Chapter-1

Nature and Significance of Management

1. Define Management. Explain the characteristics of

management?
Ans. Management is the process of designing and maintaining an
environment in which individuals, working together in groups,
efficiently accomplish selected aims.
Characteristics:
(i) Management is a goal-oriented process: An organisation has a set
of basic goals which are the basic reason for its existence. Different
organisations have different goals. Management unites the efforts of
different individuals in the organisation towards achieving these
goals.
(ii) Management is all pervasive: The activities involved in managing
an enterprise are common to all organisations whether economic,
social or political. A petrol pump needs to be managed as much as a
hospital or a school.
(iii) Management is multidimensional: Management is a complex
activity that has three main dimensions. These are: (a) Management
of work: All organisations exist for the performance of some work.
Management translates this work in terms of goals to be achieved
and assigns the means to achieve it. This is done in terms of
problems to be solved, decisions to be made, plans to be established,
budgets to be prepared, responsibilities to be assigned and authority
to be delegated.
(b) Management of people: Human resources or people are an
organisation’s greatest asset.
(i) it implies dealing with employees as individuals with diverse needs
and behaviour.
(ii) it also means dealing with individuals as a group of people.
(c) Management of operations: No matter what the organisation, it
has some basic product or service to provide in order to survive. This
is interlinked with both the management of work and the
management of people.
(iv) Management is a continuous process: The process of
management is a series of continuous, composite, but separate
functions (planning, organising, directing, staffing and controlling).
These functions are simultaneously performed by all managers all
the time. The task of a manager consists of an ongoing series of
functions.
(v) Management is a group activity: An organisation is a collection of
diverse individuals with different needs. Every member of the group
has a different purpose for joining the organisation but as members
of the organisation they work towards fulfilling the common
organisational goal. This requires team work and coordination of
individual effort in a common direction.
(vi) Management is a dynamic function: Management is a dynamic
function and has to adapt itself to the changing environment. An
organisation interacts with its external environment which consists
of various social, economic and political factors.
vii) Management is an intangible force: Management is an
intangible force that cannot be seen but its presence can be felt in
the way the organisation functions. The effect of management is
noticeable in an organisation where targets are met according to
plans, employees are happy and satisfied, and there is orderliness
instead of chaos.
2. Explain the objectives of management?
Ans. Management seeks to achieve certain objectives which are
the desired result of any activity. They must be derived from the
basic purpose of the business. Objectives can be classified into
organisational objectives, social objectives and personal or
individual objectives.
Management As Art
(i) Organisational Objectives: Management is responsible for
setting and achieving objectives for the organisation. It has
to achieve a variety of objectives in all areas considering the
interest of all stakeholders including, shareholders,
employees, customers and the government. organisation
should be to utilise human and material resources to the
maximum possible advantage, i.e., to fulfill the economic
objectives of a business.
Survival: Management must strive to ensure the survival of the
organisation. In order to survive, an organisation must earn
enough revenues to cover costs.
Profit: Management has to ensure that the organisation makes a
profit. Profit provides a vital incentive for the continued successful
operation of the enterprise. Profit is essential for covering costs
and risks of the business.
Growth: To remain in the industry, management must exploit fully
the growth potential of the organisation. Growth of a business can
be measured in terms of sales volume increase in the number of
employees, the number of products or the increase in capital
investment, etc.
(ii) Social objectives: It involves the creation of benefit for
society.This refers to consistently creating economic value
for various constituents of society. This includes using
 environmental friendly methods of production, giving
employment opportunities to the underpreviledged sections
of society and providing basic amenities like schools and
healthcare, etc.
(iii) Personnel objectives: They all become part of the
organisation to satisfy their diverse needs. These vary from
financial needs such as competitive salaries and perks, social
needs such as peer recognition and higher level needs such
as personal growth and development.

3. Justify Management as an Art,Science,Profession.

Ans. Art is the skillful and personal application of existing
knowledge to achieve desired results. The basic features of an art
are as follows:
(i)Existence of theoretical knowledge: Art presupposes the existence
of certain theoretical knowledge. Experts in their respective areas
have derived certain basic principles which are applicable to a
particular form of art. For example, literature on dancing, public
speaking, acting or music is widely recognised.
(ii) Personalised application: The use of this basic knowledge varies
from individual to individual. Art, therefore, is a very personalised
concept. For example, two dancers, two speakers, two actors, or two
writers will always differ in demonstrating their art.
(iii) Based on practice and creativity: All art is practical. Art involves
the creative practice of existing theoretical knowledge.

Management can be said to be an art since it satisfies the following

criteria:
 (i) A successful manager practices the art of management in
the day-to-day job of managing an enterprise based on
study, observation and experience . There is existence of
theoretical knowledge.
(ii) There are various theories of management, as propounded
by many management thinkers, which prescribe certain
universal principles.
(iii) A manager applies this acquired knowledge in a
personalised and skillful manner in the light of the realities
of a given situation. He is involved in the activities of the
organisation, studies critical situations and formulates his
own theories for use in a given situation. This gives rise to
different styles of management.

