Management - Meaning, Nature 1

and Importance  By JC Classes

 By CA Yogesh Jaiswal
OFU – KINGFISHER AIRLINES 2
INTRODUCTION 3

- HUMANS NEEDS AND DESIRES GAVE RISE TO THE CULTURE OF WORKING

TOGETHER.

- SINCE HUMANS ARE SOCIAL BEING THEY LOVE TO LIVE TOGETHER.

- BY LIVING TOGETHER HUMAN SATISFY THEIR SOCIAL AND ECONOMICAL

NEEDS.
- SEVERAL TYPES OF GROUP ARE FAMILY, SCHOOL, GOVERNMENT ARMY,
BUSINESS FIRM, A CRICKET TEAM.

- AS MIND COORDINATES AND REGULATES ALL ACTIVITIES OF BODY

SIMILARLY MANAGEMENT COORDINATES ALL ACTIVITIES OF MEMBERS
OF AN ORGANISATION.
MEANING OF MANAGEMENT – Meaning 4
of management can be understood in various senses.
Like -

Management as an Activity
Management as a Group
Management as a Discipline
Management as a Process
 Management as an Activity 5

Management means art of getting things

done through efforts of other people.
(Dusrooooo se kaam kra ke lena).

Management is centred in the hand of

administrators or managers.
Management is an activity which GIR-DIR
guides, integrate, regulate, directs
human efforts towards achievement of
common goals.
To make a productive enterprise
management integrates 5 M.
MANAGEMENT AS AN ACTIVITY - IMPLICATIONS 6
(I Go GOA Decision)
 Interpersonal activity – Management is an interpersonal
activity because to get things done managers have to
interact with other persons.

 Group Activity – as managers coordinates the efforts of group

of persons.

 Goal Oriented Activity – as Managers seeks to achieve

common goal.

 Decisional activity – as managers take decision to the

organisation. They also give and receive information for
running the organisation.
 MANAGEMENT AS A GROUP 7
 Management as a group means – All those persons (people) who perform the task of management.

 Jaise company me bolte hai TOP Management matlab- BOD – Board of Directors is called
Management.

 BOD, CEO, CFO, HOD BRANCH MANAGERS, SUPERITENDENTS, SUPERVISORS ETC ETC ETC
ETC……………..

 Types of managers –
 Family managers – becoming manager by virtue of being relatives. RAJA ka beta RAJA

 Professional managers - appointed as manager on account of degree and experience.

 Civil Servants or IAS Officers – managers of public sector undertaking (PSU).

Managers ki bohot iiizaaatt 8

hai.(power and respect)

 Managers have become very powerful and respected group in
society because their one decision affects many lives.
 Eg – If BOD of TATA Steel decides to start new plant it provides jobs
to thousands of people and contributes in economic development
of country. Hence managers enjoys high standards of living in
society.

 Management is a Rule making and Rule enforcing Body means they

decide, regulate and supervise the work of others.
TATA NANO Plant – case study 9
MANAGEMENT AS A DISCIPLINE 10

 IIM – Indian Institute of Management

 Management as a Discipline implies specialised branch of

knowledge which involves study of PP i.e Principles and Practice of
administration. (SBK of PP)

 Renowned Institutions like IIM teaches management disciplines

which has become very popular field education and training
nowadays.

 Some eg includes – Financial Management, Marketing

Management, Personnel Management, Production Management,
Event Management etc.
MANAGEMENT AS A PROCESS 11

 Process means series of activities where inputs are transformed into

output. Hence Management is considered as process because it is
considered as series of interrelated elements/functions.
 These functions are performed in a systematic manner to transform
input into output.
 Management process consist of –
 Planning
 Organising
 Staffing
 Directing
 And Controlling.
Management as a process has 12
following implications: (In Universe I
come & socialize)
 Management is a Integrated process because it brings
together Human, physical and financial resources and
integrates them.
 Management is a universal process as it is required in all
types of organisation.
 Management is a iterative process as all management
functions are contained within each other.
 Management is a continuous process.
 Management is a social process as managers work with
and through people.(socialize)
CHARACTERISTICS OF MANAGEMENT 13
 Management is Universal – Management is required in all types of
organisations big or small, Business or Non-Business, Basic
functions of management is performed at all Levels (Top-Middle-
Lower).
 Management is Goal Oriented – Management seek to achieve
economic and social objectives.
 Management is Group activity – Management is concerned with
the effort of group of people who come together to get the work
done.
 Management is Social Process – Management involves getting
things done with and through people.
 Management is a Dynamic Function – Management is performed
continuously to change policies and practices as per changes in
the environment.
CHARACTERISTICS OF MANAGEMENT 14

 Management is a system of authority – Management is a rule

making and rule enforcing authority. In management there is a
chain of authority among people working in different levels of
organisation.
 Management is both ART and SCIENCE – Management is Science as
it has principles which have universal application and Management
is art as it depends on the skills of managers to get best results
through management.
 Management is Intangible – Management is invisible force which
can be felt in form of results but cannot be seen.
 Management is Multi-disciplinary – In Management knowledge of
several discipline is used such as Economics, Sociology, Psychology,
anthropology etc.
 NATURE OF MANAGEMENT 15
 Management as :-
 NATURE OF MANAGEMENT 16
 Management as SCIENCE :
 Knowledge + Observations(cause and effect) + Experiments(cause and
effect) = Science which becomes universally accepted principles.
 Let us define science : Science is a Systematic body of knowledge
– which are acquired through observation and experimentations –
consisting of universally accepted principles established between causes
and effects.

