Prudence Management

Definition

Management is the organization and coordination of the activities of a business in order to

achieve defined objectives,

Management is often included as a factor of production along with, machines, materials and
money. The basic task of management includes both marketing and innovation. Practice of
modern management originates from the 16th century study of low- efficiency and failure of
certain enterprises.

Management consists of the interlocking functions of creating corporate policy and organizing,
planning, controlling, and directing an organization’s resources in order to achieve the
objectives of that policy.

Importance of Management

According to Peter Drucker, “management is what the modern world is all about.”

This statement means that all the development that has taken place in the world is due to
efficient management. The following points bring out the significance or importance of
management.

1) Encourages Initiative
Management encourages initiative. Initiative means to do the right thing at the right
time without being told or influenced by the superior. The employees should be
encouraged to make their own plans and also to implement these plans. Initiative gives
satisfaction to employees and success to organization.
2) Encourages Innovation
Management also encourages innovation in the organization. Innovation brings new
ideas, new technology, new methods, new products, new services, etc. this makes the
organization more competitive and efficient.
3) Facilitates growth and expansion
Management makes optimum utilization of available resources. It reduces wastage and
increase efficiency. It encourages team work and motivates employees. It also reduces
absenteeism and labor turnover. All this results in growth, expansion and diversification
of the organization.
4) Improves life of workers
Management shares some of its profits with the workers. It provides the workers with
good working environment and conditions. It also gives the workers many financial and
non-financial incentives. All this improves the quality of life of the workers.
5) Improves Corporate image
If the management is good, then the organization will produce good quality goods and
services. This will improve the goodwill and corporate image of the organization. A good
corporate image brings many added benefits to the organization.
6) Motivates employees
Management motivates employees by providing financial and non-financial incentives.
These incentives increase the willingness and efficiency of the employees. This results in
boosting productivity and profitability of the organization.
7) Optimum use of resources
Management brings together the available resources. It makes optimum (best) use of
these resources. This brings best results to the organization.
8) Reduces wastage
Management reduces the wastage of human, material and financial resources. Wastage
is reduced by proper production planning and control. If wastage is reduced then
productivity will increase.
9) Increase efficiency
Efficiency is the relationship between returns and cost. Management uses many
techniques to increase returns and to reduce costs. Higher efficiency brings many
benefits to the organization.
10) Improves relations
Management improves relations between individuals, group, and departments and
between levels of management. Better relations lead to better team work. Better team
work brings success to the organization.
11) Reduces absenteeism and labor turnover
Absenteeism means the employee is absent without permission.
Labor turnover means the employee leaves the organization.
Labor absenteeism and turnover increases the cost and cause many problems in the
smooth functioning of the organization. Management uses different techniques to
reduce absenteeism and labor turnover in the organization.
12) Encourage Team Work
Management encourages employees to work as a team. It develops a team spirit in the
organization. This unity brings success to the organization.
The importance of good management

The success of any business depends heavily on the effectiveness of its managers. Good
managers need to make the right decisions and ensure the business is able to exploit any
opportunities open to it. At the same time, good managers protect the business by anticipating
and acting against any threats to its welfare.

Managers have to;

 Forecast and plan to determine where the business is going

 Organize the resources necessary to achieve these objectives
 Command people to do things
 Coordinate the different activities
 Control the activities to make sure they are completed as planned.

Managers in an organization have to decide on its priorities and allocate resources within it.
They must decide what needs doing and how best to do it. A good manager should push the
business forward, as new challenges arise, and take responsibility for their decisions.

