CHAPTER 1

Introduction to
Management and
Organisation
Management in all business and personal organizational activity is simply the act of getting
people mutually to accomplish desired goals and objectives. Management comprises
“planning, organizing, staffing, leading or directing, and controlling. An organization is also
known as a group of one or more people or entities or effort for the principle of accomplishing
a goal. Resourcing encompasses the consumption and manipulation of human resources,
financial resources, technological resources and natural resources. The 21st century has brought
with it a new workplace, one in which each one must get used to a quickly execution society
with continuously variable demands and chances. The economy has developed into global
and is determined by innovations and technology and organizations have to change themselves
to serve up new customer prospect. Today’s economy presents demanding opportunities as
well as staged indecision.

Management
Some people define management as managing people tactfully. People are the most valuable
resources used by any organization. Others defined it as getting things done throughout the
effort of other people. Here I am citing some definitions of eminent writers on management:

Management is the process aimed at accomplishing organizational objectives by:

I. Effectively coordinating the procurement, allocation, and utilization of human and

physical resources of the organization; and

2. Maintaining the organization in a state of dynamic equilibrium with the environment.

This definition plays important role on two aspects namely, coordinating among
2 Introduction to Management

different resources and maintaining harmony with the environment in which the organization
is continuing its operations.

The verb manage comes from the Italian maneggiare means to handle — especially a horse, which
in turn derives from the Latin manus means hand. The French word mesnagement and
later ménagement influenced the development in meaning of the English word management in the
17th and 18th centuries.
9 Organization and coordination of the activities of an enterprise in accordance with
certain policies and in achievement of clearly defined objectives. Management is often
included as a factor of production along with machines, materials, and money. Verify to
the management guru Peter F. Drucker, the basic task of a management is twofold:
marketing and innovation.
9 Directors and managers who have the power and responsibility to make decisions to
manage an enterprise. As a discipline, management comprises the interlocking functions
of formulating corporate policy and organizing, planning, controlling, and directing the
firm’s resources to achieve the policy’s objectives. The size of management can range
from one person in a small firm to hundreds or thousands of managers in multinational
companies. In large firms, the board of directors formulates the policy which is
implemented by the chief executive officer.

Validate to David A. DeCenzo and Stephen P. Robbins, Management is the process of efficiently
getting activities completed with and through other people. The management process includes the
planning, organizing, leading and controlling activities that take place to accomplish objectives.

Ricky W. Griffin said that Management can be defined as a set of activities including planning and
decision making, organizing, leading, and controlling directed at an organization’s resources-human,
financial, physical and information with the aim of achieving organizational goals in an efficient and
effective manner.

Stephen P. Robbins and Mary Coulter mentioned that the term management refers to the process
of getting activities completed efficiently and effectively with and through other people.

Corroborate to Donnely, Gibson & Ivancrvich, Management is the process undertaken by one or
more individuals to coordinate the activities of others to achieve results not possible by one individual
acting alone.

Refer to Robert Kretner; Management is the process of working with and through others to achieve
organizational objectives in a changing environment. Central to this process is the effective and
efficient use of limited resource. Five components of this definition require close examination:
1. Working with and through others,
2. Achieving organizational objectives,
3. Balancing effectiveness and efficiency,
4. Making the most of limited resources, and
5. Coping with a changing environment.
 Chapter 1: Introduction to Management and Organisation 3

According to Heinz Weihrich and Harold Koontz, Management is the process of designing and
maintaining an environment in which individuals, working together in groups, efficiently accomplish
selected aims.

The basic definition needs to be expanded:

• As managers, people carry out the managerial functions of planning, organizing, staffing,
leading and controlling.
• Management applies to any kind of organization.
• It applies to managers at all organizational levels.
• The aim of all managers is the same: to create a surplus.
• Managing is concerned with productivity, which implies effectiveness and efficiency.

The new economy has become information based and is performance driven. The themes in the
present context area ‘respect’, participation, empowerment, teamwork and self-management. In the
light of the above challenges a new kind of leader is needed to guide business through turbulence.
Managers in organizations do this task. A manager is someone who coordinates and oversees the
work of other people so that organizational goals can be accomplished. It is not about personal
achievement but helping others do their job. Managers may also have additional work duties not
related to coordinating the work of others. Managers can be classified by their level in the organization,
particularly in traditionally structured organizations — those shaped like a pyramid.

1. First-line managers often called supervisors are located on the lowest level of Management.
2. Middle managers include all levels of management between the first-line level and the top
level of the organization.
3. Top managers include managers at or near the top of the organization who are responsible
for making organization-wide decisions and establishing plans and goals that affect the entire
organization.

The changing nature of organizations and work often requires employees in formerly Non-managerial
jobs to perform managerial activities. Non-managerial jobs are those where one works directly on a
job and had no one reporting to him.

Mary Parker Follet defines management as, “The art of getting things done through people”
Management involves coordinating and overseeing the work activities of others so that their activities
are completed efficiently and effectively.
1. Coordinating and overseeing the work of others is what distinguishes a managerial position
from a non-managerial one.
2. Efficiency is getting the most output from the least amount of inputs in order to minimize
resource costs. Efficiency is often referred to as “doing things right”. Effectiveness is completing
activities so that organizational goals are attained and is frequently described as “doing the
right things”. No two managers’ jobs are exactly alike. All managers carry out certain function,
enact certain roles and display a set of skills in their jobs.
4 Introduction to Management

Organization
According to Ricky W. Griffin, an organization is a group of people working together in a structured
and coordinated fashion to achieve a set of goals.

Stephen P. Robbins and Mary Coulter mentioned that organization is a systematic arrangement of
people to accomplish some specific purpose.

Whereas Heinz Weihrich and Harold Koontz said that organization implies a formalized intentional
structure of roles or positions.

Straub and Attner defined, an organization is a group of two or more people that exists and
operates to achieve clearly stated, commonly held objectives.

From the above definitions it is clear to us that people generate organizations to help achieve some
pre-specific objectives or purposes.

Efficiency, Effectiveness & Productivity

Efficiency is a vital part of management. It refers to the relationship between inputs and outputs. If
you can get more outputs from the given inputs, you have increased efficiency. Since managers deal
with input resources that are scarce-mainly people, money, and equipment – they are concerned
with efficient use of these resources. Management, therefore, is concerned with minimizing resource
costs. Efficiency refers to as “doing things right.”

However, it is not enough simply to be efficient. Management is also concerned with getting activities
completed; that is, it seeks effectiveness. When managers achieve their organization’s goals, we say
they are effective. Effectiveness can be described as “doing the right things”. So efficiency is concerned
with means and effectiveness with ends. By efficient, we mean using resource wisely and in a cost-
effective manner. For example, if a corporation like Square Pharmaceutical can produce high quality
drugs at relatively low cost – it is efficient. By effective, we mean making the right decisions and
successfully implementing them. If a firm can produce high quality product that are inspired by
customers, then it is effective.

Effectiveness entails promptly achieving a stated objective. While, efficiency, enters the picture when
resources required to achieve an objective are weighted against what was actually accomplished. The
more favorable the ration of benefits to costs, the greater the efficiency. Efficiency denotes most
effective use of society’s resource in satisfying people want and needs.

Effectiveness denotes right use of society’s resources.

# Effectiveness refers to the achievement of objectives.
# Effectiveness is achieving objectives with the least amount of resources.

Efficiency and effectiveness are interrelated. For instance, it is easier to be effective if one ignores
efficiency. A company can produce more accurate and attractive products if it disregarded labor and
 Chapter 1: Introduction to Management and Organisation 5

material input costs. In Bangladesh, we often criticize our bureaucrats on the ground that they are
effective but extremely inefficient; that is, they get their jobs done but at a very high cost. Management
is concerned, then, not only with getting activities completed but also with doing so as efficiently as
possible.

Organizations, on the other hand, can be efficient but not effective. Many private universities in
Bangladesh have become highly efficient in processing students. By using computer-assisted learning,
large lecture classes, and heavy reliance on part time faculty, administrators have significantly cut the
cost of educating each student. But the quality of the students after graduating from these private
universities is not beyond question. Of course, high efficiency is associated more typically with high
effectiveness. And poor management is often due to both inefficiency and ineffectiveness. In general,
successful organizations are both efficient and effective.

Productivity
In all-purpose sense, productivity is an economic measurer of efficiency that summarizers the value of
outputs relative to the value of the inputs used to create them. Productivity can be and often is
assessed at different levels and in different forms. Successful companies create a surplus through
productive operations. Although there is no absolute argument on the true meaning of productivity,
let us define it as the input-output ratio within a time period with due consideration for quality. Louis
R. Gomez-Mejia and others rightly said that Productivity is a measure of how much value individual
employees add to the goods or services that the organization produces. The greater the output per
individual, the higher the organization’s productivity.

According to Michael Le Boeuf, Productivity is doing more with less. Productivity designates how
efficiently a business uses its resources. While Charles E. Craig and R. Clark Harris mentioned that
Productivity is the efficiency with which outputs are produced – the ration of output to input.
Ivancrvich & others mentioned that Productivity can be defined in simple terms as any ratio of
output to one or more corresponding inputs. The unit of output can be anything – dollars, units of
products, customers served, patient treated or whatever is meaningful to the job or organization.

Productivity can be uttered as follows:

Productivity = Output/Input
(With a time period, quality considered)

This formula indicates that productivity can be improved

(a) By increasing outputs with the same inputs,
(b) By decreasing inputs but maintaining the same output, or
(c) By increasing output and decreasing inputs such as labor, materials, and capital. Total
factor productivity combines various inputs to arrive at a composite input. In the past,
productivity improvement program were mostly aimed at the worker level. Yet, as P. F.
Ducker, one of the most prolific writers in management observed, “The greatest
6 Introduction to Management

opportunity for increasing productivity is surely to be found in knowledge work itself

and especially in management.”

Management Functions
According to the functions approach of Stephen P. Robbins and Mary Coulter; managers perform
certain activities to efficiently and effectively coordinate the work of others. They can be classified as;

1. Planning involves defining goals, establishing strategies for achieving those goals, and
developing plans to integrate and coordinate activities.
2. Organizing involves arranging and structuring work to accomplish the organization’s goals.
3. Leading involves working with and through people to accomplish organizational goals.
4. Controlling involves monitoring, comparing, and correcting work performance.

Since these four management functions are integrated into the activities of managers throughout
the workday, they should be viewed as an ongoing process and they need not the done in the above
sequence.

According to Robert Kretner, The function of managers provides a useful structure for organizing
management knowledge. Managerial functions are general administrative duties that need to be
carried out in virtually all productive organizations. Many management writers defined management
from the context of functions performed by managers. Henri Fayol, a French industrialist turned
writer, became the father of the functional approach in 1916 when he identified five managerial
functions: planning, organizing, command, coordination and control. Fayol claimed that these five
functions were the common denominators of all managerial jobs, whatever the purpose of the
organization.

