B.

Com 1st Semester Module: 1

Functional Applications of Management Introduction to Management

Module: 1
Introduction to Management
Concepts, Significance, Management and Administration. Management process-Functions of
Management.
1 Mark Questions
1. Define the term management
According to the American Management Association, management is defined as guiding
human and physical resources into dynamic organisational units which attain their objectives
to the satisfaction of those served and with a high degree of morale and sense of attainment
on the part of those rendering service.
2. Define the term administration
According to Theo Haimann, the term administration is defined as the overall determination
of policies, setting of major objectives, the identification of general purposes and laying down
of broad programmes and projects.
3. What are the different levels of management?
The following are the different levels of management:
a) Top level management-Takes strategic decisions for the company
b) Middle level management- Takes tactical decisions for the company
c) Lower level management- Takes operational decisions for the company
4. What are the important functions of management?
Though the process of management involves many functions, the following are its important
functions:
a) Planning
b) Organising
c) Staffing
d) Directing
e) Controlling
5. Explain shortly the significance of management
The following summarises the significance of management:
a) Achieving Group Goals
b) Increases Efficiency :
c) Creates Dynamic organization
d) Achieving personal objectives
e) Development of Society
6 State the different levels of management
The following are the different levels of management:
a) Top level management
b) Middle level management
c) Lower level management

2 Mark Questions
1. What are the concepts of management?
The following are some of the ways in which management has been interpreted:
a) Management as an activity
b) Management as a process
c) Management as an economic resource
d) Management as a team
e) Management as an academic discipline
f) Management as a group
g) Management as all pervasive in nature
h) Management as an intangible force

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Functional Applications of Management Introduction to Management

i) Management as a function
j) Management as a system of authority
k) Management as a class

2. State all the functions of management

The following are the functions of management:
a) Planning
b) Organising
c) Staffing
d) Directing
e) Controlling
f) Coordinating
g) Decision making
h) Motivating
i) Reporting
j) Budgeting
k) Communicating

4 Mark Questions
1. Explain the various levels of management

The term levels of Management refers to a line of demarcation between various managerial
positions in an organization. The following are the various levels of management:

a) Top level management (Strategic decision making level) - They consists 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. 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.
b) Middle level management (Tactical decision making level) - It is the link between top
and lower level managers. They are subordinate to top managers and superior to the
first line managers. They are usually known as division heads, operations manager or
plant superintendent. Middle management is responsible for implementing and
controlling plans and strategies developed by top management. At the same time they
are responsible for all the activities of first line managers. Their main task is to carry
out the plans formulated by the top managers. For this purpose they have to (i) Study
the areas of operation (ii) Appoint the first line managers (iii) Assign necessary duties
and responsibilities to them, (iv) motivate them to achieve desired objectives, and (v)
co-operate with other departments for smooth functioning of the organisation. At the
same time they are responsible for all the activities of first line managers.
c) Lower level management (Operational decision making level) - Foremen and
supervisors comprise the lower level in the hierarchy of the organisation. Supervisors
directly oversee the efforts of the workforce. Their authority and responsibility is
limited according to the plans drawn by the top management. Supervisory
management plays a very important role in the organisation since they interact with
the actual work force and pass on instructions of the middle management to the
workers. Through their efforts quality of output is maintained, wastage of materials is

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Functional Applications of Management Introduction to Management

minimised and safety standards are maintained. The quality of workmanship and the
quantity of output depends on the hard work, discipline and loyalty of the workers.
2. State and explain the differences between management and
administration

The differences between management and administration are as shown below:

Points of distinction Administration Management

1. Nature It is a determinative or thinking function It is an executive or doing
function
2. Type of work It is concerned with the determination of It is concerned with the
major objectives and policies implementation of policies
3. Levels of It is mainly a top level function It is largely a middle and lower
authority level function
4. Influence Administrative decisions are influenced Managerial decisions are
mainly by public opinion and other influenced by objectives and
outside forces policies of the organisation.
5. Direction of It is not directly concerned with the It is actively concerned with
human efforts direction of human efforts direction of human efforts in the
execution of plans
6. Main functions Planning and control are the main Directing and organising are the
functions involved in it. main functions involved in it.
7. Skills required Conceptual and human skills Technical and human skills
8. Usage Used largely in Government and Public Used mainly in business
sector organisations
9.Status Administration represents Management constitutes
owners of the enterprise the employees of the
organization
10.Return Receives dividend Receives profit salary or
share in the profit of the
concern
11.Aim Determine the objectives and policies of a Executing the objectives
business enterprise. determined by the
companys administration.

15 Mark Questions
1. Briefly explain the concepts of management

Traditionally, the concepts of management were interpreted as follows:

a) Functional concept-Management basically is the task of planning, coordinating,
motivating and controlling the efforts of other towards the goals and objectives of the
organization.
b) Human relation concept- According to this concept, Management is the art of getting
things done through and with people in organized groups.
c) Leadership and decision making concept- According to this concept, management is the
art and science of preparing, organizing, directing human efforts applied to control the
forces and utilize the materials of nature for the benefits to man.
d) Productive concept- According to this concept, management may be defined as the art of
securing maximum prosperity with a minimum effort so as to secure maximum prosperity
and happiness for both employer n employee and provide best services thereby.

