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UNIT 1
MANAGEMENT
INTRODUCTION
In today’s volatile economies, every organization needs strong managers to lead its people
towards achieving the business objectives. A manager’s primary challenge is to solve problems
creatively and plan effectively. Managers thus fulfill many roles and have different
responsibilities within the various levels of an organization.
Management began to materialize as a practice during the Industrial Revolution, as large
corporations began to emerge in the late 19th century and developed and expanded into the early
20th century. Management is regarded as the most important of all human activities. It may be
called the practice of consciously and continually shaping organizations.
What is Management?
Management is a universal phenomenon. Every individual or entity requires
setting objectives, making plans, handling people, coordinating and
controlling activities, achieving goals and evaluating performance directed
towards organizational goals. These activities relate to the utilization of
variables or resources from the environment − human, monetary, physical,
and informational.
Human resources refer to managerial talent, labor (managerial talent, labor,
and services provided by them), monetary resources (the monetary
investment the organization uses to finance its current and long-term
operations), physical resources (raw materials, physical and production
facilities and equipment) and information resources (data and other kinds of
information).
Management is essentially the bringing together these resources within an
organization towards reaching objectives of an organization.
Management Defined
Management has been defined by various authors/authorities in various
ways. Following are few often-quoted definitions:
Management guru, Peter Drucker, says the basic task of management
includes both marketing and innovation. According to him, “Management is
a multipurpose organ that manages a business and manages managers, and
manages workers and work.”
Harold Koontz defined management as “the art of getting things done
through and with people in formally organized groups.”
All these definitions place an emphasis on the attainment of organizational
goals/objectives through deployment of the management process (planning,
organizing, directing, etc.) for the best use of organization’s resources.
Management makes human effort more fruitful thus effecting enhancements
and development.
Management is the process of planning, organizing, leading, and controlling an organization’s human, financial, physical, and information resources to achieve organizational goals in an efficient and effective manner
The principles of management are the means by which a manager actually manages, that is, get things done through others—individually, in groups, or in organizations.
Formally defined, the principles of management are the activities that “plan, organize, and control the operations of the basic elements of [people], materials, machines, methods, money and markets, providing direction and coordination, and giving leadership to human efforts, so as to achieve the sought objectives of the enterprise.”
Importance of Management
- It helps in Achieving Group Goals - It arranges the factors of production, assembles and organizes the resources, integrates the resources in effective manner to achieve goals. It directs group efforts towards achievement of pre- determined goals. By defining objective of organization clearly there would be no wastage of time, money and effort. Management converts disorganized resources of men, machines, money etc. into useful enterprise. These resources are coordinated, directed and controlled in such a manner that enterprise work towards attainment of goals.
- (^) Optimum Utilization of Resources - Management utilizes all the physical & human resources productively. This leads to efficacy in management. Management provides maximum utilization of scarce resources by selecting its best possible alternate use in industry from out of various uses. It makes use of experts, professional and these services leads to use of their skills, knowledge, and proper utilization and avoids wastage. If employees and machines are producing its maximum there is no under employment of any resources.
- Reduces Costs - It gets maximum results through minimum input by proper planning and by using minimum input & getting maximum output. Management uses physical, human and financial resources in such a manner which results in best combination. This helps in cost reduction.
highly inseparable. Each function blends into the other & each affects the performance of others.
1. Planning It is the basic function of management. It deals with chalking out a future course of action & deciding in advance the most appropriate course of actions for achievement of pre-determined goals. 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”. 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. 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. According to Henry Fayol, “To organize a business is to provide it with everything useful or its functioning i.e. raw material, tools, capital and personnel’s”. To organize a business involves determining & providing human and non-human resources to the organizational structure. 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 It is the function of manning the organization structure and keeping it manned. Staffing has assumed greater importance in the recent years due to advancement of technology, increase in size of business, complexity of human behavior etc. The main purpose o staffing is to put right man on right job i.e. square pegs in square holes and round pegs in round holes. 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 is that part of managerial function which actuates the organizational methods to work efficiently for achievement of organizational purposes. It is considered life-spark of the enterprise which sets it in motion the action of people because planning, organizing and staffing are the mere preparations for doing the work. Direction is that inert-personnel aspect of management which deals directly with influencing, guiding, supervising, motivating sub- ordinate for the achievement of organizational goals. Direction has following elements:
- Supervision
- Motivation
- Leadership
- Communication Supervision- implies overseeing the work of subordinates by their superiors. It is the act of watching & directing work & workers.