Later on management scholars classified managerial functions from their own point of views. Robert
Kretner identified eight functions as managerial functions and these are:

Planning: Commonly referred to as the primary management function, planning is the

formulation of future courses of action. Plans and objectives on which they based give purpose
and direction to the organization, its subunits, and contributing individuals.

Decision Making: Managers choose among alternative courses of action when they make
decisions. Making intelligent and ethical decisions in today’s complex world is a major
management challenge.

Organizing: Structural considerations such as the chain of command, division of labor, and
assignment of responsibility are part of the organizing function. Careful organizing helps ensure
the efficient use of human resources.

Staffing: Organizations are only as good as the people in them. Staffing consists of recruiting,
training, and developing people who can contribute to the organized effort. Staffing involves
filling and keeping filled, the positions in the organization structure.
 Chapter 1: Introduction to Management and Organisation 7

Communicating: Today’s managers are responsible for communicating to their employees the
technical knowledge, instructions, rules and information required to get the job done.

Motivating: An important aspect of management today is motivating individuals to pursue

collective objectives by satisfying needs and meeting expectations with meaningful work and
valued rewards.

Leading: Managers become inspiring leaders by serving as role models and adapting their
management styles to the demands of the situation. The idea of visionary leadership is popular
today. Leading is the influencing people so that they will contribute to organizational and
group goals; it has to do predominantly with interpersonal aspect of managing.
Controlling: When managers compare desired results with actual results and take necessary
corrective action, they are keeping on track through the control function. Difference from the
past plans should be considered when formulating new plans.
Frenchman Henri Fayol considers management to consist of seven functions:

• Planning

• Organizing
• Leading

• Coordinating

• Controlling
• Staffing

• Motivating

Some people, however, find this definition, while useful, far too narrow. The phrase “management is
what managers do” occurs widely, suggesting the difficulty of defining management, the shifting
nature of definitions, and the connection of managerial practices with the existence of a
managerial cadre or class.

One habit of thought regards management as equivalent to “business administration” and thus
excludes management in places outside commerce, as for example in charities and in the public sector,
More realistically, however, every organization must manage its work, people, processes, technology,
etc., in order to maximize its effectiveness. Nonetheless, many people refer to university departments
which teach management as “business schools”. Some institutions use that name while others employ
the more inclusive term “management.”

Management Process
A management process is a collection of related, structured activities or tasks that produce a specific
service or product to serve a particular goal for a particular customer or customers. It often can be
visualized with a flow chart as a sequence of activities. In this book, I have briefly described main
management activities and how they manage functions and time.
8 Introduction to Management

Planning
Planning in organizations and public policy is both the organizational process of creating and
maintaining a plan; and the psychological process of thinking about the activities required to create
a desired goal on some scale. As such, it is a fundamental property of intelligent behavior. This
thought process is essential to the creation and refinement of a plan, or integration of it with other
plans, that is, it combines forecasting of developments with the preparation of scenarios of how to
react to them. The term is also used to describe the formal procedures used in such an endeavor, such
as the creation of documents diagrams, or meetings to discuss the important issues to be addressed,
the objectives to be met, and the strategy to be followed. Beyond this, planning has a different
meaning depending on the political or economic context in which it is used.

Two attitudes to planning need to be held in tension: on the one hand we need to be prepared for
what may lie ahead, which may mean contingencies and flexible processes. On the other hand, our
future is shaped by consequences of our own planning and actions. Planning is a process for
accomplishing purpose. It is blue print of business growth and a road map of development. It helps
in deciding objectives both in quantitative and qualitative terms. It is setting of goals on the basis of
objectives and keeping in view the resources.

Outlook of Plan
A plan should be a realistic view of the outlook. Depending upon the activities, a plan can be long
range, intermediate range or short range. It is the framework within which it must operate. For
management seeking external support, the plan is the most important document and key to growth.
Preparation of a comprehensive plan will not guarantee success, but lack of a sound plan will almost
certainly ensure failure.

Foundation of Plan
Just as no two organizations are alike, therefore it is important to prepare a plan keeping in view the
necessities of the enterprise. A plan is an important aspect of business. It serves the following three
critical functions:

1. It helps management to clarify, focus, and research their businesses or project’s development
and prospects.

2. It provides a considered and logical framework within which a business can develop and
pursue business strategies over the next three to five years.
3. It offers a benchmark against which actual performance can be measured and reviewed.

Consequence of the Planning Process

A plan can play a vital role in helping to avoid mistakes or recognize hidden opportunities. Preparing
a satisfactory plan of the organization is essential. The planning process enables management to
understand more clearly what they want to achieve, and how and when they can do it. A well-
 Chapter 1: Introduction to Management and Organisation 9

prepared business plan demonstrates that the managers know the business and that they have
thought through its development in terms of products, management, finances, and most importantly,
markets and competition.

Ground Rules of Planning

Planning is not done off hand. It is prepared after careful and extensive research. Management has to
prepare a comprehensive business plan, keeping the following key points in mind:

• Acceptability
• Easily measurable
• It should be specific
• Review periodically
• Review past performance
• The goal should be realistic
• Strategies for implementation
• Decide budgetary requirement
• Focus on matters of strategic importance
• Clearly define the target or goal in writing
• It should be set by a person having authority
• Identify shortcomings in the concept and gaps
• Identify all the main issues which need to be addressed

Character of Planning
The character or nature of planning can be tainted by studying its characteristics. They are as follows:

(i) Planning is a Mental Activity: Planning is not a simple process. It is an intellectual

exercise and involves thinking and forethought on the part of the manager.

(ii) Planning is Goal-oriented: Every plan specifies the goals to be attained in the future
and the steps necessary to reach them. A manager cannot do any planning, unless
the goals are known.

(iii) Planning is Forward Looking: Planning is in keeping with the adage, “look before
you leap”. It is futuristic in nature since it is performed to accomplish some objectives
in future.

(iv) Planning Pervades All Managerial Activities: Planning is the basic function of
managers at all levels, although the nature and scope of planning will vary at each
level.

(v) Planning is the Primary Function: Planning logically precedes the execution of all
other managerial functions, since managerial activities in organizing; staffing, directing
10 Introduction to Management

and controlling are designed to support the attainment of organizational goals.

Thus, management is a circular process beginning with planning and returning to
planning for revision and adjustment.
(vi) Planning is Based on Facts: Planning is a conscious determination and projection
of a course of action for the future. It is based on objectives, facts and considered
forecasts. Thus planning is not a guess work.
(vii) Planning is Flexible: Planning is a dynamic process capable of adjustments in
accordance with the needs and requirements of the situations. Thus planning has to
be flexible and cannot be rigid.
(viii) Planning is Essentially Decision Making: Planning is a choice activity as the planning
process involves finding the alternatives and the selection of the best. Thus decision
making is the cardinal part of planning.

Merit of Planning
According to G. R. Terry, “Planning is the foundation of most successful actions of all enterprises.” An
enterprise can achieve its objectives only through systematic planning on account of the increasing
complexities of modern business. The importance and usefulness of planning can be understood
with reference to the following benefits.

(a) Minimizes Uncertainty: The future is generally uncertain and things are likely to change
with the passage of time. Planning helps in minimizing the uncertainties of the future as
it anticipates future events.

(b) Emphasis on Objectives: The first step in planning is to fix the objectives. When the
objectives are clearly fixed, the execution of plans will be facilitated towards these
objectives.

(c) Promotes Coordination: Planning helps to promote the coordinated effort on account
of pre-determined goals.
(d) Facilitates Control: Planning and control are inseparable in the sense that unplanned
actions cannot be controlled. Control is nothing but making sure that activities conform
to the plans.
(e) Improves Competitive Strength: Planning enables an enterprise to discover new
opportunities, which give it a competitive edge.

(f) Economical Operation: Since planning involves a lot of mental exercise, it helps in
proper utilization of resources and elimination of unnecessary activities. This, in turn,
leads to economy in operation.

(g) Encourages Innovation: Planning is basically the deciding function of management.

Many new ideas come to the mind of a manager when he is planning.
 Chapter 1: Introduction to Management and Organisation 11

(h) Tackling Complexities of Modern Business: With modern business becoming more
and more complex, planning helps in getting a clear idea about what is to be done, when
it is to be done, where it is to be done and how it is to be done.

Borders of Planning
Although planning is a primary function of management and facilitates various other management
functions, it has many barriers and limitations. Some of them are explained below:

(a) Costly Process: Planning is a costly process as time; energy and money are involved in
gathering of facts and testing of various alternatives.
(b) Rigidity: Planning restricts the individual’s freedom, initiative and desire for creativity as
it strictly adheres to –predetermined -policies and Programs.

(c) Limited Scope: The scope of planning is said to be limited in the case of organizations
with rapidly changing situations.

(d) Influence of External Factors: The effectiveness of planning is sometimes limited

because of the external social, political, economical and technological factors which are
beyond the control of the planners.

(e) Non-availability of Data: Planning needs reliable facts and figures. Planning loses its
value unless reliable information is available.
(f) People’s Resistance: Resistance to change hinders planning. Planners often feel
frustrated in instituting new plans, because of the inability of people to accept them.

Necessities of a Good Plan

An effective and sound plan should have the following features:
(a) Clear Objective: The purpose of plans and their components is to develop and facilitate
the realization of organizational objectives. The statement on objectives should be clear,
concise, definite and accurate. It should not be colored by bias resulting from emphasis
on personal objectives.

(b) Proper Understanding: A good plan is one which is well understood by those who
have to execute it. It must be based on sound assumptions and sound reasoning.
(c) Flexible: The principle of flexibility states that management should be able to change an
existing plan because of change in environment without undue extra cost or delay so
that activities keep moving towards the established goals. Thus, a good plan should be
flexible to accommodate future uncertainties.

(d) Stable: The principle of stability states that the basic feature of the plan should not be
discarded or modified because of changes in external factors such as population trends,
technological developments, or unemployment.
12 Introduction to Management

(e) Comprehensive: A plan is said to be comprehensive when it covers each and every
aspect of business. It should integrate the various administrative plans so that the whole
organization operates at peak efficiency.
(f) Economical: A plan is said to be good, if it is as economical as possible, depending upon
the resources available with the organization.

Segments of Planning
Planning is of several kinds depending upon their nature. The various types of plans are as follows:

(a) Financial and Non-financial Planning: Financial planning relates to the monetary aspect
of the concern. On the other hand, non-financial planning relates to the physical resources
of the concern.
(b) Formal and Informal Planning: A planning in black and white is known as formal
planning. Informal planning is only thinking about it and nothing more.

(c) Short-range and Long-range Planning: Short-term planning relates to a period of less
than one year. It is to accomplish objectives in the near future. Medium-term planning
covers a period of over one year but less than three years. A planning between three to
five years is known as long-term planning.
(d) Standing and Ad hoc Planning: Standing plans are permanent in nature and are meant
to be used over and over again. They ensure quick decision and action whenever need
arises. On the other hand, ad hoc plans are generally for specific matters and are prepared
only when some need arises.

