturing or trading, they are performed for each
operative function. Whichever operative function manager performs (product or finance), these
functions are performed in all functional areas.

7. Notes on the Tasks of Management:

Peter F. Drucker defined three important tasks that management should perform:
(i) Purpose and objectives of the organisation:
Every institution exists for a specific purpose. Business institution exists to achieve economic
results and non-business institution exists to accomplish the non-economic goals. Their basic
purpose is social tasks, e.g., education or health care.

Business management deals with business goals, i.e., the economic goals. The practice of
management can be felt only if the objective of profit maximisation or wealth maximisation is
achieved. The institution must achieve its economic goals and provide quality goods to
consumers at the right price.
(ii) Making work productive and the worker possessing a sense of achievement:
An institution is efficient if it makes the work productive. It implies efficient conversion of
inputs (materials) into outputs (goods and services). The basic force that helps in conversion is
the human factor. Without human resource, inputs would remain as inputs only. Development
cannot be achieved, whatever be the resources, unless human force acts upon it. It is, thus, an
important task of management to make work productive by making the human resource
productive.

The human element not only helps to achieve the organisational goals but also provides a sense
of accomplishment to workers. People work to earn a living and achieve some status in society.
This is reflected in worker achievement.

Making the worker achieving implies “consideration of human being as an organism having
peculiar physiological and psychological properties, abilities and limitations and a distinct mode
of action.” It is, thus, an important task of managers to ensure that within the physical and mental
abilities and limitations, people achieve satisfaction out of their jobs.

(iii)  Social responsibilities:

The business enterprise or a non-business enterprise does not operate in isolation. Though it
provides a living to workers and gives them social status in the society, it is also answerable to
other sections of the society i.e. consumers (providing quality goods and services), Government
(paying taxes regularly), general community (environment protection) and shareholders
(regularly paying dividends). Though profit or wealth maximisation is the main objective of an
enterprise, social responsibilities are also important for its survival.

8. Notes on the Aspects of Management:

Management is a multidisciplinary field of study and draws its concepts and principles from
various disciplines such as economics, anthropology, sociology, psychology, etc.

Considering these diverse views, management is viewed as:

(i) An Activity

(ii) A Process

(iii) A Discipline
(iv) A Group

(v) An Economic Resource

(i) Management as an Activity:

Activity means exercising some kind of action. It refers to actions performed by managers to
achieve organisational objectives within the constraints of internal and external environmental
variables.

Management as an activity is “the art of getting things done through people” — Mary Parker
Follett.

Management as an activity refers to what managers actually do rather than what they should do
to achieve organisational goals. What managers actually do defines the role of managers.

Management as an activity, thus, defines the role of managers. Empirical evidence has proved
that managers perform ten roles which can be broadly classified into three.

These are described below:

1. Interpersonal roles or activities:
Management is the art of getting things done through others. In dealing with others, managers
contact their superiors, peers, subordinates and outside parties. They greet people; attend
functions; receive official visitors; hire, train and motivate employees; solve their psychological
and work-related problems and communicate with people within (superiors, subordinates and
peers) and outside (consumers, suppliers, government etc.) the organisation. Though these
activities are routine in nature, they help in running the organisation smoothly.

2. Informational roles or activities:

In dealing with people within and outside the organisation, managers communicate with
stakeholders like consumers, creditors, employees, suppliers, Government etc. They need
information to make right decisions and communicate them to members.

In this context, managers perform activities like collect information from various journals and
conduct tours; transmit information to members through meetings, notices and circulars and
interact with people outside the organisation to communicate the company’s plans and policies.

3. Decisional roles or activities:

The information collected by managers in informational roles is not only communicated to others
but also used by them as inputs for making decisions. In this regard, managers use market
information to launch a new product, solve organisational disturbances like strikes, lock outs
etc., allocate scarce resources over business activities in the order of priority and negotiate
amongst parties within (employees and employers) and outside (organisation and suppliers or
union representatives) the organisation.

