CHAPTER 1 NATURE AND SIGNIFICANCE OF MANAGEMENT

Traditionally, Management was defined as: “Management is the art of getting things
done through others.” But this viewpoint is considered inappropriate in the present day environment
as it treats employees as mere means to achieve certain ends. Workers today are educated and have
higher level of aspirations.

As such, according to the Modern Concept, “Management is the process of creation of an

internal environment, where individuals working in a group can perform effectively and
efficiently for the achievement of organizational goals.”

Modern definition of management insists on:

1) Process- Process refers to the series of steps or basic functions necessary to get the
things done. The steps in the management process are Planning, Organising, Staffing,
Directing and Controlling.

THE MANAGEMENT PROCESS

Men and Women (Human 1) Planning (2) Organising (3) Staffing

Goods and
Resource) Services
Materials desired by
Machines the
Methods customers
Money (Capital) (4) Directing (5) Controlling

2) Effective and Efficient Performance- Effectiveness refers to completion of work or

achievement of target on time. It is concerned with end result.
Efficiency refers to optimum utilization of resources i.e. completion of work with minimum cost.
It is concerned with cost-benefit analysis i.e. using fewer resources and getting maximum benefits.

3) Achievement of group or organizational goals- All the functions and activities of managers
must be directed towards the achievement of organizational goals (i.e. the efforts of all the
workers must be coordinated to achieve the goals of the organization).

Effectiveness versus Effectiveness

BASIS EFFECTIVENESS EFFICIENCY

1) Meaning It refers to completion of task on It refers to optimum utilisation of resources
time. for task completion.
2) Concern It is concerned with end result. It is concerned with cost benefit analysis
i.e. using fewer resources and getting
maximum benefits.
3)Aim/Objective Producing target production on Producing target production with minimum
time. cost.
Question: “A successful enterprise has to achieve its goals effectively and efficiently.” Explain.
Answer: The term efficiency focuses on optimum utilisation of inputs or resources to achieve
the desired level of output, while effectiveness strives at achieving the targets on goals
within the stipulated time frame. These are two different yet inter related concepts.
Management continuously tries to bring a balance between the two.
Example: If a manager is able to achieve the target, but by using more inputs (labour costs,
raw materials, electricity, etc.); leading to a higher production cost, the organization will lose
on profits. This is a case of inefficiency, even though the manager was effective.
On the other hand, if the management concentrates more on producing goods using fewer
resources, i.e. cutting down cost but does not achieve the target production, they may loose
on market and thus profits. This is a case of trying to be efficient but surely being ineffective.
Conclusion: Management needs to be both, effective and efficient. It is important for the
management to achieve the organizational goals (i.e. effectiveness) with minimum resources
(i.e. as efficiently as possible). This will lead to higher profit and prosperity of the
organization.