(e) Administrative and Operational Planning: Planning is generally done at various levels
of management like top level, middle level, and lower level. On the other hand,
operational planning associates with lower levels of management and deals with actual
execution of operations. Top level planning is concerned with fixing of objectives.

Vision, Mission, Goals and Objectives

Vision
Defines the desired or intended future state of an organization or enterprise in terms of its
fundamental objective and or strategic direction. Vision is a long term planning, sometimes describing
a view of how the organization would like the world in which it operates to be. For example a charity
working with the poor might have a vision statement which read “A world without poverty”.

Mission
Defines the fundamental purpose of an organization or an enterprise, basically describing why it
exists and what it does to achieve its Vision. Mission may be Long-term as well as for short-term for any
organization. A corporate Mission can last for many years or for the life of the organization or may
 Chapter 1: Introduction to Management and Organisation 13

change as per the demand of the organization mission varies. It is an objective with a timeline, but
rather the overall goal that is accomplished over the years as objectives are achieved that are aligned
with the corporate mission.

Goals
A goal or objective is a projected state of affairs that a person or a system plans or intends to achieve
— a personal or organizational desired end-point in some sort of assumed development. Many people
endeavor to reach goals within a finite time by setting deadlines. A desire or an intention becomes a
goal if and only if one activates an action for achieving it. It is roughly similar to purpose or aim, the
anticipated result which guides action, or an end, which is an object, either a physical object or an
abstract object, that has intrinsic value.

Business goals are as diverse as the people who establish them. Some are no-brainers, such as “win
enough clients to pay the rent and my salary.” A goal can be as specific as “install a new graphics
program. Goals are measuring sticks; but on these sticks, we get to draw the dividing marks. We
determine what we’d like to achieve during a specific time frame; we design a particular outcome.
You define your goals to meet your needs. Goals are also your guideposts, established to keep you on
the right path and to help you assess your progress.

Handle Plans: Most new business owners, and many experienced ones, too, are all too familiar with
activities that can take us in a dozen different directions at the same time. They scatter our focus, until
at the end of the day we’re exhausted—but find ourselves wondering whether we’ve accomplished
anything of importance. No doubt about it, such tasks can derail the most capable business owner.
That’s why it’s important to make the distinction between a tactic, an approach to accomplish
something, and an activity, which, while necessary, could be assigned a lower priority or delegated
elsewhere, freeing you to keep your eye on the prize.

Objectives
When a sole trader sets up they may have some unstated aims or objectives. An aim is where the
business wants to go in the future, its goals. It is a statement of purpose, e.g., we want to grow the
business into India. Business objectives are the stated, measurable targets of how to achieve business
aims. Objectives give the business a clearly defined target. Plans can then be made to achieve these
targets. This can motivate the employees. It also enables the business to measure the progress towards
to its stated aims.

The most SMART business objectives meet the following criteria:

S – Specific: objectives are aimed at what the business does, e.g. a hotel might have an objective
of filling 60% of its beds a night during October, an objective specific to that business.
M – Measurable: The business can put a value to the objective, e.g., Rs. 10,00,000 in sales in the
next half year of trading.
A – Agreed by all those concerned in trying to achieve the objective.
14 Introduction to Management

R – Realistic: The objective should be challenging, but it should also be able to be achieved by
the resources available.

T – Time Specific: They have a time limit of when the objective should be achieved, e.g., by the
end of the year.

The major objectives that a business might have are:

Survival: A short term objective, probably for small business just starting out, or when a new
firm enters the market or at a time of crisis.

Profit Maximization: Try to make the most profit possible – most like to be the aim of the
owners and shareholders.
Profit Satisfying: Try to make enough profit to keep the owners comfortable – probably the
aim of smaller businesses whose owners do not want to work longer hours.

Sales Growth: Where the business tries to make as many sales as possible, this may be because
the managers believe that the survival of the business depends on being large. Large businesses
can also benefit from economies of scale.

A business may find that some of their objectives conflict with one and other:

Growth Versus Profit: For example, achieving higher sales in the short term e.g., by cutting
prices will reduce short-term profit.
Short-term Versus Long-term: For example, a business may decide to accept lower cash flows
in the short-term whilst it invests heavily in new products or plant and equipment.

Large investors in the Stock Exchange are often accused of looking too much at short-term objectives
and company performance rather than investing in a business for the long-term.

Categorization of Objectives of Business

It is generally believed that a business has a single objective, that is, to make profit. But it cannot be
the only objective of business. While pursuing the objective of earning profit, business units do keep
the interest of their owners in view. However, any business unit cannot ignore the interests of its
employees, customers, the community, as well as the interests of society as a whole. For instance, no
business can prosper in the long run unless fair wages are paid to the employees and customer
satisfaction is given due importance. Again a business unit can prosper only if it enjoys the support
and goodwill of people in general. Business objectives also need to be aimed at contributing to
national goals and aspirations as well as towards international well-being. Thus, the objectives of
business are:

A. Economic Objectives
Economic objectives of business pass on to the objective of earning profit and also other objectives
that are necessary to be pursued to achieve the profit objective, which includes creation of customers,
 Chapter 1: Introduction to Management and Organisation 15

regular innovations and best possible use of available resources. Let us learn about these. Profit is the
lifeblood of business, without which no business can survive in a competitive market. Infect profit
making is the primary objective for which a business unit is brought into existence. Profits must be
earned to ensure the survival of business, its growth and expansion over time. Certain other objectives
are also necessary to be pursued by business, which are as follows:

(a) Conception of Customers: A business unit cannot survive unless there are customers to
buy the products and services. Again a businessman can earn profits only when s/he
provides quality goods and services at a reasonable price. For this it needs to attract
more customers for its existing as well as new products. This is achieved with the help of
various marketing activities.

(b) Standard Innovations: Innovation means changes, which bring about improvement in
products, process of production and distribution of goods. Business units, through
innovation, are able to reduce cost by adopting better methods of production and also
increase their sales by attracting more customers because of improved products.
Reduction in cost and increase in sales gives more profit to the businessman. Use of
power-looms in place of handlooms, use of tractors in place of hand implements in
farms etc. are all the results of innovation.

(c) Top Possible Use of Resources: As you know, to run any business you must have sufficient
capital or funds. The amount of capital may be used to buy machinery, raw materials,
employ men and have cash to meet day-to-day expenses. Thus, business activities require
various resources like men, materials, money and machines. The availability of these
resources is usually limited. Thus, every business should try to make the best possible use
of these resources. This objective can be achieved by employing efficient workers, making
full use of machines and minimizing wastage of raw materials.

B. Social Objectives
Social objectives are those objectives of business, which are desired to be achieved for the benefit of
the society. Since business operates in a society by utilizing its scarce resources, the society expects
something in return for its welfare. No activity of the business should be aimed at giving any kind of
trouble to the society. If business activities lead to socially harmful effects, there is bound to be public
reaction against the business sooner or later. Social objectives of business include production and
supply of quality goods and services, adoption of fair trade practices and contribution to the general
welfare of society and provision of welfare amenities.

(a) Production and Supply of Quality Goods and Services: Since the business utilizes the
various resources of the society, the society expects to get quality goods and services
from the business. The objective of business should be to produce better quality goods
and supply them at the right time and at a right price. It is not desirable on the part of
the businessman to supply adulterated or inferior goods which cause injuries to the
16 Introduction to Management

customers. They should charge the price according to the quality of the goods and
services provided to the society. Again, the customers also expect timely supply of all
their requirements. So it is important for every business to supply those goods and
services on a regular basis.

(b) Implementation of Fair Trade Practices: In every society, activities such as hoarding,
black-marketing and over-charging are considered undesirable. Besides, misleading
advertisements often give a false impression about the quality of products. Such
advertisements deceive the customers and the businessmen use them for the sake of
making large profits. This is an unfair trade practice. The business unit must not create
artificial scarcity of essential goods or raise prices for the sake of earning more profits.

(c) Payment to the General Welfare of the Society: Business units should work for the
general welfare and up liftment of the society. This is possible through running of schools
and colleges for better education, opening of vocational training centers to train the
people to earn their livelihood, establishing hospitals for medical facilities and providing
recreational facilities for the general public like parks, sports complexes etc.

C. Human Objectives
Human objectives refer to the objectives aimed at the well-being as well as fulfillment of expectations
of employees as also of people who are disabled, handicapped and deprived of proper education
and training. The human objectives of business may thus include economic well-being of the
employees, social and psychological satisfaction of employees and development of human resources.

(a) Economic Happiness of the Employees: In business employees must be provided with
fair remuneration and incentives for performance, benefits of provident fund, pension
and other amenities like medical facilities, housing facilities etc. By this they feel more
satisfied at work and contribute more for the business.

(b) Expansion of Human Resources: Employees as human beings always want to grow.
Their growth requires proper training as well as development. Business can prosper if
the people employed can improve their skills and develop their abilities and competencies
in course of time. Thus, it is important that business should arrange training and
development programs for its employees.

(c) Welfare of Socially and Economically Rearward People: Business units being inseparable
parts of society should help backward classes and also people those are physically and
mentally challenged. This can be done in many ways. For instance, vocational training
program may be arranged to improve the earning capacity of backward people in the
community. While recruiting it staff, business should give preference to physically and
mentally challenged persons. Business units can also help and encourage meritorious
students by awarding scholarships for higher studies.
 Chapter 1: Introduction to Management and Organisation 17

D. National Objectives
Being an important part of the country, every business must have the objective of fulfilling national
goals and aspirations. The goal of the country may be to provide employment opportunity to its
citizen, earn revenue for its exchequer, become self-sufficient in production of goods and services,
promote social justice, etc. Business activities should be conducted keeping these goals of the country
in mind, which may be called national objectives of business. The following are the national objectives
of business.

(a) Formation of Employment: One of the important national objectives of business is to

create opportunities for gainful employment of people. This can be achieved by
establishing new business units, expanding markets, widening distribution channels,
etc.

(b) Encouragement of Social Fairness: As a responsible citizen, a businessman is expected

to provide equal opportunities to all persons with whom s/he deals. S/he is also expected
to provide equal opportunities to all the employees to work and progress. Towards this
objective special attention must be paid to weaker and backward sections of the society.

(c) Manufacture According to National Precedence: Business units should produce and
supply goods in accordance with the priorities laid down in the plans and policies of the
Government. One of the national objectives of business in our country should be to
increase the production and supply of essential goods at reasonable prices.

(d) Donate to the Revenue of the Country: The business owners should pay their taxes
and dues honestly and regularly. This will increase the revenue of the government,
which can be used for the development of the nation.

(e) Independence and Export Promotion: To help the country to become self-reliant,
business units have the added responsibility of restricting import of goods. Besides,
every business units should aim at increasing exports and adding to the foreign exchange
reserves of the country.

E. Global Objectives
Earlier India had a very restricted business relationship with other nations. There was a very rigid
policy for import and export of goods and services. But, now-a-days due to liberal economic and
export–import policy, restrictions on foreign investments have been largely abolished and duties on
imported goods have been substantially reduced. This change has brought about increased
competition in the market. Today because of globalization the entire world has become a big market.
Goods produced in one country are readily available in other countries.

