UNIT-1

INTRODUCTION

INTRODUCTION TO MANAGEMENT

Management is a vital aspect of the economic life of man, which is an

organised group activity. It is considered as the indispensable institution in the
modern social organization marked by scientific thought and technological
innovations. One or the other form of management is essential wherever
human efforts are to be undertaken collectively to satisfy wants through some
productive activity, occupation or profession.

It is management that regulates man's productive activities through

coordinated use of material resources. Without the leadership provided by
management, the resources of production remain resources and never
become production.

DEFINITION OF MANAGEMENT

Harold Koontz says, "Management is the art of getting things done through
and within formally organized group.

Henry Fayol, "To mange is to forecast and plan, to organize, to compound, to

co-ordinate and to control.

Mary Parker Follett defines management as the "art of getting things done
through people". This definition calls attention to the fundamental difference
between a manager and other personnel of an organization. A manager is one
who contributes to the organization’s goals indirectly by directing the efforts of
others – not by performing the task himself. On the other hand, a person who
is not a manager makes his contribution to the organization’s goals directly by
performing the task himself. "

CHARACTERISTICS OF MANAGEMENT:

Management is a distinct activity having the following salient features:

1. Economic Resource : Management is one of the factors of production

together with land, labour and capital. As 10 industrialization increases, the
need for managers also increases. Efficient management is the most critical
input in the success of any organized group activity as it is the force which
assembles and integrates other factors of production, namely, labour, capital
and materials. Inputs of labour, capital and materials do not by themselves
ensure production, they require the catalyst of management to produce goods
and services required by the society. Thus, , management is an essential
ingredient of an organization.

2. Goal Oriented : Management is a purposeful activity. It coordinates the

efforts of workers to achieve the goals of the organization. The success of
management is measured by the extent to which the organizational goals are
achieved. It is imperative that the organizational goals must be well-defined
and properly understood by the management at various levels.

3. Distinct Process : Management is a distinct process consisting of such

functions as planning, organizing, staffing, directing and controlling. These
functions are so interwoven that it is not possible to lay down exactly the
sequence of various functions or their relative significance.

4. Integrative Force : The essence of management is integration of human and

other resources to achieve the desired objectives. All these resources are
made available to those who manage. Managers apply knowledge, experience
and management principles for getting the results from the workers by the use
of non-human resources. Managers also seek to harmonize the individuals'
goals with the organizational goals for the smooth working of the organization.

5. System of Authority : Management as a team of managers represents a

system of authority, a hierarchy of command and control. Managers at
different levels possess varying degree of authority. Generally, as we move
down in the managerial hierarchy, the degree of authority gets gradually
reduced. Authority enables the managers to perform their functions
effectively.

6. Multi-disciplinary Subject : Management has grown as a field of study (i.e.

discipline) taking the help of so many other disciplines such as engineering,
anthropology, sociology and psychology. Much of the management literature is
the result of the association of these disciplines. For instance, productivity
orientation drew its inspiration from industrial engineering and human
relations orientation from psychology. Similarly, sociology and operations
research have also contributed to the development of management science.

7. Universal Application : Management is universal in character. The

principles and techniques of management are equally applicable in the fields of
business, education, military, government and hospital. Henri Fayol suggested
that principles of management would apply more or less in every situation. The
principles are working guidelines which are flexible and capable of adaptation
to every organization where the efforts of human beings are to be
coordinated.

MANAGEMENT FUNCTIONS /PROCESS OF MANAGEMENT

For our purpose, we shall designate the following six as the functions of a
manager: planning, organizing, staffing, directing, coordinating and
controlling.

1. Planning : Planning is the most fundamental and the most pervasive

of all management functions. If people working in groups have to
perform effectively, they should know in advance what is to be done,
what activities they have to perform in order to do what is to be
done, and when it is to be done. Planning is concerned with 'what',
'how, and 'when' of performance. It is deciding in the present about
the future objectives and the courses of action for their achievement.
It thus involves:
(a)determination of long and short-range objectives
(b) development of strategies and courses of actions to be
followed for the achievement of these objectives; and
(c) formulation of policies, procedures, and rules, etc., for the
implementation of strategies, and plans.

