DELHI PUBLIC SCHOOL AGRA

(Under the aegis of Delhi Public School Society, East of Kailash, New Delhi)

CHAPTER-1: NATURE AND SIGNIFICANCE OF MANAGEMENT

Management: Concept

Management is a process of getting work done with the aim of achieving the goals of an organisation in an
efficient and effective manner. Management is always needed whenever human and non-human resources work
together to achieve any objective.

“Management is the process of designing and maintaining an environment in which individuals,

working together in groups, efficiently accomplish selected aims”
-Koontz and Weihrich

Key terms in the definition of management

Process: Process means the interrelationship among the basic functions of management such as planning,
organising, staffing, directing and controlling. None of the functions can be performed in isolation.

Effectiveness: Completing a given work in the required time with a focus on the end results.

Efficiency: Doing task correctly with the minimum possible cost and resources.

Interrelationship between Effectiveness and Efficiency

Both effectiveness and efficiency are two prime inputs for achieving an organisation‟s goals. However, a trade-
off has to be often made between them. This means that if an organisation aims at achieving efficiency, then it
may have to compromise on effectiveness and vice versa.
Effectiveness (completing the work) + Efficiency (Reducing the cost) =Achievement of goals.
Thus, a balance must be maintained so as to complete the task (effectively) employing minimum resources with
a focus on cost minimisation (efficiently).
Features/Characteristics of Management

1. Management is Goal-oriented: Management consolidates the efforts of various individuals in an

organisation for the achievement of the common goals of the organisation.
2. Management is all pervasive: „Pervasive‟ implies practiced and followed by one and all. Management is
practiced and needed by all organisations irrespective of their geographical location and whether they are
large or small, whether they work for economic, social or political interest and whether they are located
in rural or urban areas.
3. Management is Multidimensional/Multi-Faceted Concept Management involves multiple
dimensions, namely, managing the work, managing the people and managing the operations.

(a) Management of work: All organisations exist for the performance of some work. Management
translates this work in terms of goals to be achieved and assigns the means to achieve it.
(b) Management of people: Human resources or people are an organization‟s greatest asset.
Managing people has two dimensions — dealing with employees as individuals with diverse
needs and behavior and individuals as a group of people. The task of management is to make
people work towards achieving the organization‟s goals, by making their strengths effective and
their weaknesses irrelevant.
(c) Management of operations: In order to survive and grow, every organization produces goods
and services. This requires a production process which entails the flow of input material and the
technology for transforming this input into the desired output for consumption. This is
interlinked with both the management of work and the management of people.

4. Management is a Continuous process: Various functions of management (such as planning, organising,

directing, staffing and controlling) are performed simultaneously and continuously by the managers at all
levels.

5. Management is a Group activity: Every Individual in an organisation work together as a part of the
same group for the fulfillment of the common goals of the organisation. But management must ensure
the individual growth and development of each member of the organisation.
6. Management is a Dynamic function: Every organisation operates in a dynamic environment. Factors
such as government policies, competitors‟ policies, consumers‟ tastes and preferences vary widely. Such
factors are collectively termed external forces. Thus, management must aim at adapting to various
changes in the external forces for the pursuit of the organisation‟s goals.
7. Management is an Intangible force: „Intangible‟ refers to something that „cannot be seen and cannot
be touched‟. Management as a process cannot be seen, but its presence can be felt by the success of an
organisation. For instance, a high degree of harmony and orderliness in an organisation confirms the
effectiveness of its management.

Objectives of Management

Management seeks to achieve certain objectives which are the desired result of any activity. In an organization
there are different objectives and management has to achieve all objectives in an efficient manner.

1. Organisational /economic objectives: Management is responsible for setting and achieving objectives
for the organisation. The main objective of any organization is to utilize human and non-human
resources in the most efficient and effective manner. Every organization aims to achieve following three
organizational objectives:
 a) Survival: The overall revenues must be adequate to cover the costs.
b) Profit: Profits must be earned such that the risks and costs are covered.
c) Growth: To continue in the long run, an organisation should focus on growth in terms of increased
sales volume, production, number of employees, increase in capital investment etc.

