1.
Management: Concept and Definitions
The word 'manage' is derived from the Latin word meaning 'to handle some
work or activities'1. Management is fundamentally an activity concerned with
guiding human and physical resources in a systematic way to fulfil business
goals efficiently2.
Key Definitions:
Traditional Definition (Mary Parker Follet): Management is "an art of
getting things done through others"3.
Henry Fayol: "To manage is to forecast, to plan, to organize, to
command, to coordinate and to control"4.
F.W. Taylor: Management is "co-ordination of resources through the
process of planning, organizing, directing and controlling in order to
attain stated objectives"5.
Harold Koontz: Management is the "art of getting things done
through and with people in formally organized groups".
2. Nature/Features of Management
1. A Goal-Oriented Activity: Management helps attain set business
objectives by utilizing manpower and other resources 7.
2. A Group Activity: It involves getting things done from other persons or
groups; it is not the work of one individual 8.
3. Different from Ownership: A manager works on behalf of the owner, is
paid for duties, and does not share profit or undertake risk 9.
4. A Continuous Process: Management functions are ongoing and circular
activities10.
5. Invisible (Unseen): The functions are invisible, but their results and
efficiency are apparent and judged by achievement 11.
6. Universal Function (Pervasive): It is needed for commercial, non-
commercial, social, religious, and educational organizations of all sizes and
at all levels12121212.
7. A Dynamic Activity: Principles, tools, and methods are flexible and
change in accordance with the business environment 13.
8. An Art, Science, and Profession:
o Art: Requires the skill of getting work done from others 14.
o Science: Concerned with a systematic, scientific approach to
function15.
o Profession: Requires specialized knowledge and formal training 16.
9. A Social Process: Deals with the human element and involves getting
things done from manpower by motivating them to work 17171717.
[Link] at all levels of Management: From top-level planning for the
entire organization to lower-level planning for day-to-day operations 18.
3. Significance/Importance of Management
Key to Success: Directs all resources and efforts systematically towards
desired objectives19.
Achievement of Goals: Helps in the successful achievement of common
goals and develops team efforts20.
Optimum Use of Resources: Organizes physical and manpower
resources properly, leading to increased productivity and efficiency 21.
Reduction in Wastages: Minimizes resource wastage, leading to higher
productivity and cost savings22.
Increase in Competitive Strength: Reduces production cost, increases
productivity/quality, allowing the organization to provide better products
at reasonable prices23.
Motivation to Employees: Uses incentives (bonus, welfare facilities,
non-monetary benefits) to motivate employees, increasing their dedication
and morale24.
Develops Cordial Relationship: Functions like staffing and directing
help maintain healthy relations among employees, generating teamwork
and success25.
Team Spirit: Creates a sense of oneness and inspires employees to give
positive support to plans26.
Ensures Stability and Prosperity: Develops a healthy work
environment, ensures stable working (without strikes/disputes), and is
important for overall development27.
Expansion of Business: Gives lead to all activities through proper
resource use, enabling expansion in product, unit, and marketing 28.
Facing Competition: Effective management is essential for modern
organizations to face competition more effectively 29.
4. Evolution of Management
4.1. Classical Approach (1880s to 1920s)
Recommended that production could be increased by improving the efficiency of
the organization, focusing on determining the best ways to perform jobs 30.
A. Scientific Management (F.W. Taylor)
Aims to determine and apply the facts and laws of gaining efficiency without
leaving anything to chance31.
Objectives include:
To Assure Employment Security to the Employees32.
To Obtain Better Gains (Minimize wastage, increase profits,
increments/bonus)33.
To Improve the Living Standard of Workers34.
To Provide Satisfactory Working Conditions35.
To Promote Equality and Justice in disbursement of wages/benefits36.
B. Administrative Management (Henry Fayol)
French industrialist Henry Fayol laid down 14 Principles of Management based
on his managerial career37:
1. Division of Labour: Dividing work based on aptitude and skill leads to
specialization and efficiency38.
2. Authority and Responsibility: They must go hand in hand; authority
without responsibility makes a man irresponsible, and vice versa 39393939.
3. Discipline: Sincerity, obedience, respect for authority, and observance of
rules are essential for smooth functioning 40.
4. Unity of Command: A subordinate should receive orders and be
accountable to only one boss at a time to avoid confusion and
delays41414141.
5. Unity of Direction: One plan and one head for a group of activities with
the same objective; efforts should be directed towards a common goal 42.