(ii) Management as a Process:
This is the practitioner’s view of management. Process means a course of action or proceeding.
“Management is the process of planning, organising, leading, and controlling the efforts of
organisation members and of using all other organisational resources to achieve stated
organisational goals.” Process defines management as a set of functions performed by managers
regardless of their level, aptitude and skills.

Functions performed by managers while they regard management as a process are briefly
explained below:
1. Planning:
In planning, managers think in advance, the goals of the organisation and the ways to achieve
these goals.

2. Organising:
In organising, managers coordinate financial and non-financial resources of the organisation to
achieve its goals.

3. Leading:
It refers to activities performed by managers to direct and influence the behaviour of
subordinates. This is done through motivation, leadership and communication.

4. Controlling:
It refers to measuring actual organisational performance and ensuring that it conforms to planned
performance. It attempts to find deviations and take measures to correct them.

Since management continuously deals with people and integrates the human resource
with non-human resources (men, money, material, machines), it is generally defined as:
(a) A social process:
Management deals with people. It makes best use of human resource to convert the inactive
resources into productive outputs (goods and services). It understands human needs and satisfies
them through various motivational factors, both financial (money) and non-financial (power,
prestige, recognition etc.).

(b) A continuous process:

Managers continuously perform the functions of management. Organisations strive to achieve
their goals and, therefore, continuously need management to integrate their resources.

(c) An integrating process:

Management coordinates the activities of departments (production, personnel, marketing and
finance) and resources (human and non-human) to maximise output at minimum cost.

(iii)  Management as a Discipline:

Management, as a discipline, is a distinct field of study with well defined concepts and
principles. These principles help in practicing management as Art or Science.

Though management practices ideas from other fields of study as psychology, sociology etc., it
is a complete discipline in itself.

Management, which was introduced as a distinct field of study in the year 1886, has grown to an
enormous size today.

Some of the important characteristics of management as a discipline are as follows:

1. The increasing importance of management is evidenced by the fact that number of students
enrolling in management study is on a constant increase. Around 20-30% of students today join
management institutions.

2. The number of articles, journals, text-books and reference books on management is on a

constant increase.

3. Management is formally taught in Universities as “Management of Business Administration

(MBA)”. In fact, many institutes are named as Institutes of Management.

4. Though management still remains to be called a profession in the true sense of the term, as
medicine and engineering, it is fast moving towards professionalization.
(iv) Management as a Group:
Management is a group effort. An individual cannot manage the organisation alone. Managers at
all levels — top, middle and low, coordinate their efforts to establish organisational goals and
frame policies to achieve them.

The performance of organisation depends upon collective performance of managers. Top

managers are responsible for overall management of the enterprise. They frame plans and
integrate its working with the external environment. Top managers are titled as chief executives,
presidents or vice-presidents of a company.

Middle level managers mediate between top level and lower level managers. They integrate
plans and policies, guide and motivate the subordinates to excel in organisational performance.

Lower level managers are also known as first-line managers. They directly instruct the
employees to work according to plans.

Management as a group defines performing organisational tasks with and through others.

“Management is defined as the process by which a co-operative group directs actions towards
common goals”. — J.L. Massie

The group effort achieves efficiency in resource utilisation and effectiveness in achieving goals.
Efficiency means producing the same units of output with lesser number of inputs and
effectiveness means achieving the organisational goals successfully.

This is also the sociologist’s view of management. As the organisation becomes more complex,
there is need for a class of brains to manage these complexities. This can be done by a group of
people with specialised knowledge and education in the field of management. Management is,
thus, a separate class of people with specialised knowledge that deals with complexities of an
organisation.

(v) Management as an Economic Resource:

This is the economist’s view of management. Development depends upon the effective
utilisation of resources like men, material, capital, entrepreneurial ability etc. Co-ordination of
these resources is reflected in the end results of the organisation.
As the organisation moves from lower to higher levels of management, there is need for
research, development, innovation and invention. This can be done if the resources (human and
non-human) are effectively managed by the executives.

