Chapter 1 INTRODUCTION
Definition, Nature and Scope of Management
Management is regarded as the most important of all human activities. It may be called the practice of
consciously and continually shaping organizations. No organization can carry on its business without
management, which is in turn supervised by managers
Managing is essential to ensure the co-ordination of individual efforts within an organization. It is
exciting because it deals with setting, seeking and reaching objectives of an organization
the practice of management is found in every facet of human endeavour- educational institutions,
business, government or non-government organisations, associations, mosques and families ( Richard N.
Farmer), .
Management is universal. Every group effort requires setting objectives, making plans, handling people,
co-ordinating and controlling activities, achieving goals and evaluating performance directed towards
organisational goals.
These activities relate to the utilisation of four types of input or resources from the environment −
human, monetary, physical, and informational.
Human resources include managerial talent, labour, and so forth
Monetary resources are the financial capital the organisation uses to finance both ongoing and long-
term operations.
Physical resources include raw materials, office and production facilities and equipment.
Information resources are data and other kinds of information utilised by the organisation (Terry
Franklin).
The job of the manager is to combine and co-ordinate these resources to achieve the organisation’s
goals.
Definition of Management
"The process of planning, organizing, leading, and controlling the work of organization members and of
using all available organizational resources to reach stated organizational goals ( Karen Paul and Robert
Barbato),
"Management is a distinct process consisting of activities of planning, actuating, and controlling,
performed to determine and accomplish stated objectives with the use of human beings and other
resources (Peter F. Drucker,)
"Management is the process of planning, organizing, leading, and controlling an organization’s human,
financial, physical, and information resources to achieve organizational goals in an efficient and effective
manner ( Heinz Weihrich and Harold Koontz).
All these three definitions put emphasis on the attainment of organizational goals/objectives through
deployment of the management process (planning, organizing directing etc.) for the best use of
organization’s resources.
(i) 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
(ii) 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.
(iii) Management is principally the task of planning, coordinating, motivating and controlling the efforts
of others towards a specific objective. —James L. Lundy
(iv) 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
(v) 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
(vi) 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
(vii) To manage is to forecast and to plan, to organise to command, to coordinate and to control. —
Henry Fayol
(viii) Management is the function of executive leadership anywhere —Ralph C. Davis
(ix) 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
(x) 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
(xi) 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 as “getting things done through other people in an efficient manner.” The term efficient
means doing things in a systematic manner without waste.
the most widely acceptable definition of management could be the act of "designing and maintaining an
environment in which individuals, working together in groups, efficiently accomplish selected aims
In simple words, a manager is a person who is responsible for directing the efforts aimed at helping
organizations achieve their goals.
Nature and Scope of Management
Three dimensions of the nature of management:
(i) Methods, through which some pre-determined objectives can be reached,
(ii) combined effect of human efforts and
(iii) sum total of all those managers and employees who are associated with these efforts.
Joseph A. Lister has identified the nature of management as the co-ordination of (i) transformation, i.e.,
turning some factors and elements into products,
(ii) social system, which satisfies employees' needs through motivation, communication and leadership,
(iii) administrative system, through which the activities of the employees are controlled.
The nature of management can be stated as follows:
Management is a system comprising planning, organizing, staffing, leading, and controlling.
Elements of production of an organization such as labor, capital, land, equipment etc. are used
efficiently and effectively through management for achieving organizational goals.
Management applies to any type of organization.
Management identifies a special group of people whose job is to direct the effort and activities of other
people towards common objectives.
It applies to managers engaged at all levels of organization.
Management is gradually turning towards professionalization.
Management has to pay attention to fulfilling the objectives of the interested parties.
It has to render social responsibilities.
Management is both science and art.
The aim of all managers is to create a surplus.
Managing is concerned with productivity, thereby implying efficiency and effectiveness.
Harbison and Myers offered a classic threefold concept of management for emphasizing a broader scope
for the viewpoint of management. They observe management as (1) an economic resource, (2) a system
of authority, and (3) a class and status system.
(1) As viewed by the economist,
management is one of the factors of production together with land, labour and capital . The managerial
resources of a firm determine, in large measure, its productivity and profitability. Executive
development, therefore, is more important for those firms in a dynamic industry in which progress is
rapid.
