Management Concepts

& Theories
Nature & Scope of Management
• Every human being has several needs and desires.
• But no individual can satisfy all his wants.
• Therefore, people work together to meet their mutual needs
which they cannot fulfil individually.
• Moreover, man is a social being as he likes to live together with
other people.
• It is by working and living together in organised groups and
institutions that people satisfy their economic and social needs.
• As a result there are several types of groups, eg., family,
school, government, army, a business firm, a cricket team and
the like.

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Nature & Scope of Management
• Such formal groups can achieve their goals
effectively only when the efforts of the people
working in these groups are properly coordinated and
controlled.
• The task of getting results through others by
coordinating their efforts is known as management.
• Just as the mind coordinates and regulates all the
activities of a person, management coordinates and
regulates the activities of various members of an
organisation.

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 Definition of Management
• It is very difficult to give a precise definition of the
term ‘management’.
• Different scholars from different disciplines view
and interpret management from their own angles.
• The economists consider management as a resource
like land, labour, capital and organisation.
• The bureaucrats look upon it as a system of authority
to achieve business goals.
• The sociologists consider managers as a part of the
class elite in the society.

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 Definition of Management
• Management consists in guiding human and physical
resources into dynamic, hard-hitting organisation unit
that attains its objectives to the satisfaction of
those served and with a high degree of morale and
sense of attainment on the part of those rendering
the service.
—Lawrence A. Appley
• Management is the coordination of all resources
through the process of planning, organising, directing
and controlling in order to attain stated objectives.
—Henry L. Sisk.

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 Definition of Management
• Management is principally the task of planning,
coordinating, motivating and controlling the
efforts of others towards a specific objective.
—James L. Lundy
• Management is the art and science of organising
and directing human efforts applied to control
the forces and utilise the materials of nature
for the benefit of man.
—American Society of Mechanical Engineers

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 Definition of Management
• Management is the creation and maintenance of an
internal environment in an enterprise where individuals,
working in groups, can perform efficiently and
effectively towards the attainment of group goals.
—Harold Koontz and Cyrill O’Donnell
• Management is the art of knowing what you want to do
and then seeing that it is done in the best and cheapest
way.
—F.W. Taylor
• To manage is to forecast and to plan, to organise to
command, to coordinate and to control.
—Henry Fayol
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 Definition of Management
• Management is the function of executive leadership
anywhere.
—Ralph C. Davis
• Management is concerned with seeing that the job gets
done; its tasks all centre on planning and guiding the
operations that are going on in the enterprise.
—E.F.L. Breach
• Management is a distinct process consisting of planning,
organising, actuating and controlling performed to
determine and accomplish the objectives by the use of
people and resources.
—George R. Terry
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 Definition of Management
• Management is 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.
—American Management Association
• Management is a multipurpose organ that manage
a business and manages Managers and manages
Workers and work.
—Peter Drucker

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 Concepts of Management
• The term management has been interpreted in several ways
Management as an Activity
• Management is an activity just like playing, studying,
teaching.
• As an activity management has been defined as the art of
getting things done through the efforts of other people.
• Management is a group activity wherein managers do to
achieve the objectives of the group.
• The activities of management are:
– Interpersonal activities
– Decisional activities
– Informative activities

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 Concepts of Management

• The term management has been interpreted in several

ways
Management as a Process
• Management is considered a process because it
involves a series of interrelated functions.
• It consists of getting the objectives of an organisation
and taking steps to achieve objectives.
• The management process includes planning, organising,
staffing, directing and controlling functions.

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 Concepts of Management
Management as a Process
•Management as a process has the following implications:
•Social Process:
– Management involves interactions among people.
– Goals can be achieved only when relations between people are
productive.
– Human factor is the most important part of the management.
•Integrated Process:
– Management brings human, physical and financial resources
together to put into effort.
– Management also integrates human efforts so as to maintain
harmony among them.

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 Concepts of Management
Management as a Process
•Management as a process has the following
implications:
•Continuous Process:
– Management involves continuous identifying and solving
problems.
– It is repeated every now and then till the goal is achieved.
•Interactive process:
– Managerial functions are contained within each other.
– For example, when a manager prepares plans, he is also laying
down standards for control.

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 Concepts of Management
• The term management has been
interpreted in several ways
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.

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 Concepts of Management
• The term management has been interpreted in several ways
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.
• These persons are called as managers who operate at different levels
of authority (top, middle, operating).
• Some of these managers have ownership stake in their firms while
others have become managers by virtue of their training and
experience.
• Civil servants and defence personnel who manage public sector
undertakings are also part of the management team.
• As a group managers have become an elite class in society, occupying
positions with enormous power and prestige.