The management is, thus, viewed as a separate resource which largely determines the
productivity of the organisation. It is one of the factors of production together with land, labour
and capital. As Peter F. Drucker puts, “The greatest opportunity for increasing productivity is
surely to be found in knowledge, work itself, and especially in management.”

The progressing industries, thus, view management as a separate factor of production which is
increasingly required in industries which experience innovations and growth.

On this basis, “management is concerned with ideas, things and people”.

Management is concerned with ideas:

Ideas or thoughts are the route to organisational survival and success. Once an organisation starts
operations according to planned courses of action, it constantly changes its plans and policies to
exploit environmental opportunities and adapt to environmental changes.

Managers think of new ideas that lead to development and innovations, new markets and
customers, new technologies and product lines in the dynamic and changing environment. It is
necessary that managers are aware of internal and external environment and generate new ideas
to adapt to the changing environment. Generation of ideas helps in becoming market leaders.

Management is concerned with things:

Ideas would remain ideas if not converted into outputs. In order to convert ideas into reality,
managers use resources like men, material, money, technology etc. Management of things means
effective utilisation of organisational resources to produce outputs at minimum cost.

Management of people:
All ideas and things would remain inactive if people do not convert them into outputs. Workers
are not mere inputs of an organisation. They are active participants of the organisation who attain
its goals. Unless workers are satisfied with their jobs, they do not contribute effectively to
organisational output.
It becomes the duty of managers, therefore, to ensure that workers are satisfied both as
individuals and as members of groups (formal and informal). Satisfied workers merge individual
and group goals with formal goals and maximise organisational output.

Managers should devise effective methods of recruitment, selection, training and development,
offer them the jobs they are best suited for and provide them suitable motivators (financial and
non-financial) to keep them satisfied. This managerial effort is known as management of people.

9. Levels of Management:
Managers perform various managerial (planning, organising, staffing, directing and controlling)
and operative (production, personnel, finance and marketing) functions. The levels create a
hierarchy or scalar chain in the organisation structure.

The levels of management differentiate different managerial positions in the organisation. With
growth in size of the organisation and increase in the number of employees, there is increase in
the number of levels of the organisation and vice versa.

According to levels, managers and, accordingly management can be classified as follows:

I. Top level managers or Top management.

II. Middle level managers or Middle management.

III. Lower level managers or Lower management.

This distinction is based on authority, responsibility and nature of functions performed by

managers.

(i) Top Management:

Top management consists of managers who work at the highest level of the organisational
hierarchy. The number of managers in this group is generally the least. It is responsible for the
overall management of the organisation. Managers in this level are generally ‘chief executive
officers’, ‘president’, ‘vice-president’, ‘General Manager’, ‘managing director’ etc. though the
exact title varies from organisation to organisation.

Functions performed by top managers:

The top level management generally performs planning and co-ordination function. It lays down
the broad policies and goals of the organisation and is also accountable to the shareholders for
functioning of the organisation. All important decisions are made at this level.

Top managers perform the following functions:

(a) They lay the objectives, plans, policies and procedures for the organisation.

(b) They manage the organisation by performing the managerial functions of planning,
organising, staffing, directing and controlling.

(c) They appoint the executives for middle level i.e. departmental managers.

(d) They co-ordinate activities of various departments of the organisation.

(e) They integrate internal activities of the organisation with the external environment. They
update the internal environment according to changes in the external environment.

(f) They assemble the resources needed to put plans into action.

(g) They issue instructions for preparation of departmental budgets and procedures

(h) They decide future courses of action taking into consideration economic policies and other
social, national and international factors.

(i) They cater to the demands of various groups of stakeholders who interact with the
organisation, like Government, consumers, creditors, suppliers, owners, employees etc. and try to
harmonies their goals with organisational goals.