2. Social objectives: These are the objectives, which are desired to be achieved for the benefit of the
society. Business makes use of scarce resources of the society and so society expects something in
return for its welfare .Social objectives deals with fulfilling obligations towards the society. Some of
the major social objectives include:

a) Using environmental friendly methods of production.

b) Giving employment opportunities to the disadvantaged sections of society.
c) Providing basic amenities like schools and crèches to employees.
d) Supply of quality products at fair prices.
e) Conducting business in lawful manner.
f) Avoidance of anti-social and unfair trade practices

3. Personal objectives: Personal objectives refer to the objectives related to the individual needs of the
employees of an organization. Organisations are made up of people who have different personalities,
backgrounds, experiences, attitude, aptitude and objectives. Prosperity of employees should be the
primary objective of a business. Workers may lose interestin work if their objectives are neglected.
Management must try to integrate Personal objectives include satisfying following needs:

a. Financial needs like competitive salaries and perks (Employee benefits, usually in
addition to salary)
b. Social needs like peer recognition (self respect and respect for colleague)
c. Higher level needs such as policies for personal growth and development.
d. Providing good and healthy working conditions

Importance of Management

1. Management helps in achieving group goals: Management helps in achieving the goals of the
organisation by assembling and organising the necessary resources and building the proper
organisational structure which will act as a vehicle to reach the desired ends.
2. Management increases efficiency: All the resources of an organisation like labour and capital are
scarce and non-extendable. Management aims at a proper or optimum utilisation of these resources
to accomplish the desired results most efficiently.
3. Management creates a dynamic organisation: All business organisations operate in a constantly
changing environment. Through management process, it is easy to predict the future and make
adjustments accordingly. It also helps the people working in the organisation to overcome their
resistance to change and adapt as per the new circumstances and thereby ensure its survival and
growth.
4. Management helps in achieving personal objectives: Human resource is one of the important
factors of production. No organisation can function without it. Management helps to retain, develop,
grow and motivate the workers not only to help them attain their personal goals but also contribute
in a significant manner towards organisational objectives.
5. Management helps in the development of society: Management achieves its goals by serving the
general public at large. It helps in the development of society by providing quality products to the
consumer at fair and competitive prices, creating employment opportunities, development of
infrastructure and adoption of new technologies for the betterment of the people.
Nature of Management- Science, Art and Profession
The term „management‟ today has several connotations that highlight the different aspects of its nature.

Management as a science
Science may be defined as a systematized body of knowledge, acquired through observation and
experimentation, which is capable of verification.

1. Systematised body of knowledge: Science is a systematic body of knowledge .Its principles are based on
a cause and effect relationship.
Management has its own body of theories and principles that were developed over the years. Like all
other organized activity, management has its own vocabulary of terms and concepts. Thus, this feature is
present in management.
2. Principles based on experimentation: Scientific principles are based on continuous observation and
experimentation under controlled conditions.
Similarly, the principles of management have also been developed over the years based on repeated
observations. However, since management deals with human beings and human behaviour, the outcomes
of these experiments are not capable of being accurately predicted or replicated.
3. Universal validity: Scientific principles have universal validity and application.
This feature of science is also not fully applicable in management .Since the principles of management
are not as exact as the principles of science, their application and use is to be modified according to a
given situation.

Conclusion: It cannot be denied that management has a systematic body of knowledge but it is not as exact and
pure as that of other physical sciences like biology, physics, and chemistry etc. The main reason for the
inexactness of science of management is that it deals with human beings and it is very difficult to predict their
behavior accurately. Since it is a social process, therefore it falls in the area of social sciences. Ernest Dale has
called it as a Soft Science.

Management as an Art
Art refers to skillful and personal application of systematic knowledge to bring desired results.

1. Existence of theoretical knowledge: Art is based on some theoretical knowledge of concepts and
principles. For example, literature on dancing, public speaking, acting is widely recognized. This
feature of art is present in management. Management has its own literature for theoretical
knowledge and learning, such as Henry Fayol‟s principles of management and Frederick Taylor‟s
scientific management theory.
2. Personalized application: Art is a personalized concept as everyone applies the theoretical knowledge
in his own way. This feature of art is present in management as managers applies these scientific
methods and body of knowledge to a given situation, an issue or a problem in his own unique manner.
3. Based on practice and creativity: Application of art needs regular practice to do things creatively and
skillfully. This feature of art is also applicable in management as managers also improve their
managerial skills and efficiency with regular practice (application) of management theories and
principles.

