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Chapter 1: Fundamentals of
Management
Ref: Organization And Management - Agarwal

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 Content
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⚫ Concept of Management
⚫ Management Functions

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 Introduction
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⚫ “Management is the process of designing and maintaining

the environment in which individual work together in
group, and efficiently and effectively accomplish the
selected aim” -Basic definition

⚫ “Art of getting things done through people” -Mary

Parker Follett.

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 Definition
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⚫ “Management is the art of “knowing what you want to

do” and then seeing that it is done in the best and
cheapest way.
……F.W.Taylor
⚫ Management as a process “consisting of planning,
organizing, actuating and controlling, performed to
determine and accomplish the objective by the use of
people and resources.”
……George R. Terry

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In this definition,
⚫ Planning means Plan in advance.
⚫ Organizing means coordination between human
resources and material resources.
⚫ Actuating means motivation and giving direction to
subordinate.
⚫ Controlling means to ensure about implementation of
plan without deviation.
Thus this definition tells that management is act of
achieving the organization objectives.

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 Functions of Management
1. Planning
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⚫ It is a process of deciding the business objectives and

charting out the plan/ method for achieving the same. This
includes
Determination of what is to be done, how, and where it is to
be done, who will do it and how result are to be evaluated.
Determination of short and long range objectives.
Development of strategies and courses of action to be
followed
Formulation of policies, procedures and rules for
implementing strategies and plans.

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 2. Organizing
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⚫ To organize a business is to provide it with everything

useful to its functioning i.e. personnel, raw materials,
machineries, capital etc.
⚫ Once objectives are established, manager has to develop
plan to achieve them with help of human resources as
well as material resources.
⚫ Assignment of jobs to employees.
⚫ Delegation of authority.

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 3. Staffing
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⚫ Manpower planning: determination of no. of and the

kind of personnel required.
⚫ Recruitments of suitable no. of employees
⚫ Selection of most suitable employees
⚫ Placement, induction and orientation
⚫ Transfer, promotions & terminations
⚫ Trainings and developments

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 4. Directing
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⚫ Directing involves communication, leadership and

motivation.
• Communication is the process of passing the
information and understanding it from one person to
other person.
• Leadership is the function wherebythe person or
manager guides and influences the work of his
subordinates.
• Motivation is to motivate the employee to give their
best to the organization.

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 5. Coordinating
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⚫ Clear definition of authority-responsibility relationships

⚫ Unity of direction

⚫ Unity of command

⚫ Effective communication

⚫ Effective leadership

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 6. Controlling
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⚫ The controlling involves-

1. Establishing standards of performance.

2. Measuring current performance and comparing it
against the established standard.
3.Taking corrective action that does not meet the standard.

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Network of Management Functions
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Environment Makes Management A Dynamic
Process
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 Management And Administration
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On the Basis of Functions: -

Management Administration

Meaning Management is an art of getting things done It is concerned with formulation of broad
through others by directing their efforts objectives, plans & policies.
towards achievement of pre-determined goals.

Nature Management is an executing function. Administration is a decision-making function.

Process Management decides who should do it & how Administration decides what is to be done &
should he do it. when it is to be done.

Function Management is a doing function because Administration is a thinking function because

managers get work done under their plans & policies are determined under it.
supervision.

Skills Technical and Human skills Conceptual and Human skills

Level Middle & lower level function Top level function

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 Management And Administration
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On the Basis of Usage: -

Basis Management Administration

Applicability It is applicable to business concerns i.e. It is applicable to business and

profit-making organization. non-business concerns i.e. clubs, schools,
hospitals etc.

Influence The management decisions are The administration is influenced by public

influenced by the values, opinions, opinion, govt. policies, religious
beliefs & decisions of the managers. organizations, customs etc.

Status Management constitutes the employees Administration represents owners of the

of the organization who are paid enterprise who earn return on their capital
remuneration (in the form of salaries & invested & profits in the form of dividend.
wages).

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 Management And Administration
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The Figure above clearly shows the degree of administration and management
performed by the different levels of management.

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Managerial
Skills

Ref: Industrial Engineering and

Management – O. P. Khanna

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Levels of Management

Top
Management
President, CEO,
Executive
Vice Presidents

Middle Management
Plant Managers, Division Managers,
Department Managers

First-Line Management
Foreman, Supervisors, Office Managers

Non- Managerial Employees

 Most

Least
Important

Important
Planning

Organizing

Top
Staffing

Managers
Directing
Controlling

Planning
Organizing
Managers in Each Level

Staffing

Middle
Directing

Managers
Controlling

Planning
Organizing
Staffing
Directing
Managers
First-Line

Controlling
Importance of Management Functions to
 Managerial Skills
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Technical Skill Conceptual Skills Human Relation

Skills
• The proficiency • Decision Making • Communicating
in handling Skills Skills
• Methods • Organizational
Skills
• Motivating
• Processes & Skills
• Techniques of • Leadership
a particular Skills
kind of
business

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Managerial Skills
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Fig: Managerial Skills

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 Managerial Skills
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1. Technical Skills
• The proficiency in handling
✔ Methods
✔ Processes &
✔ Techniques of a particular kind of business
• Essential for lower level management

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 Managerial Skills
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2. Conceptual Skills
The ability to see organization as a whole, to recognize
inter-relationships among different functions, to guide
effectively organizational efforts.
•Essential for top executive management
•Difficult to learn than technical skills.

a. Decision Making Skills

Requires mental stability and presence of mind.
b. Organizational Skills
Placement of right people for right job

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 Managerial Skills
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3. Human Relation Skills

The ability to select and fix the work effectively with
others and build cooperative work groups to achieve
organizational goals.
a. Communicating Skills
b. Motivating Skills
c. Leadership Skills

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 Managerial Skills
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a. Communicating Skills
ability to pass information to others.
b. Motivating Skills
ability to inspire people to do what the manager want
them to do. (+VE/-VE).
c. Leadership Skills
ability to inspire confidence and trust in the
subordinates to have maximum cooperation for getting
the work done.

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