6. Subordination of Individual Interest to General Interest: The
organization's interests are greater than individual or group interests 43.
7. Fair Remuneration: Payment should be fair and satisfactory to both
employer and employees to reduce tension 44.
8. Centralization of Authority: The degree of centralization (top
management retaining most decision-making authority) or
decentralization (delegation) depends on factors like business size and
complexity.
9. Scalar Chain: The unbroken line of authority (and communication) from
the highest to the lowest level. Can be cut short using a 'Gang Plank' for
convenience/urgency46464646.
[Link]: Systematic arrangement of men, machines, and materials. A
specific place for every employee and item is necessary.
[Link]: All employees should be treated with fairness, kindness, and
justice by managers to foster loyalty.
[Link]: Stability of tenure creates belongingness, increases
productivity, and saves the cost of labour turnover.
[Link]: Managers should encourage subordinates to suggest new
ideas/methods and take initiative in their work.
[Link] de Corps (Team Spirit): Coordination, harmony, and
understanding inspire workers to work harder and enjoy the organization.
C. Bureaucratic Management (Max Webber)
Bureaucratic management is promoted as the most appropriate administration,
characterized by52:
Management by standard rules53.
Division of labour54.
Selection of personnel having technical skills55.
Hierarchical organisational structure56.
Record of all administrative acts, decisions, and rules57.
4.2. Modern Approach (1950s)
Focused mainly on employee satisfaction, noting that employees are
motivated by affection and respect from co-workers, not just money 58.
A. Systems Approach (Late 1960s)
Defines an organization as a system—a set of interacting or interdependent
components forming a single unit59. The system must be thoroughly understood
by analysing its units and sub-units, and it has boundaries and a specific goal.
B. Contingency Approach (Situational Approach)
States there is no single set of rules applicable to all organizational
problems61. Managers must analyse the specific conditions and environment of
each problem and define different ways to solve it 62626262.
🎯 Planning
Planning is the first and basic function of management63. It involves
deciding in advance what to do, how to do it, when to do it, and who is to
do it64. It is the process of determining organizational objectives and the future
course of action to achieve them, bridging the gap from where we are and where
we want to go65656565.
Importance of Planning
1. Increases Efficiency: Ensures optimum utilization of resources, reduces
wastage, and aims for the highest returns at the lowest cost 66.
2. Reduces Business-Related Risks: Helps to forecast risks, take
precautions, and prepare for future uncertainties 67.
3. Facilitates Proper Coordination: Ensures that the plans of all
departments and different time horizons (short, medium, long-term) are
well-coordinated.
4. Aids in Organizing: Tells the manager the number of resources (6 Ms)
needed and when, making organizing possible 69.
5. Gives Right Direction: Provides proper information, instructions, and
guidance to subordinates, as it defines what, how, and when to do
things70.
6. Keeps Good Control: Planning provides the standards for comparison,
which is essential for comparing actual performance and correcting
deviations71.
7. Helps to Achieve Objectives: Enables the organization to achieve its
goals with ease and promptness, avoiding random activities 72.
8. Motivates Personnel: Provides various financial and non-financial
incentives to encourage managers and employees to work hard 73.
9. Encourages Creativity and Innovation: Allows managers to express
creativity and innovation, leading to satisfaction and organizational
success74.
[Link] in Decision-Making: Involves making many different plans and
selecting the best available strategy (i.e., making a selection/decision) 75.
Strategic Planning
Strategic planning is the process of documenting and establishing the direction
of a business by assessing both where it is and where it is going 76. It records the
mission, vision, values, long-term goals, and the action plans to reach them 77.
Benefits of Strategic Planning
Increase Productivity: Involving employees gives them a sense of
accountability and increases their likelihood of helping achieve targets 78.
Identifying Strengths and Weaknesses: The process examines and
analyzes the entire business, helping to improve in the future and
minimize risks79797979.
Fostering a Proactive Business: Helps put the business in the best
position to succeed by figuring out how to grow and addressing future
challenges and opportunities80.
Formulate Better Strategies: The systematic process itself significantly
improves a company's overall performance 81.
Enhanced Communication: Initiated through dialogue and participation,
it increases commitment as employees understand the company's goals
and the reasons behind its actions 82828282.
Empowers Individuals: Increased dialogue strengthens employees'
sense of effectiveness and importance in the company's overall success 83.