CHARACTERISTICS/FEATURES OF MANAGEMENT
Management is a distinct activity having the following salient features/characteristics:
1) Management is a Goal Oriented Process- Management always aims at achieving the
organizational objectives. The managers (a) plan the course of action, (b) orgainse all the
resources and (c) coordinate the efforts of all the employees to achieve the goals of the
organisation.
(a) It is imperative (necessary) that the organizational goals are well defined (i.e. clearly stated)
and properly understood by the managers at various levels.
(b) The success of management is measured by the extent to which the organizational goals
are achieved.
2) Management is All Pervasive- The activities involved in managing an enterprise are common
to all organisations. The principles and techniques of management are applicable in all the
organizations whether social, economic or political. Even non-profit organisations like school,
hospital, etc. need to be managed properly. The principles of management are the common
working guidelines (i.e. what to do is same) for all organisations but they are flexible and can
be applied according to the needs of the organization (i.e. how to do it may be different).
3) Management is Multi-Dimensional- Management is a complex activity that has three main
dimensions:
(a) Management of Work- All organisations are set up to perform some tasks or work. The work
depends upon the nature of business, for e.g.: The main
objective of an industry is to produce goods; that of a school is to provide education, etc.
Management translates this work in terms of goals to be achieved and assigns the means to
achieve them. This is done in terms of problems to be solved, decisions to be made, plans to be
established, budget to be prepared, responsibilities to be assigned and authority to be delegated.
(b) Management of People- Human resource i.e. the employees are the most important asset
of an organization. Management needs to get the task completed through people, by making
their strengths effective and their weaknesses irrelevant.
Managing people has two dimensions:
(i) Dealing with employees as individuals with diverse needs and behaviour.
(ii) Dealing with individuals as a group of people.
 (c) Management of Operations- Operations refers to activities of production cycle such as
buying inputs, converting them into semi-finished goods and finished goods using technology.
Management of operations concentrates on integrating management of work and management
of people i.e. deciding what work has to be done, how it has to be done, and who will do it.
4) Management is a Continuous Process- Management is a continuous or never ending
function. The process of management is a series of continuous, composite, but separate
functions (Planning, Organising, staffing, Directing and Controlling). These are simultaneously
performed by all the managers at all levels.
5) Management is a Group Activity- An organization comprises of different individuals with
varying needs. But as members of the organisation, they work towards fulfilling the common
organizational goals.
A manager needs to ensure team work and coordination of individual effort in the common
direction. Further he/she should also enable all the members to grow and develop individually
as needs and opportunities change.
6) Management is a Dynamic Function- Management has to make changes in the objective
and other activities according to changes taking place in the environment. The external
environment consisting of social, economical, technical and political factors has great impact
on management. Management activities are modified according to the needs of the
environment.
7) Management is an Intangible Force- Management function cannot be physically seen but its
presence can be felt in the way the organizational activities are carried on. The effect of
management is stated as successful or unsuccessful on the basis of the smooth running of the
organization. The management of an organization will be considered successful, if (1) the
targets are being met according to the plans, (2) employees are happy and satisfied and (3)
there is orderliness and coordination in the working environment.

OBJECTIVES OF MANAGEMENT

Objectives are the ends towards which all activities of an organisation are directed.
They are the standards or benchmarks against which the performance is measured
and assessed.
Management has to achieve all its objectives in an effective and efficient manner. The objectives of
an organisation can be classified into three major categories:

OBJECTIVES
OF
MANAGEMENT

ORGANISATIONAL SOCIAL PERSONAL / INDIVIDUAL

OBJECTIVES OBJECTIVES OBJECTIVES

1) ORGANISATIONAL OBJECTIVES – These are the main objectives, which are required to
achieve the economic goals of the organisation. These objectives relate to the survival of the
 organisation and aim at the prosperity and growth of the organization. Every organisation aims
to achieve following three organisational / economic objectives:
a) Survival – Management of an organisation must strive to ensure the survival of the
organisation. Survival is possible only when organisation is able to earn enough
revenue to cover its costs.
b) Profit – Management must ensure that the organisation makes a profit, which is a
vital incentive for the continued successful operation of the enterprise. Profit is
essential to cover costs and risks of the business.
c) Growth – It is important for every business to grow and expand its activities in the
long run. Management must exploit fully the growth potential of the organisation.
Growth of a business can be measured in terms of (i) increase in sales volume, (ii)
increase in the number of products, (iii) increase in number of employees, (iv) increase
in capital investment, etc.

2) SOCIAL OBJECTIVES – These relate to taking initiatives for the welfare of the society at
large. Social objectives of management involve consistently creating benefits or economic
value for various constituents of the society. Business organisations earn by using society’s
resources, so they must do something for society also.
Some of the major social objectives include:
a) Using environmental friendly methods of production and packaging material.
b) Generation of employment opportunities for the disadvantaged sections of society.
c) Supply of good quality products at fair prices.
d) Conducting business in an ethical / lawful manner.
e) Providing financial support to Community projects.
f) Avoidance of anti-social and unfair trade practices like black marketing, misleading
advertising, under-weighing, adulteration, etc.
g) Contributing to the education and training of people in the backward regions.
h) Conservation of Natural Resources.