The personal ingenious and imaginative power of the manager lends management the approach of an art. This creative power of the manager enriches his performance skill. In fact, the art of managing involves the conception of a vision of an orderly whole, created from chaotic parts and the communication and achievement of this vision. Managing can be called "art of arts" because it organizes and uses human talent, which is the basis of every artistic activity.
Management as a Science
Management is a body of systematized knowledge accumulated and established with reference to the practice and understanding of general truth concerning management. It is true that the science underlying managing is not as accurate or comprehensive as physical sciences (such as chemistry or biology) which deal with non-human entities.
The involvement of the human angle makes management not only complex but also controversial as pure science. Nevertheless, the study of the scientific elements in management methodologies can certainly improve the practice of management.
Management as a Science and Art
Science urges us to observe and experiment a phenomenon, while art teaches us the application of human skill and imagination to the same. In order to be successful, every manager needs do things effectively and efficiently. This requires a unique combination of both science and art. We can say that the art of managing begins where the science of managing stops. As the science of managing is imperfect, the manager must turn to artistic managerial ability to perform a job satisfactorily.
Management as a Profession
Over a large few decades, factors such as growing size of business unit, separation of ownership from management, growing competition etc have led to an increased demand for professionally qualified managers. The task of manager has been quite specialized. As a result of these developments the management has reached a stage where everything is to be managed professionally.
A profession may be defined as an occupation that requires specialized knowledge and intensive academic preparations to which entry is regulated by a representative body.
Levels of Management
The term “ Levels of Management ’ refers to a line of demarcation between various managerial positions in an organization. The number of levels in management increases when the size of the business and work force increases and vice versa. The level of management determines a chain of command, the amount of authority & status enjoyed by any managerial position. The levels of management can be classified in three broad categories:
- Top level / Administrative level
- Middle level / Executory
- Low level / Supervisory / Operative / First-line managers
Managers at all these levels perform different functions. The role of managers at all the three levels is discussed below:
LEVELS OF MANAGEMENT
1. Top Level of Management It consists of board of directors, chief executive or managing director. The top management is the ultimate source of authority and it manages goals and policies for an enterprise. It devotes more time on planning and coordinating functions.
The role of the top management can be summarized as follows -
a. Top management lays down the objectives and broad policies of the enterprise. b. It issues necessary instructions for preparation of department budgets, procedures, schedules etc. c. It prepares strategic plans & policies for the enterprise. d. It appoints the executive for middle level i.e. departmental managers. e. It controls & coordinates the activities of all the departments. f. It is also responsible for maintaining a contact with the outside world. g. It provides guidance and direction. h. The top management is also responsible towards the shareholders for the performance of the enterprise.
2. Middle Level of Management
f. They help to solve the grievances of the workers. g. They supervise & guide the sub-ordinates. h. They are responsible for providing training to the workers. i. They arrange necessary materials, machines, tools etc for getting the things done. j. They prepare periodical reports about the performance of the workers. k. They ensure discipline in the enterprise. l. They motivate workers. m. They are the image builders of the enterprise because they are in direct contact with the workers.
Mintzberg’s Set of Ten Roles
Professor Henry Mintzberg, a great management researcher, after studying managers for several weeks concluded that, to meet the many demands of performing their functions, managers assume multiple roles.
He propounded that the role is an organized set of behaviors. He identified the following ten roles common to the work of all managers. These roles have been split into thre e grou ps as illust rate d in the follo wing figur e. Int erp ers on
al Rol e
- Figurehead – Has social, ceremonial and legal responsibilities.
- (^) Leader – Provides leadership and direction.
- Liaison – Networks and communicates with internal and external contacts.
Informational Role
- Monitor – Seeks out information related to your organization and industry, and monitors internal teams in terms of both their productivity and well- being.
- Disseminator – Communicates potentially useful information internally.
- Spokesperson – Represents and speaks for the organization and transmits information about the organization and its goals to the people outside it.
