CONCEPT AND NATURE OF MANAGEMENT
Management is a universal phenomenon. It is a very popular and widely used term. All organizations - business, political, cultural or social are involved in management because it is the management which helps and directs the various efforts towards a definite purpose. According to Harold Koontz, Management is an art of getting things done through and with the people in formally organized groups. It is an art of creating an environm environment ent in which which people people can perfor perform m and indivi individua duals ls can co-ope co-operat ratee toward towardss atta attain inme ment nt of grou group p goals goals!. !. Accor Accordi ding ng to ".#. ".#. $ayl $aylor, or, Mana Manage geme ment nt is an art art of %nowing what to do, when to do and see that it is done in the best and cheapest way!. Management is a purposive activity. It is something that directs group efforts towards the attainment of certain pre - determined goals. It is the process of wor%ing with and through others to effectively achieve the goals of the organization, by efficiently using limited resources in the changing world. &f course, these goals may vary from one enterprise to another. '.g.( "or one enterprise it may be launching of new products by conducting mar%et surveys and for other it may be profit ma)imization by minimizing cost. Management involves creating an internal environment. It is the management which puts into into use use the the vari variou ouss fact factor orss of produ product ctio ion. n. $her $heref efor ore, e, it is the the resp respons onsib ibil ilit ity y of management to create such conditions which are conducive to ma)imum efforts so that people are able to perform their tas% efficiently and effectively. It includes ensuring availability of raw materials, determination of wages and salaries, formulation of rules * regulations etc. $herefore, we can say that good management includes both being effective and efficient. +eing effective means doing the appropriate tas% i.e, fitting the suare pegs in suare holes and round pegs in round holes. +eing efficient means doing the tas% correctly, at least possible cost with minimum wastage of resources.
$he study and application of management techniues has %ept on changing with time. ariou ariouss dimens dimension ionss have have got added added with with the changi changing ng nature nature of the discipli discipline ne of management as various contributions came forth from time to time. In the present day conte)t, the following dimensions are integral to the nature of management( Continuous Process ( Management is a never ending process. It will remain the • part of organization till the organization itself e)ists. Management is an unending process as past decisions always carry their impact impact for the future course of action. Universal in Nature ( Management is universal in nature i.e. it e)ists everywhere • in univ univer erse se wher wherev ever er ther theree is a huma human n acti activi vity ty.. $he $he basi basicc prin princi cipl ples es of management can be applied anywhere whether they are business or non-business organization.
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Multidisciplinary ( Mana Manage geme ment nt is basi basica call lly y mult multid idis isci cipl plin inar ary y. $hou $hough gh management has been developed as a separate discipline, it draws %nowledge and concept conceptss of variou variouss other other discip disciplin lines es li%e li%e sociol sociology ogy,, psychol psychology ogy,, economi economics, cs, statistics etc. Management lin%s ideas and concepts of all these disciplines and uses them for the benefit of the organization. Management is a group activity . Management is a vital part of group activity. As no individual can satisfy all her/his needs herself/himself, 0s1/he unites with her/his co-wor%ers and wor% together as an organized group to achieve what 0s1/he cannot achieve individually. oriented activity. activity. It wor%s Management is goal oriented ( Management is a goal oriented to achieve some predetermined ob2ectives or goals which may be economic or social. Dynamic ( Management is dynamic in nature i.e. techniues to mange business changes itself over a period of time. ystem o! aut"ority ( Authority is power to get the wor% done by others and compel them to wor% systematical systematically. ly. Management cannot perform in absence absence of author authority ity.. Author Authority ity and respon responsib sibili ility ty depends depends upon posit position ion of manage managerr in organization. Relative principles ( Management principles are relative and not absolute, and they they shou should ld be appl applie ied d acco accord rdin ing g to the the need need of the the orga organi niza zati tion on.. 'ach 'ach organization is different from the other, and the differences might e)ist because of time, place, socio-cultural factors etc. Management is an art ( Management is considered as art as both reuires s%ills, %nowledge, e)perience and creativity for achievement of desired results.i Management Management is science. Management is considered as science. 3cience tells about about the the cause causess and and effe effect ctss of appli applicat catio ions ns and is base based d on some some spec specif ific ic principles and procedures. Management also uses some principles and specific methods. $hese are formed by continuous observations. COPE OF MANAGEMENT
4enerally, the scope of management hovers around the following functional areas( 5 6roduction management 5 Mar%eting management 5 "inancial management 5 6ersonal management Production management ( 6roduction means creation of utilities by converting raw material into final product by various scientific methods and regulations. It is very important field of management. arious sub-areas of the production department are as follows. Plant lay out and location ( $his area deals with designing of plant layout, decide • about the plant location for various products an d providing various plant utilities Production planning ( Managers have to plan about various production policies • and production methods.