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 Concepts of Management
• The term management has been interpreted in
several ways
Management as an Academic Discipline
•  Management has emerged as a specialised branch of
knowledge.
• It comprises principles and practices for effective
management of organisations.
• Management has become as very popular field of study as is
evident from the great rush for admission into institutes of
management.
• Management offers a very rewarding and challenging career.

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 Concepts of Management
• The term management has been interpreted in
several ways
Management as a Group
• Management means the group of persons occupying
managerial positions.
• It refers to all those individuals who perform
managerial functions.
• All the managers, e.g., chief executive (managing
director), departmental heads, supervisors and so
on are collectively known as management.

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 Concepts of Management
• The term management has been interpreted in several ways
Management as a Group
• For example, when one remarks that the management of
Wipro Ltd. is good, he is referring to the persons who are
managing the company.
• There are several types of managers which are listed as
under.
– Family managers who have become managers by virtue of their being
owners or relatives of the owners of a company.
– Professional managers who have been appointed on account of their
degree or diploma in management.
– Civil Servants who manage public sector undertakings.

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 Concepts of Management
• The term management has been interpreted in several ways
Management as a Group
• Managers have become a very powerful and respected group in
modern society.
• This is because the senior managers of companies take decisions
that affect the lives of a large number of people.
• For example, if the managers of Wipro Limited decide to expand
production it will create job for thousands of people.
• Managers also help to improve the social life of the public and the
economic progress of the country.
• Senior managers also enjoy a high standard of living in society.
• They have, therefore, become an elite group in the society.

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 Concepts of Management
• The term management has been interpreted in several ways
Nature and Characteristics of Management
• The salient features which highlight the nature of management are
as follows:
• Management is goal-oriented:
– Management is not an end in itself.
– It is a means to achieve certain goals.
– Management has no justification to exist without goals.
– Management goals are called group goals or organisational goals. The basic goal of
management is to ensure efficiency and economy in the utilisation of human,
physical and financial resources.
– The success of management is measured by the extent to which the established
goals one achieved.
– Thus, management is purposeful.

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 Concepts of Management
• The term management has been interpreted in several ways
Nature and Characteristics of Management
• The salient features which highlight the nature of management are
as follows:
• Management is universal:
– Management is an essential element of every organised activity irrespective of the
size or type of activity.
– Wherever two or more persons are engaged in working for a common goal,
management is necessary.
– All types of organisations, e.g., family, club, university, government, army, cricket
team or business, require management.
– Thus, management is a pervasive activity.
– The fundamental principles of management are applicable in all areas of organised
effort.
– Managers at all levels perform the same basic functions.

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 Concepts of Management
• The term management has been interpreted in several ways
Nature and Characteristics of Management
• The salient features which highlight the nature of
management are as follows:
• Management is an Integrative Force:
– The essence of management lies in the coordination of individual
efforts in to a team.
– Management reconciles the individual goals with organisational
goals.
– As unifying force, management creates a whole that is more than
the sum of individual parts.
– It integrates human and other resources.

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 Concepts of Management
• The term management has been interpreted in several ways
Nature and Characteristics of Management
• The salient features which highlight the nature of
management are as follows:
• Management is a Social Process:
– Management is done by people, through people and for people.
– It is a social process because it is concerned with interpersonal relations.
– Human factor is the most important element in management.
– According to Appley, “Management is the development of people not the
direction of things.
– A good manager is a leader not a boss.
– It is the pervasiveness of human element which gives management its
special character as a social process”.

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 Concepts of Management
• The term management has been interpreted in several ways
Nature and Characteristics of Management
• The salient features which highlight the nature of
management are as follows:
• Management is multidisciplinary:
– Management has to deal with human behaviour under dynamic
conditions.
– Therefore, it depends upon wide knowledge derived from several
disciplines like engineering, sociology, psychology, economics,
anthropology, etc.
– The vast body of knowledge in management draws heavily upon
other fields of study.

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 Concepts of Management
• The term management has been interpreted in
several ways
Nature and Characteristics of Management
• The salient features which highlight the nature of
management are as follows:
• Management is a continuous Process:
– Management is a dynamic and an on-going process.
– The cycle of management continues to operate so long as
there is organised action for the achievement of group
goals.

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 Concepts of Management
• The term management has been interpreted in
several ways
Nature and Characteristics of Management
• The salient features which highlight the nature of
management are as follows:
• Management is Intangible:
– Management is an unseen or invisible force.
– It cannot be seen but its presence can be felt everywhere
in the form of results.
– However, the managers who perform the functions of
management are very much tangible and visible.

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 Concepts of Management
• The term management has been interpreted in several
ways
Nature and Characteristics of Management
• The salient features which highlight the nature of
management are as follows:
• Management is an Art as well as Science:
– It contains a systematic body of theoretical knowledge and it
also involves the practical application of such knowledge.
– Management is also a discipline involving specialised training and
an ethical code arising out of its social obligations.