3) PERSONAL OR INDIVIDUAL OBJECTIVES – Personal objectives are concerned with satisfying

diverse needs of the employees such as:
a) Financial needs like competitive salaries and perks like housing, medical facilities, etc.
b) Social needs like peer recognition (Self-Respect and respect for colleague)
c) Higher level needs such as opportunities for Training, Personal growth and Development.

An organisation is made up of people who have different personalities, backgrounds, experiences

and objectives. They all become part of the organisation to satisfy their diverse needs. As
employees are one of the most valuable resources for an organisation, satisfaction of their
objectives is very important, because a satisfied workforce contribute maximum for the
organisation. Fulfilment of personal objectives enable the management to keep its staff
happy and satisfied and retain the good employees for long.
→ Management has to reconcile personal objectives with organisational objectives for harmony
in the organisation.
 IMPORTANCE OF MANAGEMENT
Successful organisations do not achieve their goals by chance but by following a deliberate process
called management.
Management = Manage: men + t (things)
According to Peter F. Drucker, “Management is the dynamic life giving element in every business.
Without it the resources of production remain resources and shall never become production.”
Management is essential for the successful running an enterprise/organization due to the following
reasons:
1) Management helps in achieving Group Goals- Management assembles, organizes and
directs the available physical and human resources for the accomplishment of the goals of the
organization. The task of a manager is to give a common direction to the individual effort in
achieving the overall goal of the organization.
2) Management increases efficiency- Management utilizes the available resources effectively
and according to plans. This results in elimination of all types of wastages and thus, reduction
in cost. Thus, management increases efficiency by reducing costs and increasing productivity
through better planning, organizing, directing and controlling the activities of the organization.
3) Management creates a dynamic organization- Organisations have to survive in a dynamic
(constantly changing) environment. The employees in the organization generally resist
change. Efficient management motivates employees and help them adapt to the changes
willingly (by convincing them that the change is beneficial for their personal development as
well) so that the organization is able to maintain its competitive edge.
4) Management helps in achieving personal objectives- Management harmonises personal
objectives with organizational objectives by developing team spirit, cooperation and
commitment to group success. Management helps in achieving personal objectives by
motivating and leading in such a way that the individual members are able to achieve personal
goals while contributing to the overall organizational objectives.
5) Management helps in the development of society- Management helps in the development
of society by providing good quality products and services, creating employment opportunities,
adopting new technology for the greater good of the people, and leading the path towards
growth and development.

NATURE OF MANAGEMENT
MANAGEMENT AS AN ART
Art refers to the skillful and personal application of existing knowledge to achieve desired
results. It can be acquired through study, observation and experience. The main features of art are:
1) Existence of theoretical knowledge- Art is based on theoretical knowledge of concepts,
principles and applications about a particular field. Eg: Literature on dancing, public speaking,
acting or music is widely recognized.
The practice of management involves the use of knowledge of management concepts,
principles and techniques. There is a lot of literature available in various areas of management
like marketing, finance, human resource, etc.
2) Personalised application of knowledge and skills- Art is a very personalized concept.
Every artist, eg: any two dancers, two musicians, two actors or two writers differ in
demonstrating their art.
 In the field of management, all managers learn the same theories and principles but the
application of these principles depend on the experience and personal skills of the manager.
This gives rise to different styles of management.
3) Based on Practice and Creativity- Art involves the creative practice of existing theoretical
knowledge. An artist uses his skills and style to create better results. Besides this, it is learnt
and refined through continuous practice.
A manager applies the principles and techniques of management, to a given situation, an
issue or a problem in his own unique manner. A good manager works through a combination
of practice, creativity, imagination, initiative and innovation.
CONCLUSION: Moulding the attitudes and behavior of people at work towards achievement of
certain goals is an art of the highest order. The effectiveness of the manager is dependent
upon his personal skills, the people to be managed and the type of situations faced.