2. Organizing : Organizing involves identification of activities

required for the achievement of enterprise objectives and
implementation of plans; grouping of activities into jobs; assignment
of these jobs and activities to departments and individuals;
delegation of responsibility and authority for performance, and
provision for vertical and horizontal coordination of activities
Having identified the activities, he has to group identical or
similar activities in order to make jobs, assign these jobs or groups
of activities to his subordinates, delegate authority to them so as to
enable them to make decisions and initiate action for undertaking
these activities, and provide for coordination between himself and
his subordinates, and among his subordinates
3. Staffing : Staffing is a continuous and vital function of management.
After the objectives have been determined, strategies, policies,
programmes, procedures and rules formulated for their achievement,
activities for the implementation of strategies, policies, programmes,
etc. identified and grouped into jobs, the next logical step in the
management process is to procure suitable personnel for manning
the jobs. Since the efficiency and effectiveness of an organization
significantly depends on the quality of its personnel and since it is
one of the primary functions of management to achieve qualified and
trained people to fill various positions, staffing has been recognized
as a distinct function of management
4. Directing : Directing is the function of leading the employees to
perform efficiently, and contribute their optimum to the achievement
of organizational objectives. Jobs assigned to subordinates have to
be explained and clarified, they have to be provided guidance in job
performance and they are to be motivated to contribute their
optimum performance with zeal and enthusiasm.
5. Coordination : Coordinating is the function of establishing such
relationships among various parts of the organization that they all
together pull in the direction of organizational objectives. It is thus
the process of tying together all the organizational decisions,
operations, activities and efforts so as to achieve unity of action for
the accomplishment of organizational objectives.
6. Controlling : Controlling is the function of ensuring that the
divisional, departmental, sectional and individual performances are
consistent with the predetermined objectives and goals. Deviations
from objectives and plans have to be identified and investigated, and
correction action taken. Deviations from plans and objectives
provide feedback to managers, and all other management processes
including planning, organizing, staffing, directing and coordinating
are continuously reviewed and modified, where necessary.
It also implies a flexible and dynamic organization which will permit
changes in objectives, plans, programmes, strategies, policies,
organizational design, staffing policies and practices, leadership
style, communication system, etc., for it is not uncommon that
employees failure to achieve predetermined standards is due to
defects or shortcomings in any one or more of the above dimensions
of management.
Thus, controlling involves the following process :
(a) Measurement of performance against predetermined goals.
(b) Identification of deviations from these goals.
(c) Corrective action to rectify deviations.

LEVELS OF MANAGEMENT
The real significance of levels is that they explain authority relationships in
an organization. Considering the hierarchy of authority and responsibility,
one can identify three levels of management namely:

(i) Top management of a company consists of owners/shareholders, Board of

Directors, its Chairman, Managing Director, or the Chief Executive, or the
General Manager or Executive Committee having key officers.
(ii) Middle management of a company consists of heads of functional
departments viz. Purchase Manager, Production Manager, Marketing
Manager, Financial controller, etc. and Divisional and Sectional Officers
working under these Functional Heads.
(iii) Lower level or operative management of a company consists of
Superintendents, Foremen, Supervisors, etc.

1. Top management : Top management is the ultimate source of authority

and it lays down goals, policies and plans for the enterprise. It devotes more
time on planning and coordinating functions. It is accountable to the owners
of the business of the overall management. It is also described as the policy
making group responsible for the overall direction and success of all
company activities. The important functions of top management include :
(a) To establish the objectives or goals of the enterprise.
(b) To make policies and frame plans to attain the objectives laid.
(c) To set up an organizational frame work to conduct the operations as
per plans.
(d) To assemble the resources of money, men, materials, machines and
methods to put the plans into action.
(e) To exercise effective control of the operations.
(f) To provide overall leadership to the enterprise.

2. Middle management : The job of middle management is to implement the

policies and plans framed by the top management. It serves as an essential
link between the top management and the lower level or operative
management. They are responsible to the top management for the
functioning of their departments. They devote more time on the
organization and motivation functions of management. They provide the
guidance and the structure for a purposeful enterprise. Without them the top
management's plans and ambitious expectations will not be fruitfully
realized. The following are the main functions of middle management :
(a) To interpret the policies chalked out by top management.
(b) To prepare the organizational set up in their own departments for
fulfilling the objectives implied in various business policies.
(c) To recruit and select suitable operative and supervisory staff.
(d) To assign activities, duties and responsibilities for timely
implementation of the plans.
(e) To compile all the instructions and issue them to supervisor under
their control.
(f) To motivate personnel to attain higher productivity and to reward
them properly.
(g) To cooperate with the other departments for ensuring a smooth
functioning of the entire organization.
(h) To collect reports and information on performance in their
departments.
(i) To report to top management
(j) To make suitable recommendations to the top management for the
better execution of plans and policies.

3. Lower or operative management: It is placed at the bottom of the

hierarchy of management, and actual operations are the responsibility of
this level of management. It consists of foreman, supervisors, sales officers,
accounts officers and so on. They are in direct touch with the rank and file
or workers. Their authority and responsibility is limited. They pass on the
instructions of the middle management to workers.

SIGNIFICANCE OF MANAGEMENT

1.Achievements of group goals : 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.
2. Optimum utilization of resources : Management always
concentrates on achieving the objectives of the enterprise. 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.

3. Minimisation of cost : 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, material control,
etc.
4. Change and growth : 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 everchanging
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.
5. Efficient and smooth running of business : Management ensures
efficient and smooth running of business, through better planning,
sound organization and effective control of the various factors of
production.
6. 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.
7. Provide innovation : Management gives new ideas, imagination
and visions to an enterprise.
8. 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.
9. 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".
10. 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.
SCIENTIFIC MANAGEMENT:

Definition of F.W.Taylor, the Father of the Scientific management Movement.