(ii) Middle Management:

Middle management consists of departmental heads. They serve as a link between top-level and
lower-level managers. It implements the organisational goals and plans according to directions of
the top management. They act as mediator between top and lower- levels management by
clarifying and explaining policies from top to lower-levels and communicate reports from lower-
level to the top-level management.

It also trains and boosts the lower-level managers for better performance. Middle-level managers
bridge the gap between two. It removes misunderstanding and creates cordial relationships
amongst the top and lower levels of management.
The organisation is divided into departments and middle level managers act as heads of their
respective departments. They are the ‘departmental managers’, ‘plant managers’,’ assistant
managers’ etc., the exact title, however, differs from organisation to organisation.

The heads of the various departments receive orders from the top level managers and they pass it
to their subordinates (lower-level managers). They supervise, direct and control the activities of
foremen, inspectors and supervisors. The middle- level management is answerable to the top
management for functioning of their departments. A large sized organisation has a fairly large
number of middle-level managers.

Functions performed by middle-level managers:

Middle-level managers perform the following functions:
(a) They communicate policy decisions of top managers to lower-level managers and guide
lower-level managers to implement them. Thus, they direct the activities of lower-level and
operating employees.

(b) They lay the goals, plans and policies for their respective departments and ensure their
successful accomplishment.

(c) They spend major part of their time (about 15%) in managing day-to-day operations of the
company. They do not actively interact with the outside parties (customers, suppliers etc.)

(d) They balance the demands of superiors with the capabilities of subordinates. They observe
the activities of lower-level managers and report them to top managers.

(e) They participate in employment and training of lower-level management.

(f) They coordinate the activities within their division or department.

(g) They send important reports and other important data to top management and evaluate
performance of junior managers.

(h) They inspire lower-level managers towards better performance.

(i) They motivate subordinates for higher productivity and award them for their outstanding
performance.

(j) They recommend amendments in policies of their respective departments.

(iii) Lower Management:
It is also called as operational level management. It consists of first-line managers or supervisors.
They serve as a link between middle-level managers and non-managerial employees. They
supervise the activities of non-managerial employees and co-ordinate their work with those
operating at higher levels of hierarchy.

They train the workers, look after their problems and try to solve them. They operate as the last
level of management. These managers are ‘foremen’, ‘supervisors’, ‘office managers’, ‘operating
managers’, superintendents, etc. They may be technical supervisors, production supervisors,
financial supervisors or marketing supervisors. An organisation has the largest number of
managers at the lower- level.

Functions performed by lower-level managers:

Lower-level managers perform the following functions:
(a) They supervise the activities of employees, issue instructions and help them execute those
instructions.

(b) They coordinate the work of employees with the organisational resources (financial and non-
financial).

(c) They train employees to perform better to ensure smooth conduct of business operations.

(d) They evaluate the performance of employees and send their reports to higher-level managers.

(e) They plan day-to-day operations of the business and do not deal with the outside world.

(f) They assign jobs and tasks to various workers. They also provide training to the workers.

(g) They are responsible for the quality and quantity of production.

(h) They help to solve grievances of the workers.

(i) They prepare periodical reports about the performance of the workers.

(j) They communicate workers’ problems, suggestions and appeals to higher levels.

(k) They receive instructions from middle-level management and implement them to achieve
routine functions of the business.
(I) They ensure safety of tools, machines and equipment’s on which workers perform the
operations.

(m) They create a sense of belongingness amongst workers which helps in building the image of
the enterprise.