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 Concepts of Management
• The term management has been interpreted in
several ways
Nature and Characteristics of Management
• On the basis of these characteristics, management
may be defined as a continuous social process
involving the coordination of human and material
resources in order to accomplish desired
objectives.
• It involves both the determination and the
accomplishment of organisational goals.

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 Concepts of Management
• The term management has been interpreted in several ways
Objectives Of Management
• The objectives of management are:
• Organisational objectives:
• Management is expected to work for the achievement of the
objectives of the particular organisation in which it exists.
• Organisational objectives include:
– Reasonable profits so as to give a fair return on the capital invested in
business.
– Survival and solvency of the business, i.e., continuity.
– Growth and expansion of the enterprise.
– Improving the goodwill or reputation of the enterprise.

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 Concepts of Management
• The term management has been interpreted in several ways
Objectives Of Management
• The objectives of management are:
• Personal objectives:
• An organisation consists of several persons who have their
own objectives.
• These objectives are as follows:
– Fair remuneration for work performed.
– Reasonable working conditions.
– Opportunities for training and development.
– Participation in management and prosperity of the enterprise.
– Reasonable security of service.

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 Concepts of Management
• The term management has been interpreted in several ways
Objectives Of Management
• The objectives of management are:
• Social objectives:
• Management is not only a representative of the owners and workers,
but is also responsible to the various groups outside the
organisation.
• It is expected to fulfil the objectives of the society which are:
– Quality of goods and services at fair price to consumers.
– Honest and prompt payment of taxes to the Government.
– Conservation of environment and natural resources.
– Fair dealings with suppliers, dealers and competitors.
– Preservation of ethical values of the society.

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Role And Importance Of Management
• Management is indispensable for the successful
functioning of every organisation.
• It is all the more important in business enterprises.
• No business runs in itself, even on momentum.
• Every business needs repeated stimulus which can
only be provided by management.
• According to Peter Drucker,“ management is a
dynamic life-giving element in an organisation,
without it the resources of production remain mere
resources and never become production”.

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Role And Importance Of Management
The importance of management:
(i) Achievement of group goals:
•A human group consists of several persons, each specialising in doing a
part of the total task.
•Each person may be working efficiently, but the group as a whole
cannot realise its objectives unless there is mutual cooperation and
coordination among the members of the group.
•Management creates team-work and coordination in the group.
•It reconciles the objectives of the group with those of its members
so that each one of them is motivated to make his / her best
contribution towards the accomplishment of group goals.
•Managers provide inspiring leadership to keep the members of the
group working hard.

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Role And Importance Of Management
The importance of management:
(ii) Optimum utilisation of resources:
•Managers forecast the need for materials, machinery, money and
manpower.
•They ensure that the organisation has adequate resources and at the
same time does not have idle resources.
•They create and maintain an environment conducive to highest
productivity.
•Managers make sure that workers know their jobs well and use the
most efficient methods of work.
•They provide training and guidance to employee’s so that they can
make the best use of the available resources.

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Role And Importance Of Management
The importance of management:
(iii) Minimisation of cost:
•In the modern era of cut-throat competition no
business can succeed unless it is able to supply the
required goods and services at the lowest possible cost
per unit.
•Management directs day-to-day operations in such a
manner that all wastage and extravagance are avoided.
•By reducing costs and improving efficiency, managers
enable an enterprise to be competent to face
competitors and earn profits.

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Role And Importance Of Management
The importance of management:
(iv) Survival and growth:
•Modern business operates in a rapidly changing environment.
•An enterprise has to adapt itself to the changing demands of the market
and society.
•Management keeps in touch with the existing business environment and
draws its predictions about the trends in future.
•It takes steps in advance to meet the challenges of changing environment.
•Changes in business environment create risks as well as opportunities.
•Managers enable the enterprise to minimise the risks and maximise the
benefits of opportunities.
•In this way, managers facilitate the continuity and prosperity of business.

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Role And Importance Of Management
The importance of management:
(v) Generation of employment:
•By setting up and expanding business enterprises,
managers create jobs for the people.
•People earn their livelihood by working in these
organisations.
•Managers also create such an environment that people
working in enterprise can get job satisfaction and
happiness.
•In this way managers help to satisfy the economic and
social needs of the employees.

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Role And Importance Of Management
The importance of management:
(vi) Development of the nation:
•Efficient management is equally important at the national level.
•Management is the most crucial factor in economic and social development.
•The development of a country largely depends on the quality of the
management of its resources.
•Capital investment and import of technical know- how cannot lead to
economic growth unless wealth producing resources are managed
efficiently.
•By producing wealth, management increases the national income and the
living standards of people.
•That is why management is regarded as a key to the economic growth of a
country.