Characteristics of Management

1) Management as a continuous process

Management can be considered as a process because it consists of planning, organizing,
activating and controlling the resources (personnel and capital) of an organization. So
they are used to the best advantage in achieving the objectives of the organization.
None of the managerial functions would produce the ultimate results in the absence of
all other basic functions. Hence we can say that management is a continuous process.
2) Management as a discipline
Since the boundaries of management are not exact as that of any other physical science,
it may not fit in very well for being addressed as discipline. However its status as a
discipline increases because it continuously discovers many aspects of business
enterprises and also passed on the verified knowledge to the practitioners of the
managerial process.
3) Management as a career
As a career or occupation, management is a broad concept – Management itself can be
regarded as a career, but it also presents a variety of interesting and challenging careers
focused on specialized occupations in the fields such as marketing, finance and
personnel.
4) Management as an Applied Science
Even though management is a science so far as it possesses a systematized body of
knowledge and uses scientific methods of research, it is not an exact science, like
natural sciences which deal with living phenomena such as botany and medicine.
5) Universal Application
Management is a universal activity, applied to any form activity, economic or otherwise.
6) Goal Oriented
Management has the task of attaining certain objectives. The success or failure of the
management depends on how far it is able to attain the desired goals. It is judged by the
extent to which it achieves its targets.
7) Guidance
The main task of the management is guidance in the utilization of material and human
resources in the best possible way. Through optimum utilization of resources it has to
ensure that the objectives are attained. The essential element of management is that it
gets the work done by coordinating the performance of who’s who actually perform
diverse and specific jobs.
8) Divorced from proprietorship
Management does not signify proprietorship. In earlier days, management and
enterprise were lumped into the same factor. It now refers to a specialized group of
people who have acquired the ability to carry out a project.
9) An activating factor
Management is the factor which activates other factors of production. A manager’s skill
lies in motivating his workers through guidance, training, incentives, rewards, status,
security, control, etc. So a mangers’ ability lies in the fact that he is able to motivate
others to apply their skill to the best advantage of the enterprise in the accomplishment
of its objectives.
10) Management is a human activity
Management functions are discharged only by individuals. No corporate body or an
artificial being can perform the work of a management. Although it is an activity which
may be performed by an individual it cannot be seen. It can only be felt.
11) Management signifies authority
Since the essence of management is to direct, guide and control, it has to have
authority. Authority is the power to compel others to work and behave in a particular
manner. Management cannot discharge its function without authority. It is the
foundation of management. Since management has authority it stands at a higher
pedestal.
 12) Leaderships
The management has to lead a team of workers. it must be capable of inspiring,
motivating and winning their confidence.

Functions of Management

Henri Fayol defined five functions of management for the management component and these
are still seen as relevant to organizations today. These five functions focus on the relationship
between personnel and its management and they provide points of reference so that problems
can be solved in a creative manner.

1) Planning
Planning is looking ahead. According to Henri Fayol, drawing up a good plan of action is
the hardest of the five functions of management. This requires an active participation of
the entire organization. With respect to time and implementation, planning must be
linked to and coordinated on different levels. Planning must take the organisation’s
available resources and flexibility of personnel into consideration as this will guarantee
continuity.
2) Organizing
An organization can only function well if it is well-organized. This means that there must
be sufficient capital, staff and raw materials so that the organization can run smoothly
and that it can build a good working structure. The organizational structure with a good
division of functions and tasks is of crucial importance. When the number of functions
increases, the organization will expand both horizontally and vertically. This requires a
different type of leadership. Organizing is an important function of the five functions of
management.
3) Commanding
When given orders and clear working instructions, employees will know exactly what is
required of them. Return from all employees will be optimized if they are given concrete
instructions with respect to the activities that must be carried out by them. Successful
managers have integrity, communicate clearly and base their decisions on regular
audits. They are capable of motivating a team and encouraging employees to take
initiative.
4) Coordinating
When all activities are harmonized, the organization will function better. Positive
influencing of employees behavior is important in this. Coordination therefore aims at
stimulating motivation and discipline within the group dynamics. This requires clear
 communication and good leadership. Only through positive employee behavior
management can the intended objectives be achieved.

5) Controlling
By verifying whether everything is going according to plan, the organization knows
exactly whether the activities are carried out in conformity with the plan. Control takes
place in a four-step process;
i. Establish performance standards based on organizational objectives.
ii. Measure and report on actual performance
iii. Compare results with performance and standards
iv. Take corrective or preventive measures as needed

Each of these steps is about solving problems in a creative manner. Finding a creative solution is
often more difficult than discovering what the problem is, than making choices or the decision
making process. It starts with creating an environmental analysis of the organization and it ends
with evaluating the results of the implemented solution.

Management Roles

Management is incorporated into every aspect of an organization and involves different roles
and responsibilities. Henry Mintzberg , the Cleghorn Professor of Management studies at McGill
University, defined ten management roles within three categories; interpersonal, informational
and decisional.

Each of the three categories embraces the different roles.

Interpersonal

1 Figurehead: symbolic head; performs a number of routine duties of a legal or social

nature.
2 Leader: motivates and activates subordinates; performs staffing, training, and
associated duties.
3 Liaison: maintains a self- developed network of outside contacts and informers who
provide favors and information.

Informational

1 Mentor: seeks and receives a wide variety of special information (much of it current) to
develop a thorough understanding of the organization and environment; emerges as the
nerve center of internal and external information for the organization.
 2 Disseminator: transmits information received from outsiders or from other
subordinates to members of the organization. Some information is factual; some
involves interpretation and integration of diverse value position of organizational
influences.
Disseminating what is of value, and how is a critical informational role.
3 Spokesman: transmits information (plans, policies, results, etc.) within and outside of
the organization; serves as an expert on the organization’s industry.

Decisional

1 Entrepreneur: searches the organization and its environment and initiates improvement
projects to bring about change; supervises design of certain projects as well.
2 Disturbance Handler: takes corrective action when the organization faces important,
unexpected disturbances.
3 Resource Allocator: allocates the organization’s resources; makes or approves of all
significant organizational decisions.
4 Negotiator: represents the organization at major negotiations.