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Material management ( $his area deals with purchase, storage, issue and control of the material reuired for production department. Researc" and Development ( $his area deals with research and developmental activities of manufacturing department. 8efinement in e)isting product line or develop a new product are the ma2or activities. #uality Control Control ( 9uality control department wor%s for production of uality product by doing various tests which ensure the customer satisfaction. satisfaction.
Mar$eting management% Mar%eting management involves distribution of the product to the buyers. It may need number of steps. 3ub areas are as follows •
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Advertising ( $his area deals with advertising of product, introducing new product in mar%et by various means and encourage the customer to buy thee products. ales management management( 3ales 3ales managem management ent deals deals with with fi)ati fi)ation on of prices prices,, actual actual transfer of products to the customer after fulfilling certain formalities and after sales services. Mar$et researc" ( It involves in collection of data related to product demand and performance by research and analysis of mar%et.
Finance and accounting management ( "inanci "inancial al and account accounting ing managem management ent deals deals with with manage manageria riall activi activitie tiess relate related d to procurement and utilization of fund for business purpose. Its sub areas are as follows follows •
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Financi Financial al accounti accounting ng ( It rela relate tess to reco record rd %eep %eepin ing g of vari variou ouss fina financ ncia iall transactions, their classification and preparation of financial statements to show the financial position of the organization. Management Management accounting accounting ( It deals with analysis and interpretation of financial record so that management can ta%e certain decisions on investment plans, return to investors and dividend policy $his area area deals deals with with vari variou ouss dire direct ct and and indi indire rect ct ta)e ta)ess whic which h an Ta&ation ( $his organization has to pay. Costing ( :osting deals with recording of costs, their classification, analysis and cost control.
Personnel Management% 6ersonnel management is the phase of management which deals with effective use and control of manpower. "ollowing are the sub areas of personnel management •
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Personn Personnel el planning planning( $his $his deal dealss with with prep prepar arat atio ion n inve invent ntor ory y of avai availa labl blee manpower and actual reuirement of wor%ers in organization. Recruitment Recruitment and selection selection ( $his deals with hiring and employing human being for various positions as reuired.
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Training and development ( $raining and development deals with process of ma%i ma%ing ng the the empl employ oyees ees more more effi effici cient ent and and effe effect ctiv ivee by arra arrang ngin ing g trai traini ning ng programmes. It helps in ma%ing team of competent employees which wor% for growth of an organisation. 'age administration ( It deals in 2ob evaluation, merit rating of 2obs and ma%ing wage and incentive policy for employees. deals with with mainte maintenanc nancee of overal overalll employ employee ee relati relation, on, (ndustrial (ndustrial relation( It deals providing good wor%ing conditions and welfare services to employees.
FUNCT(ON OF MANAGEMENT
"or theoretical purposes, it may be convenient to separate the function of management but practically these functions are overlapping in nature i.e. they are highly inseparable. 'ach function blends into the other * each affects the performance of others. Planning ( It is the basic function of management. It deals with chal%ing out a future course of action * deciding in advance the most appropriate course of actions for achievement of predetermined goals. According to K&&<$=, 6lanning is deciding in advance - what to do, when to do * how to do. It bridges the gap from where where we are * where we want to be!. A plan is a future course of actions. It is an e)ercise in problem solving * decision ma%ing. 6lanning is determination of courses of action to achieve desired goals. $hus, planning is a systematic thin%ing about ways * means for accomplishment of predetermined goals. 6lanning is necessary to ensure proper utilization of human * nonhuman resources. It is all pervasive, it is an intellectual activity and it also helps in avoiding confusion, uncertainties, ris%s, wastages etc. Organi)ing% It is the proces processs of bringi bringing ng togeth together er physic physical, al, financ financial ial and human human resour resources ces and developing developing productive productive relationshi relationship p amongst amongst them for achievement achievement of organizati organizational onal goals. According to Henry "ayol, $o organize a business is to provide it with everything useful or its functioning i.e. raw material, tools, capital and personnel>s!. $o organize a business involves determining * providing human and non-human resources to the organizational structure. &rganizing as a process involves( • • • • •
Identification of activities. :lassification of grouping of activities. Assignment of duties. ?elegation of authority and creation of responsibility. :oordinating authority and responsibility relationships.