💡 Decision-Making
Decision-making is an essential and primary function of management84. A
decision is defined as "a course of action which is consciously chosen from
among a set of alternatives to achieve a desired result"85. It is the starting
point of the whole management process and is an indispensable component of
it86868686.
Nature/Characteristics
Implies Choice: It is the process of selecting one solution out of two or
more available alternatives87.
Continuous Activity: It is a never-ending, dynamic process that
pervades all organizational activity 88888888.
Mental/Intellectual Activity: Requires knowledge, skills, experience,
and maturity on the part of the decision-maker 89.
Goal Oriented Process: Aims at providing a solution to a problem or
difficulty before a business enterprise90.
Means and not the End: It is a means for solving a problem or achieving
a target, not the target itself91.
Responsible Job: Wrong decisions can be very costly, requiring the
decision-maker to be mature, experienced, and rational 92.
Pervasive Process: Managers at all levels take decisions on matters
within their jurisdiction93.
Steps in the Decision-Making Process
The process is a rational or scientific approach to problem-solving.
1. Identifying the Problem: The first step is to identify the real problem
and gather relevant information for critical analysis 94949494.
2. Analyzing the Problem: Classifying the problem to know who must take
the decision and who must be informed, considering its futurity, scope of
impact, qualitative considerations, and uniqueness 95.
3. Collecting Relevant Data: Obtaining information/data about the
problem to bring clarity to all its aspects 96969696.
4. Developing Alternative Solutions: Determining realistic alternative
courses of action that could solve the problem, keeping in mind time, cost
constraints, and psychological barriers 97.
5. Selecting the Best Solution: Choosing the most rational alternative. Its
acceptance by group members is desirable for effective
implementation98989898.
6. Converting Decision into Action: The selected decision must be
converted into effective action to avoid remaining merely a declaration of
good intentions. This often involves the manager converting 'his decision'
into 'their decision' through leadership 99.
7. Ensuring Feedback: The last step is to make arrangements to
continuously test actual developments against expectations (follow-up
measures) to decide if the decision should be continued or
modified100100100100.
🧠 Creativity & Decision Making
Creativity is the ability to link or combine ideas in novel ways, and the unique
alternatives produced must be considered useful 101. It helps the decision maker
fully appraise and understand the problem, sometimes in ways others can't
see102.
Characteristics of Creative Leaders
Perseverance in the face of obstacles.
Willingness to take risks103103103103.
Willingness to grow and openness to experience.
Tolerance of ambiguity.
Guidelines for Creative Decision-Making
1. Always a Better Way: A creative person assumes and understands that
there is always a more efficient way to do something, even if the current
method works well104.
2. Multiple Solutions: They recognize that problems do not have single
solutions and will address as many sides of an issue as possible before
deciding105.
3. Proper Assessment: They evaluate all things properly and are willing to
challenge commonly established facts106.
4. Not Afraid of Failure: They recognize that the path to true success is
built on top of past failures107.
Types of Thinking
A creative person relies on two types of thinking:
Convergent Thinking: Solving a problem using established methods.
It is linear and assumes a viable solution already exists 108.
Divergent Thinking: Analyzing the problem and trying to break it into
individual parts. It allows addressing different aspects of the issue to see
the problem as a whole, rather than approaching it in a predefined way 109.
Creating a Climate for Creativity
Managers can encourage creativity by:
Recognizing the need for change110.
Encouraging new ideas by listening and implementing profitable
ones111.
Interaction with people inside and outside the enterprise 112.
Tolerating failure, viewing the time and money spent on failed ideas as
an investment for the future113.
Having clear objectives for creativity114.
Techniques for Generating Creative Ideas
Brainstorming Sessions: A group of people contributes ideas without
regard to how practical they may be to come up with "outside the box"
solutions115.
Asking "What-If" Questions: Considers hypothetical scenarios (e.g.,
performing a process in reverse, expanding operations) to lead to new
discoveries and big ideas116116116116.
Role-Playing Scenarios: Provides a different perspective, such as a
salesperson pretending to be the customer to better anticipate
objections117.
Provocation Techniques: Intentionally rejecting a truism (e.g., getting
rid of computers to improve productivity) to stimulate creative thought
and re-examine current processes118118118118.
Fostering Collaboration: Encouraging teamwork and mixing up diverse
teams to generate a plethora of wide-ranging ideas, stressing that no idea
is too wild to be considered119.