(a) Lift up General Standard of Living: Growth of business activities across national borders
makes available quality goods at reasonable prices all over the world. The people of one
18 Introduction to Management

country get to use similar types of goods that people in other countries are using. This
improves the standard of living of people.

(b) Diminish Disparities Among Nations: Business should help to reduce disparities among
the rich and poor nations of the world by expanding its operation. By way of capital
investment in developing as well as underdeveloped countries it can foster their industrial
and economic growth.

(c) Formulate Available Globally Competitive Goods and Services: Business should
produce goods and services which are globally competitive and have huge demand in
foreign markets. This will improve the image of the exporting country and also earn
more foreign exchange for the country.

Diverse Aims and Objectives

Not all businesses seek profit or growth. Some organizations have alternative objectives. Examples of
other objectives:

Ethical and Socially Responsible Objectives

Organizations like the Co-op or the Body Shop have objectives which are based on their beliefs on
how one should treat the environment and people who are less fortunate. Public sector
corporations are run to not only generate a profit but provide a service to the public. This service will
need to meet the needs of the less well off in society or help improve the ability of the economy to
function: e.g., cheap and accessible transport service. Public sector organizations that monitor or
control private sector activities have objectives that are to ensure that the business they are monitoring
comply with the laws laid down.

Health Care and Education Establishments

Their objectives are to provide a service – most private schools for instance have charitable status.
Their aim is the enhancement of their pupils through education.

Charities and Voluntary Organizations

Aims and objectives of charities and voluntary organizations are led by the beliefs they stand for.

Altering Objectives
A business may change its objectives over time due to the following reasons:

A business may achieve an objective and will need to move onto another one e.g. survival in the
first year may lead to an objective of increasing profit in the second year.

The competitive environment might change, with the launch of new products from competitors.
Technology might change product designs, so sales and production targets might need to change.
 Chapter 1: Introduction to Management and Organisation 19

Values
Values drive an organization’s culture and priorities. Goal-setting ideally involves establishing specific,
measurable, attainable, realistic and time-targeted objectives. Work on the theory of goal-setting
suggests that it can serve as an effective tool for making progress by ensuring that participants have
a clear awareness of what they must do to achieve or help achieve an objective. On a personal level,
the process of setting goals allows people to specify and then work towards their own objectives —
most commonly financial or career-based goals. Goal-setting comprises a major component of Personal
development.

Organizing
Organizing also called organizing and is the act of re-arranging elements following one or more rules.
Anything is commonly considered organized when it looks like everything has a correct order of
placement. But it’s only ultimately organized if any element has no difference on time taken to find
it. In that sense, organizing can also be defined as to place different objects in logical arrangement
for better searching. Organizations are groups of people frequently trying to organize some specific
subject, such as political issues. So, even while organizing can be viewed as a simple definition, it can
get as complex as organizing the world’s information.

Confirm to Chester Barnard, “Organizing is a function by which the concern is able to define the
role positions, the jobs related and the co- ordination between authority and responsibility. Hence,
a manager always has to organize in order to get results."

A manager performs organizing function with the help of following steps:-

Identification of Activities
All the activities which have to be performed in a concern have to be identified first. For example,
preparation of accounts, making sales, record keeping, quality control, inventory control, etc. All
these activities have to be grouped and classified into units.

Departmentally Organizing the Activities

In this step, the manager tries to combine and group similar and related activities into units or
departments. This organization of dividing the whole concern into independent units and
departments is called departmentation.

Classifying the Authority

Once the departments are made, the manager likes to classify the powers and its extent to the
managers. This activity of giving a rank in order to the managerial positions is called hierarchy. The top
management is into formulation of policies, the middle level management into departmental
supervision and lower level management into supervision of foremen. The clarification of authority
20 Introduction to Management

helps in bringing efficiency in the running of a concern. This helps in achieving efficiency in the
running of a concern. This helps in avoiding wastage of time, money, effort, in avoidance of duplication
or overlapping of efforts and this helps in bringing smoothness in a concern’s working.

Co-ordination between Authority and Responsibility

Relationships are established among various groups to enable smooth interaction toward the
achievement of the organizational goal. Each individual is made aware of his authority and he/she
knows whom they have to take orders from and to whom they are accountable and to whom they
have to report. A clear organizational structure is drawn and all the employees are made aware of it.

Staffing
Staffing including recruiting, selecting, hiring and training of employees is among the skills that
become more important as the complexity and overall level of performance of a farm business
increases. With increasing size and improving performance comes people complexity: more things
accomplished through employees, more delegation to key employees and more reliance on employees
to maintain a routine that assures superiority. Any cynical attitudes managers have about employees
need to be replaced with positive attitudes.

Staffing follows with the filling and keeping filled all positions on the farm. Recruiting a pool of
applicants for a position, selecting new employees from among the pool of applicants, training new
employees and retraining experienced employees are the key elements of the staffing function.
Managing resignations and discharges is also part of staffing. Staffing may be mistakenly limited to
regular employees. Instead, staffing includes all personnel categories: managers, working managers
and laborers; family and non-family; paid and unpaid; and full-time and part-time.

Practically all farms function without a personnel department. This means that management generalists
rather than personnel specialists handle staffing. The farm human resource managers must deal with
factors external to the farm such as labor laws and regulations, labor markets, practices of other
employers and stereotypes of farm employment. Internal factors such as policies regarding family
members’ entry into the business, conflict between family and business goals and limited opportunities
for promotion because of flat organization charts must be dealt with. Staffing has both short-run
and long-run ramifications. In the short-run, positions must be kept filled with qualified people who
can get the work done. In the long run, development of top and middle level management personnel
for business continuity into the next generation tops the list of staffing challenges.

The subsequent hypothesis provides the context of staffing:

1. The mission for the farm has been given careful attention by top management and distributed
to the management team and all employees, i.e., the reasons the farm is in business are known.

2. A management team is in place and able to divide up responsibilities. Top management is

willing and able as needed to delegate responsibilities and authority.
 Chapter 1: Introduction to Management and Organisation 21

3. Key positions, e.g., a herdsperson, full-time crops and machinery person, or a full-time office
person are being filled. The process for filling key positions can be modified for part-time and
temporary positions.
4. The person hired will be trained to carry out the responsibilities of the position, i.e., it is not
necessary to hire a person who already knows how to do the job.

5. No selection process can guarantee selection success. Even if the “right” person was hired
based on all the information available to the employer at the time the decision was made, six
months, a year or three years later, it may seem that the “wrong” person was hired.

Directing
Directing means to manage or conduct the dealings of; regulate. It is also known as to have or take
charge of; control or to give authoritative instructions to. Directing concerns the total manner in
which a manager influences actions of subordinates. First, it includes issuing orders that are clear,
complete and within the capabilities of subordinates to accomplish. Assignments have to be defined
to allow subordinates to think through the task, determine their level of authority, and allow them to
ask questions and make recommendations. Outlines must likewise be provided to be used as guides
and bases for evaluation or in building checkpoints. Second, it suggests an incessant training activity
in which subordinates are given instructions to enable them to carry out the particular assignment in
the existing situation. Third, it involves the motivation of workers to meet the expectations of the
manager. Let subordinates do the job; match them to the task; focus on process as well as on product.
Fourth, it consists of maintaining discipline and rewarding those who perform well. Offer specific
examples, provide positive feedback, recognize individual performances, and be sincere through it
all.

Briefly stated, directing is the final action of a manager in getting others to effect all preparations
toward completion. How good are the results that get from subordinates? These results must meet
three objectives:

1. Output or Production: You will require your subordinates to turn out a certain amount of
work per day, per week, or per month. It will be expected that this will be done on time, and
therefore will meet delivery schedules and project deadlines.

2. Quality and Workmanship: This means minimal or zero product defects, service errors or
customer complaints.

3. Costs and Budget Control: Output and quality of work are always restricted by the amount
of money the management allows to be spent to carry them out.

More than any other function, the manager will do well to act as an individual and not to try to act the
way others act. In saying things, Manager should simultaneously act as:

Trainer: Take responsibility, be assertive and work with them, not on them.
Educator: Give on-going guidance and instructions, follow day-to-day progress and provide
feedback.
22 Introduction to Management

Director: Inspire, motivate and Influence your subordinates so that they will strive willingly and
enthusiastically toward the achievement of group goals.

A manager will be involved in various situations calling for different approaches in directing
subordinates. If, for example, subordinates are unskilled and require detailed instructions, the manager
may train them. In research activity, an indulgent and advisory approach may be expedient. In cases of
emergency, the manager may assume a “take charge” role and give short, clear authoritative commands,
whereas if action is not critical, a deliberate and analytical attitude may be in order.

Diverse leadership types have been identified and provide a framework for a manager in selecting an
approach to directing. However, leadership styles depend upon which set of assumptions about
human behavior the manager uses. Motivation must be given to the subordinates. Successful leading
of subordinates results from effective motivation. Try to reflect on this symbol: “The foundation
takes the anxiety from both sides and uses this anxiety to build a stronger bend. The sides can be held
together only by the keystone, which strengthens, not weakens, the arch.” The keystone position is
the vital role of supervisors and managers in business organizations.

Controlling
Controlling consists of verifying whether everything occurs in conformities with the plans adopted,
instructions issued and principles established. Controlling ensures that there is effective and efficient
utilization of organizational resources so as to achieve the planned goals. Controlling measures the
deviation of actual performance from the standard performance, discovers the causes of such
deviations and helps in taking corrective actions

With reference to Breech, “Controlling is a systematic exercise which is called as a process of checking
actual performance against the standards or plans with a view to ensure adequate progress and also
recording such experience as is gained as a contribution to possible future needs.”

With mentioned to Donnell, “Just as a navigator continually takes reading to ensure whether he is
relative to a planned action, so should a business manager continually take reading to assure himself
that his enterprise is on right course.” Controlling has got two basic purposes i.e. facilitating the co-
ordination and helps in planning.

Uniqueness of Controlling Function

Following are the characteristics of controlling function of management:

Controlling is a conclusion function – A function which comes once the performances are made in
conformities with plans. Controlling is a pervasive function – which means it is performed by managers
at all levels and in all type of concerns. Controlling is forward looking-because effective control is not
possible without past being controlled. Controlling always looks to future so that follow-up can be
made whenever required.
 Chapter 1: Introduction to Management and Organisation 23

Victorious controlling requires the existence of plans, since planning provides the necessary
performance standards or objectives. Controlling also requires a clear understanding of where
responsibility for deviations from standards lies. Two traditional control techniques are the budget
and the performance audit. Although controlling is often thought of in terms of financial criteria,
managers must also control production/operations processes, procedures for delivery of services,
compliance with company policies, and many other activities within the organization.