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Distinction Between Management And
Administration
• There has been a controversy on the use of these two terms –
‘management’ and ‘administration’.
• Many experts make no distinction between administration and
management and use them as synonyms.
• Several American writers consider them as two distinct
functions.
• The management experts like Elbourne, Unwick and Mary Follett
regarded ‘administration’ and ‘management’ as synonymous and
use them interchangeably in their works.
• But Schuze and Sheldon found distinction between these two
concepts.

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 Distinction Between Management And
Administration
• According to them the distinction is important to clearly understand the
role of people in administrative positions versus those in managerial
positions.
• Oliver Sheldon in his “The Philosophy of Management” defines
‘Administration as a function is concerned with the determination of the
corporate policy, the coordination of finance, production and distribution,
the settlement of the compass (i.e., structure) of the organisation, under
the ultimate control of the executive.’
• On the other hand, ‘Management is concerned with the execution of the
policy, within the limits setup by administration and the employment of the
organisation for the particular objects before it. Thus Sheldon declares
administration as a thinking process and management as doing process.
• In other words, management is a concomitant of administration

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Distinction Between Management And
Administration

• E.F.L. Breach distinguishes administration and management.

• Breach considers management as a social process entailing the
responsibility for effective planning, regulation, coordination
and control of operations including the responsibility for
personnel supervision.
• According to him, the administration is that part of
management which is concerned with the installation and
carrying out the procedures by which the progress of
activities is regulated and checked against plans.

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Distinction Between Management And
Administration

• Few authors treat administration as part of management.

• There are three points of view as explained below.
(i)Administration is different from management:
• According to this view point, administration is a higher level
activity while management is a lower level function.
• Administration is a determinative function concerned with the
determination of objectives and policies while management is
an executive function involving the implementation of policies
and direction of efforts for the achievement of objectives.

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Distinction Between Management And
Administration
(i) Administration is different from management: (Contd.)
•This view is held largely by American experts on management.
•American experts such as Florence, Lansburg, Haimann,
Milward, McFarland, Spriegel, Schulze and Tead also hold this
view that administration involves decision-making and policy-
formulation while management is concerned with the execution
of policies and supervision of work.
•According to them, administration is superior to management as
the latter has only a peripheral role in determination of
objectives and policies.

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Distinction Between Management And
Administration
(ii) Administration is a part of management:
•According to the European School of thought,
management is a wider term including administration
and organisation.
•This viewpoint has been propounded by Breach.
•According to him, “Management is the generic term
for the total process of executive control involving
responsibility for effective planning and guidance of
operations of an enterprise.

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Distinction Between Management And
Administration
(ii) Administration is a part of management: (Contd.)
•Administration is that part of management which is concerned
with the installation and carrying out of the procedures by which
the programme is laid down and communicated and the progress
of activities is regulated and checked against plans”.
•Kimball and Kimball, Richman and Copen also hold similar views.
•According to them, administration is only an implementing
agency while management is determinative.
•Thus, the European viewpoint is exactly opposite to the
American opinion.

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Distinction Between Management And
Administration
(iii) Administration and management are one:
•Many writers like Henri Fayol, William Newman, Chester
Barnard, George Terry, Louis. A. Allen, Koontz and O’ Donnell
make no distinction between management and administration.
•According to Newman, Management or administration is “the
guidance, leadership and control of the efforts of a group of
individuals towards some common goals”.
•According to Fayol, all undertakings require the same functions
and all must observe the same principles.
•There is one common science which can be applied equally well
to public and private affairs.

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Distinction Between Management And
Administration
(iii) Administration and management are one: (Contd.)
•Therefore, the distinction between administration and
management is superfluous or academic.
•In actual practice, the two terms are used
interchangeably.
•The term administration is more popular in Government
and other public organisations while the word management
is more commonly used in the business world, where
economic performance is of primary importance.

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Distinction Between Management And
Administration
• Both management and administration are based upon the same
set of principles and functions.
• It may be possible to make theoretical or conceptual
distinction between the two.
• But in practice such a distinction is misleading.
• In order to resolve the terminological conflict between
administration and management, we may classify management
into:
– Administrative management; and
– Operative management.

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Distinction Between Management And
Administration
• Administrative management involve determination
of objectives and policies whereas operative
management is primarily concerned with the
execution of plans for the achievement of
objectives.
• At every level of management, an individual
manager performs both types of functions.
• Every manager spends a part of his time on
administrative management and the remaining
time on operative management.

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Distinction Between Management And
Administration
 
Points of distinction Administration Management

1. Nature It is a determinative It is an executive or doing

or thinking function Function

2. Type of work It is concerned with the It is concerned with the

determination of major implementation of policies
objectives and policies

Levels of It is mainly a top It is largely a middle and

3. authority level function lower level function

Influence Administrative decisions are Managerial decisions are

4. influenced mainly by public influenced by objectives
opinion and other outside forces and policies of the
Organisation.