MANAGEMENT AS A SCIENCE

Science can be defined as a systematised and organized body of knowledge that explains
certain general truths or the operation of general laws. The main characteristics /features of
science are:
1) Systematised body of knowledge- Science is a systematic body of knowledge . Its principles
are based on cause and effect relationship.
Like Science, Management has a systematized body of knowledge that has its own theory,
concepts, principles and techniques have been developed over a period of time.
2) Principles based on observation and experimentation – Scientific principles are first
developed through observation and then tested through repeated experimentation under
controlled conditions.
The principles of management are derived over a period of time through observation and
repeated experimentation. However, since management deals with human beings and human
behaviour, the outcomes of these experiments are not capable of being accurately predicted or
replicated. Therefore, management can be called an inexact science.
3) Universal Validity - Science comprises of exact principles which can be verified and produce
the same cause and effect relationship every time.
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 the given
situation. However, they provide managers with certain standardised techniques that can be
used in different situations. These principles are also used for training and development of
managers.
CONCLUSION - Management cannot be treated as a perfect science like Physics,
Chemistry, etc. Since its principles are subject to change with time, situation and human
nature, it is therefore, an Inexact Science.
The main reason for the inexactness is that managers deal with people, which is a
social process.
Ernest Dale has called management as a soft science because its principles are quite flexible
and can be modified according to the given situation.
 MANAGEMENT AS A PROFESSION

The term ‘Profession’ may be defined as ‘an occupation backed by a specialized body of
knowledge and training and to which entry is regulated by a representative body’. The main
features of a profession are:
1) Well defined body of knowledge- All professions are based on a well-defined body of
knowledge that can be acquired through instruction.
Management as a discipline is also based on a systematic body of knowledge comprising
well defined principles, concepts, theories and techniques. This knowledge can be
acquired at different colleges and professional institutes (IIMs) and through a number of books
and journals.
2) Restricted entry – The entry to a profession is restricted through an examination or through
acquiring an educational degree. Eg: A Chartered Accountant has to clear a specified exam
conducted by ICAI, a doctor needs to have a MBBS degree.
There is no restriction on anyone being appointed as a manager in any business
enterprise. Unlike professions, such as medicine, law or CA, which require a practitioner to
possess valid degrees, it is not mandatory for a manager to possess any such specific
degree. Anyone can be called a manager irrespective of the educational qualifications
possessed. However, these days, professional knowledge and training (eg: BBA or MBA
degree) is considered to be a desirable qualification in the field of management.
3) Professional Association- All professions are affiliated to a professional association which
(a) regulates entry, (b) grants certificate of practice and (c) formulates and enforces a code of
conduct. Eg: ICAI, Bar Council, etc. Every professional has to get himself registered with his
association before practicing that profession.
In case of management, there are several associations of practicing managers in India, like
AIMA (All India Management Association ) that has laid down a code of conduct to regulate the
activities of their members. However, there is no compulsion for managers to be members
of such an association.
4) Ethical Code of Conduct- All professions are bound by a code of conduct which guides the
behaviour of its members.
AIMA has devised a code of conduct for Indian managers but there is n statutory backing for
this code. It is not compulsory for all the managers to get registered with AIMA and
abide by the ethical code.
5) Service Motive- The basic motive of a profession is to serve their clients’ interest by rendering
dedicated and committed service.
The basic purpose of management is to help the organisation achieve its stated goal.
However, if an organisation has a good management, which is effective and efficient, it
automatically serves society by providing good quality goods at reasonable prices.

CONCLUSION- Presently, all the features of Profession are not present in management
and therefore it cannot be recognized as a full fledged profession like legal, accounting
or medical professions.
 LEVELS OF MANAGEMENT

Q) What is meant by ‘Levels of management’?