Management As Science
Science is a systematised body of knowledge that explains certain
general truths or the operation of general laws. The basic features of
science are as follows:
(i)Systematised body of knowledge: Science is a systematic body of
knowledge. Its principles are based on a cause and effect relationship.
For example, the phenomenon of an apple falling from a tree towards
the ground is explained by the law of gravity.
(ii) Principles based on experimentation: Scientific principles are first
developed through observation and then tested through repeated
experimentation under controlled conditions.
(iii)Universal validity: Scientific principles have universal validity and
application.

(i) Management has a systematised body of knowledge. It has its

own theory and principles that have developed over a period
 of time, but it also draws on other disciplines such as
Economics, Sociology, Psychology and Mathematics.
(ii) The principles of management have evolved over a period of
time based on repeated experimentation and observation in
different types of organisations.
(iii) Since the principles of management are not as exact as the
principles of science, their application and use is not
universal. They have to be modified according to a given
situation.

Management As Profession

A profession has the following characteristics:

(i) Well-defined body of knowledge: All professions are based
on a well-defined body of knowledge that can be acquired
through instruction.
(ii) Restricted entry: The entry to a profession is restricted
through an examination or through acquiring an educational
degree.
(iii) Professional association: All professions are affiliated to a
professional association which regulates entry, grants
certificate of practice and formulates and enforces a code of
conduct.
(iv) Ethical code of conduct: All professions are bound by a code
of conduct which guides the behaviour of its members. All
doctors, for example, take the oath of ethical practice at the
time they enter the profession.
(v) Service motive: The basic motive of a profession is to serve
their client’s interests by rendering dedicated and
committed service. The task of a lawyer is to ensure that his
client gets justice.
a) Management as a discipline. It is based on a systematic body of
knowledge comprising well-defined principles based on a
variety of business situations.
b) There is no restriction on anyone being designated or
appointed as manager in any business enterprise.
c) There are several associations of practising managers in India,
like the AIMA (All India Management Association) that has laid
down a code of conduct to regulate the activities of their
members.
d) The basic purpose of management is to help the organisation
achieve its stated goal. This may be profit maximisation for a
business enterprise and service for a hospital.

4. Explain the functions of management?

Ans. Management is described as the process of planning,
organising, directing and controlling the efforts of organisational
members and of using organisational resources to achieve specific
goals.
Planning :is the function of determining in advance what is to be
done and who is to do it. This implies setting goals in advance and
developing a way of achieving them efficiently and effectively.
purchase from different suppliers. Planning cannot prevent
problems, but it can predict them and prepare contingency plans
to deal with them if and when they occur.
Organising: is the management function of assigning duties,
grouping tasks, establishing authority and allocating resources
required to carry out a specific plan. Once a specific plan has been
established for the accomplishment of an organisational goal, the
organising function examines the activities and resources required
to implement the plan.
Staffing: simply stated, is finding the right people for the right job.
A very important aspect of management is to make sure that the
right people with the right qualifications are available at the right
places and times to accomplish the goals of the organisation.
Directing: Directing involves leading, influencing and motivating
employees to perform the tasks assigned to them. This requires
establishing an atmosphere that encourages employees to do
their best. Motivation and leadership are two key components of
direction. Directing also involves communicating effectively as
well as supervising employees at work.
Controlling: Controlling is the management function of monitoring
organisational performance towards the attainment of
organisational goals. The task of controlling involves establishing
standards of performance, measuring current performance,
comparing this with established standards and taking corrective
action where any deviation is found.

5. What is Co-ordination.Explain its characteristic?

Ans. The process by which a manager synchronises the activities
of different departments is known as coordination.
(i) Coordination integrates group efforts: Coordination unifies
unrelated or diverse interests into purposeful work activity.
It gives a common focus to group effort to ensure that
performance is as it was planned and scheduled.
(ii) Coordination ensures unity of action: The purpose of
coordination is to secure unity of action in the realisation of
a common purpose. It acts as the binding force between
departments and ensures that all action is aimed at
achieving the goals of the organisation.
(iii) Coordination is a continuous process: Coordination is not a
one-time function but a continuous process. It begins at the
planning stage and continues till controlling.
(iv) Coordination is an all pervasive function: Coordination is
required at all levels of management due to the
interdependent nature of activities of various departments.
It integrates the efforts of different departments and
different levels.
(v) Coordination is the responsibility of all managers:
Coordination is the function of every manager in the
organisation. Top level managers need to coordinate with
their subordinates to ensure that the overall policies for the
organisation are duly carried out. Middle level management
coordinates with both the top level and first line managers.
Operational level management coordinates the activities of
its workers to ensure that work proceeds according to plans.
(vi) Coordination is a deliberate function: A manager has to
coordinate the efforts of different people in a conscious and
deliberate manner. Even where members of a department
willingly cooperate and work, coordination gives a direction
to that willing spirit