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Management fundaments MBA 1st year 1st Sem
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/ 47
Introduction to Management and Basies of Managing in Workplace (Unit 1) n
Introduction to Management and Basics of
Managing in Workplace
1.1.1.. Meaning and Definition of Management.
‘The term: ‘management’ stands for the act of planning, organising, directing and, controlling the activities of
human beings and physical resources with the intention of acconiplishing a predefined objective. Being: broad in
nature the word carries many contextual meanings.
Itis looked upon as a ‘factor of production’, as a ‘class of persons’, a8.a ‘process’ and as an ‘exploiting set of people’
from the viewpoints of economists, socialists, management practitioners and trade unionists, respectively.
According to Louis Allen, “Management is what a manager does”.
‘According to James D. Mooney and Allan C. Reiley, “Management is the art of directing and inspiring people”.
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According to Peter Drucker, “Management is a multipurpose organ that manages a business, manages
manager and manages workers and work”.
According to Koontz and O°Donnel, “Management is the creation and maintenance of an internal
environment in an enterprise where individuals, working in groups, can perform efficiently and effectively
toward the attainment of group goals. It is the art of getting the work done through and with people in formally
organised groups”.
In a nutshell, it is portrayed as “an activity” or ‘a process’ executed by ‘a group of people’ dynamically engaged
with the authorities to make decisions or policies. Simply, it can be stated that, management is the job of a
manager, who exhibits the art of managing the people and getting the things done with the help of formally
‘organised groups of people.
1.1.2. Basic Concepts of Management
: Different concepts related to management are as follows:
i 1) Management as a Process: Management is considered a process as it comprises of a soquence of activities.
Process of management involves setting organisational goals and taking necessary actions ensuring that the set
‘goals are realised. Functions like planning, organising, staffing, directing and controlling are all a part of the
‘management process. Management can thus be understood as a process of setting the objectives and performing
different activities for achieving these objectives. Facets of management as a process are as follows:
i) Management is a Social Process: The process of management is generally considered as a social
process because while carrying-out the management operations, managers have to deal with people who
are involved in attaining the organisational goals. A manager can successfully perform his duties only
when there is a positive interaction between employees. Hence, being a social process, management is
responsible for ensuring that the employees communicate with éach other in a productive way.
ii) Management is an Integrating Process: There is a continuous interaction between human and the
non-human resources (materials, assets, buildings, technologi¢s, machineries, etc.) in an organisation. It
is the responsibility of the management to combine the efforts of the employees with other
organisational resources. Management integrates and synchronises all financial, technological, human
4 and physical resources of the organisation. 2 MBA First Semester (Management Fundamental) SPPU
iti) Management is a Continuous Process: Management is a never-ending process and is not just
confined to creating harmony between physical and human resources for specific task. The scope of
management duties is quite wide which encompasses solving of different problems and concerns. The
process of management focuses on continuous detection and resolution of issues and problems.
2) Management as an Activity: Management is considered as a process as it involves a set of activities which in
order to be effective should be carried-out in a particular sequence. Management in éontext of being an activity
suggests that, ‘management is what managers do’. Management as an activity involves the following aspects:
i) Informational Activities: In order to perform its functions, managers are continuously in touch with
their superiors, colleagues and subordinates. Managers perform information sharing activities in verbal
and non-verbal format. They provide and receive information regarding different people, processes,
circumstances, responsibilities, etc, Different organisational procedures are commenced, continued and
concluded on the basis of information communicated by the management,
ii) Decisional Activities: One of the most important activities performed by the managers is decision-
making. Managers are required to invest a substantial amount of time in making various decisions. In
practice, managers are required to make all sorts of decjsion in performing the managerial furictions.
For example, when an employee is on leave, the manager has to make a decision to assign his duties to
some other employee.
iii) Inter-personal Activities: Managers interact continuously with employees at different positions of the
“organisation. These relations play a significant role in realising the organisational goals. Different inter-
personal activities performed by managers are solving specific problems of employees, sustaining a positive
social work environment and developing harmonious relations with the superiors as well as the subordinates.
3) Management as a Group: As 2 group, management is stated as a section of people that holds managerial
positions in the organisation. These groups of people collectively perform different managerial operations.
Hence, if the. management of an organisation is praised, can be said that the nianagers are good at
performing their roles. Top level, middle level and operational level managers together form the
‘management’ of the organisation.
4) Management as a ‘Discipline: Previously management was called as a ‘distinct field’ and ‘body of
knowledge’. In present times, management is documented as an ‘organised discipline’ that can be studied
and taught. Recognition of management as a discipline can be witnessed in different parts of the world.
There are large number of institutions, universities and colleges in different countries that are well known
for their management cours
5) Management as an Economic Resource: Management in general, can be understood 2s optimum utilisation
of scarce resources. These resources are commonly called the 5 Ms, ie., materials, money, machinery, method
and manpower. The primary goal of management is to ensure effective utilisation of these 5 Ms by
transforming the inputs into outputs (products and services). Management is said to be an economic resource
as it helps in effective utilisation of the 5 Ms with the help of proper planning and coordination.