A manager’s job is never static; it is always dynamic. At any given time, a manger may carry out
some combination of these roles to varying degrees, from none of the time to 100 percent of
the time. Throughout an individual’s working life, a person may hold various management
positions that call upon different roles.

No one person can be all things to all people. While these ten roles are highly useful in framing
organizational leadership, to expect one person to fill each role in a large organization is
impractical. Instead, crafty hiring managers will hire people with one or two specific roles in
mind, thereby creating a team of managers capable of handling the wide variety of challenges
in the business world today.

Management Levels

Most organizations have three management levels:

 Low-level managers;
 Middle-level managers; and
 Top-level managers.

These managers are classified in a hierarchy of authority, and perform different tasks. In many
organizations, the number of managers in every level resembles a pyramid.
Top- Level Managers

The board of directors, president, vice – president, and CEO are all examples of top-level
managers.

These managers are responsible for controlling and overseeing the entire organization. They
develop goals, strategic plans, company policies, and make decisions on the direction of the
business.

In addition, top-level managers play a significant role in the mobilization of outside resources.

Top-level managers are accountable to the shareholders and general public.

Middle-level managers

General Managers, branch managers and department managers are all example of middle-level
managers. They are accountable to the top management for their department’s function.

Middle-level managers devote more time to organizational and directional functions than top-
level managers. Their roles can be emphasized as:

 Executing organizational plans in conformance with the company’s policies and the
objectives of the top management;
 Defining and discussing information and policies from top management to lower
management; and most importantly.
 Inspiring and providing guidance to low-level managers towards better performance.

Some of their functions are as follows;

 Designing and implementing effective group and intergroup work and information
system;
 Defining and motivating group-level performance indicators;
 Diagnosing and resolving problems within and among work group;
 Designing and implementing reward systems supporting cooperative behavior.
Low-level managers

Supervisors, section foremen are examples of low – level management titles. These managers
focus on controlling and directing.

Low level managers usually have the responsibility of:

 Assigning employees tasks;

 Guiding and supervising employees on day-to-day activities;
 Ensuring the quality and quantity of production;
 Making recommendations and suggestions; and
 Up channeling employee problems.

Also referred to as first-level managers, low-level managers are role models for employees.
These managers provide;

 Basic supervision;
 Motivation;
 Career planning
 Performance feedback; and
 Staff supervision.

Management skills

Management is, essentially, organization and coordination of the activities of a business to

achieve defined objectives. Organizations that are led by effective managers will experience low
turnover, maximum productivity, a high caliber of talent, and an increase in bottom-line results.

Make Your Managers Effective

An “effective” manager takes responsibility for ensuring that each individual within his
department succeeds and that the team or business unit achieves results. Successful managers
require both talent and skill. Effective management skills can be developed through training,
mentoring and experience. But if a manger is void of natural talent, then the odds that he will
be successful diminish significantly.

Develop Managers
The most productive companies are typically more proactive then their peers when it comes to
identifying and developing effective managers. The six most common managerial success traits
include communication, leadership, adaptability, relationships, development of others, and
personal development.

Teach Communication Skills

A manager with good communication skills is able to instruct as well as he listens. Managers
who can communicate effectively can process information, and then relate it back to their
teams clearly. Effective managers should be able to understand, decipher, and relate the
organization’s vision back to their employees in order to maintain productivity.

Expand Leadership Skills

Leadership is a crucial attribute that many mangers lack despite their job title. It is common
practice for companies to promote employees with the best results, but sometimes the best
salesman’s doesn’t make the best managers. True leaders are able to instill trust, provide
direction, and delegate responsibility amongst team members.

Encourage Adaptability

Adaptability also contributes to a manager’s effectiveness. When a manager is able to adjust

quickly to unexpected circumstances, he is able to lead his team to adjust as well. Adaptability
also means that a manager can thick creatively and find new solutions to old problems.

Foster Interpersonal Skills

Effective managers should strive to build personal relationships with teams. Employees are
more likely to exceed expectations when they trust their managers. When managers establish a
relationship with employees, it builds trust and employees fell valued. Valued employees are
more willing to get the job done right.

The best managers know when their employees need more development, and how to ensure
those developments are successful. Developing others involves cultivating each individual’s
talents, and motivating those individuals to channel those talents toward productivity.

Promote Personal Growth

Finally, an effective manager is aware of their own personal development. In order to
successfully develop and lead others, managers must seek improvement in themselves. A
manager who is willing to learn more and use their natural talents to the best of their ability
will be able to encourage the same behavior in employees.

Effective management skills are comprised of several key components, and are not easily
achieved. Organizations need to recognize the traits associated with successful management,
and then promote employees based on those traits. The highest achieving employees o not
always make the best managers, but employees that naturally exude the attributes desired by
managers are sure to be effective and successful in management roles.