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Functional Applications of Management Introduction to Management

e) Integration concept- According to this concept, management is the coordination of human

and material resources towards the achievement of organizational objectives as well as the
organization of the productive functions essential for achieving stated or accepted
economic goal.
To overcome the limitations of the above concepts, Theo Haimann, the leading management
expert has explained three basic concepts of management as under:
a) Management as an Activity- As an activity management has been defined as the art of
getting things done through the efforts of other people to achieve the objectives of the
group. The activities of management are: (a) Interpersonal activities (b) Decisional
activities (c) Informative activities
b) Management as a Process- Management is considered a process because it involves a
series of interrelated functions which includes planning, organising, staffing, directing
and controlling functions. Management as a process has the following implications: (i)
Social Process (ii) Integrated Process (iii) Continuous Process (iv) Interactive Process
c) Management as an Economic Resource- Like land, labour and capital, management is
an important factor of production. Management occupies the central place among
productive factors as it combines and coordinates all other resources
d) Management as a Team- As a group of persons, management consists of all those who
have the responsibility of guiding and coordinating the efforts of other persons.
e) Management as an Academic Discipline- Management has emerged as a specialised
branch of knowledge which comprises principles and practices for effective
management of organisations.
f) Management as a Group- Management means the group of persons occupying
managerial positions.
g) Management as all pervasive in nature- The activities involved in managing an
enterprise are common to all organisations whether economic, social or political.
h) Management as an intangible force- Management is an intangible force that cannot be
seen but its presence can be felt in the way the organisation functions.
i) Management as a 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.
j) Management as a system of authority- Experts consider management as a system of
authority which is a rulemaking and rule- enforcing body, and within itself it is bound
together by a web of relationships between superiors and subordinates".
k) Management as a class- Sociologists look upon management as a distinct class in
society with its own status system. With the growing importance of organizations and
the need for their efficient management, managers have become a very powerful or
elite group in society.
2. Explain the important functions of the management process
Though the process of management involves many functions, the following are its important
functions:
a) Planning- Planning is the determination of organisational goals and a means of
achieving it and is the basic function of management. In other words, 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. Proper planning
encourages people to work harder even for extended periods in order to accomplish
organisational goals by implementing better ways of working. Most importantly,
companies with better planning have higher profits than those that do not have it.
Thus, Planning provides directions, reduces the risks of uncertainty, reduces
overlapping and wasteful activities and establishes standards for controlling
b) Organising- Organising is deciding where the decisions will be made, who will do
what jobs and tasks and who will work for whom in the organisation. In other words,
it is the process of bringing together physical, financial and human resources and
developing productive relationship amongst them for achievement of organizational
goals. Organizing as a process which involves:

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Functional Applications of Management Introduction to Management

i. Identification of activities.
ii. Classification of grouping of activities.
iii. Assignment of duties.
iv. Delegation of authority and creation of responsibility.
v. Coordinating authority and responsibility relationships.
Organising is a means for translating plans into action. Thus the organising function
leads to the creation of an organisational structure which includes the designing of
roles to be filled by suitably skilled people and defining the inter relationship between
these roles so that ambiguity in performance of duties can be eliminated.
c) Staffing- Staffing has been described as the managerial function of filling and keeping
filled the positions in the organisation structure. This is achieved by identifying
requirement of work force, followed by recruitment, selection, placement, promotion,
appraisal and development of personnel, to fill the roles designed into the organisation
structure. The main purpose of staffing is to put right man on right job. Staffing
involves:
i. Manpower Planning
ii. Recruitment, Selection & Placement.
iii. Training & Development
iv. Remuneration
v. Performance Appraisal
vi. Promotions & Transfer.
Today, staffing may involve any combination of employees including daily wagers,
consultants and contract employees. Staffing recognises the importance of every single
person employed by an organisation as it is the individual worker, who is the ultimate
performer.
d) Directing- Directing is the process of inspiring and motivating workers to work harder
in order to achieve the organisational goals. It is that part of managerial function which
actuates the organizational methods to work efficiently for achievement of
organizational purposes. It is considered life-spark of the enterprise which sets it in
motion the action of people. Direction has following elements:
i. Supervision
ii. Motivation
iii. Leadership
iv. Communication
Directing is a continuous process which initiates action, takes place at every level of
management and flows from top to bottom. Thus, Directing integrates people towards
achievement of common objectives where managers not only tell the people in the
organisation as to what they should do, when they should do and how they should do
but also see that their instructions are implemented in proper perspective.
e) Controlling- Controlling is the process of monitoring progress towards goal
achievement and then taking corrective action when there is no progress made. This
process involves the following:
i. Setting standards to achieve goals
ii. Comparing actual performance to the standards set
iii. If any variations are present, then taking corrective measures to return the
performance to those standards
Thus controlling implies the measurement of accomplishment against the standards
and correction of deviation if any to ensure achievement of organizational goals. The
purpose of controlling is to predict deviations before they actually occur.

