What is 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 environment in which
people can perform and individuals and can co-operate towards attainment of group goals.
According to F.W. Taylor, Management is an art of knowing 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 working with and through
others to effectively achieve the goals of the organization, by efficiently using limited
resources in the changing world. Of course, these goals may vary from one enterprise to
another. E.g.: For one enterprise it may be launching of new products by conducting market
surveys and for other it may be profit maximization by minimizing cost.
Features of Management
Management is an activity concerned with guiding human and physical resources such that
organizational goals can be achieved. Nature of management can be highlighted as: 1. Management is Goal-Oriented: The success of any management activity is assessed
by its achievement of the predetermined goals or objective. Management is a
purposeful activity. It is a tool which helps use of human & physical resources to full
fill the pre-determined goals. For example, the goal of an enterprise is maximum
consumer satisfaction by producing quality goods and at reasonable prices. This can
be achieved by employing efficient persons and making better use of scarce resources.
2. Management integrates Human, Physical and Financial Resources: In an
organization, human beings work with non-human resources like machines. Materials,
financial assets, buildings etc. Management integrates human efforts to those
resources. It brings harmony among the human, physical and financial resources.
3. Management is Continuous: Management is an ongoing process. It involves
continuous handling of problems and issues. It is concerned with identifying the
problem and taking appropriate steps to solve it. E.g. the target of a company is
maximum production. For achieving this target various policies have to be framed but
this is not the end. Marketing and Advertising is also to be done. For this policies have
to be again framed. Hence this is an ongoing process.
4. Management is all universal: Management is required in all types of organizations
whether it is political, social, cultural or business because it helps and directs various
efforts towards a definite purpose. Thus clubs, hospitals, political parties, colleges,
hospitals, business firms all require management. Whenever more than one person is
engaged in working for a common goal, management is necessary. Whether it is a
small business firm which may be engaged in trading or a large firm like Tata Iron &
Steel, management is required everywhere irrespective of size or type of activity.

5. Management is a Group Activity: Management is very much less concerned with

individuals efforts. It is more concerned with groups. It involves the use of group
effort to achieve predetermined goal of management of ABC & Co. is good refers to a
group of persons managing the enterprise.
Objectives of Management
The main objectives of management are:
1. Getting Maximum Results with Minimum Efforts - The main objective of
management is to secure maximum outputs with minimum efforts & resources.
Management is basically concerned with thinking & utilizing human, material &
financial resources in such a manner that would result in best combination. This
combination results in reduction of various costs.
2. Increasing the Efficiency of factors of Production - Through proper utilization of
various factors of production, their efficiency can be increased to a great extent which
can be obtained by reducing spoilage, wastages and breakage of all kinds, this in turn
leads to saving of time, effort and money which is essential for the growth &
prosperity of the enterprise.
3. Maximum Prosperity for Employer & Employees - Management ensures smooth
and coordinated functioning of the enterprise. This in turn helps in providing
maximum benefits to the employee in the shape of good working condition, suitable
wage system, incentive plans on the one hand and higher profits to the employer on
the other hand.
4. Human betterment & Social Justice - Management serves as a tool for the upliftment as well as betterment of the society. Through increased productivity &
employment, management ensures better standards of living for the society. It
provides justice through its uniform policies.
Functions of Management
Management has been described as a social process involving responsibility for economical
and effective planning & regulation of operation of an enterprise in the fulfilment of given
purposes. It is a dynamic process consisting of various elements and activities. These
activities are different from operative functions like marketing, finance, purchase etc. Rather
these activities are common to each and every manger irrespective of his level or status.
Different experts have classified functions of management. According to George & Jerry,
There are four fundamental functions of management i.e. planning, organizing, actuating
and controlling.
According to Henry Fayol, To manage is to forecast and plan, to organize, to command, &
to control. Whereas Luther Gullick has given a keyword POSDCORB where P stands for
Planning, O for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for
reporting & B for Budgeting. But the most widely accepted are functions of management
given by KOONTZ and ODONNEL
i.e.Planning, Organizing, Staffing, Directing and Controlling.

For 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. Each
function blends into the other & each affects the performance of others.