Principles of Management – Fayol’s 14 Principles

 Division of Work – This principle of management is based on the theory that if workers
are given a specialized task to do, they will become skillful and more efficient in it than if
they had a broader range of tasks. Therefore, a process where everyone has a specialized
role will be an efficient one.
 Authority – This principle looks at the concept of managerial authority. It looks at how
authority is necessary in order to ensure that managerial commands are carried out. If
managers did not have authority then they would lack the ability to get work carried out.
Managers should use their authority responsibly and ethically.
 Discipline – This principle relates to the fact that discipline is needed within an
organization for it to run effectively. Organizational rules, philosophies, and structures
need to be met. In order to have disciplined workers, managers must build a culture of
mutual respect and motivation.
 Unity of command – There should be a clear chain of command in place within an
organization. An employee should know exactly whose instructions to follow.
  Unity of direction – Work should be organized in a way that means employees are
working in harmony toward a shared objective or goal using a shared method or
procedure.
 Subordination individual interests to the collective interests – The interests of the
organization as a whole should take precedence over the interests of any individual
employee or group of employees. This encourages a team spirit and collective mentality
of all for one and one for all.
 Remuneration – In order to motivate and be fair to employees, they should be paid a
reasonable rate for the work they carry out. An organization that underpays will struggle
to attract quality workers who are motivated.
 Centralization – This principle relates to whether decisions should be made centrally, as
in from the top down, or in a more democratic way, from the bottom up. Different
decision making processes are appropriate for different types of decisions.
 Scalar chain – This relates to the principle of a clear chain of communication existing
between employees and superiors. The chain should be respected, unless speedy
communication is vital, in which case the chain may be bypassed if all parties consent.
 Order – This relates to the proper use of resources and their effective deployment in a
structured fashion.
 Equity – Managers should behave ethically towards those they manage. Almost every
organization in the modern world will have a written set of policies and procedures which
will outline exactly what is expected from staff at all levels.
 Stability of tenure of personnel – It is seen as desirable within an organization to have a
low staff turnover rate. This is due to the benefits that come with having experienced staff
and the time and expense needed to train new ones. There should be a clear and efficient
method of filling any staff vacancies that arise.
 Initiative – Employees that have an input as to how to best do their job are likely to feel
more motivated and respected. Many organizations place a great deal of emphasis on
listening to the concerns of staff.
 Morale – Keeping a high level of morale and team spirit is an essential part of having the
most productive organization possible. Happy and motivated employees are far more
likely to be productive and less absent.

Useful notes on Management: Introduction, and Concept of Management!

Introduction to Management:
Every human being has several needs and wants.

But it is not possible for an individual to satisfy all his desires himself. Therefore, he joins hands
with his fellow- beings and works in an organized group to achieve, what he cannot accomplish
single handedly. There are many types of organized groups, viz., a family, a hockey team, a
college, a business firm, a government, etc.
Whatever may be the nature and kind of the group, it cannot work successfully unless there is
someone to manage its affairs. Management is essential, wherever group efforts are needed to be
directed towards certain goals. Group efforts become productive only when they are effectively
managed.

It is the management which plans, organises, co-ordinates and controls the affairs of an
enterprise. Every enterprise makes use of money, machinery and manpower. Management is
required to assemble and co-ordinate these resources in the best possible manner for the
achievement of the objectives of the enterprise.

Concept of Management:
The word ‘management’ can be styled as—Management (i.e., manage-men- tactfully). Why
manage men tactfully? This is with a view to getting the things done through others.
Traditionally, management means “managing men tactfully to get the things done through
others”. But the modern approach to management is much broader in scope than the traditional
one. It involves all kinds of activities which determine the objectives of the organisation.

It creates an environment for the achievement of these objectives with the help of various
functions. Thus, the modern concept of management is goal oriented and it creates an internal
environment for attaining the goals efficiently. The term management is also used as a process,
as a group, as a discipline and as an activity.

1. Management: A Process:
Management is considered as a process which includes all the activities—starting from the
setting up of objectives of a business enterprise to the taking up of steps which ensure the
attainment of these objectives.

The management process comprises all functions which transform resources such as men,
materials, money, machines, methods, marketing and management into products and services to
satisfy the consumers’ needs. These resources as a whole are termed as 7 M’s.

The functions performed during the process of transformation of resources (i.e., 7 M’s into
products and services) are known as management functions. Thus the management process
comprises of functions such as planning, organising, staffing, directing and controlling.