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Distinction Between Management And
Administration
  Points of distinction Administration Management
Direction of It is not directly It is actively concerned with
5. human efforts concerned with the direction of human efforts in
direction of human efforts the execution of plans

Main functions Planning and control are the Directing and organising are
6. main functions involved in it. the main functions involved in
it.

Skills required Conceptual and human skills Technical and human skills
7.
Usage Used largely in Government Used mainly in business
8. and Public sector organisations

Illustrations Commissioner, Registrar, Managing Director,

9. Vice-Chancellor, Governor General Manager,
etc. Sales Manager,
Branch Manager etc.

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 Levels Of Management
• Every business organisation, irrespective of its
size, has many managerial positions in its
structure.
• These positions are created through the process
of delegation of authority from top to lower
levels.
• Each position is marked by authority,
responsibility, functions, roles and relationships.
• The contents and nature vary, depending on the
level at which the position lies.

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 Levels Of Management
• As one moves upward in the organisation, the managerial
position plays an important role, larger the contribution,
greater the authority and higher the responsibility.
• These managerial positions lying in the chain of command
may be classified into various groups or levels of
management.
• Broadly speaking, an organisation has two important levels
of management, namely functional and operative.
• The functional level is concerned with the process of
determining primary objectives, formulating basic policies,
making vital decisions and controlling and coordinating
activities of personnel.

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 Levels Of Management

• The operative level of management is related to

implementation of plans and decisions, and pursuit of basic
policies for achieving the objectives of the organisation.
• Generally, the levels of management consisting of various
managerial positions in the structure of an organisation,
differ from one organisation to another, depending on the
size of business activity, philosophy of management, span of
control and other related factors.
• But, in a company, for conducting its business efficiently,
managerial personnel may be placed in three levels, that is,
top, middle and lower or supervisory level.

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 Levels Of Management
Top Level Management
• The top level management is generally
occupied by the ownership group.
• In a company, equity shareholders are the
real owners of the company.
• Thus, they elect their representatives as
directors, form a board, known as board of
directors, which constitutes the top level
of management.

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 Levels Of Management
Top Level Management
• Besides the board, other functionaries including
managing director, general manager or Chief
executive to help directors, are included in this
level.
• It is the highest level in the managerial hierarchy
and the ultimate source of authority in the
organisation.
• The top level managers are accountable to the
owners and responsible for overall management of
the organisation.

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 Levels Of Management
The major functions of the top level management are
as under:
2. To make a corporate plan for the entire organisation
covering all areas of operations.
3. To decide upon the matters which are vital for the
survival, profitability and growth of the organisation
such as introduction of new product, shifting to new
technology and opening new plant etc.
4. To decide corporate goals.
5. To decide structure of organisation, creating various
positions there in.

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 Levels Of Management

The major functions of the top level management are

as under:
2. To exercise overall managerial control through the
process of reviewing over all financial and operating
results.
3. To make decisions regarding disposal and distribution
of profits.
4. To select key officials and executives for the
company.

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 Levels Of Management

The major functions of the top level management are

as under:
• To coordinate various sub-systems of the
organisation.
3. To maintain liaison with outside parties having a stake
in business such as government, trade union and trade
associations etc.
4. To formulate basic policies and providing direction
and leadership to the organisation as a whole.

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 Levels Of Management

Middle Level Management

• In order to fill up the gap which exists
between functional and operative level, some
managerial positions are created at the
middle level of management.
• Middle level management consists of
departmental managers, deputy managers,
foreman and administrative officers etc.

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 Levels Of Management
Middle Level Management
• These executives are mainly concerned with
the over all functioning of their respective
departments.
• They act as a link between top and lower level
managers.
• The activities of middle level managers
centres around determining departmental
goals and devising ways and means for
accomplishing them.

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 Levels Of Management
The main functions performed by these managers are
as under:
2. To prepare departmental plan covering all activities
of the department within the basic framework of the
corporate plan.
3. To establish departmental goals and to decide upon
various ways and means for achieving these goals to
contribute to organisational goals.
4. To perform all other managerial functions with regard
to departmental activities for securing smooth
functioning of the entire department.

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 Levels Of Management
The main functions performed by these
managers are as under:
2. To issue detailed orders and instructions to
lower level managers and coordinate the
activities of various work units at lower level.
3. Middle level managers explain and interpret
policy decisions made at the top level to lower
level managers.

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 Levels Of Management

Lower Level or Supervisory Level Management

• Lower-level management is known as
supervisory management, because it is
concerned mainly with personal oversight and
direction of operative employees.
• It consists of factory supervisors,
superintendents, foremen, sales supervisors,
accounts officers etc.