Conclusion: On comparing the features of art with management, we can conclude that management is an art
as it satisfies all its characteristics.
Management as a Profession
Profession refers to an occupation backed by specialized knowledge and training, in which entry is restricted.

1. Well defined body of knowledge: Every profession has a systematized body of knowledge,
which can be learnt through instructions.
This feature of profession is present in management as knowledge of management can be
attained by studying in various management colleges and institutes and by reading
management books.
2. Restricted entry: Every profession restricts the entry on the basis of examination or
education. This feature is not applicable to management as no specific qualification or degree
is required to be a manager. It must be noted that now-a-days, more emphasis is placed on
taking management graduates in the organisation due to need for specialization.
3. Professional association: All professions are affiliated to a professional association which regulates
entry, grants certificate of practice and develops code of conduct. For example, a lawyer has to become a
member of Bar Council, to practice law in India. This feature is also not applicable to management as it
is not compulsory for a manager to be a member of any management association. Although, there are
management associations like All India Management Association (AIMA), but they do not enjoy legal
status and membership of such associations is not essential for practicing managers.
4. Code of conduct: A strict code of conduct exists in every profession. This feature is also not present
in management. Although, certain management associations have formulated ethical codes for
managers, but it is not obligatory for managers to abide by the code.
5. Service motive: The basic motive of a profession is to serve clients with dedication. For example,
task of lawyer is to ensure that his client gets justice. This feature is not fully applicable in
management as management aims to accomplish organizational goal, which is generally profit
maximization. In the present scenario, the objective of profit maximization is progressively
changing. To survive in this competitive world, management has to give due importance to social
obligations along with economic objectives.
Conclusion: Finally, it can be concluded that management does not possess all necessary features of
a profession. But, it is moving fast in the direction of becoming a profession.

Levels of Management-Top, Middle and Lower/Supervisory/Operational level of Management

 1. Top level management: Top level management consists of managers at the highest level of
hierarchy, e.g., chief executives, president, vice-president, board of directors, etc. The main
responsibilities of top level managers are:

(a) To establish and describe the overall objectives of the organisation and formulate
strategies for their achievement.
(b) To integrate the activities of various departments to achieve the objectives of the
organisation.
(c) They are responsible for the welfare and survival of the business.
(d) Analysing the business environment and its effect on survival and growth of the
business.
(e) They are responsible for all the activities of the organisation. Social
responsibility also lies with them.

2. Middle Level Management: This level of management consists of departmental heads other
executive officers attached to different department .of the organisation. The responsibilities of
middle level managers are:
(a) To implement and control plans and strategies developed by top level
management.
(b) To direct the activities of lower level managers and to act as a link between top and
operative management.
(c) To evaluate and regulate the departmental performance.
(d) Ensure that their department has the necessary personnel.
(e) Cooperate with other departments for smooth functioning of the organization
(f) Motivate personnel to improve their performance in order to achieve desired
objectives.

3. Lower Level Management: These managers rank at the lowest level in the organizational
hierarchy. They consist of foremen, supervisors, etc. The main responsibilities of lower level
managers are:
( a ) To oversee the work of operating emplo yees.
( b ) They act as liaison officers between middle level management and the workers.
( c ) To ensure that the quality of output is maintained, wastage of materials is minimized
and safety standards are maintained.
( d ) To ensure implementation of work as per instructions, orders and standards.
( e ) To send information and progress reports to higher level of management.
( f) To create better human relations and a conducive work environment .