In his words,Scientific Management is “knowing exactly what you want people
to do and knowing that they do in the best and the cheapest way possible“.

Objectives of Scientific Management

The broad objectives of Scientific Management can be outlined as follows:
1. To increase the rate of production with the help of standardized tools,
equipment and methods.
2, To improve the quality of production by effective inspection and quality
control through scientific research.
3. Systemic planning and regulation of cost control mechanism will reduce the
cost of production.
4. To eradicate waste of time and resources, and to implement effective
methods of production.
5. To recruit right person for the job through scientific selection and training
which in turn will control employee turnover.
6. Establishing a sound system of wage payment so that efficiency of output is
maximum.
7. Ensuring a steady flow of quality goods to the consumers at reasonable
prices.
Features of Scientific Management
The broad features of scientific management can be outlined as follows:
1. Scientific Management does not involve a single element but a combination
of varied elements.
2. It is concerned with a group or joint effort within an organization directed
towards a common objective.
3. The group efforts should be made through certain type of organization and
procedures.
4. The procedures and organization which form part of it must not be either on
casual observation or chance factors.
5. The organization and procedures must be based on laws and principles
evolved after a careful investigation and analysis of the work situation.
6. The system must be a dynamic one and not a static one.

Advantages of scientific management :-

To employees
a. Better utilization of resources through scientific techniques
b. Scientific selection and training of employees leads to better workforce
which ensures increase in efficiency
c. Harmonious relationship between the workers and the management
d. Standardization of tools, materials, techniques , equipments for
increasing efficiency
e. Reduction of production cost
To workers
a. Opportunity for scientific training and development to increase skills
knowledge and competency
b. Better working conditions
c. Application of scientific methods and techniques in better working
conditions to reduce fatigue
d. Higher wages to the workers for higher productivity
To society
a. People get better quality products at lower cost
b. Increase productivity in the country by utilizing resources properly
c. Improve standard of living of people through better products
d. Scientific investigation promotes technological development

Limitations of scientific management: –

a. It is based upon one best way and is applicable for simple organizations
than that for today’s dynamic and complex organization
b. It focuses on individual performance than group efforts and divides the
workers into efficient and inefficient categories
c. It is focused on specialization and repetition of jobs to increase the
productivity which reduces innovation and creativity and promotes monotony
d. It neglects human factor because it motivates workers to work for
monetary benefits rather than human resource development and resources
e. There is no scope for creativity of employees because they are developed
by manager which promotes frustration.

Management Principles developed by Henry Fayol:

1. DIVISION OF WORK: Work should be divided among individuals and groups to
ensure that effort and attention are focused on special portions of the task.
Fayol presented work specialization as the best way to use the human
resources of the organization.

2. AUTHORITY: The concepts of Authority and responsibility are closely related.

Authority was defined by Fayol as the right to give orders and the power to
exact obedience. Responsibility involves being accountable, and is
therefore naturally associated with authority. Whoever assumes authority
also assumes responsibility.
3. DISCIPLINE: A successful organization requires the common effort of
workers. Penalties should be applied judiciously to encourage this
common effort.
4. UNITY OF COMMAND: Workers should receive orders from only one
manager.
5. UNITY OF DIRECTION: The entire organization should be moving towards
a common objective in a common direction.

6. SUBORDINATION OF INDIVIDUAL INTERESTS TO THE GENERAL

INTERESTS: The interests of one person should not take priority over the
interests of the organization as a whole.

7. REMUNERATION: Many variables, such as cost of living, supply of

qualified personnel, general business conditions, and success of the
business, should be considered in determining a worker’s rate of pay.

8. CENTRALIZATION: Fayol defined centralization as lowering the

importance of the subordinate role. Decentralization is increasing the
importance. The degree to which centralization or decentralization should
 be adopted depends on the specific organization in which the manager is
working.
9. SCALAR CHAIN: Managers in hierarchies are part of a chain like authority
scale. Each manager, from the first line supervisor to the president,
possess certain amounts of authority. The President possesses the most
authority; the first line supervisor the least. Lower level managers should
always keep upper level managers informed of their work activities. The
existence of a scalar chain and adherence to it are necessary if the
organization is to be successful.

10.ORDER: For the sake of efficiency and coordination, all materials and
people related to a specific kind of work should be treated as equally as
possible.
11.EQUITY: All employees should be treated as equally as possible.

12.STABILITY OF TENURE OF PERSONNEL: Retaining productive employees

should always be a high priority of management. Recruitment and
Selection Costs, as well as increased product-reject rates are usually
associated with hiring new workers.

13.INITIATIVE: Management should take steps to encourage worker

initiative, which is defined as new or additional work activity undertaken
through self direction.
14.ESPIRIT DE CORPS: Management should encourage harmony and general
good feelings among employees.