The management functions of planning, organizing, leading, and controlling are widely considered
to be the best means of describing the manager’s job as well as the best way to classify accumulated
knowledge about the study of management. Although there have been tremendous changes in the
environment faced by managers and the tools used by managers to perform their roles, managers
still perform these essential functions. Controlling is a four-step process of establishing performance
standards based on the firm’s objectives, measuring and reporting actual performance, comparing
the two, and taking corrective or preventive action as necessary. Performance standards come from
the planning function.

Scheming Useful Control Systems

Effective control systems have the following characteristics:

1. Control at all levels in the business

2. Acceptability to those who will enforce decisions

3. Flexibility
4. Accuracy

5. Timeliness

6. Cost effectiveness
7. Understandability

8. Balance between objectivity and subjectivity

9. Coordinated with planning, organizing and leading

Coordination — the Spirit of Managership

Some authorities consider coordination to be a separate function of the manager. It seems more
accurate, however, to regard it as the essence of manager ship; for achieving harmony among individual
efforts toward the accomplishment of group goals. Each of the managerial function is an exercise
contributing to coordination. Even in the case of a church or a fraternal organization, individuals
often interpret similar interest in different ways, and their efforts toward mutual goals do not
automatically mesh with the efforts of others. It thus becomes the central task of the manager to
reconcile differences in approach, timing, effort, or interest and to harmonize individual goals to
contribute organizational goals.
24 Introduction to Management

Executive Duty
Regardless of their level or area within an organization, all managers must play certain roles if they are
to be successful. The concept of a role, in this sense, is similar to the role an actor play in a theatrical
production. A person does certain things; meet certain needs in the organization and has certain
responsibilities. To run an organization whatever the type may be, in an effective and efficient
manner they must play certain roles in their respective organizations. Some people defined role, as
“A role is a set of expectations of manager’s behavior.” Robbins defined roles as specific categories of
managerial behavior. In the late 1960s, Henry Mint berg conducted a precise study of managers at
work. He concluded that managers perform ten different roles, which are highly interrelated showing
in the following table.

Table 1.1: Fundamental Managerial Roles & Research

Group Position Example of Actions

Interpersonal Figurehead Chief Presence ribbon-cutting ceremony for new plant

Connection Heartening employees to improve productivity

Manage activities of two projects groups

Informational Observe Examine industry reports to stay abreast of

developments

Disseminator Distribution memos outlining new organizational

initiatives

Speaker Creation a speech to discuss growth plans

Decisional Entrepreneur Mounting new ideas for innovation

Disturbance Handler Decide conflicts between two subordinates

Resource Allocator Estimate and revising budget requests

Representative attainment agreement with a key supplier or

labor union

(a) Interpersonal Position

All managers are required to perform duties that are ceremonial and symbolic in nature-interpersonal
roles. When the president of a college hands out diplomas at commencement, he or she is acting in
a figurehead role. All managers have leader roles. This role includes hiring, training, motivating and
disciplining employees. The third role is liaison role. In the word of Mint berg, this role implies
contacting external sources who provide the manager with information.
 Chapter 1: Introduction to Management and Organisation 25

(b) Informational Position

All managers, to some degree, fulfill informational roles – receiving and collecting information from
organizations and institutions outside their own. The informational role typically flows from
interpersonal role. The first informational role is that of monitor, one who actively seeks information
that may be of value. The manager is also a disseminator of information, transmitting relevant
information back to others in the workplace. When they represent the organization to outsiders,
managers also perform a spokesperson role.

(c) Decisional Position

Sometimes it is said that management means decision -making. Managers have to make choices from
different alternatives available to hum/her, which will best fit the organization. As entrepreneurs,
managers initiate and oversee projects that will improve their organization’s performance. As
entrepreneur managers have to initiate change. As disturbance handler, managers take corrective
action in response to previously unforeseen problems. Managers are required to handle such problems
as strikes, copyright infringements, or problems in public relations or corporate image. As resource
allocator, managers are responsible for allocating human, physical, and monetary resources. Last,
managers perform a representative role when they discuss and bargain with other groups to gain
advantages for their own units.

Although the functions approach represents the most useful way to describe the manager’s job,
Mint berg’s roles give additional insight into work of managers.

Management Talent
Skills allow individuals to perform activities and to function in society. A management skill is the ability
to use knowledge, behaviors and training, and aptitudes to performing a task. During the early 1970s,
research by Robert L. Katz found that managers need three essential skills or competencies: technical,
human and conceptual. In addition to fulfilling numerous roles, mangers also need a number of
specific skills if they are to succeed. The most fundamental management skills are technical,
interpersonal, conceptual, diagnostic, communication, decision-making and time management
skills.

Technical Talent
Technical skills include knowledge about methods, processes and equipments for conducting the
specialized activities of the manager’s organizational unit. Technical skills also include factual knowledge
about the organization and knowledge about the organization’s products and services. This type of
knowledge is acquired by a combination of formal education, training, and job experience. Effective
managers are able to obtain information and ideas from many sources and store it away in their
memory for use when they need it.
26 Introduction to Management

According to Straub and Attner Technical skills are those involved in making a product or providing
a service. Technical skill is the knowledge of and ability to use the processes, practices, techniques, or
tools of a specialty responsibility area. Technical skills are necessary to accomplish or understand the
specific kind of work being done in an organization. Technical skills are especially important for first
line managers. The managers spend much of their time training subordinates and answering questions
about work-related problems.

Human Talents or Interpersonal Talents

Interpersonal skills include knowledge about human behavior and group processes, ability to
understand the feelings, attitudes, and motives of others and ability to communicate clearly and
persuasively. Specific types of interpersonal skills such as apathy, social insight, charm, tact, and
diplomacy, persuasiveness and oral communication ability are essential to develop and maintain
cooperative relationships with subordinates, superiors, peers, and outsiders.

Straub and Attner said that; Human relations skills involve relating and interacting with subordinates,
peers, superiors, and customers or clients. Human skill is the ability to interact with other persons
successfully. A manager must be able to understand, work with and relate both individuals and
groups to build a teamwork environment. Human skill is the ability to work effectively with people
and to build teamwork. In the other words it is the ability of a person to work well with other people
both individually and in groups. Since managers deal with people, this skill is crucial. Managers have to
spend considerable time interacting with people both inside and outside the organization.

Conceptual Talents
In general terms, conceptual or cognitive skills involve good judgment, foresight, intuition, creativity,
and the ability to find meaning and order in ambiguous, uncertain events. Specific conceptual skills
that can be measured with aptitude test include analytical ability, logical thinking, concept formation,
inductive reasoning, and deductive reasoning. Conceptual skills are the managers’ ability to organize
and integrate information to better understand the organization as a whole. Conceptual skill deals
with ideas and abstract relationships. It is the mental ability to view the organization as a whole and
to see how the parts of the organization relate to and depend on one another. In addition, conceptual
skill is the ability to imagine the integration and coordination of the parts of an organization- all it
processes and systems.

Time Management Talents

Finally, effective managers usually have good time management skills. Time management skills refer to
the manager’s ability to prioritize work, to work efficiently, and to delegate appropriately. Managers,
work with different pressures and challenges. So, managers need to use their time effectively in
order to run their organizations in an effective manner.
 Chapter 1: Introduction to Management and Organisation 27

Diagnostic Talents
Successful managers also posses diagnostic skills or skills that enable a manager to visualize the most
appropriate response to a situation. This skill is as like the skill of a physician who diagnoses a patient’s
illness by analyzing symptoms and determining their probable causes.

Decision-making Talents
Management means decision-making. Decision-making skills refer to the manager’s ability to recognize
and define problems and opportunities correctly and then to select an appropriate course of action
to solve problems and capitalize on opportunities. No managers make right decision all the time.
However, effective managers make good decisions most of the time. And when they do make a bad
decision, they usually recognize their mistake quickly and then make good decisions to recover with
as little cost or damage to their organization as possible.

Communication Talents
Communication skill is now a day considered to be an important skill of successful managers.
Communication skills refer to the manager’s abilities both to convey ideas and information effectively
to others and to receive ideas and information effectively from others. These skills enable a manager
to transmit ideas to subordinates so that they know what is expected, to coordinate work with peers
and colleagues so that they work together properly, and to keep higher -level managers informed
about what is going on.

Transferability of Talent Across Organizations

An appealing query about managerial skills is the extent to which they are transferable from one type
of organization to another. Writers generally agree that lower level managers cannot easily transfer
to a different functional specialty e.g., from sales manager to engineering manager, because the
technical skills needed at this level of management are so different across organizations.

Katz proposed that top-managers with ample human relations and conceptual skills can be shifted
from one industry to another with great ease and no loss of effectiveness. Some other writers
contend that the transferability of skills for top executive is limited due to variations in ownership,
traditions, organizational climate, and culture. Different industries have unique economic, market,
and technological characteristics. Familiarity with technical matters, products, personalities, and
traditions is a type of knowledge that is acquired only through long experience in the organization.
Only the general components of conceptual and technical skills can be used in a different situation.

Organizations Call for Administrators

A manager is someone who works with and through other people by coordinating their work activities
in order to accomplish organizational goals. That may mean coordinating the work of a departmental
28 Introduction to Management

group, or it may mean supervising a single person. It could involve coordination the work activities of
a team composed of people from several different departments or even people outside the
organization such as temporary employees or employees who work for the organization’s suppliers.
Keep in mind, also, that managers may have other work duties not related to coordinating and
integrating of others. For example, an insurance claims supervisor may also process claims in addition
to coordinating the work activities of other claims clerks.

Managers are people who are in charge of others and are responsible for timely and correct execution
of actions that promote their units’ successful performance. As enterprises grow from an owner to
a group of to a corporation, a number of managerial levels are created and they begin to take on a
shape. Three distinct levels of management executive, middle, and first-line are usually portrayed as a
managerial hierarchy. Thus, hierarchy depicts what is called a chain of command, or simply a channel
of communication, coordination, and control. The first-line manager reports to a middle-line manager,
who reports to an executive level manager.

Levels of Management
A typical organization has several layers of management. Think of these layers as forming a pyramid
like the one in figure No1 Levels of Management, with top managers occupying the narrow space at
the peak, first-line managers the broad base, and middle-managers the levels in between. As move up
the pyramid, management positions get more demanding, but they carry more authority and
responsibility along with more power, prestige, and pay. Top managers spend most of their time in
planning and decision making, while first-line managers focus on day-to-day operations. For obvious
reasons, there are far more people with positions at the base of the pyramid than there are with jobs
at the other two levels.

Top Managers
By the side of or close to the top of the organization are the top managers also known as executives,
who are responsible for making organization-wide decisions and establishing the plans and goals
that affect the entire organization. These individuals typically have titles such as executive vice
president, president, managing director, chief operating officer, chief executive officer, or chairman
of the board. As the top of management pyramid sits the president or chief executive officer and
other managers engaged primarily in charting the overall mission, strategy, and objectives of the
business. They function externally for the business and are important spokes person for everything
the company is attempting to accomplish.