Ans) The term ‘levels of management’ refers to the chain or hierarchy of various managerial
positions in an organisation.
Every individual in the organisational hierarchy is responsible for successful completion of a
particular task. To be able to fulfill that responsibility he is assigned authority or the right to take
decisions. This authority-responsibility relationship binds individuals as superiors and
subordinates. It gives rise to different levels of management in an organisation.

Generally, there are three levels in the hierarchy of an organisation:

1) Top Level Management
2) Middle Level Management
3) Operational or Supervisory or Lower Level Management or First Line Managers.

Chairman, President, Vice President,

Top Level Managing Director, General Manager,
Board of Directors, Chief Executive Officer
(CEO), Chief Operating Officer (COO),
Chief Marketing Officer (CMO), Chief
Finance Officer (CFO), etc.

Plant superintendent, Operations Manager,

Regional Manager, Zonal Manager,
Middle Level Divisional or Departmental Heads like
Human Resource Manager, Production
Management
Manager, Marketing Manager, Finance
Manager, Sales Department Head,
Production Department Head, etc.

Operational / Supervisory / Foreman, Supervisor, Section Officer,

First Line / Lower Level Superintendent, Sub-Department
Management Executive, etc.
Q) Who are considered as ‘Operative managers’?

Ans) The managers who interact with the actual work force and directly oversee their performance
are known as operative managers. Eg: Leadman, Foreman, Superintendent, etc.

→ The levels of management are:

I. TOP LEVEL MANAGEMENT – Top level management of a company consists of the senior-
most executives of the organisation. They are usually referred to as Chairman, President,
Vice President, Managing Director, General Manager, Board of Directors, Chief Executive
Officer (CEO), Chief Operating Officer (COO), Chief Marketing Officer (CMO), Chief Finance
Officer (CFO), etc. They are responsible for the success and survival of the enterprise.
Top management is the ultimate source of authority and it establishes goals and policies
for the enterprise.

Functions and Roles: The functions and roles of Top management are as follows:
a) To formulate overall organisational goals and strategies for their achievement.
b) To integrate diverse elements and coordinate the activities of different departments
according to the overall objectives of the organisation.
c) Top management is responsible for survival, welfare and growth of the organisation. They
formulate plans, policies and strategies to achieve organisational goals and meet the
challenges of ever changing market demands.
d) To analyse the business environment and its implications for the survival of the firm.
e) To be responsible for all the activities of the business and for its impact on the society.
f) It builds and maintains relations with the outside public i.e. financial institutions, suppliers,
government departments, media, etc.
g) It appoints the executives for the middle level. It controls the activities of all the regions,
departments, etc. with the help of reports, memoranda, etc.

The job of Top Management is complex and stressful, demanding long hours and commitment to
the organisation.

II. MIDDLE LEVEL MANAGEMENT – Middle management of an organisation is the link between
top management and operational management . Middle level managers are usually known as
divisional heads, regional managers, production or operations managers, plant
superintendents, etc. They are responsible to the top management for the functioning of their
departments, regions or plants. This level is subordinate to Top management and superior
to First line managers (Lower management). Middle management devote more time to
the organisation and direction functions of management.

Functions and Roles: The functions and roles of Middle level management are as follows:
a) To interpret the plans and policies framed by Top management and explain them to line
managers for effective implementation. They make plans and budgets for their
departments.
b) To ensure that their departments have necessary personnel with adequate qualification
and experience to perform functions expected from them. They participate in the
employment and training of operational mangers.
 c) They assign duties and responsibilities among the operational managers, give them
necessary instructions and provide needful resources so that they can do the assigned
jobs without any difficulty.
d) They evaluate the performance of operational managers and also motivate them. They
submit the progress reports and other important data to the top management to enable them to
make new plans and policies.
e) They attempt to achieve coordination within their departments.
f) They cooperate with the managers of other departments for the smooth functioning of the
organisation.
Middle Management is responsible for all the activities of first level managers or operational
managers.

