Unit One: MANAGEMENT CONCEPT

Learning Outcomes

After reading this unit, students should be able to:

 Define management.
 Write the meaning of management.
 List the Characteristics of Management.
 What are the objectives of business?
 List the levels of management?
 Brief the functions of management.

1. MANAGEMENT CONCEPT

INTRODUCTION

Management is a widely used term that encompasses various activities,

primarily involving the leadership and oversight of different operations within
an enterprise. People in organisations perform diverse tasks, but they are all
working towards the same goal. Management aims at guiding their efforts
towards achieving a common objective - a goal. Thus, management has to see
that tasks are completed and goals are achieved (i.e., effectiveness) with the least
amount of resources at a minimum cost (i.e., efficiency). Management began to
materialize as a practice during the Industrial Revolution, as large corporations
began to emerge in the late 19th century and developed and expanded into the
early 20th century. Management is regarded as the most important of all human
activities. It may be called the practice of consciously and continually shaping
organizations.
 Management is a universal phenomenon. Every individual or entity
requires setting objectives, making plans, handling people, coordinating and
controlling activities, achieving goals, and evaluating performance directed
towards organizational goals. These activities relate to the utilization of
variables or resources from the environment − human, monetary, physical, and
informational. Human resources refer to managerial talent, labor (managerial
talent, labor, and services provided by them), monetary resources (the monetary
investment the organization uses to finance its current and long-term
operations), physical resources (raw materials, physical and production facilities
and equipment) and information resources (data and other kinds of information).

Management is essentially the bringing together of these resources within

an organization towards reaching objectives of the organization.

1.1. MANAGEMENT DEFINED

Management Guru, Peter Drucker, says the basic task of management

includes both marketing and innovation. According to him, “Management is a
multipurpose organ that manages a business and manages managers, and
manages workers and work.”
Harold Koontz defined management as “the art of getting things done
through and with people in formally organized groups.”
All these definitions emphasize the attainment of organizational
goals/objectives through deployment of the management process (planning,
organizing, directing, etc.) for the best use of the organization’s resources.
Management makes human effort more fruitful thus affecting enhancements and
development.
 Management is the process of planning, organizing, leading, and
controlling an organization’s human, financial, physical, and information
resources to achieve
organizational goals efficiently and effectively.

1.2. CHARACTERISTICS OF MANAGEMENT

After going through some of the definitions, we find some elements that may be
called the basic characteristics of management:

1. Management is a goal-oriented process: An organisation has a set of

basic goals which are the basic reason for its existence. These should be
simple and clearly stated. Different organisations have different goals.
2. Management is all pervasive: The activities involved in managing an
enterprise are common to all organisations whether economic, social or
political. A petrol pump needs to be managed as much as a hospital or a
school. What managers do in India, the USA, Germany or Japan is the
same. How they do it may be quite different. This difference is due to the
differences in culture, tradition and history.

3. Management is Multidimensional: Management is a complex activity

that
has three main dimensions. These are:

a. Management of Work: All organisations exist for the performance of

some work. In a factory, a product is manufactured, in a garment store a
customer’s need is satisfied and in a hospital a patient is treated.
Management translates this work in terms of goals to be achieved and
 assigns the means to achieve it. This is done in terms of problems to be
solved, decisions to be made, plans to be established, budgets to be
prepared, responsibilities to be assigned and authority to be delegated.
b. Management of People: Human resources or people are an
organisation’s
greatest asset. Despite all developments in technology, “getting work
done
through people” is still a major task for the manager.