1.1.3.. Nature of Management
Nature of management can be explained with the help of the following points:
"Nature of Management
Continuous Process
Management a a Discipline
Management asa Corer
‘Management aba Science as wells an AT
(Goal-Oriented I
Guidance
Management is a Human Acivity
‘Management Denotes Authority
Management is Universal
‘Management Ensures Coordination
Managements Dynamic
‘Managements Primarily a Leadership Activity
‘Management is Decision-Making
L| ‘Management is Profession
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Introduction to Management and Basics of Managing in Workplace (Unit !) B
1). Continuous Process: Management is a never ending process. It continuously follows a series of steps like
planning, organising, staffing, directing and controlling for effective utilisation of financial and personnel
organisational resources. All these functions are inter-dependent and one function cannot operate without
the presence of the other. Hericé, management is an unending process that follows a mumber of steps so that
the problems are identified and resolved. °
3). Management as a Discipline: Management may not fit well in the context-of a discipline like other
physical seiences but its status is gradually increasing amongst the practitioners of management. In recent
times, the status of management as a discipline is increasing as it provides certified information and
knowledge to management practitioners and also aims at discovering new aspects of the business world.
‘Management as a Career: Management on its own is an excellent career option offering diverse growth
opportunities. Management also offers insights in interesting, stimulating and specialised areas like human
resources, marketing, finance, supply chain management, etc. These ure all the upcoming challenging areas
and lucrative career options. :
4), Management as a Science as well as an Art: Managethent is.a good combination of art as well as science,
‘As it is an organised body of knowledge and states various facts and truths, hence it can be considered as a
science. Management is also an art, as it involves maniaging various protesses which requires different set
of skills by managers.
5), Goal-Oriented: Every organisation has to attain a sel of pre-determined goals. The successor failure of the
management depends on the extent to which these goals have been achieved.
6) Guidance: Management provides guidance and explains the ways in which human and material resources
can be utilised in the most efficient manner. It suggests techniques for effective and economic utilisation of
scarce resources to achieve the objectives of a business enterprise. It is an art of getting things done by
© *chieving coordination among employees who carry-out specific and diverse busines® operations.
3} Management is a Human Activity: Management can be’ termed as a human activity and the functions of
management can only be performed by the organisational staff members. Thus, no artificial entity or
‘corporate body can perform managerial functions. It is an intangible activity which can be felt but not seen
of touched.
8) Management Denotes Authority: Authority compels people to work and behave in a particular manner.
‘Authority is the prime base of management, i.c., managerial process cannot function without authority.
‘Management gives the authority to the managers to guide, direct and control. This authority enables the
‘management to attain a higher position in the hierarchy of any business organisation,
9) Management is Universal: Application of management is universal, i.2., it can be applied anywhere and
everywhere. Every business activity, clubs, government offices, charitable and religious institutions, army,
etc., come unider the scope of management.
10) Management Ensures Coordination: Coordination is important at each and every stage in an
“organisation. Coordination between every employee and between every department is crucial for smooth
functioning of the business. Mutual harmony between employees helps in attaining organisational
objectives successfully.
11) Management is Dynamic: It is difficult for any business environment to remain constant for a long period
of time. Hence, management also changes with every change in the environment of the business.
‘Management tools and techniques help in converting the threats associated with environment into
opportunities. Management adapis itself according to the changing goals, requirements aud challenges of
the business.
12) Management is Primarily a Leadership Activity: Management is essentially an art of getting things done
by people. One of the main roles of a manager is to exercise leadership practice. Leadership is an important
factor for the success of an enterprise. It is the process of influencing people to willingly contribute towards
achieving organisational objectives. Some of the qualities of good manager and leader are willpower,
knowledge, decisiveness, motivator, integrity, etc. A good leader must be inspiring and be able to guide the
‘group of people towards maximising their potential 4 MBA First Semester (Management Fundamental) SPPU
13) Management is Decision-Making: Decision-making is an important activity for any business manager.
Decisions are based on the available facts and figures and depend on the understanding and analysis of the
managers. Various technical methods are used to determine the best decision for the overall betterment of
the organisation, For example, a finance manager is responsible for taking decisions related to activities
like organising funds, preparing budgets, cost control, etc.
14) Management is Profession: Management is not an inherent ability, it is a profession. Managers are not
bom; they are made by proper training and acquiring managerial skills. As management is a discipline and
body of knowledge, any qualified person can become a manager.
1.1.4. Scope of Management :
The scope of management can be understood with the help of the following points:
1) Activity Point of View: Management principles and practices can be used in the following functions and
activities:
i) Planning: Planning activities involve formulating rules, objectives, policies, processes, strategies, etc.
‘These activities also help the managers in deciding what, how and when to achieve.
ii) Organising: Organising is the process of assigning designations by. distributing work in the form of
suitable duties.
iii) Staffing: Staffing activities involve assigning human resource to the designations developed during the
organising process.
iv) Directing: While directing, managers are responsible for leading’ the employees, guiding them and
providing them information regarding dos’ and don'ts of the organisation.