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 Levels Of Management

Lower Level or Supervisory Level Management

• They directly guide and control the
performance of rank and file workers.
• They issue orders and instructions and guide
day to-day activities.
• They also represent the grievances of the
workers to the higher levels of management.

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 Levels Of Management

Supervisory management performs the

following functions:
2.Planning of day to day work
3.Assignment of jobs and issuing orders
and instructions
4.Supervising and guiding workers

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 Levels Of Management
Supervisory management performs the
following functions:
2. Maintaining close personal contacts with
workers to ensure discipline and team-work
3. Evaluating operating performance
4. Sending reports and statements to higher
authorities
5. Communicating the grievances and suggestions
of workers to higher authorities.

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 Nature Of Management
Management is Combination of Art and Science
• Management knowledge exhibits characteristics of both art and
science, the two not mutually exclusive but supplementary.
• Every discipline of art is always backed by science which is basic
knowledge of that art.
• Similarly, every discipline of science is complete only when it is used in
practice for solving various kinds of problems faced by human beings in
an organisation or in other fields of social life which is more related to
an art.
• Art basically deals with an application of knowledge personal skill and
know-how in a specific situation for efficiently achieving a given
objective.
• It is concerned with the best way of doing things and is consequently,
personalised in nature.

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 Nature Of Management
Management is Combination of Art and Science
• During the primitive stages of development of
management knowledge, it was considered as an art.
• There was a jungle of managerial knowledge.
• It was not codified and systemised.
• People used it to get things done by others, in their
own way giving an impression that whosoever uses it,
knows the art of using it.
• This kind of loose and inadequate understanding of
management supported the view that it was an art.

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 Nature Of Management
Management as a Science
• Science means a systematic body of knowledge pertaining to a
specific field of study.
• It contains general principles and facts which explains a
phenomenon.
• These principles establish cause-and-effect relationship
between two or more factors.
• These principles and theories help to explain past events and
may be used to predict the outcome of actions.
• Scientific methods of observations, and experiments are used to
develop principles of science.
• The principles of science have universal application and validity.
• Their Validity can be verified and they serve as reliable guide
for predicting future events.

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 Nature Of Management
Management as a Science
2. Systematic body of knowledge:
a) Management has a systematic body of knowledge consisting
of general principles and techniques.
b) These help to explain events and serve as guidelines for
managers in different types of organisations.
3. Universal principles:
a) Scientific principles represent basic facts about a
particular field enquiry.
b) These are objective and represent best thinking on the
subject.
c) These principles may be applied in all situations and at all
times.

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 Nature Of Management
Management as a Science
2. Universal principles:
a) Exceptions, if any, can be logically explained.
b) For example, the Law of Gravitation states that if you
throw an object in the air it will fall on the ground due to
the gravitational force of the earth.
c) This law can be applied in all countries and at all points of
time.
d) It is as applicable to a football as it is to an apple falling
from tree.
e) Management contains sound fundamental principles which
can be universally applied.

72
 Nature Of Management
Management as a Science
2. Universal principles:
a) For instance, the principle of unity of command states that
at a time one employee should be answerable to only one
boss.
b) This principle can be applied in all types of organisation-
business or non business.
c) However, principles of management are not exactly like
those of physics or chemistry.
d) They are flexible and need to be modified in different
situations.

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 Nature Of Management
Management as a Science
2.Scientific enquiry and experiments:
a) Scientific principles are derived through
scientific investigation and reasoning.
b) It means that there is an objective or unbiased
assessment of the problem situation and the
action chosen to solve it can be explained logically.
c) Scientific principles do not reflect the opinion of
an individual or of a religious guru.
d) Rather these can be scientifically proved at any
time.

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 Nature Of Management
Management as a Science
2. Scientific enquiry and experiments:
a) They are critically tested.
b) For example, the principle that the earth revolves around
the sun has been scientifically proved.
c) Management principles are also based on scientific enquiry
and investigation.
d) These have been developed through experiments and
practical experience of a large number of managers.
e) For example, it has been observed that wherever one
employee has two or more bosses simultaneously, confusion
and indiscipline are likely to arise, with regard to following
the instructions.

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 Nature Of Management
Management as a Science
2.Cause and effect relationship:
a) Principles of science lay down a cause and effect
relationship between related factors.
b) For example, when water is heated up to 100ºC, it
starts boiling and turns into vapour.
c) Similarly, the principles of management establish
cause and effect relationship between different
variables.
d) For instance lack of balance between authority
and responsibility will cause management to
become ineffective.