4. Management is a Continuous Process: The process of management is a

series of continuous, composite, but separate functions (planning,
organising,
directing, staffing and controlling). These functions are simultaneously
performed by all managers all the time. You may have observed that Anu
at
Annai Designer Candles performs several different tasks in a single day.
Some days she may spend more time in planning a future exhibition and
on another day, she may spend time in sorting out an employee’s problem.
The task of a manager consists of an ongoing series of functions.
5. Management is a Group Activity: An organisation is a collection of
diverse
individuals with different needs. Every member of the group has a
different purpose for joining the organisation but as members of the
organisation they work towards fulfilling the common organisational goal.
This requires team work and coordination of individual effort in a common
direction.
6. Management is a Dynamic Function: Management is a dynamic function
and has to adapt itself to the changing environment. An organisation
interacts with its external environment which consists of various social,
 economic and political factors. In order to be successful, an organisation
must change itself and its goals according to the needs of the environment.
You probably know that McDonald's, the fast food giant, made major
changes in its menu to be able to survive in the Indian market.
7. Management is an Intangible Force: Management is an intangible force that
cannot be seen, but its presence can be felt in the way the organisation
functions. The effect of management is noticeable in an organisation where
targets are met according to plans, employees are happy and satisfied, and
there is orderliness instead of chaos.

1.3. OBJECTIVES OF MANAGEMENT

Management seeks to achieve certain objectives which are the desired

result of any activity. They must be derived from the basic purpose of the
business. In any organisation there are different objectives and management
has to achieve all objectives in an effective and efficient [Link]
can be classified into organisational objectives, social objectives and personal
or individual objectives.
A. Organisational Objectives: Management is responsible for setting and
achieving objectives for the organisation. It has to achieve a variety of
objectives in all areas considering the interest of all stakeholders
including, shareholders, employees, customers and the government. The
main objective of any organisation should be to utilise human and
material resources to the maximum possible advantage, i.e., to fulfill the
economic objectives of a business. These are survival, profit and growth.
Survival: The basic objective of any business is survival
Management
must strive to ensure the survival of the organisation. In order to survive,
an organisation must earn enough revenues to cover costs.
 Profit: Mere survival is not enough for business. Management has
to ensure that the organisation makes a profit. Profit provides a vital
incentive for the continued successful operation of the enterprise. Profit is
essential for covering costs and risks of the business.
Growth: A business needs to add to its prospects in the long run,
for this it is important for the business to grow. To remain in the industry,
management must exploit fully the growth potential of the organisation.
Growth of a business can be measured in terms of sales volume increase
in the number of employees, the number of products or the increase in
capital investment, etc. There can be other indicators of growth.

B. Social objectives: It involves the creation of benefit for society. As a part

of society, every organisation whether it is business or non-business, has a
social obligation to fulfill. This refers to consistently creating economic
value for various constituents of society. This includes using
environmental friendly methods of production, giving employment
opportunities to the under previledged sections of society and providing
basic amenities like schools and healthcare, etc., for community. The box
given below illustrates how a company can fulfill its social responsibility.
C. Social objectives: It involves the creation of benefit for society. As a part of
society, every organisation whether it is business or non-business, has a
social obligation to fulfill. This refers to consistently creating economic
value for various constituents of society. This includes using
environmentally friendly methods of production, giving employment
opportunities to the under previledged sections of society and providing
basic amenities like schools and healthcare, etc., for community. The box
given below illustrates how a company can fulfill its social responsibility.

4. IMPORTANCE OF MANAGEMENT
 Having understood that management is a universal activity that is
integral to any organisation we now examine some of the reasons that have
made management so important:
- Management Helps in Achieving Group Goals: Management is required
not for itself but for achieving the goals of the organisation. The task of a
manager is to give a common direction to the individual effort in achieving
the overall goal of the organisation.
- Management increases Efficiency: The aim of a manager is to reduce
costs and increase productivity through better planning, organising,
directing, staffing and controlling the activities of the organisation.
- Management Creates a Dynamic Organisation: All organisations have
to
function in an environment which is constantly changing. It is generally
seen that individuals in an organisation resist change as it often means
moving from a familiar, secure environment into a newer and more
challenging one. Management helps people adapt to these changes so that
the organisation is able to maintain its competitive edge.
- Management Helps in Achieving Personal Objectives: A manager
motivates and leads his team in such a manner that individual members are
able to achieve personal goals while contributing to the overall
organisational objective. Through motivation and leadership the
management helps individuals to develop team spirit, cooperation and
commitment to group success.
- Management Helps in the Development of Society: An organisation has
multiple objectives to serve the purpose of the different groups that
constitute it. In the process of fulfilling all these, management helps in the
development of the organisation and through that it helps in the development
of society. It helps to provide good quality products and services, creates
 employment opportunities, adopts new techno-logy for the greater good of
the people and
leads the path towards growth and development.