¥) Controlling: Controlling involves comparing the results with the set objectives, detecting deviations if
any, taking corrective measures to remove them so that the actual results are~equivalent to the set
objectives. 4
2) Functional Areas of Management: Scope of management can be visualised in the following functional
areas:
i) Financial Management: Financial management involves budgetary control, financial planning,
making cost control forecasts, statistical control, managing earnings, management accounting, etc.
ii) Personnel Management: Personnel management involves recruiting and selecting the employees,
training them, providing them social security, ensuring labour-welfare, maintaining industrial relations,
etc. It is also responsible for conducting activities like promoting, transferring, demoting, terminating
and retiring of the employees.
iii) Purchasing Management: Purchasing management deals with material control, inviting tenders for
purchasing materials, entering into contracts, placing orders, etc.
iv) Production Management: Production management involves times-study, quality inspection and
control, production planning, motion studies, tools and techniques of production control, etc.
v) Maintenance Management: It involves maintaining and taking good care of organisational
infrastructure like machinery, plants, buildings, etc.
vi) Logistics Management: Logistics management deals with different components like material handling,
warehousing, order processing, transportation, inventory control, etc.
vii) Marketing Management: Marketing management is quite wide in scope and deals with marketing
processes, marketing mix decisions, market research, managing risks in marketing, market planning and
control, etc,
viii) Office Management: It involves activities like staffing, availability and maintenance of office
‘equipment, preparing office layout, etc.
ix) Development Management: Development management involves conducting researches, experiments,
etc,
3) Management is an Inter-Disciplinary Approach: Management principles are based on multiple
disciplines. For successful application of management principles and practices, study of different fields like
psychology, economics, mathematics, commerce, etc., is very crucial “Introduction to Mangement and Basiés of Managing in Workplace (Unit 1) 8
4) Universality of Management: Management principles are universally accepted and hence, can be applied
to any collective activity for realising mutual goals.
5) Agent of Change: With the help of research and development techniques, management concepts can be
applied in different fields for changing traditional methods and implementing modem management
practices. /
1.1.5. Need of Management
Effective management is indispensable for the successful functioning of an organisation. It ensures optimum
utilisation of available physical and buman resources to accomplish desired plans and objectives. This results in
creased efficiency leading to maximisation of productivity. The need of management is explained under the
following points:
1). Accomplishing Organisational Goals: Management is essential for ensuring proper arrangement of available
physical and human resources for completion of plans or realisation of organisational goals, Management
principles and practices help the employces in achieving their objectives in an efficient manner.
Ensures Efficient Use of Resources: By exercising proper management skills, a manager seeks to reduce
wastage and spoilage of resources. As each activity is performed according to the pre-determined standards
and goals, this ensures that the physical and human resources are used in the most efficient and effective
‘mainer.
Reduction in Costs: Management is always in search of methods and techniques which maximise output
and minimise the operational costs. Efficient management with the aid of proper planning, organising and
controlling can lead to reduction in costs and improvement in overall results. Efficient controlling
techniques can avoid deviations and minimise cost which ¢an otherwise have adverse effects on the pre-
determined or estimated cost structure. :
Formation of a Sound Organisation: A planned structure of hierarchy creates a sound base of an
organisation, Allotment of authority and responsibifity to right candidates selected under an’efficient
‘staffing process helps the managers in balancing the organisational structure. With the help of management
practices, these inter-related positions are handled by the efficient personnel, groomed under ‘various skill
“enhancement programmes conducted by the organisation.
5) -Aids in Maintaining Equilibrium: The nature of business environment is ever changing and unstable. The
future of any organisation is dependent on the risks and opportunities associated with its environment, These
-risks and opportunities are beyond the control of any organisation. Management helps an organisation to
adjust according to these changing external factors. Hence, management helps in adapting with the changes
and implementing them into actions so that the organisation can achieve success and growth.
6) Necessity for a Prosperous Society: An efficient management process is always in search of various ways
and means to provide better quality products to the society. By applying various cost reduction techniques and
optimum utilisation of resources, management can offer quality services at affordable and economical prices.
‘This offers a better standard of living to the society. Adapting with changing technological environment and
innovating new and beneficial products offers valuc to the customers and to the society at large.
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1.1.6. Purpose of Management
‘The purpose or objectives of management are explained below:
1) Organisational Purpose: Management practices should be such that they help in realising the goals of the
‘organisation, The basic organisational goals are as follows:
4) Every business activity has certain amount of capital invested by its shareholders and other investors.
Hence, the prime objective of any management should be to give fair returns to these investors by
‘earning reasonable profits.
ii) Survival is the prime aim of any business activity. Continuing existence of the business in the long-run
stands to be a major objective for the management of the organisation.
iii) Expanding the business with the growing demands of the products and searching new business avenues.
iv) Improving the popularity and goodwill of the business enterprise in the market is one of the main
concerns of the management. 16 MBA Fist Semester (Management Fundamental) SPPU
2) ‘Personal Purpose: There are different people in every organisation and each of them has their own
individual purpose. Achievement of these personal objectives encourages the’staff to improve their
performance and help the organisation to grow and prosper. Some of them are as follows:
i) Reasonable salary and allowances as per the performance is the basic expectation of an employee from
the management of the organisation.
ii) Proper working environment is elso required by the employees. ,
iii) Management also aims for providing latest technological updates and training for the employees’ at
regular intervals.
iv) Employees expect equal and fair opportunity of participation in the management decisions.
v) Employees need security agaiust termination and prospects of growth.
3) Social Purpose: A business enterprise functions in a society. Thus, being a prt ofthe sovety it has certain
obligations towards it. The objectives of the management towards the society are listed below: :
i) The quality and value of the goods and services offered to the consumers should be affordable.
ii) Taxes and other returns to be filed on time with the governmént, regulatory and statutory agencies.
iii) Exploitation of natural resources should not be done for increasing profitability. Hence, management
should protect the environment from harmful business activities. :
iv) Management should maintain friendly relations with dealers, suppliers and competitors,
¥) Management should conserve moral and ethical values of the society.
