Module1:- Introduction to Management

What is Management:-
A set of activities (planning and decision making, organizing, leading, and controlling)
directed at an organization’s resources (human, financial, physical, and information) with
the aim of achieving organizational goals in an efficient and effective manner.

Some Important terms in this definition are:-

 Organization:-Groups of individuals constantly join forces to accomplish common
goals. Sometimes the goals of these organizations are for profit, such as franchise
restaurant chains or clothing retailers. Other times, the goals are more altruistic,
such as nonprofit churches or public schools. But no matter what their aims, all
these organizations share two things in common: They're made up of people (called
Managers), and certain individuals are in charge of these people.
 Efficiency:-
The ability to minimize the use of resources in achieving organizational objectives:
“doing things right”
 Effectiveness:-
the ability to determine appropriate objectives and achieving those objectives:
“doing the right things.”

CHARACTERISTICS OF MANAGEMENT
In the context of the various definitions of management and subsequent discussions, one
can enumerate certain important features of the discipline of management:

 Management is organized activities: Management is essentially a group effort. Unless

groups are properly organized through coordination and control, management loses its
essence. Proper organizing of activities with a clear structure showing authority
relationships is important for managing an organization.

 Management is aligned with organizational objectives: Every organization develops

clearly stated objectives. Peter F. Drucker (1954) had emphasized management by
objectives (MBO) for achieving results in an organization. For deciding the objectives of
an organization, a participative approach is followed to elicit commitment from the
cross-sections of employees working in an organization. Even though MBO traditionally
puts stress on deciding the objectives at the corporate or the highest level in the
organization, in order to make it participative, key result areas (KRAs) or key
performance areas (KPAs) are framed for individual employees of the organization.
KRAs/KPAs are individual, qualitative, and quantitative targets and are mutually decided
by the manager and the subordinates.

Page 1 of 8
 Management optimizes constraining resources: Appropriate resource allocation and
optimization of the resources is an important feature of management. Objectives are set
keeping in view the resource constraint. A manager has to rationalize the utilization of
constraining resources to achieve the best results. Let us understand this with an
example. A manager has two options before him: one is to buy new technology with a
huge capital investment and the other is to sub-contract or outsource the job. Capital
investment will require the organization to borrow the fund required, the payback
period of which is more than 10 years. On the other hand, sub-contracting will enable the
organization to manage the activity once a proper vendor is identified. If the manager
faces this situation, what will he do? He will obviously go for the second option. It has
been seen that there are many companies who are doing very well with the second
option and are even outsourcing their manufacturing activities.

 Management works with and through people: An organization is not just brick and
mortar, nor is it just system and structure. It consists of its people, or employees. The
competitive advantage of any organization is its people. Hence, managing people
successfully is the most important priority for an organization. Encyclopaedia Britannica,
Inc. which was more than two centuries old, collapsed because it could not manage its
people to respond to change. When Microsoft's sister concern Encarta introduced a CD
version of the encyclopaedia in the market, Britannica could not respond with a
competing product as the CD version would reduce the commission income of its sales
force. Ultimately, the company had to sell its stake to another new investor at less than
half of its price. This shows that management cannot succeed without taking people into
confidence.

 Management is decision making: One of the most important tasks of a manager is

decision making. A manager has to evaluate various decisional alternatives and select the
best one. Proper decision making minimizes the risk involved in decisions.

 Management is a science as well as an art: Learning management is possible through a

scientific process. Therefore, as a discipline, management is a science. However, effective
application of management is an art. That is why managerial styles differ. A manager may
be too formal with subordinates and maintain a task-oriented relationship, while
another may be informal and people-oriented. Both may lead to results but long-term
effectiveness is achieved only through people orientation.