ta!!ing%
It is the function of manning the organization structure and %eeping it manned. 3taffing has assumed greater importance in the recent years due to advancement of technology, increase in size of business, comple)ity of human behavior etc. $he main purpose o staffing is to put right man on right 2ob. According to Kootz * &>?onell, Managerial functi function on of staffi staffing ng involv involves es mannin manning g the organi organizat zation ion struct structure ure through through proper proper and effective selection, appraisal * development of personnel to fill the roles designed un the structure!. 3taffing involves( •
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Manpower 6lanning 0estimating man power in terms of searching, choose the person and giving the right place1. 8ecruitment, selection * placement. $raining * development. 8emuneration. 6erformance appraisal. 6romotions * transfer.
Directing% It is that part of managerial managerial function function which actuates actuates the organizational organizational methods to wor% efficientl efficiently y for achievement of organizatio organizational nal purposes. purposes. It is considered considered life-spar% life-spar% of the enterprise enterprise which sets it in motion motion the action action of people because planning, organizing organizing and staffing are the mere preparations for doing the wor%. ?irection is that inert-personnel aspect aspect of managem management ent which which deals deals direct directly ly with with influe influenci ncing, ng, guidin guiding, g, superv supervisi ising, ng, motiva motivatin ting g sub-or sub-ordin dinate ate for the achiev achieveme ement nt of organi organizat zation ional al goals. goals. ?irect ?irection ion has following elements( 3upervision • Motivation • eadership • :ommunication • 3upervision- implies overseeing the wor% of subordinates by their superiors. It is the act of watching * directing wor% * wor%ers.
Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to wor%. wor%. 6ositi 6ositive, ve, negati negative, ve, moneta monetary, ry, non-mon non-moneta etary ry incent incentive ivess may be used used for this this purpose. eadership- may be defined as a process by which manager guides and influences the wor% of subordinates in desired direction. :ommunications- is the process of passing information, e)perience, opinion etc from one person to another. It is a bridge of understanding. Controlling% It implie impliess measur measureme ement nt of accompl accomplish ishmen mentt against against the standa standards rds and correc correctio tion n of devia deviati tion on if any any to ensu ensure re achi achieve eveme ment nt of orga organi niza zati tion onal al goal goals. s. $he $he purp purpos osee of controlling is to ensure that everything occurs in conformities with the standards. An effici efficient ent system system of control control helps helps to predic predictt deviat deviation ionss before before they they actual actually ly occur. occur. According to $heo Haimann, :ontrolling is the process of chec%ing whether or not
proper progress is being made towards the ob2ectives and goals and acting if necessary, to corr correc ectt any any devi deviat atio ion! n!.. Acco Accord rdin ing g to Koon Koontz tz * &>?o &>?one nell ll :on :ontr trol olli ling ng is the the measurement * correction of performance activities of subordinates in order to ma%e sure sure that that the the ente enterp rpri rise se ob2e ob2ect ctiv ives es and and plan planss desi desire red d to obta obtain in them them as bein being g accomplished!. $herefore controlling has following steps( • • •
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'stablishment of standard performance. Measurement of actual performance. :omparison of actual performance with the standards and finding out deviation if any. :orrective action.
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6roduction management ?esigning the product • ocation and layout of plant and building • 6lanning and control of factory operations • &perations of purchase and storage of materials • 8epairs and maintenance • Inventory cost and uality control • 8esearch and development • Mar%eting Management Mar%eting research to determine the needs and e)pectation of consumers • 6lanning and developing suitable products • 3etting appropriate price • 3electing the right channel of distribution • 6romotional activities li%e advertisement and salesmanship to communicate with • the customers "inancial Management 3electing the appropriate source of funds • 8aising the reuired funds at the right time • Administration of earnings • 'stimating the volume of funds • 6ersonnel management Manpower planning • 8ecruitment • 3election • $raining • Appraisals • 6romotions • $ransfers • :ompensation • 'mployee welfare services • 6ersonnel records, research etc. •
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Art is about creative communication of ideas and emotions. 3cience is about establishing truth or finding ob2ective facts through verifiable e)perimentation. e)perimentation.