Middle Managers
Middle managers include all levels of management between the first-line level and the top level of
the organization. These managers manage the work of first line managers and may have titles such as
department head, project leader, plant manager, or division managers. The middle level of the
 Chapter 1: Introduction to Management and Organisation 29

management hierarchy includes plant supervisors, college deans, project directors, and regional sales
coordinators. These managers receive the broad overall strategies, mission, and objectives from
executive-level managers and translate them into specific action programs. The emphasis is on
implementing the broad organizational plans.

First-line Managers
First-line managers are the lowest level of management and manage the work of non-managerial
individuals who are involved with the production or creation of the organization’s products. They’re
often called supervisors, but may also be called line managers, office managers or even foreman. The
third level of management, the first-line or supervisory level is directly responsible for the minute
details needed to coordinate the work of non-managers. Supervisors must work directly with
employees and motivate them to perform satisfactorily. The supervisor in a factory, the departmental
chairperson in a university, and the product manager in a marketing department must translate
overall corporate goals into plans.

Table 1.2: Managers at Different Organizational Stage *

Type of Organization/
Industry Educational Government
Level of Management

Top level Managing Director President Cabinet Secretary

Middle level Divisional Managers Vice President Commissioner

Dean Division Director

First level Supervisor, Foreman Department Chairperson Program Manager

* Different organizations use various terms to identify managers at dissimilar organizational levels

The cornerstone that separates the three levels of managers from non-mangers is decision making.
Managers at any level, performing any managerial function and applying any managerial principle,
must make decisions. Executive-level managers must determine the overall direction of the company.
The middle manager must decide how to implement the overall plan at the supervisory level. The
first-line supervisors must decide how to motivate employees and reward the best performance.

An organization is a deliberate arrangement of people to accomplish some specific purpose.

Organizations share three common characteristics:
1. Each has a distinct purpose
2. Each is composed of people
3. Each develops some deliberate structure so members can do their work.

Although these three characteristics are important in defining what an organization is, the concept
of an organization is changing. The characteristic of new organizations of today include: flexible
work arrangements, employee work teams, open communication systems, and supplier alliances.
30 Introduction to Management

Organizations are becoming more open, flexible, and responsive to changes. Organizations are
changing because the world around them has changed and is continuing to change. These societal,
economic, global, and technological changes have created an environment in which successful
organizations must embrace new ways of getting their work done.

Personality of Managers
Management might not on the face of it appear to be that difficult compared to the technical
aspects of the role. Some of the key manager’s qualities are mentioned below:

Act with Truthfulness

Acting with integrity is about behaving in a way that demonstrates professionalism. There will be
times, especially when under pressure where manager might be tempted to breach manager’s own
standards. Notice when this is happening and catch him before manager say or do something that
conflicts with his or her values.

Being Accountable
Part of the deal of being a manager is being accountable for what is and what is not delivered. If
manager are happy taking the rewards that comes with a management role, it is important to make
sure that manager are willing to take responsibility for results.

Reasonable
The final quality that good managers have in abundance and is often overlooked is common sense.
When faced with a host of challenges, it is all too easy to lose sight of the obvious solutions.

Steadiness
Manager’s team will look to manager for support and help when things are difficult for them. Be
there for them and show them that they can rely on manager through good and not so good times.

Softness
Good managers have a knack of bouncing back from setbacks and disappointments. In other words
they are resilient. They believe in themselves and what they can achieve and see setbacks as an
obstacle to overcome.

Honesty
Managers have to deal with many problems and challenges. From time to time manager will have to
make some tough choices. Those that you manage will look to manager for re-assurance that everything
will be okay. It is not always going to be possible to do that so learn to be honest with people.
 Chapter 1: Introduction to Management and Organisation 31

Determination
Getting results requires both inspiration and determination. Determination is a willingness to keep
looking for ways to get the result manager want, even when the odds appear to be stacked against
manager.
According to Bill Gates a good manager has at least ten good qualities; there isn’t a magic formula for
good management, of course, but if you’re a manager, perhaps these tips will help you be more
effective:
1. Choose a Field Thoughtfully: Make it one you enjoy. It’s hard to be productive
without enthusiasm. This is true whether you’re a manager or employee.

2. Hire Carefully and are Willing to Fire: You need a strong team, because a mediocre team
gives mediocre results, no matter how well managed it is. One mistake is holding on to
somebody who doesn’t measure up. It’s easy to keep this person on the job because he’s not
terrible at what he does. But a good manager will replace him or move him to where he can
succeed unambiguously.

3. Create a Productive Environment: This is a particular challenge because it requires different

approaches depending on the context. When I was building Microsoft, I set out to create an
environment where software developers could thrive. I wanted a company where engineers
liked to work. I wanted to create a culture that encouraged them to work together, share
ideas and remain motivated. If I hadn’t been a software engineer myself, there’s no way I
could have achieved my goal.

4. Define Successes: Make it clear to your employees what constitutes success and how they
should measure their achievements. Goals must be realistic. Project schedules, for example,
must be set by the people who do the work. People will accept a “bottoms-up” deadline they
helped set, but they’ll be cynical about a schedule imposed from the top that doesn’t map to
reality. Unachievable goals undermine an organization.

5. To be a Good Manager: You have to like people and be good at communicating. This is hard
to fake. If you don’t enjoy interacting with people, it’ll be hard to manage them well. You
must have a wide range of personal contacts within your organization. You need relationships
- not necessarily personal friendships - with a fair number of people, including your own
employees.

6. Develop your People to do Their Jobs better than You Can: Transfer your skills to them.
This is an exciting goal, but it can be threatening to a manager who worries that he’s training
his replacement. Many smart managers like to see their employees increase their
responsibilities because it frees the managers to tackle new or undone tasks.

7. Build Morale: Make it clear there’s plenty of goodwill to go around and that it’s not just you
or some hotshot manager who’s going to look good if things go well. Give people a sense of
the importance of what they’re working on - its importance to the company, its importance
to customers.
32 Introduction to Management

8. Take on Projects by You: You need to do more than communicate. The last thing people
want is a boss who just doles out stuff. From time to time, prove you can be hands-on by
taking on one of the less attractive tasks and using it as an example of how your employees
should meet challenges.

9. Don’t Make the Same Decision Twice: Spend the time and thought to make a solid decision
the first time so that you don’t revisit the issue unnecessarily. If you’re too willing to reopen
issues, it interferes not only with your execution but also with your motivation to make a
decision in the first place. People hate indecisive leadership; however, that doesn’t mean
you have to decide everything the moment it comes to your attention. Nor that you can’t
ever reconsider a decision.

10. Let People Know Whom to Please: Maybe it’s you, maybe it’s your boss, and maybe it’s
somebody who works for you. You’re in trouble and risking paralysis in your organization
when employees start saying to themselves: “Am I supposed to be making this person happy
or this other person happy? They seem to have different priorities.”

I don’t pretend that these are the only ten approaches a manager should keep in mind. There are lots
of others. Just a month ago I encouraged leaders to demand bad news before good news from their
employees. But these ten ideas may help you manage well, and I hope they do.

Rewards and Challenges of Manager

Each day offers new challenges and rewards for manager, detailed discussion are;

Challenges
With new and luxurious condos going up all the time across the city, management companies are
champing at the bit to become the first managing agent for these often high-profile, upscale
properties. If it’s a choice between managing a new multi-unit residential property or an older existing
property, it seems like a no-brainer to go with the new one. After all, becoming the first managing
agent offers firms the opportunity to establish proprietary operational and procedural systems on a
property with all the latest amenities. Although it might initially seem that a new building has everything
up and running perfectly, there are often lingering construction problems, clueless first-time
homeowners and problems that need to be worked out—usually with a lot of help and sweat on the
part of the managing agent.

Moment Limitations
The traditional fences between work time and home time are falling. Working parents need to hear
from their kids in the afternoon. Conference calls with colleagues overseas require odd hours. Email
pours in from everywhere, at any time. And we can get email on our computers, our pagers, our
cellular phones, and our palm pilots, to name just the major sources today. Tele-working generally
 Chapter 1: Introduction to Management and Organisation 33

supports a more varied schedule, and urban congestion drives non-traditional hours. Work and
home are both becoming 24X7 propositions. Therefore, to create a work environment that rewards
work completed more than hours spent, allows some time chaos, and motivates staff to produce.
This environment should acknowledge the very real pressures on staff and support effective systems
that work within those pressures while still requiring accountability.

Employee Scarcity
There is a growing shortage of qualified workers. Earth’s population is nearing the top of the growth
curve, and we are in the early stages of spreading out into a vast new territory – space. This is going to
become significant over the next few decades. As well as facing shortage of resources at both ends
of the bell curve — retail stores are having trouble finding holiday workers this year, and high tech
firms are struggling to recruit and keep specialists. Above discussion gives following conclusion;

(a) Managers may have difficulty in effectively blending the knowledge, skills, ambitions,
and experiences of a diverse group of employees.
(b) A manager’s success typically is dependent on others’ work performance.

Rewards
In most cases, economic health is growing rather than shrinking. The opening of space will increase
resources. The increasingly global economy is likely to increase the geographic area which enjoys
economic health.

So, it becomes a Maslow’s hierarchy thing. If people have food, love, shelter, and health, then they
want different rewards on top of that. Sure, some of the young are leaving free-massage ridden dot-
coms for traditional companies today. But that’s because the dot-coms were failing to meet the basic
needs of stability and salary. Generally, successful workers want more time, more meaningful work,
and increased flexibility in their lives. The points are given below;

(a) Managers have an opportunity to create a work environment in which organizational

members can do their work to the best of their ability and help the organization achieve
its goals.
(b) Managers often receive recognition and status in the organization and in the larger
community; influence o organizational outcomes; and receive appropriate compensation.

(c) Knowing that their efforts, skills, and abilities are needed by the organization gives many
managers great satisfaction.

The manager of today must integrate management skills with new approaches that emphasize the
human touch, enhance flexibility, and involve employees.
34 Introduction to Management

The Authenticity of Work

The core of management texts are concerned with efficiency, both bureaucratic and post bureaucratic
organizations. The limitation is that it concerns itself with how, and not why the organizing is done
in a particular way. To introductions of the early theorists, looking at how they apply to organizations
today and reflecting on employees work experience through weblogs. Seminar discussion points will
be portrayed in this paper to further emphasize reality. As time progresses, people’s attitudes to
work changes and It will show how people now strive for motivation, responsibility, and quality of
life rather than having money as their only objective in their job.

The idea of making the production process as efficient as possible was first publicized by Frederick
Taylor in the late 19th and early 20th century with his time-motion study. It involved stream lining the
process to remove all unnecessary movements, along with the standardization of tools and processes.
The results were astonishing, with the employees producing much more than ever before. The
organization benefitted with increased profits, some of which was passed on to the employees as a
reward. This kept morale and productivity high at all times.

Later, ‘Taylor was hired by a large number of firms to rationalize work and employ his methods to
their workforce. This is known as scientific management and is regarded as a dehumanizing system in
which humans are considered as expendable.