Decisional Role
depend on one another, and anticipate how a change in any of its parts will affect the whole.
- Creativity, broad knowledge and ability to conceive abstract ideas. For example, the managing director of a telecom company visualizes the importance of better service for its clients which ultimately helps attract a vast number of clients and an unexpected increase in its subscriber base and profits.
Other Managerial Skills
Besides the skills discussed above, there are two other skills that a manager should possess, namely diagnostic skill and analytical skill.
Diagnostic Skill : Diagnose a problem in the organization by studying its symptoms. For example, a particular division may be suffering from high turnover. With the help of diagnostic skill, the manager may find out that the division’s supervisor has poor human skill in dealing with employees. This problem might then be solved by transferring or training the supervisor.
Analytical Skill : Ability to identify the vital or basic elements in a given situation, evaluate their interdependence, and decide which ones should receive the most attention. This skill enables the manager to determine possible strategies and to select the most appropriate one for the situation.
For example, when adding a new product to the existing product line, a manager may analyze the advantages and risks in doing so and make a recommendation to the board of directors, who make the final decision.
Diagnostic skill enables managers to understand a situation, whereas analytical skill helps determine what to do in a given situation.
Scientific Management by Taylor
Fredrick Winslow Taylor ( March 20, 1856 - March 21, 1915) commonly known as ’Father of Scientific Management’ started his career as an operator and rose to the position of chief engineer. He conducted various experiments during this process which forms the basis of scientific management. It implies application of scientific principles for studying & identifying management problems.
According to Taylor, “Scientific Management is an art of knowing exactly what you want your men to do and seeing that they do it in the best and cheapest way”. In Taylors view, if a work is analysed scientifically it will be possible to find one best way to do it.
Hence scientific management is a thoughtful, organized, dual approach towards the job of management against hit or miss or Rule of Thumb.
The fundamental principles that Taylor saw underlying the scientific approach to management may be summarized as follows:
- Replace rule-of-thumb work methods with methods based on a scientific study of the tasks.
- Scientifically select, train, and develop each worker rather than passively leaving them to train themselves.
- Cooperate with the workers to ensure that the scientifically developed methods are being followed.
- Divide work nearly equally between managers and workers, so that the managers1 apply scientific management principles to planning the work and the workers actually perform the tasks.
Taylor concentrated more on productivity and productivity based wages. He stressed on time and motion study and other techniques for measuring work. Apart from this, in Taylor’s work, there also runs a strongly humanistic theme. He had an idealist’s notion that the interests of workers, managers and owners should be harmonized.
Criticism of Scientific Management
Although it is accepted that the scientific management enables the management to put resources to its best possible use and manner, yet it has not been spared of severe criticism.
Workers Viewpoint
- Unemployment - Workers feel that management reduces employment opportunities from them through replacement of men by machines and by increasing human productivity less workers are needed to do work leading to chucking out from their jobs.
- Exploitation - Workers feel they are exploited as they are not given due share in increasing profits which is due to their increased productivity. Wages do not rise in proportion as rise in production. Wage payment creates uncertainty & insecurity (beyond a standard output, there is no increase in wage rate).
- Monotony - Due to excessive specialization the workers are not able to take initiative on their own. Their status is reduced to being mere cogs in wheel. Jobs become dull. Workers loose interest in jobs and derive little pleasure from work.
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Elt on Ma yo an d Hu go Mu ns ter be rg ar e co nsi de red pi on ee rs of thi s school. The most important contribution to this school of thought was made by Elton Mayo and his associates through Hawthorne plant of the Western Electric Company between 1927 and 1932.
Following are the findings of Mayo and his colleagues from Hawthorne studies:
- Human/social element operated in the workplace and productivity increases were as much an outgrowth of group dynamics as of managerial demands and physical factors.
- Social factors might be as powerful a determinant of worker-productivity as were financial motives.
- Management with an understanding of human behavior, particularly group behavior serves an enterprise through interpersonal skills such as motivating, counseling, leading and communicating – known as Hawthorne effect.
- Employees or workers are social beings, so it is very important to fit them into a social system, resulting in a complete socio-technical system in an organization.