3. Mention the significance of management

The points below bring out the significance or importance of management:

a) Encourages Initiative- Management encourages initiative. Initiative means to do the
right thing at the right time without being told or influenced by the superior. The

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Functional Applications of Management Introduction to Management

employees should be encouraged to make their own plans and also to implement these
plans. Initiative gives satisfaction to employees and success to organisation.
b) Encourages Innovation- Management also encourages innovation in the organisation.
Innovation brings new ideas, new technology, new methods, new products, new
services, etc. This makes the organisation more competitive and efficient.
c) Facilitates growth and expansion- Management makes optimum utilisation of
available resources. A business enterprise operates in a constantly changing
environment. Changes in business environment create uncertainties and risk and also
produce opportunities for growth. An enterprise has to change and adjust itself in the
ever changing environment. Sound management moulds not only the enterprise but
also alters the environment itself to ensure the success of the business. Many of the
giant business corporations of today had a humble beginning and grew continuously
through effective management.
d) Improves life of workers- Management shares some of its profits with the workers. It
provides the workers with good working environment and conditions. It also gives the
workers many financial and non-financial incentives. All this improves the quality of
life of the workers.
e) Improves corporate image- If the management is good, then the organisation will
produce good quality goods and services. This will improve the goodwill and corporate
image of the organisation. A good corporate image brings many added benefits to the
organisation.
f) Motivates employees- Management motivates employees by providing financial and
non-financial incentives. These incentives increase the willingness and efficiency of the
employees. This results in boosting productivity and profitability of the organisation.
g) Optimum use of resources- Management brings together the available resources and
always concentrates on achieving the objectives of the enterprise. It makes optimum
(best) use of these resources. The available resources of production are put to use in
such a way that all sort of wastage and inefficiencies are reduced to a minimum.
Workers are motivated to put in their best performance by the inspiring leadership.
Managers create and maintain an environment conducive to highest efficiency and
performance. Through the optimum use of available resources, management
accelerates the process of economic growth. This brings best results to the
organisation.
h) Reduces wastage- Management reduces the wastage of human, material and financial
resources. In the modern era of intense competition, every business enterprise must
minimise the cost of production and distribution. Only those concerns can survive in
the market, which can produce goods of better quality at the minimum cost. A study of
the principles of management helps in knowing certain techniques used for reducing
costs. These techniques are production control, budgetary control, cost control,
financial control, and material control. Wastage is reduced by proper production
planning and control. If wastage is reduced then productivity will increase.
i) Increases efficiency- Efficiency is the relationship between returns and cost.
Management uses many techniques to increase returns and to reduce costs and
ensures efficient and smooth running of business, through better planning, sound
organization and effective control of the various factors of production. Higher
efficiency brings many benefits to the organisation.
j) Improves relations- Management improves relations between individuals, groups,
departments and between levels of management. Better relations lead to better team
work. Better team work brings success to the organisation.
k) Reduces absenteeism and labour turnover- Absenteeism means the employee is absent
without permission. Labour Turnover means the employee leaves the organisation.
Labour absenteeism and turnover increases the cost and causes many problems in the
smooth functioning of the organisation. Management uses different techniques to
reduce absenteeism and labour turnover in the organisation.

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Functional Applications of Management Introduction to Management

l) Encourages Team Work- Management encourages employees to work as a team. It

develops a team spirit in the organisation. Management makes group efforts more
effective. The group as a whole cannot realise its objectives unless and until there is
mutual co-operation and co-ordination among the members of the group.
Management creates team work and team spirit in an organization by developing a
sound organization structure. It brings the human and material resources together and
motivates the people for the achievement of the goals of the organization. This unity
bring success to the organisation.
m) Higher profits: Profits can be enhanced in any enterprise either by increasing the sales
revenue or reducing costs. To increase the sales revenue is beyond the control of an
enterprise. Management by decreasing costs increases its profits and thus provides
opportunities for future growth and development.
n) Social benefits: Management is useful not only to the business firms but to the society
as a whole. It improves the standard of living of the people through higher production
and more efficient use of scarce resources. By establishing cordial relations between
different social groups, management promotes peace and prosperity in society.
o) Useful for developing countries: Management has to play a more important role in
developing countries, like India. In such countries, the productivity is low and the
resources are limited. It has been rightly observed, "There are no under-developed
countries. They are only under-managed ones".
p) Sound organization structure: Management establishes proper organization structure
and avoids conflict between the superiors and subordinates. This helps in the
development of spirit of cooperation and mutual understanding, and a congenial
environment is provided in the organization.

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