The Universality of Management

Universality of management refers to the transferability of its principle, techniques, functions and
skills from one time, place or job to another. All these management practices are equally practicable
and applicable everywhere in the world irrespective of the nature of the job, differences in customs,
habits and social laws. Managerial functions and techniques can be practiced in every organized
effort. Whether it is a business, shop, industry, government office, educational, social, profitable or
non-profitable organization, management principles, functions and techniques are profitably and
productively applied. A successful manager of a company or a field can be equally successful in the
other.

Universality of management can be judged from the fact that an army general can efficiently hold a
position of a company or a country, although the nature of technical work is quite different in both
places; but the principles of performing the jobs are same. According to Fayol and Urwick,
management has some principles, like unity of command or division of work which can be ignored
nowhere. Universality never means that one particular job should be performed by every manager.
But it means that all jobs have principles in common that must be followed by every type of manager.

Doctrine of Management
Henri Fayol, a Frenchman, was one of the first writers to introduce the ideas of principles of
management. A principle is defined as ‘a fundamental, primary, or general truth, on which other
 Chapter 1: Introduction to Management and Organisation 35

truths depend. A principle can be defined as a fundamental statement or truth providing a guide to
thought or action. Principles in management are fundamental truth or what thought to be truth in
a given time; explaining relationship between two or more set of variables, usually an independent
variable and a dependent variable.

A Principle may be defined as a fundamental statement or truth providing a guide to thought or

action. They are guide to action. They are basic but not absolute. They are working hypotheses that
are reasonably well established, accepted and used in many successful organizations. As more research
is conducted, new principles will emerge, other management principles will be modified, and some
will be discarded as not truly representative of management practice today.

A high-quality management principle should be;

(a) Sensible, which means they can be applied almost any time in the organization’s life and
be appropriate,
(b) Applicable to the broad forms of organization structure,
(c) Reliable in that for similar sets of circumstances, similar results will occur and
(d) Bendable in that their application should take into account particular differences or
changes in the conditions that affect the organization.

The use of management principle is intended to simplify management work. Keys to what actions
should be taken are suggested by these principles. They provide the benchmarks from which the
comprehensiveness mastery of a subject may be stated and they can be viewed as capsules of what is
believed to be major considerations in current management thought.

Management: Science or Art?

One of the enduring questions in the field of management is whether it is an art or a science.
Webster’s College Dictionary defines an art as “skill in conducting any human activity” and science as
“any skill or technique that reflects a precise application of facts or a principle.” Reflected in the
differences in these definitions is the use of precision in science, in that there is a particular, prescribed
way in which a manager should act. Thus, management as a science would indicate that in practice,
managers use a specific body of information and facts to guide their behaviors, but that management
as an art requires no specific body of knowledge, only skill.

Conversely, those who believe management are an art are likely to believe that there is no specific
way to teach or understand management, and that it is a skill borne of personality and ability. Those
who believe in management as an art are likely to believe that certain people are more predisposed
to be effective managers than are others, and that some people cannot be taught to be effective
managers. That is, even with an understanding of management research and an education in
management, some people will not be capable of being effective practicing managers.
36 Introduction to Management

Science Standpoint
Working managers who deem in management as a science are likely to believe that there are ideal
managerial practices for certain situations. That is, when faced with a managerial dilemma, the manager
who believes in the scientific foundation of his or her craft will expect that there is a rational and
objective way to determine the correct course of action. This manager is likely to follow general
principles and theories and also by creating and testing hypotheses. For instance, if a manager has a
problem with an employee’s poor work performance, the manager will look to specific means of
performance improvement, expecting that certain principles will work in most situations. S/he may
rely on concepts learned in business school or through a company training program when determining
a course of action, perhaps paying less attention to political and social factors involved in the situation.

Essential Elements of Science are:

• Systematic body of knowledge

• Universal Principle
• Scientific Enquiry and experiment
• Cause and effect relationship
• Test of validity and predictability

Numerous early management researchers subscribed to the vision of managers as scientists. The
scientific management movement was the primary driver of this perspective. Scientific management,
pioneered by Frederick W. Taylor, Frank and Lillian Gilbert, and others, attempted to discover
“the one best way” to perform jobs. They used scientific processes to evaluate and organize work so
that it became more efficient and effective. Scientific management’s emphasis on both reducing
inefficiencies and on understanding the psychology of workers changed manager and employee
attitudes towards the practice of management.

Art Point of View

Committed managers who believe in management as an art are unlikely to believe that scientific
principles and theories will be able to implement in actual managerial situations. Instead, these
managers are likely to rely on the social and political environment surrounding the managerial issue,
using their own knowledge of a situation, rather than generic rules, to determine a course of action.
Rather than having a standard response to such a problem, this manager is likely to consider a broad
range of social and political factors, and is likely to take different actions depending on the context
of the problem.

Henry Mint berg is almost certainly the most well-known and prominent supporter of the school of
thought that management is an art. Mint berg is an academic researcher whose work capturing the
actual daily tasks of real managers was ground breaking research for its time. Mint berg, through his
surveillance of actual managers in their daily work, determined that managers did not sit at their
desks, thinking, evaluating, and deciding all day long, working for long, uninterrupted time periods.
Rather, Mint berg determined that mangers engaged in very fragmented work, with constant
 Chapter 1: Introduction to Management and Organisation 37

interruptions and rare opportunities to quietly consider managerial issues. Thus, Mint berg
revolutionized thinking about managers at the time that his work was published, challenging the
prior notion that managers behaved judiciously and methodically. This was in line with the viewpoint
of management as an art, because it indicated that managers did not necessarily have routine behaviors
throughout their days, but instead used their own social and political skills to solve problems that
arose throughout the course of work.

One more scholar that promoted the concept of management as an art was David E. Lilienthal, who
in 1967 his series of lectures had titled Management: A Humanist Art published. In this set of published
lectures, Lilienthal argues that management requires more than a mastery of techniques and skills;
instead, it also requires that managers understand individuals and their motivations and help them
achieve their goals. Lilienthal believed that combining management and leadership into practice, by
not only getting work done but understanding the meaning behind the work, as effective managerial
behavior. Thus, he promoted the idea of the manager as a motivator and facilitator of others. This
manager as an artist was likely to respond differently to each employee and situation, rather than use
a prescribed set of responses dictated by set of known guidelines.

Another supporter of the management as art school of thought is Peter Drucker, famed management
scholar who is best known for developing ideas related to total quality management. Drucker terms
management “a liberal art,” claiming that it is such because it deals with the fundamentals of knowledge,
wisdom, and leadership, but because it is also concerned with practice and application. Drucker
argues that the discipline i.e., the science of management attempts to create a paradigm for managers,
in which facts are established, and exceptions to these facts are ignored as anomalies. He is critical of
the assumptions that make up the management paradigm, because these assumptions change over
time as society and the business environment change. Thus, management is more of an art, because
scientific “facts” do not remain stable over time.

Management is both art and science; in another word Management is inaccurate Science. Management
science is the body of systemized knowledge accumulated and accepted with the understanding of
general truth concerning management. Management is an inexact science and it is not a pure science
as physical science, because the inclusion of human elements in managing makes this discipline not
only complex but also divisive as a pure science. Human behavior is unpredictable, different people
think, act or react differently not identical circumstance.

Art and Science in Management Schooling and Expansion

Management education and development, which attempt to prepare today’s managers for
organizational challenges, are guided by both the notion of management as an art and as a science.
The approach to management education and development is likely to differ dramatically depending
on the belief one has as to the nature of the practice of management. The perspective of management
as an art assumes to some extent that a manager has a disposition or experiences that guide him or
her in managerial decisions and activities. Thus, with this perspective, many managers may be successful
without any formal education or training in management. The perspective of management as a
38 Introduction to Management

science, however, would indicate that management skills can be taught through an understanding of
theory and principles of management. Many of today’s educational institutions and workplaces blend
the notion of management as a science and an art in their approach to preparing employees for
management.

Primarily, formal management education for practicing managers, such as with bachelors and masters
degrees, emphasizes the science of management. Management education in today’s universities
primarily emphasizes management as a science. Textbooks are used in management courses for
bachelors’ degrees, and these texts emphasize many of the consistent findings of many decades of
management research. And, as these degrees increase in popularity, it is likely that more practicing
managers will have a set of established management ideals with which they operate.

While official management education may promote management as a science, many development
efforts support the notion of management as an art. These activities allow managers to gain greater
social and political insight and thus rely on their own decision and abilities to improve their
management style. Much of mentoring involves behavior modeling, in which a protégé may learn
nuances of managerial behavior rather than a set of specific guidelines for managing. Overseas
experiences are likely to involve a great deal of manager adaptation, and the general rules by which
a manager might operate in one culture are likely to change when managing workers in other countries.
Finally, job rotation is a method that requires a manager to work in a variety of settings. Again, this
encourages a manager to be flexible and adaptive, and likely rely more on his or her personal skill in
managing.

The essentials of management as an art and management as a science are evident in today’s educational
institutions and work organizations. Management as a science was primarily influenced by researchers
in the area of scientific management, such as Frederick Taylor, and continues today in much of the
empirical research on management issues. Management as an art has been influenced by scholars
such as Henry Mint berg and Peter Drucker, and is often evident in complex theories of management.
Many scholars and practitioners blend art and science to more effectively cultivate managerial talent.
This is evident in recent theories of management, research in workplaces, and education and
development of managers.

Management by Objective (MBO)

MBO is a different modus operandi, management use to make workers productive or progress
motivational environment.

First: Prerequisite to MBO is worker involvement is goal setting: Workers must be involved in setting
their work objectives. It allows workers and superior know exactly what performance is expected.
Contained in MBO is that neither side will accept poor performance by the other.

Second: prerequisite to MBO is fairness: Team play in attaining firm’s objectives provides a fair system
of compensation, rewards, and penalties. If workers and supervisor work as a team to attain goals
then they should be rewarded fairly.
 Chapter 1: Introduction to Management and Organisation 39

Third: MBO prerequisite self-control over work: MBO uses work to meet workers’ human needs by
giving them control and influence over their work. Fourth: MBO requirement performance is dealt
with: If workers failing to meet performance are dealt with harshly others will set goals they can easily
meet. If they exceed their goals and are not properly rewarded, the incentive for others to excel will
be diminished - i. e., rewards and sanctions must be given for success or failure at stated goals, not for
some hidden agenda. MBO success is highly dependent on honest support of all management levels.

The Supervisor-employee Involvement

A key element in firm’s success is quality of supervisors’ relationships with workers. Development of
good relationship requires mutual interest, openness, honesty, trust, and common vision of corporate
goal and efforts of managers.

1. Structuring Trust
Managers can convey trust in workers by delegation & leeway in work

(a) Freedom: Manager can show trust to workers by giving them leeway in how they do
their jobs. It enables them to adapt jobs to their personal preferences. Manager’s role is
to provide tools and monitor their progress.