III. OPERATIONAL / SUPERVISORY / FIRST LINE / LOWER LEVEL MANAGEMENT –

Supervisory management refers to those executives who are basically concerned with
supervision and direction of operative employees (i.e. workers). It is also known as lower
level or first line management. This level includes supervisors, foremen, section officers,
accounts officers, sales officers, etc. They are in direct contact with workers and are
responsible for their functioning. They are more concerned with direction and control
functions of management. The authority and responsibility of this level is limited according to
plans drawn by the top management.

Functions and Roles: The functions and roles of Operational/Lower level management are as
follows:
a) They implement the Top management policies communicated to them through the Middle
management. Supervisory management interact with the actual workforce and pass on
instructions of the middle management to the workers.
b) They plan and organise day to day activities of their units. They arrange for necessary
materials, machines, tools, etc. for the workers and provide them with proper and safe
working environment.
c) Supervisors directly oversee the efforts of the workforce. Through their efforts, quality of
output is maintained, wastage of materials is minimised, and safety standards are
maintained.
d) They provide training to the workers under their supervision. They guide them and also
encourage the workers to take initiative, and welcome their suggestions.
e) They communicate the workers’ grievances to the middle level management.
f) The first line managers are responsible to maintain discipline and loyalty among the entire
workforce. They maintain good human relations in their units.
g) They lead, direct and motivate workforce to achieve the organisational goals most effectively.
They appraise the performance of their subordinates and send periodical progress reports
to their seniors.
 FUNCTIONS OF MANAGEMENT

Management functions includes all those activities which managers perform in an organisation
to achieve desired results. These functions are Planning, Organising, Staffing, Directing and
Controlling.

Management is the process of planning, organising, directing and controlling the efforts of
organisational members and of using organisational resources to achieve specific goals.

PLANNING

CONTROLLING ORGANISING

DIRECTING STAFFING

The functions of management are interdependent and interrelated. A manager has to perform all the
functions simultaneously to achieve the desired objectives. The functions of management include:

1) Planning- Planning is the basic function of management. It involves deciding in advance

what to do, when to do it, where to do it, how to do it, who is to do it and how the results are
to be evaluated. It determines the objectives to be achieved and the course of action to be
followed to achieve them. It is a mental process requiring the use of (a) intellectual faculties, (b)
foresight, and (c) sound judgement. (Planning is an intellectual process that involves analysis of
data and decision making.)

Planning implies systematic thinking about the ways and means for the accomplishment of pre-
determined goals or objectives of the organisation. It bridges the gap between where we are (current
position) and where we want to reach (future image).

Planning cannot prevent problems, but it can predict them and prepare contingency plans to deal with
them.

2) Organising – 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. Organising involves identification and grouping the activities to be
performed into manageable departments or work units, assigning duties, establishing
authority responsibility relationships and allocating resources required to carry out a
specific plan.
 (After planning, a manager needs to organize the activities and establish an organization
structure to execute the plan. Setting up an Organisational structure means deciding upon
how many departments, units and subunits are needed; how many posts or designations are
needed in each department; and how to distribute the authority and responsibility among
different people. Once thesedecisions are taken, an organizational structure gets set up.
(Steps of Organising- Chapter 5)

3) Staffing – Staffing means filling up various job positions in the organisation with competent
personnel. Staffing involves finding the right people for the right job at the right time to
accomplish the goals of the organisation. It includes activities like recruitment, selection,
placement, training and development of employees.

4) Directing – Directing involves leading, influencing and motivating employees to perform

the tasks assigned to them. Directing function is basically concerned with influencing the
behaviour of human resources. Directing involves the following elements:
a) Supervision – It means overseeing the functioning of the subordinates.
b) Communication – A manager has to tell the subordinates what to do, how to do it. He has to
create an understanding in their minds in regard to these things.
c) Leadership – It is the process by which a manager guides and influences his subordinates to
do what he wants them to do.
d) Motivation – It means inspiring the subordinates with a zeal to work for the accomplishment of
organisational objectives. A manager makes use of different motivational techniques to
enthuse the workers.