(2) As viewed by a specialist in administration and organization,
management is a system of authority. Historically, management first developed an authoritarian
philosophy. Later on, it turned paternalistic. Still later, constitutional management emerged,
characterized by a concern for consistent policies and procedures for dealing with the working group.
Finally, the trend of management turned towards a democratic and participatory approach. Modern
management is nothing but a synthesis of these four approaches to authority.
(3) As viewed by a sociologist, management is a class-and-status system. The increase in the complexity
of relationships in modern society demands that managers become an elite of brains and education.
Entry into this class of executives is being more and more dependent on excellence in education and
knowledge rather than family or political connections. Some scholars view this development as
"Managerial Revolution( Weihrich and Koontz),
From the economic viewpoint, management is a factor of production. The administrative and
organizational angle regards it as systemic, while the sociologist would like to view it in hierarchical
terms.
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
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.
Thus, the essential features of science are as follows:
(i) Basic facts or general principles capable of universal application
(ii) Developed through scientific enquiry or experiments
(iii) Establish cause and effect relationships between various factors.
(iv) Their Validity can be verified and they serve as reliable guide
for predicting future events.
The extent of management to satisfy the above Conditions:
(i) Systematic body of knowledge: Management has a systematic body
of knowledge consisting of general principles and techniques.
(ii) Universal principles: Scientific principles represent basic facts
about a particular field enquiry. Management contains sound
fundamental principles which can be universally applied. For
instance, the principle of unity of command states that at a time
one employee should be answerable to only one boss.
(iii) Scientific enquiry and experiments: Scientific principles are derived
through scientific investigation and reasoning.
IV. Cause and effect relationship: The relationship between different variables
V. Test of validity and reliability:
Thus management is undoubtedly a science.
Management as an Art
Art involves the systematic application of theoretical knowledge and personal skills to achieve desired
results. The function of art is to effect change and to bring about desired results through deliberate
efforts. Art represents 'how' of human behavior because it is the know-how to accomplish concrete
practical results.
Management is essentially an art because of the following reasons:
(a) The process of management involves the use of knowledge and skills. Every manager has to apply
certain knowhow and skills while dealing with people.
(b) Management seeks to achieve concrete practical results, e.g., profits, service, etc. According to Prof.
John F. Mee, "management is the art of securing maximum results with a minimum of effort so as to
secure maximum prosperity and happiness for both employer and employee and give the public best
possible service."
(c) Like any other art, management is creative. It brings out new situations and makes resources
productive. In fact, management is one" of the most creative arts because it requires molding and
welding the attitudes and behavior of people at work for the accomplishment of specific goals in a
changing environment.
(d) Like any other art, management is a personalized process. Every manager has his own approach and
technique depending upon his perception and the environmental conditions.
(e) As an art, management requires judgment and skills. The art of management can be refined with
continuous practice of management theories and principles.
The art of management is as old as human civilization. The importance of management art has increased
with rapid growth in the number size and complexity of organizations.
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.
However, 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.
Purpose and Importance of Management
For most business firms, an important purpose is the creation of a surplus.
Management is to establish an environment in which people can accomplish organizational goals with
the least amount of time, money, materials and personal dissatisfaction or in which they can achieve as
much as possible of a desired goal with available resources( Peter F. Drucker),
Management can greatly affect not only an organization but also the socio-economic and political goals
of a country.
Improving economic and social standards of living and creating a better political environment are the
real challenges before modern management.
Management makes human effort more productive. It brings better equipment, plant, offices, products,
services, and human relations to our society
Management thus applies to small and large organisations, to profit and non-profit enterprises, to
manufacturing as well as service industries.
Effective managing is the concern of the corporation president, the hospital administrator, the
government secretary, the football manager, the college principal and the university Vice-Chancellor.
Management draws up plans, and motives and guides the employees for their best performance within
the limits of the organization's available resources.
Economic giants like the USA and Germany could not have reached their present position without
proper management.