1.1.7. Different Levels of Management a
Every organisation has a chain of command which determines the powers and the rank held by the managerial
personnel. Levels of management can be divided into following categories:
1) Top Management: Top level management consists of people that are at the highest managerial positions.
This position is held by the senior most authorities in an organisation including the Board of Directors,
Chief Executive Officer (CEO),, sectional heads, etc. They are involved in the long-term planning, laying:
down policies and strategies for organisational development and selection of methods to be adopted for
achieving the objectives. They act a5 a medium of communication for maintaining relations with the
external suppliers and agencies. Being the leaders of the organisation, they are accountable for good of poor
performance of the organisation.
2) Middle Management: Departmental heads form
the middle level management. They are responsible
for monitoring the departmental activities, giving
instructions and maintaining coordination between
the various activities, carried-out in the several
units and divisions. They act as a mediator between
the top level management and lower level
management. They convey the decisions taken by
the seniors and explain the importance of the same
to the lower level management. They also transmit Foreman, Supervisors,
the feedback and suggestions given by the Office Managers, Team Leaders
supervisory level to the seniors. Their role is to Figure Lis Levels of Management
motivate, inspire and encourage the operational
level managers to increase their performance levels.
3) Supervisory or Operative Management: First line supervisors like ~ section officer, superintendent,
supervisor, foreman, etc., are a part of the operative management level. They follow the instructions and
guidelines provided by the middle level of management. They are responsible for getting things done by the
workers. Production activities, assignment of jobs amongst workers, arrangement of required machinery
and tools, etc., are the activities performed by these managers. It is the responsibility of these managers to
‘get the work done of the desired quality in the specific period of time. They provide technical assistance to
the workers; ensure availability of necessary facilities; report problems and feedback to the higher level
authorities, etc. It is also a part of their job description to prepare the daily plan of action as per the
‘guidelines specified by senior level managers.
Supervisory/Operative Management |
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Introduction to Management and Basics of Managing in Workplace (Unit 1) ”
1.1.8. Management Functions
Each and every business endeavour has its own predetermined goals to achieve. The realisation of those goals,
may not be possible without an intended and incorporated unanimous effort of all the organisational members
who follow the instructions of a central coordinating agency. For example, in case of a football or hockey
team, one cannot win the game until and unless there is a combined attempt by the players under the appropriate
guidance of a Captain of the team, The central coordinating agency in this context ig (M-A-N-A-G-F-M-E-N-
‘T’ and the approach of getting the things done is known as the ‘management process’. Hence, management is a
complex process which includes many activities in a particular sequence. Each activity contributes towards the
attainment of the organisational goals. Individual action or activity performed in the management process is
designated as ‘functions of management’
Im the process of management, individual functions are carried-out according to a time-specific arrangement.
‘Thus, management process can be defined as a process where the manager performs functions in sequential
time-bound manner. Management is a social process as it is accountable of achieving the goals of the
organisation by regulating its functions and also ensuring that the planning activities are being carried-out in a
cost-effective and efficient manner. Management is also a dynainic process containing different components
and practices. Practices performed by management are not similar to the operational-level activities like
procurement, marketing, production, finance, etc. These dynamic activities are performed by the top, middle
and operative level managers.
‘The main functions of management process are as follows:
1) Planning: Planning is the deliberate effort to attain the expected Sutcome through a determined future
course of action. It involves visualisation of activities that need to be done, the methods for doing them,
where they are to be done, what will be the outcome and the methods to evaluate the outcomes. As per
Henry Fayol, every management should visualise a plan that comprises of the desired result, foresceing the
line of action, methods .to follow and stages to go through. a
2) Organising: The second function of management is to prepare
and organise. Organising involves division and re-division of
work into smaller duties, distributing the tasks among Consofting
designated work-force and allotting authority to every position
for ensuring proper functioning. By organising properly, the
cffectiveness of the organisation is enhanced, redundancy,
repetition and duplication of the activities is avoided; thereby Dieting swath
reducing the functioning cost of the organisation. It is the
responsibility of the management to organise the required
resources beforehand and then to follow the planned activities.
3) Staffing: It is the process of appointing people for the positions formed by the process of organisation,
Staffing is the process of recruiting, deploying and retaining sufficient and qualified employees or staffs to
create and maintain a favourable working environment and thereby improving the organisational
effectiveness, In large companies, staffing process is carried-out by coordinating with the human resource
department.
4) Directing: Direction is the key to achieve required goal. After the orientation of the subordinates, the senior
manager is accountable for directing and leading them to achieve enhanced job performance and to
motivate them to work with passion, confidence and enthusiasm. Directing motivates the employees to
perform their responsibilities in realising the organisational goals. While planning, organising and staffing
are the preliminary functions to the actual business activities, direction adds a spark to the organisation by
‘bringing the processes into motion.
5) Controlling: Functions of a manager are not complete even when the above elements are in place. It is very
important for the manager to review and assess the organisational activities on a regular basis and take
necessary steps for ensuring that the plans are being cartied-out in compliance with the predetermined path.
Controlling is a visualisation process that verifies that the tasks are performed as per expectations and
checks for current and future deviations. The control function helps the management in identifying the
deviations if any, and makes significant changes in the plans for realising the organisational goals.
‘Figure 1.2: Functions of Management 18 ‘MBA First Semester (Management Fundamental) SPPU.