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 Nature Of Management
Management as a Science
2. Tests of validity and predictability:
a) Validity of scientific principles can be tested at any time and any
number of times.
b) Every time the test will give the same result.
c) Moreover, the future events can be predicted with reasonable
accuracy by using scientific principles.
d) For example, the Law of Gravitation can be tested by throwing
various things in the air and every time the object will fall on the
ground.
e) Principles of management can also be tested for their validity.
f) For example, the principle of unity of command can be tested by
comparing two persons, one having a single boss and other having
two bosses.
g) The performance of the first person will be higher than that of
the second.

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 Nature Of Management
Management as a Science
• Thus, management is undoubtedly a science.
• It contains a systematic body of knowledge in the form of general
principles which enjoy universal applicability.
• However, management is not as exact a science — Physics,
Chemistry, Biology and other Physical sciences.
• This is because management deals with people and it is very difficult
to predict accurately the behaviour of living human beings.
• Management principles are universal but they cannot be expected to
give exactly the same results in every situation.
• That is why management is known as a soft science.
• Management is a social science.
• It is still growing, with the growing needs of human organisations.

78
 Nature Of Management
Management as an Art
• Art implies the application of knowledge and
skills to bring about the desired results. The
essential elements of arts are:
(i) Practical knowledge
(ii) Personal skill
(iii) Result oriented approach
(iv) Creativity
(v) Improvement through continuous practice

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 Nature Of Management
Management as an Art
2. Practical knowledge:
a) Every art signifies practical knowledge.
b) An artist not only learn the theory but also its application in
practice.
c) For example, a person may have adequate technical knowledge of
painting but he cannot become a good painter unless he knows how
to make use of the brush and colours.
d) Similarly, a person cannot become a successful manager simply by
reading the theory and getting a degree or diploma in management.
e) He must also learn to apply his knowledge in solving managerial
problems in practical life.
f) A manager is judged not just by his technical knowledge but by his
efficiency in applying this knowledge.

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 Nature Of Management
Management as an Art
2. Personal skill:
a) Every artist has his own style and approach to his job.
b) The success of different artists differ even when all of
them possess the same technical knowledge or
qualifications.
c) This is due to the level of their personal skills.
d) For example, there are several qualified singers but Lata
Mangeshkar has achieved the highest degree of success.
e) Similarly, management is personalised.
f) Every manager has his individual approach and style in
solving managerial problems.
g) The success of a manager depends on his personality in
addition to his technical knowledge.

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 Nature Of Management
Management as an Art
2.Result-oriented approach:
a) Arts seeks to achieve concrete results.
b) The process of management is also directed
towards the accomplishment of desirable
goals.
c) Every manager applies certain knowledge and
skills to achieve the desired results.
d) He uses men, money, materials and machinery
to promote the growth of the organisation.

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 Nature Of Management
Management as an Art
2.Creativity:
a) Art is basically creative and an artist aims at
producing something that had not existed before.
b) Therefore, every piece of art requires imagination and
intelligence to create.
c) Like any other art, management is creative.
d) A manager effectively combines and coordinates the
factors of production to create goods and services.
e) Moulding the attitudes and behaviour of people at
work, towards the achievement of the desired goals is
an art of the highest order.

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 Nature Of Management
Management as an Art
2.Improvement through people:
a) Practice makes one perfect.
b) Every artist becomes more and more
efficient through constant practice.
c) A dancer, for example, learns to perform
better by continuously practicing a dance.
d) Similarly, manager gains experience
through regular practice and becomes more
effective.

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 Nature Of Management

Management as a Science and as an Art

• Thus, “management is both a science as well as an art”.
• It is a science because it has an organised body of knowledge
consisting of certain universal facts.
• It is known as an art because it involves creating results
through practical application of knowledge and skills.
• How- ever, art and science are complementary to each other.
• They are not mutually exclusive.
• Science teaches one to know and art to do.
• Art without science has no guide and science without art is
knowledge wasted.

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 Nature Of Management
Management as a Science and as an Art
• For example, a person cannot be a good surgeon unless he has
scientific knowledge of human anatomy and the practical skill
of applying that knowledge in conducting an operation.
• Similarly, a successful manager must know the principles of
management and also acquire the skill of applying those
principles for solving managerial problems in different
situations.
• Knowledge of principles and theory is essential, but practical
application is required to make this knowledge fruitful.
• One cannot become an effective manager simply by learning
management principles by heart.
• Science (theory) and art (practice) are both essential for the
success of management.

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 Skills Of Management
• In modern business the job management has
become very difficult.
• Several skills are required to manage
successfully a large organisation in a
dynamic environment.
• These skills of managers have been
classified into four categories, namely
technical, human, diagnostic and conceptual
skills.

