Importance of Management

Management is a critical element in the economic growth of a country.

• “Without management, a country’s resources of production remain resources
and never become production.” - Peter Drucker

Management is essential in all organised efforts, be it a business activity or any

other activity.
• Other organisations include educational, social, military and government.

Management is the dynamic, life-giving element in every organisation.

• In a competitive economy, the quality and performance of the management
determine the success of an organisation; indeed, they determine its very
survival.
“Management is the central core
of our national as well as
personal activities, and the way
we manage ourselves and our
institutions reflects with
alarming clarity what we and our
society will become.”
Claude S. George
Definition of Management
• Can we define management?
• Do we have an universally accepted definition of
management?

• Management is the art of getting things done through

people. - Mary Parker Follett

• A manager is one who contributes to the organisation’s goals

indirectly by directing the efforts of others- not by
performing the task himself.
Limitations of Mary Parker Follett’s definition are:

1. It uses the word ‘art’ in defining management. Art deals

with the application of knowledge. Management is not
merely application of knowledge. It also involves
acquisition of knowledge i.e., science. Management based
on intuition is not correct management.

2. This definition does not throw light on the various

functions of a manager.
• Management is a process consisting of planning, organising, actuating
and controlling, performed to determine and accomplish the
objectives by the use of people and resources. - George R. Terry
• Planning: Managers think of their actions in advance.
• Organising: Managers coordinate the human and material resources
of the organisation.
• Actuating: Managers motivate and direct subordinates.
• Controlling: Managers attempt to ensure that there is no deviation
from the norm or plan. If some part of their organisation is on the
wrong track, managers take action to remedy the situation.

• Whatever the objectives of a particular organisation, management is

the process by which the objectives are achieved.
Management Functions (The Process of Management)

1. Planning

2. Organising

3. Directing

4. Controlling

5. Innovating

6. Representing
Planning
• Determines in advance what should be done.
• It is a process of deciding the business objectives and charting out the
methods of attaining those objectives.
• It is the determination of what is to be done, how and where it is to be
done, who is to do it and how results are to be evaluated.

• Planning is a function which is performed by managers at all levels—

top, middle and supervisory.

• Plans made by top management covers longer periods, whereas plans

made by middle or first line managers, cover much shorter periods.
Organising
• It involves providing resources for functioning of a business enterprise,
which includes personnel, raw materials, tools and capital.

• It includes human organisation and material organisation.

• Staffing is an important function involved in building the human

organisation.
• In staffing, the manager attempts to find the right person for each job.

• Staffing fixes a manager’s responsibility to recruit and to make certain

that there is enough manpower available to fill the various positions
needed in the organisation.
Directing

• Manager explains to his people what they have to do and helps them
do it to the best of their ability.

• Directing involves three sub-functions: communication, leadership

and motivation.

• Communication is the process of passing information and

understanding from one person to another.

• Leadership is the process by which a manager guides and influences

the work of his subordinates.
• Motivation means arousing desire in the minds of workers to give
their best to the enterprise.

• How a manager can motivate his subordinates?

• Two broad categories of motivation are: financial and non-financial.

• Financial motivation takes the form of salary, bonus, profit-sharing,

etc. while non-financial motivation takes the form of job security,
opportunity of advancement, recognition, praise, etc.
Controlling
• The manager must ensure that performance occurs as per the plans
adopted, the instructions issued and the principles established.

• Controlling involves three elements:

1. Establishing standards of performance
2. Measuring current performance and comparing it against the
established standards
3. Taking action to correct any performance that does not meet
those standards

• In the absence of sound control, there is no guarantee that the

objectives which have been set will be realised.
Innovating
• Innovation means creating new ideas which may improve a product,
process or practice.

• It is necessary for an organisation to constantly grows better. This

makes innovation an important function of a manager.
Representing

• A manager has to represent his organisation before various outside

groups which have some stake in the organisation. These stake-
holders can be government officials, labour unions, financial
institutions, suppliers, customers, etc.