Criticism
Following are the criticisms of Hawthorne studies:
- Unreasonably high emphasis on the social or human side as against organizational needs.
- The approach facilitates exploitation of employees by keeping them satisfied and happy, manipulating their emotions which in fact, serves the management goal of increasing productivity.
Contingency Approach
The ‘Contingency Approach to Management’ is relatively a new approach to management.
It is an extension of the system approach. The basic idea of the contingency approach is that the organisation has to come up with different situations in different ways.
There is no single best way of managing applicable to all situations.
In order to be effective, the internal functioning of an organisation must be consistent with the demands of the external environment. The managers must keep the functioning of an organisation in harmony with the needs of its members and the external forces.
The main characteristics of the Contingency Approach to
management are pointed out below:
- Management is entirely situational. The application and effectiveness of any technique is contingent on the situation.
Some of the major limitations of contingency approach are as follows: 1. Inadequate Literature 2. Complex 3. Difficult Empirical Testing 4. Reactive not Proactive.
In-spite of the various contributions, contingency approach has not been acknowledged as a unified theory of management because it suffers from some limitations.
ADVERTISEMENTS:
These limitations are of following nature:
1. Inadequate Literature: Contingency approach suffers from inadequately of literature. Therefore, it has not adequately spelled out various types of actions which can be taken under different situations. It is not sufficient to say that ‘a managerial action depends on the situation.’
The approach should provide ‘if this is the situation, this action can be taken.’ Unless, this is done, the approach cannot offer much assistance to the practice of management. No doubt, researches have been conducted in this direction but, by and large, they have not satisfied the needs of managers.
2. Complex: ADVERTISEMENTS:
The suggestion of the approach is very simple, that is, managers should do according to the needs of the situation. However, when put into practice, this becomes very complex. Determination of situation in which managerial action is to be taken involves analysis of a large number of variables with multifarious dimensions. Therefore, there is a possibility that managers, who are always short of time, may ignore the thorough analysis of all these variables and may resort to short-cut and easier way.
3. Difficult Empirical Testing: Contingency approach being complex, presents problems in testing the percepts of the theory. For empirical testing of the theory, it is necessary that some methodology is available. No doubt, methodology is available but because of the involvement of too many factors, testing becomes difficult. 4. Reactive not Proactive: Contingency approach is basically reactive in nature. If nearly suggests what managers can do in a given situation. For a given organisation, super system constitutes environment and management can be applied to supra-system also. Therefore, managers are responsible to manage the environment in such a way that they avoid the undesirable aspects of environment.
System Approach to Management:
Definition, Features and Evaluation!
In the 1960, an approach to management appeared which try to unify the prior schools of thought. This approach is commonly known as ‘Systems Approach’. Its early contributors include Ludwing Von Bertalanfty, Lawrence J. Henderson, W.G. Scott, Deniel Katz, Robert L. Kahn, W. Buckley and J.D. Thompson.
They viewed organisation as an organic and open system, which is composed of interacting and interdependent parts, called subsystems. The system approach is top took upon management as a system or as “an organised whole” made up of sub- systems integrated into a unity or orderly totality.
Systems approach is based on the generalization that everything is inter-related and interdependent. A system is composed of related and dependent element which when in interaction, forms a unitary whole. A system is simply an assemblage or combination of things or parts forming a complex whole.
One its most important characteristic is that it is composed of hierarchy of sub- systems. That is the parts forming the major system and so on. For example, the world can be considered-to be a system in which various national economies are sub-systems.
In turn, each national economy is composed of its various industries, each industry is composed of firms’ and of course a firm can be considered a system composed of sub-systems sudi as production, marketing, finance, accounting and so on.
Features of Systems Approach:
(i) A system consists of interacting elements. It is set of inter-related and inter- dependent parts arranged in a manner that produces a unified whole. (ii) The various sub-systems should be studied in their inter-relationships rather, than in isolation from each other.
(iii) An organisational system has a boundary that determines which parts are internal and which are external.
(iv) A system does not exist in a vacuum. It receives information, material and energy from other systems as inputs. These inputs undergo a transformation process within a system and leave the system as output to other systems.
(v) An organisation is a dynamic system as it is responsive to its environment. It is vulnerable to change in its environment.