5. LEVELS OF MANAGEMENT

Management is a universal term used for certain functions performed by

individuals in an enterprise who are bound together in a hierarchy of
relationships. Every individual in the hierarchy is responsible for successful
completion of a particular task. To be able to fulfill that responsibility he is
assigned a certain amount of authority or the right to take a decision. This
authority-responsibility relationship binds individuals as superiors and
subordinates and gives rise to different levels in an organisation. Generally
speaking there are three levels in the hierarchy of an organisation.
5.1. Top Management: They consist of the senior-most executives of the
organisation by whatever name they are called. They are usually referred to as
the chairman, the chief executive officer, chief operating officer, president and
vice-president. Top management is a team consisting of managers from different
functional levels, heading finance, marketing etc. For example chief finance
officer, vice president (marketing). Their basic task is to integrate diverse
elements and coordinate the activities of different departments according to the
overall objectives of the organisation. These top level managers are responsible
for the welfare and survival of the organisation. They analyse the business
environment and its implications for the survival of the firm. They formulate
overall organisational goals and strategies for their achievement. They are
responsible for all the activities of the business and for its impact on society. The
job of the top manager is complex and stressful, demanding long hours and
commitment to the organisation.
5.2. Middle Management: It’s A Link between Top and Low Level
Management. They are usually known as division heads. Their main task is to
carry out the plans formulated by the top managers. For this they need to:
(i) interpret the policies framed by top management,
(ii) Ensure that their department has the necessary personnel,
(iii) Assign necessary duties and responsibilities to them,
(iv) Motivate them to achieve desired objectives, and
(v) Cooperate with other departments for smooth functioning of the
organisation. At the same time they are responsible for all the activities of first
line managers.

5.3. Low level or Supervisory or Operational Management: Foremen and

supervisors comprise the lower level in the hierarchy of the organisation.

6. Functions of Management – P-O-D-C Framework: The primary challenge

faced by organizations and managers today is to creatively solve business
problems. The principles of management are guidelines using which managers
can tackle business challenges. The principles of management have been
categorized into the four major functions of planning, organizing, Directing,
and controlling popularly known as the P-O-D-C framework.
Planning is the function determining in advance what is to be done and who is
to do it. This implies setting goals in advance and developing a way of
achieving them efficiently and effectively. Planning means determining what
the organization’s position and situation should be at some time in the future
and deciding how best to bring about that situation. It helps maintain
managerial effectiveness by guiding future activities.
Organising is the management function of assigning duties, grouping tasks,
establishing authority and allocating resources required to carry out a specific
plan. Once a specific plan has been established for the accomplishment of an
organisational goal, the organising function examines the activities and
resources required to implement the plan. It determines what activities and
resources are required. It decides who will do a particular task, where it will be
done, and when it will be done. Organising involves the grouping of the
required tasks into manageable departments or work units and the establishment
of authority and reporting relationships within the organisational hierarchy.
Proper organisational techniques help in the accomplishment of work and
promote both the efficiency of operations and the effectiveness of results.
Staffing simply stated, is finding the right people for the right job. A very
important aspect of management is to make sure that the right people with the
right qualifications are available at the right places and times to accomplish the
goals of the organisation. This is also known as the human resource function
and it involves activities such as recruitment, selection, placement and training
of personnel. Infosys Technologies which develops software needs systems
analysts and programmers.
Directing involves leading, influencing and motivating employees to perform
the tasks assigned to them. This requires establishing an atmosphere that
encourages employees to do their best. Motivation and leadership are two key
components of direction. Directing also involves communicating effectively as
well as supervising employees at work. Motivating workers means simply
creating an environment that makes them want to work. Leadership is
influencing others to do what the leader wants them to do. A good manager
directs through praise and criticism in such a way that it brings out the best in
the employee.
Controlling is the management function of monitoring organisational
performance towards the attainment of organisational goals. The task of
controlling involves establishing standards of performance, measuring current
performance, comparing this with established standards and taking corrective
action where any deviation is found. Here management must determine what
activities and outputs are critical to success, how and where they can be
measured and who should have the authority to take corrective action.