1.1.9. Universality of Management Lone
‘The application and uses of management concepts and principles are universal, This also means that the transt
of management knowledge is possible from organisation to organisation or from country to country. This
generally means: : :
1) The principles of management are applicable in several organisation structures like hospitals, clubs,
enterprises, etc. z
2) They can also be applied to various nations and economic systems. They therefore have universal
applicability.
However, some philosophers and scholars of management do not concur on the universal applicability of the
management principles. There are thus two divergent views — one which views management as universal in
nature in terms of applicability and another which does not consider it as universal. Those who support the
universal aspect of management are Koontz and O’Donnel, McFarland, Allen, Lundy, Taylor and Fayol.
However, those who do not support the universal nature of management are Joan Woodward, Drucker,
Ernest Dale, etc,
1.1.9.1, Arguments for Universality of Management :
‘The following arguments favour the universal application of management:
1) Management as a Process: The concept of management is universal, if it considered as a process. This
implies that, irrespective of the organisational structure anid type, the basic managerial functions of
planning, organising, directing and controlling are the same and carried out by all the managers in the same
‘manner.
2) Distinction between Fundamentals and Techniques: There is a difference between the fundamentals and
the techniques of management, The fundamentals of management refer to the simple theories and principles
whereas the means to carry out the functions of management are provided by the maiiagement techniques.
The fundamentals of management do not change, however their applicable may change according to
situations. Therefore, it is only the practices which change; the managerial skills, concepts and principles
remain universal. :
3) Common Problems of Effective Use of Inputs: The objectives of organisations definitely differ. However
every organisation still requires some common inputs in the form of managerial concepts, principles and
skills which can be utilised in the process of allocation of scarce resources. These resources can be-capital,
human resources, time, etc. The very fact that managers change jobs and also industries indicate that there
are a certain common skills and concepts in play which remain the same. :
1.19.2. Arguments Against Universality of Management
‘The non-universality of management is based on the theory that much of management practise depends on the
prevalent situations and is therefore not transferable. The main arguments against universality of management
are as follows:
1) Differences in Objectives: The managerial type of an organisation is dependent on the objectives which
have been framed. Since the objectives of organisations are different, this implies that the managerial skills
and competencies also cannot be transferred from organisation to organisation. It is possible that a person
ccan therefore not show the same level of performance across all organisations. *
2) Differences in Philosophies: Organisations also differ in terms of philosophies or attitudes that they hold.
Due to such different philosophies across different organisations, it is possible that a manager may ot
perform effectively in all organisational situations. Since the philosophies of organisations are different,
they require different techniques of management. Therefore, the organisational philosophies will have
Provide
While sperforming informational roles the fea erieate
‘manager acts as a:
qo i), Monitor: A manager has to develop a
personal network of contacts inside and + Monitor
outside of the organisation. As a monitor, i Intoratonal + Diseninioe fe—] Prose
hhe has to constantly analyse his business ee
environment for extracting information,
questioning his subordinates and receiving aaa
unsolicited information from the * isarbance Handler
established contacts. Pecslonal 5 Resource Allocation |“ \Wrmation
ii) Disseminator: It is the role of a manager bide oneet
to share privilege business information
with his department members which * Figure 1.4: Role of Manager
otherwise would not be available to them.
iii) Spokesperson: An organisation has several stakeholders like shareholders, investors, consumers,
society, etc., Who require information about the activities of the enterprise. A manager's role are to
* recommend the shareholders regarding financial performance, assure the government and regulatory
authorities that the enterprise abides by the law, and ensure that social responsibilities are met for the
_ well-being of consumers.
3) Decisional Roles: A manager is the key personnel in the decision-making process. As he has access to all
the information and can voice his opinions for the benefit of the organisation: While performing decisional
roles the imanager acts as a/an:
i) Entrepreneur: Business environment is dynamic in nature. The environmental factors keep on
changing constantly. A successful manager is one who adopts these changes, implements them to
improve existing and new products, device innovative business plans, etc.
ii), Disturbance Handler: A manager must be prepared for handling unanticipated problems in and outside
the organisation, He inust have contingency plans or prompt solutions in case of strike by the workers,
important consumers going bankfupt, a client terminating contract against the terms decided, etc.
iii) Resource Allocator: Division of work among subordinates and delegation of authority to perform the given
work should be done by the manager. He assigns tasks to employees as per their individual capacities.
iv) Negotiator: A manager represents the organisation in case of a dispute that calls for negotiation. A
” corporate level manager plays a role of a negotiator and takes decisions for the organisation as a whole.
Not all negotiations are handled by the top-level manager; issues at executive level are resolved by the
executive level managers.
1.2.5. Managing Workplace R
‘A manager has to manage various respons
below:
onsibilities
ties at his workplace. Following are the responsibilities given
Responsibilities of a Manager
Planning for Work
Proper and Bffective Communication|
Coordination of Eorts|
Geting Cooperation of Employees
Encouraging Team Spirit
Boiter Utilisation of Resources
‘Solcing RighsPromaire |_|
5, — “Maintaining Good Human Relations
Solving the Problem ‘Acranging Tairing and Development
Facilites 24 MBA First Semester (Management Fundamental) SPPU
1) Planning for Work: Managers are primarily responsible for planning work by focussing on the
organisational objectives. Every work plan should aim towards the achievement of such objectives.