Conversely, the oil rich countries like Saudi Arabia, Iran or Iraq have failed to make any headway
towards industrialization because of the poor quality of their managerial capability.
In fact management is the most important of all resources. It is vital both at the micro and the macro
level.
It is essential for every enterprise, for every society, for every country.
President Roosevelt once rightly said, "No ideology, no ism, no political theory can win a greater output
with less effort from a given complex of human and material resources without sound management
(Abdul Mannan)
Scientific and technological developments can bear no fruit without management. Thus the
contemporary thrust is more on managerial development, than on scientific research.
The use of information technology and computer software in management is an added impetus to the
overriding importance of management.
The only hope of countries with meagre natural and/or economic resources, is to improve management
and ensure better life for their people.
Features/Characteristics of Management
(1) Management is usually associated with group efforts:
(2) Management is accomplished through the efforts of others: Management is sometimes defined as
“getting things done through others’ efforts.”
(3) Management is purposeful: Wherever there is management there is a purpose
(4) Management is action-oriented: Managers focus their attention and efforts on bringing about
successful action.
(5) Management is intangible: Management is often called the unseen force, its presence being
evidenced by the results
of its efforts - motivation among employees, discipline in the group, high productivity, adequate
surplus etc
(6) Management is indispensable: Management can neither be replaced nor substituted by anything
else. Even the computer which is the wonderful invention of the twentieth century can only aid but
not replace management.
7) Management can ensure better life: A manager can do much to improve the work environment,
stimulate people to perform better, achieve progress, bring hope and accomplish better things in
life.12
Organization, Administration and Management
By organization we simply mean the “collection, preservation and co-ordination of the elements of an
enterprise in an integrated manner.”
It also signifies the bringing together of various resources of an enterprise into a harmonious whole.
It is the primary job of an entrepreneur, and the existence of an enterprise cannot be conceived of
without it. Scholars suggest that the pre-condition of success of any venture is proper organisation.
Administration is the driving force of an enterprise which sets the objectives and formulates plans to
achieve them
Administration also determines the principles for ensuring the effective performance of the activities of
different divisions and branches of the enterprise.
Thus the board of directors of a company or the syndicate of university can be called the administrative
organ, performing the planning and leadership functions for the whole enterprise/ institution.
Management is primarily entrusted with the responsibility of executing the plans and policies set by the
administration for achieving pre-determined goals and objectives.
The success of an enterprise/institution is thus dependent on how efficiently the management can
execute plans and policies set by the administration. Thus the administration cannot be successful
without the co-operation of management.
Administration is entrusted with planning and effective execution of company policies through efficient
leadership. The job of management is to ensure orderly and methodical accomplishment of the pre-set
policy objectives of an enterprise.
Objectives Of Management
(i) Organisational objectives: Management is expected to work for the
achievement of the objectives of the particular organisation in
which it exists. Organisational objectives include:
(a) Reasonable profits so as to give a fair return on the capital
invested in business
(b) Survival and solvency of the business, i.e., continuity.
(c) Growth and expansion of the enterprise
(d) Improving the goodwill or reputation of the enterprise.
(ii) Personal objectives: An organisation consists of several persons
who have their own objectives. These objectives are as follows:
(a) Fair remuneration for work performed
(b) Reasonable working conditions
(c) Opportunities for training and development
(d) Participation in management and prosperity of the enterprise
(e) Reasonable security of service.
(iii) 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 given below:
(a) Quality of goods and services at fair price to consumers.
(b) Honest and prompt payment of taxes to the Government.
(c) Conservation of environment and natural resources.
(d) Fair dealings with suppliers, dealers and competitors.
(e) Preservation of ethical values of the society.
SKILLS OF MANAGEMENT
In modern business the job management has become very difficult.
Several skills are required to manage successfully a large organization in a dynamic environment.
These skills of managers have been classified into four categories, namely technical, human, diagnostic
and conceptual skills.
(i) 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
(ii) 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.
(iii) Conceptual Skills
Conceptual skills comprise the ability to see the whole organization 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.
(iv) 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.
• If you are planning for one year, grow rice. If you are planning for 20 years, grow trees. If you are
planning for centuries, grow men!
• Chinese Proverb