 Management is universal: Management encompasses everything, not merely a business

organization. Even for managing a temple, a church or a mosque, one has to apply
management principles. Approaches may differ, though. Universality also implies
transferability of management knowledge and skills across countries. It may be noted
that there are arguments that are for and against universality. Proponents of cross-

Page 2 of 8
 cultural management are against universality of management as they consider
management to be situational. Those who subscribe to the concept of universality of
management suggest that management is universal and can be found in all types of
organizations.

 Management is intangible: Management is not something that is tangible or visible. It is

an intellectual process that facilitates the management of an organization. Information
and knowledge are the key elements of management and these become the most
important inputs. The entire process of management, including planning and organizing,
comprises intangible inputs that add value to the organization.

 Management is an interdisciplinary approach: Management is a structured approach

encompassing different fields like political science, economics, sociology, psychology,
mathematics, statistics, anthropology, and even engineering. Inputs from all these
disciplines have strengthened management and managerial functions.

 Management is a social process: As a social process, management has to be responsive

to social needs. The social responsibility of an organization is now a well-developed
concept that requires management to take inputs from society and give output to society.
Efficient management through proper utilization of resources of society can improve the
quality of life.

 Management is a system of authority: Management involves decision making. In any

organization, the onus of decision making is ultimately on the management.
Organizational structure, therefore, traditionally puts management at the top, from
where authority and reporting relationships flow. Even though there are attempts to
make the organization more participative through horizontal, matrix, and to some extent
hybrid organizational structures, ultimately the planning and controlling functions still
rest with the management.

 Management is dynamic: Since an organization has to keep environmental forces in

context and adapt to changes, it has to be dynamic. Without a dynamic approach, an
organization may lose its competitive advantage. Using the strength–weakness–
opportunities–threat (SWOT) model, the Boston Consulting Group (BCG) matrix, or
Porter's model, an organization decides its course of action to respond to the changing
requirements and frames its plans and strategies accordingly.

 Management principles are relative and not absolute: The application of

management principles depend on the situation. Each organization may have a situation
different from that of others. Such difference may be in terms of time, place, or
sociocultural factors. Therefore, principles of management should be understood in the

Page 3 of 8
 light of the prevailing culture or situations. This can be illustrated through an example. A
multinational organization wanted to apply the same principles that were applicable in
their branch in the United States, in the branches in Peru and Mexico. The result was
disastrous since, in comparison to the United States, the working hours and business
etiquette are completely different in these countries. One of the many differences is that
workers in Peru and Mexico usually get a long lunch break between their working hours,
which can extend up to three hours, allowing them time to even enjoy a nap. However,
they start very early in the morning to maintain the schedule of their working hours.
Hence, the principles of management that were applicable in the United States could
never have been successfully applied in this context.

 Management is a profession: The word profession has a variety of meanings. It is

characterized as an occupation based on specialized knowledge and skill, a theoretical
structure, and a learning of science. Management as an occupation has these
characteristics. On the other hand, management lacks the characteristic of a profession
because it does not fulfil certain other requirements. In order to be a profession in the
true sense, the field of management has to satisfy certain other characteristics, namely,
the existence of an organized and systematized body of knowledge, a formal method of
acquisition of knowledge, the existence of an association with professionalization, the
formulation of ethical codes, and the existence of service motives. Many theorists argue
that management does not satisfy all these characteristics and, hence, it is wrong to
designate management as a profession. They believe that it is better to call it an
emerging profession. Whatever the contention, management is increasingly gaining
recognition as a profession and has, in fact, become one of the most well-recognized
professions in India. To substantiate this claim, there are a number of professional
management bodies like All India Management Association, National Institute of
Personnel Management, and Indian Society for Training and Development, which are
furthering the cause of management through regular membership services. They have
come up with the idea of professional ethics, which largely focuses on service motives,
taking the profession beyond the ambit of one's individual livelihood.

Is Management Arts or Science?

We often come across debate on this issue but management is blend of both. Management
requires application of rationality, logic supplemented with experience and intuition.
• The Science of Management
– Assumes that problems can be approached using rational, logical, objective,
and systematic ways.
– Requires technical, diagnostic, and decision-making skills and techniques to
solve problems.