A good manager directs through praise and criticism in such a way that it brings out the best in
the employee.

5) Controlling – Controlling is the management function of monitoring organisational

performance towards the attainment of organisational goals. The task of controlling
involves (a) establishing standards of performance, (b) measuring current performance, (c)
comparing it with established standards and (d) taking corrective actions, if there is any
significant deviation between actual and planned performance. It aims to ensure that everything
in the organisation is done according to plans to achieve the predetermined goals.

COORDINATION-THE ESSENCE OF MANAGEMENT

Coordination may be defined as ‘the process of integrating the activities and efforts of different
units of an organization for effective accomplishment of organizational activities.’ It means the
orderly arrangement of individual and group efforts to provide unity of action for the
achievement of common objectives.

The objective of coordination is to ensure that the goals of units and subunits are pursued in harmony
with each other and they are consistent with the goals of the organization as a whole. (Eg: Relay
race)

Coordination therefore involves:

a) Synchronisation of the different actions or efforts of the various units of an organization.
b) This provides the requisite amount, quality, timing, and sequence of efforts.
c) This ensures that planned objectives are achieved with a minimum of conflict.
 NATURE OF COORDINATION: The features/ characteristics of Coordination are:

1) Coordination integrates group efforts - The concept of coordination applies to group efforts.
Different individuals come from varying back grounds, having different styles of working, so
there is a need to unify their efforts in common direction.
Coordination unifies unrelated or diverse interests into purposeful work activity. It gives a
common focus to group effort to ensure that performance is according to the plans.
2) Coordination ensures unity of action – The purpose of coordination is to secure unity of
action in the realization 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 organization.
3) Coordination is a continuous process - Coordination is a never ending function but a
continuous process. It begins at the planning stage and continues till controlling.
Top management plans for the entire organization. According to these plans, the
organizational structure is developed and staffed. Directing is required for execution of plans.
Controlling corrects the deviation between standards and actual performance.
4) Coordination is all pervasive function - Coordination is required in all the types of
organization, in al the departments and at all levels of management.
It is required at all levels of management due to the interdependent nature of activities
of various departments. In the absence of coordination, there is overlapping and chaos
instead of harmony and integration of activities.
5) Coordination is the responsibility of all managers – Coordination is the function of every
manager in the organization.
(a) Top level managers need to coordinate with their subordinates to ensure that the overall
policies for the organization are duly carried out. (b) The middle management coordinates with
both – the top level and the first line managers. (c) Operational level management coordinates
the activities of workers to ensure that work proceeds according to plans.
6) 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.
Cooperation in the absence of coordination may lead to wasted effort and coordination
without cooperation may lead to dissatisfaction among employees.

IMPORTANCE OF COORDINATION

The following reasons bring out the need and importance of coordination:

1) Size of the organization- As organizations grow in size, the number of people employed by
the organization also increases. Each person differs in their interests, habits of work,
background, approaches to situations, etc. For management, it is necessary to ensure that
all individuals work towards the common goals of the organization.
But employees may have their individual goals too. Thus, for organizational efficiency, it is
important to harmonise individual goals and organizational goals through coordination.

2) Functional Differentiation – In an organization, there may be separate departments of

production, finance, marketing or human resource. All these departments may have their own
objectives, policies, strategies, etc. There may arise conflicts between them.
 However, all departments and individuals are interdependent and they have to depend on
each other for information to perform their activities.
The process of integrating the activities of various departments to ensure unity of
action and to avoid conflicts between them is achieved by coordination.

3) Specialisation - Organisations need to employ a number of specialists. Specialisation arises

out of (a) the complexities of modern technology and (b) the diversity of tasks to be performed.
Specialists usually think that they only are qualified to evaluate, judge and decide according to
their professional criteria. They do not take advice or suggestions from others. This often leads
to conflict amongst different specialists as well as others in the organization.
Therefore, coordination is required by an independent person to reconcile the
differences in approach, interest or opinion of the specialists.

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