(b) Delegation: Managers can show their trust in workers thro delegation of authority. This
allows workers to broaden management skills to assume more responsibility in future
time. It frees mgrs to attend to pressing matters.

2. Structuring Interes in Workers

Managers can show their genuine interest in workers throw open and honest system of rewards and
sanctions. System should always be done in private and reasons for reward or sanction should be
clearly explained.

Pay levels should be fair and be published. A salary or wage should reflect job responsibility and
performance.

3. General Vision of Corporate Goals

If managers and workers share a common vision of firm’s goals, it builds good relationship. If these
questions are answered honestly, the responses should force both managers and workers understand
each other job and this can strengthen their relationship.

Management by Exception (MBE)

Management by Exception is a “policy by which management devotes its time to investigating only
those situations in which actual results differ significantly from planned results. The idea is that
management should spend its valuable time concentrating on the more important items such as
40 Introduction to Management

shaping the company’s future strategic course. Attention is given only to material deviations requiring
investigation.”

In reference to dictionary of accounting terns MBO concept or policy by which management devotes
it’s time to investigating only those situations in which actual results differ significantly from planned
results. The idea is that management should spend its valuable time concentrating on the more
important items such as shaping the company’s future strategic course. Attention is given only to
material deviations requiring investigation. The tools that facilitate use of this concept include Decision
Support System (DSS), expert systems, performance report.

Accordance with dictionary of Business terms MBO described administrative policy of focusing on
those events deviating from an established standard. Management by exception practices are
established where it has been determined that only those events that deviate from a standard are
significant. For example, only those creditors having outstanding accounts for more than 45 days will
receive a second billing notice.

This type of management can be powerful when it is necessary to process lots of data in order to
make managerial decisions. The problem with this policy is that it can result in myopic behavior. This
behavior implies that lower management shifts its goal from running a successful business in a real
world environment, to feeding centralized auditors and managers with financial data which will be
interpreted as within. Thus, lower management can in some cases dodge being marked as an exception,
to the long term detriment of the plant they are managing. All organizations can use management by
exception. When routine work results in acceptable performance, no management attention is
required. Managers who have properly trained their subordinates should have no problems delegating
authority and allowing people to manage their own work.

Management by exception is increasing in reputation among managers, and it is no question why.

This form of management is a style where managers do as little as possible, instead they delegate it to
people below them, and only step in when they have to. So, it is the idea of minimizing responsibility.
So, why does this management style work for some? It is based around the concept or policy that
states that the most effective use of managers is not as a babysitter, but rather management should
devote its time to investigating only those situations in which actual results differ significantly from
planned results.

The principles of management by exception suggest that the management should spend its valuable
time concentrating on the more important items such as shaping the company’s future strategic
course. So, rather than roam the floor watching each employee with an eagle eye, they should
employ trustworthy adults who do not need constant supervision, and instead spend their time
determining the best path for the company to take in the future.

This is worth repeating: So, rather than monitoring every move of their employees, a manager should
encourage, and set a path, then only step in if there is a big deviation from the path. In the meantime,
they should be planning future paths for their employees to follow. If the people employed are
responsible enough to move forward, and work toward company goals without constant prodding
 Chapter 1: Introduction to Management and Organisation 41

and supervision, than this is an excellent choice of management style. It works best in situations
where all employed greatly benefit from the success, or are harmed by the failure of their outcomes.
People who are paid hourly, and could find similar work easily should the company go under, and
those who do not look at this job as a career path would not do well with this type of management.

Management by Walking Around (MBWA)

According to Wikipedia refers to a style of business management which involves managers wandering
around, in an unstructured manner, through the workplace(s), at random, to check with employees,
or equipment, about the status of ongoing work. The emphasis is on the word “wandering” as
an impromptu movement within a workplace, rather than a plan where employees expect a visit
from managers at more systematic, pre-approved or scheduled times. MBWA involves;

• Managers consistently reserving time to walk through their departments and/or to be

available for impromptu discussions. MBWA frequently goes together with an open-door
management policy.
• Individuals forming networks of acquaintances throughout their organizations.

• Lots of opportunities for chatting over coffee or lunch, or in the corridors.

• Managers getting away from their desks and starting to talk to individual employees. The
idea is that they should learn about problems and concerns at first hand. At the same time
they should teach employees new methods to manage particular problems. The
communication goes both ways.

Merits
Managing by walking around does not just cut through vertical lines of communication as well as
MBWA gives following merits to the organization

1. Refreshes organizational values.

2. Motivates staff by suggesting that management takes an active interest in people.

3. Encourages staff to achieve individual and collective goals.

4. Strengthens ability to drive cultural change for higher organizational performance.

5. Makes work less formal.

6. Builds trust and relationships.

7. Creates a healthy organization.

MBWA was popularized by becoming an important part of “The HP Way”, the open style of management
pioneered by Bill Hewlett and Dave Packard, the two founders of the eponymous computer company.
Many of the practices of The HP Way became widely copied by corporations throughout the United
States in the late 1980s and early 1990s.
42 Introduction to Management

Management by Strengths (MBS)

Management by Strengths is a program designed to help companies increase productivity; improve
customer satisfaction and employee morale through an improved understanding of how to work
more effectively together. MBS skills enhance team building throughout an organization. Management
by Strengths is a program that connects people and profits in a way that enables both managers and
employees to work at their optimum levels and with greater job satisfaction.

Management by Process
Process discipline is about orchestrating positions to produce. This is accomplished through exhibiting
zero tolerance for ethics violations, non-compliance to process, and substandard performance.
To manage by process discipline, supervisors must be held accountable to correct the performance
of direct reports each time an infraction occurs. The company must empower employees at all
levels and demand that they be directly involved in continuous improvement (the elimination of
waste and rework).

Management by Values
The concept of Value is based on the relationship between satisfying needs and expectations and
the resources required to achieve them. The aim of Value Management is to reconcile all stakeholders’
views and to achieve the best balance between satisfied needs and resources. Management by Values
is a relatively new management philosophy created by internationally renowned management experts,
with a view to better managing people in organizations. As sport organizations increasingly focus on
performance excellence, there is a parallel need to invest in an organizational framework built on a
solid foundation of values. Management by values might be described as the third phase of this
evolution of management philosophies. As the prevailing environment surrounding organizational
decision-making and management has gone from being ‘certain’ to ‘uncertain’ and now to ‘complex’,
the earlier management by instruction and management by objectives approaches have been less
than adequate.

Dolan, Garcia and Richley have written widely about management by values as a strategic leadership
tool that can have immensely practical results for organizations, through acknowledging the complexity
inherent in the environment; channeling the daily efforts of individuals towards an organization’s
strategic vision; redesigning organizational culture along more humanistic lines; and including ethical
principles into strategic leadership. Today it is widely accepted that an organization that does not
align the values of its employees with its corporate vision is not likely to survive in the long run. When
implemented correctly in organizations, Management by Values can give a company a competitive
edge by creating a sustainable, highly motivated, and energetic culture.

Value Engineering
Value engineering (VE) is a systematic method to improve the “value” of goods or products and services
by using an examination of function. Value, as defined, is the ratio of function to cost. Value can
 Chapter 1: Introduction to Management and Organisation 43

therefore be increased by either improving the function or reducing the cost. It is a primary tenet of
value engineering that basic functions be preserved and not be reduced as a consequence of pursuing
value improvements. In the United States, value engineering is specifically spelled out in Public Law
104-106, which states “Each executive agency shall establish and maintain cost-effective value engineering
procedures and processes.” Value engineering is sometimes taught within the project management
or industrial engineering body of knowledge as a technique in which the value of a system’s outputs
is optimized by crafting a mix of performance function and costs.

Value engineering follows a structured thought process that is based exclusively on “function”, i.e.
what something “does” not what it is. For example a screw driver that is being used to stir a can of
paint has a “function” of mixing the contents of paint can and not the original connotation of
securing a screw into a screw-hole. In value engineering “functions” are always described in a two
word abridgment of an active verb and measurable noun and to do so in the most non-prescriptive
way possible. In the screw driver and can of paint example, the most basic function would be “blend
liquid” which is less prescriptive than “stir paint” which can be seen to limit the action by stirring and
to limit the application.

Value engineering uses rational logic and the analysis of function to identify relationships that increase
value. It is considered a quantitative method similar to the scientific method, which focuses on
hypothesis-conclusion approaches to test relationships, and operations research, which uses model
building to identify predictive relationships. Value engineering is also referred to as “value management”
or “value methodology” (VM), and “value analysis” (VA). VE is above all a structured problem solving
process based on function analysis—understanding something with such clarity that it can be
described in two words, the active verb and measurable noun abridgement.

Discussion Questions
1. Explain the significance of management and organization.

2. Explain the qualities of managers.

3. Define the main activities of management process.

4. Describe the main categories of managers.

5. Explain rewards and challenges of managers.

6. Explain following concepts:
– Management by Objectives
– Management by Value
– Management by Exception
7. What is value engineering?
44 Introduction to Management

Business Case
CSG Krishnamacharyalu is a man on a mission. As the newly appointed CEO of Bharti Telecom (BT) he is
determined to make (BT) he is determined to make BT a more conflict friendly organization.

CSGK has some ambitious goals for BT. At the top of the list is to significantly boost sales value. In 2007,
he said he wanted the company best known for electronics products to double sales by the year 2011.
But the company’s strong cult like culture tends to different people, says CSGK. BT people are too
insular, risk averse and slow to make decisions. According to CSGK, the problem has a lot to do with
keeping isolated inside one of BT’s offices in New Delhi. The company recruits job candidates from a
variety of backgrounds, puts them through a relatively standardized technical and non-technical and
non-technical training program and then insulates them at New Delhi office. After a while they begin
to sound alike, think alike, even look alike, he says. CSGK’S career path is unusual for BT, while he’s been
with the company for nearly 15 years. He’s spent most of his time outside New Delhi. A Tamilnaduman
by birth, he joined BT as an Assistant Branch Manager in Mumbai. After 5 years he was transferred to
Chennai as an Advertising Manager and was later promoted to General Manager. Asked to describe
CSGK, those who know him describe him as a “loner”, “hard driving”, “tough”, and a person who
“doesn’t mince words” He has a reputation for shaking things up. As such, he might be just the right
man for his new job.

BT is a company in which managers have a passion for memo writing and dissent is rarely tolerated;
employees may be wasting up to half their time on “non-value added work” such as memo writing he
says. During a recent talk with employees in Chennai. For instance, one worker complained to CSGK
that he had to continually create new management review charts, often with the same information
is several different forms. The employee thought he was wasting a kit of his time.

CSGK is determined to change BTs culture. He wants to make the company faster on its feet, more
innovative and more conflict friendly. ”Great ideas, generally comes from conflict a dissatisfaction
with the status quo. I’d like to have an organization where there are rebels.”

Questions
1. How was the BT culture shaped?
2. Do you think CSGK will succeed?

3. What type of culture do you think BT is currently?

4. What type is CSGK trying to change to?

5. Give suitable heading to this case study.