Page 4 of 8
 • The Art of Management
– Decisions are made and problems solved using a blend of intuition,
experience, instinct, and personal insights.
Requires conceptual, communication, interpersonal, and time-management skills to
accomplish the tasks associated with managerial activities

FUNCTIONS OF MANAGERS:-
Managers perform five basic functions: planning, organizing, staffing, leading, and
controlling.
 Planning: This step involves mapping out exactly how to achieve a particular goal.
Say, for example, that the organization's goal is to improve company sales. The
manager first needs to decide which steps are necessary to accomplish that goal.
These steps may include increasing advertising, inventory, and sales staff. These
necessary steps are developed into a plan. When the plan is in place, the manager
can follow it to accomplish the goal of improving company sales. Thus, Planning is a
management function that involves defining goals, establishing strategies for
achieving those goals, and developing plans to integrate and coordinate activities.
 Organizing: After a plan is in place, a manager needs to organize her team and
materials according to the plan. Organizing is a management function that involves
structuring and arranging work to accomplish organizational goals. When managers
organize they determine what tasks are to be done, who is to do them, how the tasks
are to be grouped, who reports to whom, and where decisions are made.
 Staffing: After a manager discerns his area's needs, he may decide to beef up his
staffing by recruiting, selecting, training, and developing employees. A manager in a
large organization often works with the company's human resources department to
accomplish this goal.
 Leading: A manager needs to do more than just plan, organize, and staff the team to
achieve a goal. Manager must also lead. Leading involves motivating,
communicating, guiding, and encouraging. It requires the manager to coach, assist,
and problem solve with employees. Leading is a management function that involves
working with and through people to accomplish organizational goals.
 Controlling: After the other elements are in place, a manager's job is not finished.
Manager needs to continuously check results against goals and take any corrective
actions necessary to make sure that the area's plans remain on track. A management
function that involves monitoring, comparing and correcting work performance.
All managers at all levels of every organization perform these functions, but the amount of
time a manager spends on each one depends on both the level of management and the
specific organization.

MANAGEMENT LEVELS:-
Two leaders may serve as managers within the same company but have very different titles
and purposes. Large organizations, in particular, may break down management into
different levels because so many more people need to be managed. Typical management
levels fall into the following categories:

Page 5 of 8
  Top level (Strategic Level): Managers at this level ensure that major performance
objectives are established and accomplished. Common job titles for top managers
include chief executive officer (CEO), chief operating officer (COO), president, and
vice president. These senior managers are considered executives, responsible for
the performance of an organization as a whole or for one of its significant parts.
 Middle level (Operational Level): Middle managers report to top managers and
are in charge of relatively large departments or divisions consisting of several
smaller units. Examples of middle managers include clinic directors in hospitals;
deans in universities; and division managers, plant managers, and branch sales
managers in businesses. Middle managers develop and implement action plans
consistent with company objectives, such as increasing market presence.
 Low level (Tactical Level): The initial management job that most people attain is
typically a first-line management position, such as a team leader or supervisor — a
person in charge of smaller work units composed of hands-on workers. Job titles for
these first-line managers vary greatly, but include such designations as department
head, group leader, and unit leader. First-line managers ensure that their work
teams or units meet performance objectives, such as producing a set number of
items at a given quality, that are consistent with the plans of middle and top
management.

ROLES PERFORMED BY MANAGERS:-

A manager wears many hats. Not only is a manager a team leader, but he or she is also a
planner, organizer, cheerleader, coach, problem solver, and decision maker — all rolled
into one. And these are just a few of a manager's roles.
In addition, managers' schedules are usually jam-packed. Whether they're busy with
employee meetings, unexpected problems, or strategy sessions, managers often find little
spare time on their calendars. (And that doesn't even include responding to e-mail!)
In his classic book, The Nature of Managerial Work, Henry Mintzberg describes a set of ten
roles that a manager fills. These roles fall into three categories:
 Interpersonal: This role involves human interaction.
 Informational: This role involves the sharing and analyzing of information.
 Decisional: This role involves decision making.
Table 1 contains a more in-depth look at each category of roles that help managers carry
out all five functions described in the preceding “Functions of Managers” section.