Functions of Management

Planning: Deciding what is to be done, who is to do it and how Planning

it is to be done. It involves setting up the objectives and
deciding the appropriate course of action to achieve such Controlling Organising
objectives. It is basically a process of „thinking before doing‟.
Organising: Organising is the process of defining and grouping
the activities of the enterprise and establishing reporting
relationships among them. It helps in implementation of plans
by clarifying jobs and working relationships and effectively Directing Staffing
deploying resources for attainment of goals.
Staffing: Staffing is the function of management which is
 concerned with obtaining, utilizing and maintaining a satisfactory and satisfied workforce. It is the
process of obtaining and maintaining competent people to fill all positions from top to bottom.
Directing: Directing is telling people what to do and seeing that they do it to the best of their ability. It
is the process of supervising, motivating, leading and communicating with the subordinates to achieve
the organizational objectives.
Controlling: Controlling is concerned with comparing the results with the plans and taking
corrective actions when the results deviate from plans . It aims to ensure whether
everything is done according to predetermined goals.

Coordination

Co-ordination is the unification, integration, synchronization of the efforts of group members so as to provide unity of
action in the pursuit of common goals. It is a hidden force which binds all the other functions of management.

According to Mooney and Reelay, “Co-ordination is orderly arrangement of group efforts to provide unity of action in the
pursuit of common goals”.
It is a process through which the activities of various departments and units are synchronised for the
achievement of the organisation‟s goals.It is a binding force that unites the individuals‟ efforts for the
accomplishment of the common organisational goals. It acts as a link between the various functions of
management and found at every level of management.

Features of Coordination

1. Coordination integrates group efforts: Coordination integrates the efforts of the individuals towards
the set targets or goals of the organisation.

2. Coordination ensures unity of action: The main purpose of coordination is to unify the actions of
individuals. It acts as a force that binds the various functions of management. It ensures that the
people of an organisation work together towards the accomplishment of the organisational goals.

3. Coordination is a continuous process: Coordination is a never-ending and continuous process that

ensures that work is performed as per the planned targets.

4. Coordination is an all pervasive function: Coordination is a pervasive function. That is, it is

performed at all the levels of management. It is practiced by the managers of all departments at
every level in order to ensure unity of action.

5. Coordination is the responsibility of all managers: Coordination is an activity that involves the
managers at all levels. The top-level managers perform it to ensure the overall welfare of the
organisation. The middle-level managers practice it to ensure that the top-level and lower level managers
work together in harmony. The operational level managers perform it to ensure that work goes on
according to the planned targets.

6. Coordination is a deliberate function: Managers practice coordination consciously so as to give a

direction to the efforts of the individuals of the organisation. Even where members of a department willingly
cooperate and work, coordination gives a direction to that willing spirit. Cooperation in the absence of
coordination may lead to wasted effort and coordination without cooperation may lead to dissatisfaction among
employees
Importance of Coordination

1. Growth in size: With increase in size of the organization, number of employees also rises. Generally,
organizational goals do not match with the individual goals. Coordination helps to resolve this conflict
and tries to integrate individual goals with group goals.

2. Functional Differentiation: An organisation has various departments and sub-departments such as

production, sales, finance, etc. Every department works independently and with its own policies and
objectives which often leads to a conflict between the two departments. Thus, coordination is needed to
synchronise the activities of each department.

3. Specialization: Each task requires specialisation to give the requisite results. Every specialist
approaches their tasks in their own unique manner and is generally reluctant to take advice. This may
lead to conflict among various specialists in the organisation. Thus, coordination is required from
another individual such as a manager to integrate the specialists.

Coordination is the essence of management

Coordination is not a separate function, but the essence of management. Each function of management
can be accomplished only through proper coordination.
In planning, coordination is required between:
-Overall plan of the org. and the departmental plans.
-Objectives and the available resources.
For example,coordination between production department plans and sales department targets.

In Organising, coordination is required :

-Between resources and activities to be performed.
-For assigning authority, responsibility and accountability.
For example, if the finance is given authority to raise fund he should also be given the responsibility to
manage funds efficiently.

In Staffing, coordination is required between :

-Skills of the workers and the jobs assigned to them.
-Efficiency of the workers and compensation.
For example, an employee qualified as MBA in Finance should generally be given work of financial
nature.

In Directing, coordination is required:

- Among orders, instructions and suggestions.
- Between superiors and subordinates.
For example, a manager instructs the subordinates, motivates them and also supervises their work.

In Controlling, Coordination is required:

-Between standards and actual performance.
-Between corrections of deviations and achievement of objectives.
For example, if the actual output fails short of planned target, then corrective action must be taken to
ensure that plans coordinate with actual performance.