2) Proper and Effective Communication: A manager is responsible for maintaining a proper and effective
communication within the company. He is also responsible for identifying and eliminating communication
gaps and related barriers of communication. This fosters free flow of communication and removes
misunderstandings or doubts. 4
3) Coordination of Efforts: A manager is responsible for coordinating the efforts of all the employees. These
efforts are considered to have more worth than company’s finance. Thus, these efforts are accurately
coordinated in a productive manner by developing a system for channelisation.
4) Getting Cooperation from Employees: Duc to the distinct nature of employees, there is an absence of
cooperation at the workplace which often results in low production activities. Thus, a manager is
responsible for extracting cooperation from employees by motivating them towards their work,
5) Encouraging Team Spirit: Alongwith acting as a mentor, a manager is also responsible for encouraging
team spirit within workgroups. By using polite and powerful words, and simultaneously adopting a suitable
approach, a manager stimulates positivity and a sense of grobp morale among employees.
6) Better Utilisation of Resources: A manager ensures optimal and betier utilisation of resources. He is
responsible for-accurately measuring the amount of available resources and creatively using them at their
‘maximum level, so that no resource becomes a waste product:
7) Selecting Right Procedure: The top level executives establish plans and objectives of the organisation.
However, the right procedure of achieving such objectives and plans is identified and developed by
managers. They are also responsible for selecting the right course of action among various alternatives.
8) Maintaining Good Human Relations: Managers are responsible for maintaining good and healthy human
relations with all employees and workers. They also ensure harmony and good working relations between
employees of different management levels.
9) Solving the Problem: Managers are responsible for taking initiatives towards solving various problems and
conflicts that arise within an organisation. They identify and understand the real problems of employees and
make them grateful.
10) Arranging Training and Development Facilities: A manager is also responsible for organising training
and development related facilities for the growth of employees and organisation as a whole, as these
facilities are beneficial for both employees and the organisation,
1.3. ORGAI ATION
1.3.1. Meaning and Definition of Organisation
An organisation is a group of people, who are organised in a certain structure in order to satisfy a need or to
attain a common objective. Every organisation follows a particular structure for its management which specifies
that who is going to do what. It allocates different activities to different members, defines their roles and
responsibilities. It also states the authorities of different employees. Organisations are referred to a5 open
systems because organisations and its environment are connected to each other in such a way that both
influence each other.
A set arrangement for managing a company internally is known as an organisation. It is a technique of
management in which efforts of all the group members are utilised in order to achieve a common goal. It is
done by dividing the activities into various sub-activities and allotting them to different persons. Organisation is,
all about distribution of work and allocating it to persons well-suited for it.
According to Gary Johns, “Organisations are social inventions for accomplishing goals through group
efforts”.
According to Ralph C. Davis, “Organisation is a group of people who cooperate under the direction of
leaderships, for the accomplishment of a common end”. Introduction to Management and Basics of Managing in Workplace (Unit 1) 25
1.3.2. Nature of Organisation
‘The following two points explain the nature of an organisation:
1) Social System: Social system can be understood as a set of interrelated and independent components that
forms.a complete whole. In an organisation, social system consists of people of the society which is
organised by a distinctive pattern of relations. Such relations have different norms and values. Social
system is thus regarded as a social structure or social organisation. A social system can be further divided
into:
i) Feudal System: Established in the 8" Century in Europe, Feudal system is an economic and political
system having its foundation on the relation between lord and vassal, and holding of land. This system
is usually characterised by forfeiture, homage, legal and military service of tenants.
ii) Patriarchate: Patriarchate is a type of social system under which male is designated with the title of
family head, and it is his surname which is further passed to future generations. Under this system, the
male is empowered with all the powers.
iii) Matriarchate: Matriarchate is 2 type of social system under which female is designated with the title
of family head, and it is her surmame which is further passed to the future generations. Under this
S¥stem, the female is empowered with all the powers. .
iv) Meritocracy: Meritocracy is a type of social system under which the person having superior
intelligence and intellects is empowered with all the societal powers.
y) Class Structure: Under the class structure, there exist different classes within a society.
vi) Segregation: Segregation is a type of social system under which separate and distinct facilities are
provided to the minority groups.
2)._ Mutual Interest: When various groups are able (o negotiate strategies, the organisational relationships tend
to be strong. Mutual interests are the interests that are related to the achievement of respective goals and are
common to the involved parties. ‘When the mutual interests are shared among different people, the
organisation becomes stronger as a shared concem towards the achievement of common goals is developed.
For this, it is impostant that people develop a perspective for other individuals and discuss their issues in an
‘open manner. This promotes harmonious and sustainable actions that work for the organisation's mutual
direct interest.
1.3.3. Components of Organisation
Key elements of organisation are shown in figure 1.5:
People
» Teividual
© Group
Environment :
2 Government ‘Orgasisational
© Competition [>| ‘Behaviour
(© Soci Pressures
Computer Hardware and Software
Figure L5: Components of Organon
1) People: The internal social system of an organisation is made up of the people who work in it, This
comprises of individuals, large and small groups, informal and formal groups. It is the organisation that
exists fo serve its people and not vice versa. Today's organisations have changed and have become more
diverse than before. Present day employees come up with a broad range of talents, educational backgrounds
‘and perspectives. Hence, the managers are required to transform themselves with the workforce in order to
attain maximum efficiency. 26 (MBA First Semester (Management Fundamental) SPPU
2) Structure: Relationships and roles of people in the organisation are defined by structure. People working in
‘an organisation perform different roles and have different relationships with each other. Division of work is
done based on the capabilities and designation of the employees so that organisational goals are met
efficiently. These may be managers, supervisors, clerks, etc. working in one direction to achieve the
‘organisational goals in an organised manner. Authority-responsibility relationships are the essence of
structure. ,
3) Technology: Technology plays a vital role in modern organisations. It empowers people for their work
and also influences their activities. Since work cannot be done without equipments, hence
‘organisations use technology to build buildings, design machines, develop work processes and collect
resources. Technology in turn helps people to perform better. But technology has some side effects like
it is costly and limits people in certain ways, i.e., it makes them dependent on machines. So,
technology has both pros and cons.