• A manager must win their support by effectively managing the social

impact of his organisation.
Roles of a Senior Manager

• Role is the pattern of actions expected of a person in his activities

involving others.
• A senior manager who occupies different positions in different
situations plays different roles because people in each situation have
different expectations of him concerning his functions.
• According to Mintzberg, a senior manager should be regarded as
playing ten different roles.
Interpersonal Roles Informational Roles Decisional Roles

Figurehead Monitor Entrepreneur

Leader Disseminator Disturbance Handler

Liaison Spokesman Resource Allocator

Negotiator
• Figurehead: Every manager has to perform some duties of a ceremonial
nature, such as greeting the touring dignitaries, attending the wedding of
an employee, taking an important customer to lunch and so on.
• Leader: Every manager must motivate and encourage his employees.
• Liaison: Every manager must cultivate contacts outside his vertical chain
of command to collect information useful for his organisation.
• Monitor: The manager has to perpetually scan his environment for
information, interrogate his liaison contacts and his subordinates, and
receive unsolicited information, much of it as a result of the network of
personal contacts he has developed.
• Disseminator: The manager passes some of his privileged information
directly to his key subordinates who would otherwise have no access to it.
• Spokesman: A manager has to spend a part of his time in representing his
organisation before various outside groups, which have some stake in the
organisation. He advises shareholders about financial performance,
assures consumer group that the organisation is fulfilling its social
responsibilities and satisfies government that the organization is abiding
by the law.
• Entrepreneur: The manager does not merely adapt to his surrounding
situation but proactively looks out for innovation to make things happen.
When demand for his product falls off, the manager does not cut back his
production but seeks new outlets or new products in order to maintain
production.
• Disturbance Handler: The manager has to work reactively like a fire
fighter. He must seek solutions of various unanticipated problems- a
strike may loom large, a major customer may go bankrupt, a supplier
may renege on his contract, and so on.
• Resource Allocator: The manager must divide work and delegate
authority among his subordinates. He must decide who will get what.
• Negotiator: The manager at all levels has to spend considerable time
in negotiations. Thus, the president of a company may negotiate with
the union leaders about a new strike issue, the foreman may
negotiate with the workers regarding a grievance problem, and so on.
Managerial Skills

• A skill is an individual’s ability to perform physical or mental tasks

with a specified outcome.
• Skill is not necessarily inborn.
• It can be developed through practice and through translating one’s
knowledge and experience into action.
• If skill is not inborn, why a businessman’s son can easily
become a successful businessman, a politician’s son/daughter
can easily become a successful politician, a lawyer’s son can
easily become a successful lawyer, an actor’s son can easily
become an actor?
In order to be able to successfully discharge his roles, a manager should
possess three major skills.
1. Conceptual Skill
2. Human Relations Skill
3. Technical Skill

• Conceptual skill deals with ideas, technical skill with things and
human skill with people. While both conceptual and technical skills
are needed for good decision-making, human skill is necessary for a
good leader.
• Conceptual skill refers to the ability of a manager to conceptualise
the environment, the organisation, and his own job, so that he can
set appropriate goals for his organisation, for himself and for his
team. More relevant at high level management.
• Technical skill is the manager’s understanding of the nature of job
that people under him have to perform. More relevant at low level
management.
• Human relations skill is the ability to interact effectively with people
at all levels. This type of skill remains consistently important for
managers at all levels.
• People at the top shift with great ease from one industry to another
without an apparent fall in their efficiency. Their human and
conceptual skills seem to make up for their unfamiliarity with the new
job’s technical aspects.
Managerial Effectiveness

• According to Peter Drucker, a manager’s performance can be

measured in terms of two concepts: efficiency and effectiveness.
• Efficiency is the ability of a manager to do something correctly; i.e., at
the lowest possible cost or cost acceptable to the competitive
environment.
• Effectiveness is the ability of a manager to do correct things, i.e.,
achieve high levels of value.
• If a car manufacturer can provide the customer a better car without
changing the price, the value has gone up. If he can give the customer
a better car at a lower price, the value goes way up.
• Maximising efficiency and effectiveness at the same time often
creates conflict between the two goals.
• At the customer service counter at a local store or bank, being
efficient means using the fewest people possible at the counter. Being
effective though means minimising the amount of time that
customers need to wait in line.

END