Features of Management-as a Process:

1. Continuous Process:
The task of the manager does not finish even after performing the last function of management
i.e., controls. His job again starts with the planning function and so on. So, management is a
continuous process.

2. Integrating Process:
All the functions of the management viz., planning, organising, staffing, directing, controlling
are performed for integrating the human and material resources for attainment the goals of the
organisation. Therefore, the management is an integrating process.

3. Social Process:
Management deals with human beings. A manager directs co-ordinates and controls the activities
of the human beings in order to achieve the pre-determined objectives. Thus, management deals
with the human beings. So, it is also a social process.

4. Universal Process:
The principles of management are applicable to all types of enterprises whether small (like
family unit) or big units such as multinational companies. Therefore, it is a universal process.

5. Interactive Process:
The functions of the management are interwoven i.e. two or more functions may be performed at
a time. For example, while preparing a plan a manager also sets the standards for control.

2. Management: A Group

Management as a group refers to those who carry the activities of management. So, the
management consists of all those persons who are managing the affairs of the business
enterprise. Therefore, the term management represents the group of people i.e., from chairman to
supervisor, because they are concerned with getting things done through others.

Now-a-days, the contribution of the proprietors/ owners in management of an enterprise has

decreased considerably. They are not in position to handle the different resources themselves as
per the modern requirements.

For this purpose they have to employ qualified and trained managers who are entrusted with the
resources (such as men, materials, money etc.) for achieving the objectives of the enterprise.
In a company form of organisation, the shareholders who are the real owners are scattered
throughout the country, and the company is managed by number of persons employed by it.
Thus, managing a business enterprise has become a group activity and ail those who are
performing managerial duties are termed as management.

The word ‘management’ also connotes as top management viz. Chief Executive or Chairman of
Board, Board of Directors, Managing Director etc. because the real decision making authority
lies with the top management. For the outsiders, the term ‘management’ is referred to as the top
management as they deal with day to day business of sale, purchase or other matters.

Characteristics:
(i) It comprises persons right from chief executive to the supervisor, who have been assigned
managerial duties.

(ii) It refers to top management only.

(iii) The word management is used as a collective noun.

3.  Management: A Discipline

Management has been developed as a fully fledged discipline (as a subject of study) in the due
course of time. The knowledge of management is being developed by number of scholars and it
is being formally taught to the students of management.

It includes the specialised functional courses viz.: Financial Management, Personnel

Management, Marketing Management etc. Thus, the management has grown as a separate
discipline of study.

Characteristics:
Management has been recognised as a full-fledged discipline since it contains the following
feature:
(i) It is an organised body of knowledge.

(ii) It can be learnt through teaching and training.

(iii) Its study produces qualified professionals.

(iv) Code of conduct and ethics for management personnel are being considered.

(v) Association of management, body managerial personnel is also coming into existence.

4.  Management: An Activity

The functional aspect of management is to organise the human and the material resources to
achieve the objectives of the enterprise. In this process, the managers have to perform many
activities.

These activities are:

1. Communication:
All the managers have to communicate with their superiors as well as subordinates either in
writing or orally.

2. Decision Making:
In an enterprise a manager has to take a number of decisions, such as recruitment of workers,
selection actually, all the activities of the management are regulated by decision-making process.

3. Human Relations:
Management involves the activities for getting the work done through others. Therefore, the
managers maintain good relations with subordinates. The managers even develop social relation
with their subordinates and look after their personal problems sympathetically.

In this way, the managers motivate the people to work hard for achieving the objectives of the
enterprise. Thus, the management is an activity which helps in developing the relations among
human beings.

Though used in different senses, the term management as a process is the most popular. Thus,
management may be defined as the sum total of all those activities which are undertaken to plan,
organise, direct and control the efforts of others to serve the interests of all. It involves the Co-
ordination of human efforts and physical resources towards the achievement of organizational,
individual and social objectives.