4) Environment: Operations of all organisations take place under internal and external environment: An
organisation is a small part of a large system which contains elements such as government, family and other
organisations. Changes in the external environment affect the individual organisations such as schools or
factories. It also affects working conditions and people's behaviour and provides struggle for resources and
power. Thus, organisations should adopt it while studying human behaviour.
1.3.4, Types of Organisation
Classification of organisation is explained below:
‘Types of Organisations :
Private bguieations Public Organsstions Joint Organisations
Sole Partnership Joint Co-Operative
Propritonsip Stock Sosiey
company
Departmental Stamtory Government
Unerstaning Corporations ‘Companies
J) Private Organisations: Private organisations, as its name suggests, are privately owned and managed,
i.e., by @ person or group of persons. Such organisations do not have any part of management and
ownership of government in it. Private organisations include profit as well as non-profit organisations,
charities, partnership businesses, etc. For example, retail outlets, food chains, credit unions, etc. The
‘main motive of private organisations or businesses is to earn profit by selling its goods or by rendering its
services. They may even shut down the business if it no longer can generate profits. Private organisations
are of following types:
i) Sole Proprietorship: In this kind of private organisation, entire liability of the business is of single
person. Very less paper work is needed for this kind of business. Hence, itis observed that most of the
start-ups are generally started as sole proprietorship only. In this case, business and owner are not
different entities, ie., the owner stands liable for the debt created due to the business.
ii) Partnership: In this type of business setting, the business is owned by atleast two people. Partnership
itself can be of various kind such as, both the members may have equal share or one partner may have
more share than the other. There can also be a silent partner or partners; such partners only invest
money in the business and not participate in routine activities of business. Similar to sole
proprietorship, in partnership also all the partners individually are liable for the business activities and
debts, which is biggest disadvantage of partnership.
iii) Joint Stock Company: In this type of business setting, various persons come together voluntarily and
contribute money in order to carry out a business, and to achieve a shared objective. Such organisations
do exist legally and are abide by vatious legal provisions. The persons involved in such businesses are
known as its members, and the money they contributed is known as company’s capital. Every member Introduction to Management and Basics of Managing in Workplace (Unit 1) a
of the company is entitled for certain portion of capital, that portion of capital is known as share of that
member. So, such members are known as ‘shareholders’ and the capital of such companies is referred
to as ‘share capital’, Number of units in which the total share capital is divided is known as ‘shares’.
iv) Co-operative Societies: This type of business setting is also based on voluntary relationship of its
members. The co-operative societies are based on the notion of self-help os help of its members. The
key intent of these businesses is to support its members and to assist in achieving their economic goals.
‘The functioning of these societies is such that volunteers come together to form a group, combine their
resources and consume it effectively in order to provide benefits to all the members.
2) Public Organisations: Those organisations which are owned and managed either by Central Government or
by State Government are known as public organisations. The intent of public organisations is to do welfare of
the society and to support the interest of public. Those private organisations which have been nationalised by
‘government, i.c., banks and LIC of India, come in the category of public organisations. Alongwith them, the
‘enterprises established by government also come in this category, ¢.g., GAIL, HMT, STC, ete.
In India, there are three types of organisations that come ini'the category of public organisations, which are
explained below: -
i) Departmental Undertaking: This type of business setting provides the services that are vital for the
society such as railway, broadcasting, postal services, etc. Various ministries of Government are wholly
responsible for financing and managing these organisations. These types of organisations are best for
those services in which government want to take public interest into its consideration.
ii) Statutory Corporation: When an organisation is formulated by passing a special Act in Parliament or
State Legislature, then such organisation is known as Statutory Corporation or public corporation. State
‘Trading Corporation, LIC of India are some of the examples of statutory corporations. Functions,
authorities, organisational structure, etc., of these organisations are defined in its Act. Entire capital of
these organisations is provided by the government,
iii) Government Company: Those companies in which atleast 51 per cent of share capital is held by
government are known as government companies. Such companies are registered under Companies Act
‘of India and hence are administered as per the provisions of Companies Act only. Most of the
companies owned and controlled by government come in the category of government companies.
3) Joint Organisations: As the name suggests, those organisations which are owned and operated privately as
well as by government are known as joint organisations. In other words, joint organisations are those in
which investment come from the private as well as the public sector and where government actively
participate in managing and controlling the organisation. The type of economy practiced in India is mixed
‘economy and concept of joint organisations is a new addition to it.
1.4. APPROACHES TO MANAGEME
1.4.1. Introduction
‘The emergence of management thoughts and principles can be drawn out from pre-historic times. Since then, human
beings started living together in organised groups or in a society consisting of different groups. These efforts have
hhelped them to organise their actions and carry-out their activities in an efficient and productive manner.