1. Planning
It is the basic function of management. It deals with chalking out a future course of
action & deciding in advance the most appropriate course of actions for achievement
of pre-determined goals. According to KOONTZ, Planning is deciding in advance what to do, when to do & how to do. It bridges the gap from where we are & where
we want to be. A plan is a future course of actions. Planning is determination of
courses of action to achieve desired goals. Thus, planning is a systematic thinking
about ways & means for accomplishment of pre-determined goals. Planning is
necessary to ensure proper utilization of human & non-human resources. It is all
pervasive, it is an intellectual activity and it also helps in avoiding confusion,
uncertainties, risks, wastages etc.
2. Organizing
It is the process of bringing together physical, financial and human resources and
developing productive relationship amongst them for achievement of organizational
goals. According to Henry Fayol, To organize a business is to provide it with
everything useful or its functioning i.e. raw material, tools, capital and personnels.
To organize a business involves determining & providing human and non-human
resources to the organizational structure. Organizing as a process involves:

Identification of activities.

Classification of grouping of activities.

Assignment of duties.

Delegation of authority and creation of responsibility.

Coordinating authority and responsibility relationships.

3. Staffing
It is the function of manning the organization structure and keeping it manned.
Staffing has assumed greater importance in the recent years due to advancement of
technology, increase in size of business, complexity of human behaviour etc. The
main purpose of staffing is to put right man on right job i.e. square pegs in square
holes and round pegs in round holes. Managerial function of staffing involves
manning the organization structure through proper and effective selection, appraisal &
development of personnel to fill the roles designed in the structure. Staffing
involves:

Manpower Planning (estimating man power in terms of searching, choose the

person and giving the right place).

Recruitment, Selection & Placement.

Training & Development.

Remuneration.

Performance Appraisal.

Promotions & Transfer.

4. Directing
It is that part of managerial function which actuates the organizational methods to
work efficiently for achievement of organizational purposes. It is considered lifespark of the enterprise which sets it in motion the action of people because planning,
organizing and staffing are the mere preparations for doing the work. Direction is that
inert-personnel aspect of management which deals directly with influencing, guiding,
supervising, motivating sub-ordinate for the achievement of organizational goals.
Direction has following elements:

Supervision

Motivation

Leadership

Communication

Supervision- implies overseeing the work of subordinates by their superiors. It is the

act of watching & directing work & workers.

Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal

to work. Positive, negative, monetary, non-monetary incentives may be used for this
purpose.
Leadership- may be defined as a process by which manager guides and influences
the work of subordinates in desired direction.
Communications- is the process of passing information, experience, opinion etc from
one person to another. It is a bridge of understanding.
5. Controlling
It implies measurement of accomplishment against the standards and correction of
deviation if any to ensure achievement of organizational goals. The purpose of
controlling is to ensure that everything occurs in conformities with the standards. An
efficient system of control helps to predict deviations before they actually occur.
According to Theo Haimann, Controlling is the process of checking whether or not
proper progress is being made towards the objectives and goals and acting if
necessary, to correct any deviation. According to Koontz & ODonell Controlling is
the measurement & correction of performance activities of subordinates in order to
make sure that the enterprise objectives and plans desired to obtain them as being
accomplished. Therefore controlling has following steps:

Establishment of standard performance.

Measurement of actual performance.

Comparison of actual performance with the standards and finding out

deviation if any.

Corrective action.

Principles of Management
A principle refers to a fundamental truth. It establishes cause and effect relationship between
two or more variables under given situation. They serve as a guide to thought & actions.
Therefore, management principles are the statements of fundamental truth based on logic
which provides guidelines for managerial decision making and actions. These principles are
derived: a. On the basis of observation and analysis i.e. practical experience of managers.
b. By conducting experimental studies.
There are 14 Principles of Management described by Henri Fayol.
1. Division of Labor

a. Henri Fayol has stressed on the specialization of jobs.