TABLE 1 Mintzberg's Set of Ten Roles

Category Role Activity
Informational Monitor Seek and receive information; scan periodicals and
reports; maintain personal contact with stakeholders.
Disseminator Forward information to organization members via
memos, reports, and phone calls.
Spokesperson Transmit information to outsiders via reports,
memos, and speeches.
Interpersonal Figurehead Perform ceremonial and symbolic duties, such as
greeting visitors and signing legal documents.

Page 6 of 8
 Leader Direct and motivate subordinates; counsel and
communicate with subordinates.
Liaison Maintain information links both inside and outside
organization via mail, phone calls, and meetings.
Decisional Entrepreneur Initiate improvement projects; identify new ideas and
delegate idea responsibility to others.
Disturbance Take corrective action during disputes or crises;
handler resolve conflicts among subordinates; adapt to
environments.
Resource allocator Decide who gets resources; prepare budgets; set
schedules and determine priorities.
Negotiator Represent department during negotiations of union
contracts, sales, purchases, and budgets.

SKILLS NEEDED BY MANAGERS:-

Not everyone can be a manager. Certain skills, or abilities to translate knowledge into
action that results in desired performance, are required to help other employees become
more productive.
These skills fall under the following categories:
 Technical: This skill requires the ability to use a special proficiency or expertise to
perform particular tasks. Accountants, engineers, market researchers, and computer
scientists, as examples, possess technical skills. Managers acquire these skills
initially through formal education and then further develop them through training
and job experience. Technical skills are most important at lower levels of
management.
 Human: This skill demonstrates the ability to work well in cooperation with others.
Human skills emerge in the workplace as a spirit of trust, enthusiasm, and genuine
involvement in interpersonal relationships. A manager with good human skills has a
high degree of self-awareness and a capacity to understand or empathize with the
feelings of others. Some managers are naturally born with great human skills, while
others improve their skills through classes or experience. No matter how human
skills are acquired, they're critical for all managers because of the highly
interpersonal nature of managerial work.
 Conceptual: This skill calls for the ability to think analytically. Analytical skills
enable managers to break down problems into smaller parts, to see the relations
among the parts, and to recognize the implications of any one problem for others. As
managers assume ever-higher responsibilities in organizations, they must deal with
more ambiguous problems that have long-term consequences. Again, managers may
acquire these skills initially through formal education and then further develop
them by training and job experience. The higher the management level, the more
important conceptual skills become.

Although all three categories contain skills essential for managers, their relative
importance tends to vary by level of managerial responsibility. Business and management
educators are increasingly interested in helping people acquire technical, human, and

Page 7 of 8
conceptual skills, and develop specific competencies, or specialized skills that contribute to
high performance in a management job. Following are some of the skills and personal
characteristics that the American Assembly of Collegiate Schools of Business (AACSB) is
urging business schools to help their students develop.

 Leadership — ability to influence others to perform tasks

 Self-objectivity — ability to evaluate yourself realistically
 Analytic thinking — ability to interpret and explain patterns in information
 Behavioral flexibility — ability to modify personal behavior to react objectively
rather than subjectively to accomplish organizational goals
 Oral communication — ability to express ideas clearly in words
 Written communication — ability to express ideas clearly in writing
 Personal impact — ability to create a good impression and instill confidence
 Resistance to stress — ability to perform under stressful conditions
 Tolerance for uncertainty — ability to perform in ambiguous situations

Management Skill Mixes at Different Organizational Levels

Page 8 of 8