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 Skills Of Management
Technical Skills
• Technical skills refer to the ability and knowledge in using the
equipment, technique and procedures involved in performing specific
tasks.
• These skills require specialised knowledge and proficiency in the
mechanics of particular job.
• Ability in programming and operating computers is, for instance, a
technical skill.
• There are two things a manager should understand about technical
skills.
• In the first place, he must know which skills should be employed in
his particular enterprise and be familiar enough with their
potentiality to ask discerning questions of his technical advisors.
• Secondly a manager must understand both the role of each skill
employed and interrelations between the skills.

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 Skills Of Management
Human Skills
•  Human skills consists of the ability to work effectively with other
people both as individual and as members of a group.
• These are required to win cooperation of others and to build
effective work teams.
• Such skills require a sense of feeling for others and capacity to look
at things from others point of view.
• Human skills are reflected in the way a manager perceives his
superiors, subordinates and peers.
• An awareness of the importance of human skills should be part of a
managers orientation and such skills should be developed throughout
the career.
• While technical skills involve mastery of ‘things’ human skills are
concerned with understanding of ‘People’.

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 Skills Of Management
Conceptual Skills
• Conceptual skills comprise the ability to see the
whole organisation and the interrelationships
between its parts.
• These skills refer to the ability to visualise the
entire picture or to consider a situation in its
totality.
• Such skills help the manager to conceptualise the
environment, to analyse the forces working in a
situation and take a broad and far- sighted view of
the organisation.

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 Skills Of Management
Conceptual Skills
• Conceptual skills also include the competence to
understand a problem in all its aspects and to
use original thinking in solving the problem.
• Such competence is necessary for rational
decision-making.
• Thus technical skills deal with jobs, human skills
with persons and conceptual skills with ideas.
• These types of skills are interrelated.

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 Skills Of Management
Conceptual Skills
• Technical skills are most important at the supervisory or
operating level where a close understanding of job techniques is
necessary to guide workers.
• As one moves up the management hierarchy, technical skills
become less important.
• Higher level managers deal with subordinate managers and
specialised technical knowledge is comparatively less important
for them.
• Conceptual skills are very important for top management in
formulating long-range plans, making broad policy decisions, and
relating the business enterprise to its industry and the economy.

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 Skills Of Management
Conceptual Skills
• Thus, the relative importance of conceptual
skills increases as we move to higher levels of
management.
• This would be self evident as management is
the process of getting things done through
people.
• Human skills are equally important at all levels
of management because every manager has to
deal with people.

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 Skills Of Management
Diagnostic Skills
• Diagnostic skills include the ability to determine by analysis
and examination the nature and circumstances of particular
conditions.
• It is not only the ability to specify why something happened
but also the ability to develop certain possible outcomes.
• It is the ability to cut through unimportant aspects and quickly
get to the heart of the problem.
• Diagnostic skills are probably the most difficult ones to
develop because they require the proper blend of analytic
ability with common sense and intelligence to be effective.

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 Scope Of Management

• The field of management is very wide. The

operational areas of business management may be
classified into the following categories:
2.Production Management:
 Production management implies planning,
organising, directing and controlling the
production function so as to produce the right
goods, in right quantity, at the right time and at
the right cost.

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 Scope Of Management

1. Production Management:
 It includes the following activities:
(a) designing the product
(b) location and layout of plant and building
(c) planning and control of factory operations
(d) operation of purchase and storage of materials
(e) repairs and maintenance
(f) inventory cost and quality control
(g) research and development etc.

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 Scope Of Management
1. Marketing Management:
 Marketing management refers to the identification of
consumers needs and supplying them the goods and
services which can satisfy these wants. It involves the
following activities:
(a) marketing research to determine the needs and
expectation of consumers
(b) planning and developing suitable products
(c) setting appropriate prices
(d) selecting the right channel of distribution, and
(e) promotional activities like advertising and
salesmanship to communicate with the customers

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 Scope Of Management
1. Financial Management:
 Financial management seeks to ensure the right amount
and type of funds to business at the right time and at
reasonable cost. It comprises the following activities:
(a) estimating the volume of funds required for both long-
term and short-term needs of business
(b) selecting the appropriate source of funds
(c) raising the required funds at the right time
(d) ensuring proper utilisation and allocation of raised
funds so as to maintain safety and liquidity of funds and
the credit-worthiness and profitability of business, and
(e) administration of earnings
• Thus, financial management involves the planning, organising
and controlling of the financial resources.

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 Scope Of Management
1. Personnel Management:
 Personnel management involves planning, organising and
controlling the procurement, development, compensation,
maintenance and integration of human resources of an
organisation.
 It consists of the following activities:
(a) manpower planning
(b) recruitments,
(c) selection,
(d) training
(e) appraisal,
(f) promotions and transfers,
(g) compensation,
(h) employee welfare services, and
(i) personnel records and research, etc.

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Thank You