b. He recommended that work of all kinds must be divided & subdivided and
allotted to various persons according to their expertise in a particular area.
c. Subdivision of work makes it simpler and results in efficiency.
d. It also helps the individual in acquiring speed, accuracy in his performance.
e. Specialization leads to efficiency & economy in spheres of business.
2. Party of Authority & Responsibility
a. Authority & responsibility are co-existing.
b. If authority is given to a person, he should also be made responsible.
c. In a same way, if anyone is made responsible for any job, he should also have
concerned authority.
d. Authority refers to the right of superiors to get exactness from their subordinates whereas responsibility means obligation for the performance of the
job assigned.
e. There should be a balance between the two i.e. they must go hand in hand.
f. Authority without responsibility leads to irresponsible behavior whereas
responsibility without authority makes the person ineffective.
3. Principle of One Boss
a. A sub-ordinate should receive orders and be accountable to one and only one
boss at a time.
b. In other words, a sub-ordinate should not receive instructions from more than
one person because -

It undermines authority
Weakens discipline
Divides loyalty
Creates confusion
Delays and chaos
Escaping responsibilities
Duplication of work
Overlapping of efforts

c. Therefore, dual sub-ordination should be avoided unless and until it is

absolutely essential.

d. Unity of command provides the enterprise a disciplined, stable & orderly

existence.
e. It creates harmonious relationship between superiors and sub-ordinates.
4. Unity of Direction
a. Fayol advocates one head one plan which means that there should be one plan
for a group of activities having similar objectives.
b. Related activities should be grouped together. There should be one plan of
action for them and they should be under the charge of a particular manager.
c. According to this principle, efforts of all the members of the organization
should be directed towards common goal.
d. Without unity of direction, unity of action cannot be achieved.
e. In fact, unity of command is not possible without unity of direction.
Basis

Unity of command

Unity of direction

Meaning

It implies that a sub-ordinate should

receive orders & instructions from
only one boss.

It means one head, one plan for a

group of activities having similar
objectives.

Nature

It is related to the functioning of

personnels.

It is related to the functioning of

departments, or organization as a
whole.

Necessity

It is necessary for fixing

responsibility of each subordinates.

It is necessary for sound

organization.

Advantag
e

It avoids conflicts, confusion &

chaos.

It avoids duplication of efforts

and wastage of resources.

Result

It leads to better superior subordinate relationship.

It leads to smooth running of the

enterprise.

Therefore it is obvious that they are different from each other but they are dependent on each
other i.e. unity of direction is a pre-requisite for unity of command. But it does not
automatically comes from the unity of direction.

5. Equity
a. Equity means combination of fairness, kindness & justice.
b. The employees should be treated with kindness & equity if devotion is
expected of them.
c. It implies that managers should be fair and impartial while dealing with the
subordinates.
d. They should give similar treatment to people of similar position.
e. They should not discriminate with respect to age, caste, sex, religion, relation
etc.
f. Equity is essential to create and maintain cordial relations between the
managers and sub-ordinate.
g. But equity does not mean total absence of harshness.
h. Fayol was of opinion that, at times force and harshness might become
necessary for the sake of equity.
6. Order
i. This principle is concerned with proper & systematic arrangement of things
and people.
j. Arrangement of things is called material order and placement of people is
called social order.
k. Material order- There should be safe, appropriate and specific place for every
article and every place to be effectively used for specific activity and
commodity.
l. Social order- Selection and appointment of most suitable person on the
suitable job. There should be a specific place for every one and everyone
should have a specific place so that they can easily be contacted whenever
need arises.
6. Discipline
a. According to Fayol, Discipline means sincerity, obedience, respect of
authority & observance of rules and regulations of the enterprise.
b. This principle applies that subordinate should respect their superiors and obey
their order.
c. It is an important requisite for smooth running of the enterprise.