‘Management principles have evolved with time and are in continuous process of evolution, Management principles
are flexible in nature and its application depends widely on the nature of the situation. Management principles have a
road base and help in decision-making process. They are famous and have a worldwide acceptance. As
‘management principles are linked to human behaviour, they keep on constantly changing and evolving,
‘The evidence of such management practises and theories has been found. For example, in 3000 B.C, the
Sumerian civilisation followed a well-organised tax collection system under the management of priests. ‘The
history of Egyptian civilisation sets an excellent example of organising human and material resources by
constructing pyramids. Till now, the organisation of political, economic and social affairs in the Roman Empire
is regarded as the most efficient management practice. Kautilya’s Arthashastra highlights one of the best
techniques of managing the State affairs. 28 MBA First Semester (Management Fundamental) SPPU
‘The evolution of various formal management theories started in the early, 1990's. The era of industrial
revolution recognised the need of efficient management of the societal resources. This involved the
development of steam engines and other mechanised production means, so as to manage large scale production,
utilising physical and human resources.
‘The development of management thoughts comprises of major schools which can be ¢lassified into three major
categories as given in table L.1:
‘Table 1.1: Major Management Gurus and their Contributors
“Major Classification of Management Schools ‘Management Gurus
1) Classical Approach i). Scientific Management @) Frederick W. Taylor
b) Henry Gantt
©)_Frank and Litian Gilbreth
ii)_ Administrative Management Henry Fayol
Bureaucracy ‘Max Weber
2) Behavioural Approach | i) Human Relation Approach + | Elton Mayo
ii) Behavioural Science Approach | a) Meslow
b) Herzberg
©) McGregor
@) Mary Parker Follett
©), Blake and Mouton
f)"_ Chester Bernard
3) Modern Approach 1) Quantitative Approach
a) Russel L. Ackoff.
b) FW. Lanchester
©) ‘Thomas A. Edison
ii) System Approach Churchman West
iii) Contingency Theory Paul Hersey
iv)_ Social System Approach Vilfredo Pareto
¥) Decision-Making Approach Herbert A. Simon
1.42. Early Management Thoughts
‘Modern management has evolved because of the contributions of several intellectuals. Given below is the list of
such intellectuals who have contributed to the field of management in its early stages:
‘Table 1.2: Early Contributors to Management Thought
Name Period Contribution
Robert Owen 1771-1858 Various legislative reforms were suggested with a view to enhance
labour working conditions.
[Charles Babbage | 1792-1871 Scanlon Plan, based on the profit baring plao, was formulated by hi
| Also proposed the popular concept of ‘division of labour’.
“Andrew Ure 1778-1857 ‘Several management principles and practices were described by him in
an effective manner.
Charles Du 1784-1873 ‘The study of management was advocated by him,
Henry R Towne | 1844-1924 Significance of business skills required for operating a business was
emphasised by him. He also stressed on the need to regard management
as an independent discipline of study.
1) Robert Owen (1771-1858): An initiator, Charles Robert Owen, is regarded as the front runner in the
discipline of human resource management. He was of the opinion that instead of investing capital in
purchasing machinery and equipment, it is considerably better to make investments in human resource or
personnel, He thought workers of an organisation should do their jobs because they wish to do so and not
because they are compelled to do so (as necessity). He further thought, it is the responsibility of a
manager to make a worker aware by letting him know the work expected of him and also the reason of
doing so. In this way, the worker will perform in an efficient and: better. since he/she is aware and Introduction to Management and Basics of Managing in Workplace (Unit 1) 29
enlightened, All this is possible only if the manager is able to tell information to the worker with the
understanding that he will not reveal those details. Robert Owen can be known as a precursor in the
evolution of behavioural approach to management due to the concept and ideologies advocated by him.
2) Charles Babbage (1792-1871): Another contributor to early management thought, Charles Babbage was
convinced by the significance of human clement in business. He proposed that there is a direct
association between employees and the management. He formulated a profit sharing plan and suggested
the concept of participative decision-making, a crucial contribution that brought in science and
mathematics in the operations of production. He strongly supported insightful organisation of labourers
and the concept of ‘division of labour’. Probably, Babbage was foremost intellectual to suggest that
instead of individual views and intuition, decisions should be dependent on precise knowledge and
examination. The technique of time and motion study was also foreseen by Babbage for which he
received lot of acclamation. Under this technique, a job is carried out with the help of least number of
‘motions using least time which will be helpful in decreasing costs and making operations more
simplified. Garbut was of the view that, Babbage was a founder of Operations Research who utilised
methods of industrial engineering and quantitative methods in order to enhance the operations of
production, Babbage was the author of a book naméd, ‘On the Economy of Machinery and
Manufacturers’ where he stressed a lot on reduction in costs through specialisation, wage incentive,
optimum employment of tools and machinery and work computation.
3) Andrew Ure And Charles Dupin: One of the first few contributors to study of management included
Charles Dupin and Andrew Ure (1784-1873). Originally from England, Ure was an academician associated
with the Glasgow University who wrote the book, “The Philosophy of Manufacturing’ elucidating the
numerous ideas and theories of production. Originally from France, Dupin was an engineer engaged in as a
management professor in Paris in the year 1819. From here onwards began his acclaimed career as an
economist where his works became famous all across France and may have also exerted an impact on the