d. Discipline is not only required on path of subordinates but also on the part of
management.
e. Discipline can be enforced if - There are good superiors at all levels.
- There are clear & fair agreements with workers.
- Sanctions (punishments) are judiciously applied.
7. Initiative
a. Workers should be encouraged to take initiative in the work assigned to them.
b. It means eagerness to initiate actions without being asked to do so.
c. Fayol advised that management should provide opportunity to its employees to
suggest ideas, experiences& new method of work.
d. It helps in developing an atmosphere of trust and understanding.
e. People then enjoy working in the organization because it adds to their zeal and
energy.
f. To suggest improvement in formulation & implementation of place.
g. They can be encouraged with the help of monetary & non-monetary
incentives.
8. Fair Remuneration
a. The quantum and method of remuneration to be paid to the workers should be
fair, reasonable, satisfactory & rewarding of the efforts.
b. As far as possible it should accord satisfaction to both employer and the
employees.
c. Wages should be determined on the basis of cost of living, work assigned,
financial position of the business, wage rate prevailing etc.
d. Logical & appropriate wage rates and methods of their payment reduce
tension & differences between workers & management creates harmonious
relationship and pleasing atmosphere of work.
e. Fayol also recommended provision of other benefits such as free education,
medical & residential facilities to workers.
9. Stability of Tenure
a. Fayol emphasized that employees should not be moved frequently from one
job position to another i.e. the period of service in a job should be fixed.

b. Therefore employees should be appointed after keeping in view principles of

recruitment & selection but once they are appointed their services should be
served.
c. According to Fayol. Time is required for an employee to get used to a new
work & succeed to doing it well but if he is removed before that he will not be
able to render worthwhile services.
d. As a result, the time, effort and money spent on training the worker will go
waste.
e. Stability of job creates team spirit and a sense of belongingness among
workers which ultimately increase the quality as well as quantity of work.
10. Scalar Chain
a. Fayol defines scalar chain as The chain of superiors ranging from the ultimate
authority to the lowest.
b. Every orders, instructions, messages, requests, explanation etc. has to pass
through Scalar chain.
c. But, for the sake of convenience & urgency, this path can be cut shirt and this
short cut is known as Gang Plank.
d. A Gang Plank is a temporary arrangement between two different points to
facilitate quick & easy communication as explained below:

In the figure given, if D has to communicate with G he will first send the
communication upwards with the help of C, B to A and then downwards with
the help of E and F to G which will take quite some time and by that time, it
may not be worth therefore a gang plank has been developed between the two.
e. Gang Plank clarifies that management principles are not rigid rather they are
very flexible. They can be moulded and modified as per the requirements of
situations

11. Sub-Ordination of Individual Interest to General Interest

a. An organization is much bigger than the individual it constitutes therefore
interest of the undertaking should prevail in all circumstances.
b. As far as possible, reconciliation should be achieved between individual and
group interests.
c. But in case of conflict, individual must sacrifice for bigger interests.
d. In order to achieve this attitude, it is essential that - Employees should be honest & sincere.
- Proper & regular supervision of work.
- Reconciliation of mutual differences and clashes by mutual
agreement. For example, for change of location of plant, for change of
profit sharing ratio, etc.
12. Espirit De Corps (can be achieved through unity of command)
a. It refers to team spirit i.e. harmony in the work groups and mutual
understanding among the members.
b. Spirit De Corps inspires workers to work harder.
c. Fayol cautioned the managers against dividing the employees into competing
groups because it might damage the moral of the workers and interest of the
undertaking in the long run.
d. To inculcate Espirit De Corps following steps should be undertaken

There should be proper co-ordination of work at all levels

Subordinates should be encouraged to develop informal relations

among themselves.

Efforts should be made to create enthusiasm and keenness among

subordinates so that they can work to the maximum ability.

Efficient employees should be rewarded and those who are not up to

the mark should be given a chance to improve their performance.

Subordinates should be made conscious of that whatever they are

doing is of great importance to the business & society.

e. He also cautioned against the more use of Britain communication to the

subordinates i.e. face to face communication should be developed. The
managers should infuse team spirit & belongingness. There should be no place
for misunderstanding. People then enjoy working in the organization & offer
their best towards the organization.

13. Centralization & De-Centralization

a. Centralization means concentration of authority at the top level. In other
words, centralization is a situation in which top management retains most of
the decision making authority.
b. Decentralization means disposal of decision making authority to all the levels
of the organization. In other words, sharing authority downwards is
decentralization.
c. According to Fayol, Degree of centralization or decentralization depends on
no. of factors like size of business, experience of superiors, dependability &
ability of subordinates etc.
d. Anything which increases the role of subordinate is decentralization &
anything which decreases it is centralization.
e. Fayol suggested that absolute centralization or decentralization is not feasible.
An organization should strike to achieve a lot between the two.