 Features of Science:
 1. Systematic body of knowledge
 2. Principles based on observations and
experiments
 3. Cause and effect relationship
 4. Universal validity of principles.
 Understanding how far Management is Science
17
 1. Systematic body of knowledge – Management is systematic body of
knowledge in the form of basic principles and concepts.
 2. Principles based on observations and experiments – As
principles of science is build up on continuous observations and experiments similarly,
Principles of management is build up through continuous observations and experiments
after careful enquiry, analysis and experience.
 (Bezzati krdo)However management principles are not absolutely objective as science
as it is based on human behaviour which cannot be scientifically predicted.
 3. Cause and effect relationship – As science Management principles
also establish cause and effect relationship.
 4. Universal validity of principles – As Scientific principles
represents basic truth which are universally applicable similarly Fundamental principles
of management are universally applicable.
 However all principles of management are not universally applicable due to
unpredictable human behaviour hence management could be considered only soft
science.
 Moreover since management deals with people and their behaviour it is considered as
SOCIAL SCIENCE.
NATURE OF MANAGEMENT 18
 MANAGEMENT as an ART
 ART Means – Practical application of knowledge and skills to
achieve desired results.
 Features of art –
 1. Practical knowledge
 2. Personal Skills
 3. Creativity
 4. Perfection through practice.
How far Management is Art 19
 1. Practical knowledge – Art involves application of theoretical
knowledge, management is also an art of getting things done from effort of
other people to accomplish desired result. It also requires putting available
knowledge into practice.
 2. Personal Skills -
Personal skill is an individual skill in art, In
management managers also have their own style of working to tackles
various problems.
 3. Creativity – As art, management also involves creativity of transforming
inputs into outputs. It is a goal oriented and result oriented activity like
maximizing productivity or minimizing cost.
 4. Perfection through practice – As art requires continuous practice
for mastery, Management also involves regular practice to convert
challenges into opportunities.
 NATURE OF MANAGEMENT 20

 Management as a Profession
 Profession means a vocation which requires specialized knowledge, practical
training, service motive and Code of conduct (COC).

 Features of a Profession –
 Specialized body of knowledge which is transferable
 Formal Education and training
 Service Motive
 Statutory Body
 Code of conduct
How far Management is Profession 21
 1. Specialized Knowledge – As profession management also has a well
defined body of specialized knowledge which is transferable.
 2. Formal Education and Training – Specialized institutes provides
education and training in management. (Like – IIM)
 Service Motive – Like other professionals managers are also expected to
Serve society rather than only earning profits.
 Statutory body – Like Professions have regulating bodies, for eg. CA
profession has regulating body known as ICAI (Institute of Chartered
Accountants of India), Managers also have Associations like All India
management association, it is to be noted that these associations are not
legal statutory body.
 Code of Conduct – Managers also have code of conduct but it is not
legally binding on managers
 Management and Administration Generally term
Management and Administration are used interchangeably but in 22
strict sense there is difference between them.
ADMINISTRATION MANAGEMENT
 Means – determination of Objectives and  Means creation of internal environment
policies of an organization. for attaining the objectives and goals of
organization.
 It is an execution function.
 Nature – It is a decision making function.
 Scope – It has wider scope  It has narrower scope.
 It is concerned with middle and lower
 Level – It is concerned with Top level.
management.
 Use – term is used in non-business  Term is used in Business organisations.
organizations.
 Limits – It provides limits under which  It functions under the limits set by
management functions. administration.
 Decision factors – decisions are  Decisions are influenced by internal
influenced by external factors. factors.
 Objectives of Management 23
 1.Profitability –
 Management must ensure that entity earns sufficient profit to meet its various
needs.
 Investors of business must be given reasonable returns in the form of Interest,
Dividend etc.
 Profit is maximized when output is maximum at minimum cost.

 2. Prosperity and Growth –

 Management aims at continuous improvement in performance.
 Management aims to create environment where people try to give their best
to the organization.
 Right leadership of management ensures prosperity and happiness.
 Management seeks to ensure maximum productivity by best utilization of
resources.
 Objectives of Management 24
 3.Change and Innovation –
 Today every Business operates in an environment which keeps on changing
due to reasons like technology, marketing, consumers taste and preferences
etc. hence managers serve as agent for change and progress in an
organization.
 Managers focus on development of new products and services as per
changing needs of people.
 Eg – Feature phone to touch screen phone to smartphone.
 4. Development of People –
 The most important Asset to an organisation is its People (Employees).
 Management seeks to develop human talent by encouraging initiatives, skills
and technical competence, This can be achieved by providing trainings and
encouraging participations.
 Objectives of Management 25
 5.Discipline and morale –
 Management aims at improving discipline among people.
 Discipline can be ensured by exercising authority, assigning responsibility
and controlling.
 To encourage morale and discipline financial and non financial incentives
are given by management.

 6. Rightful Decision making –

 Decision making is very important part of management, decision is taken at
each step of business.
 Quality of decisions determines the future of organization.
 Hence management shall aim at making right decision at right time.
 Objectives of Management 26
 7.Improving Image –
 Management always attempts to build and maintain a sound public image.

 8. Quality Goods at fair price–

 Management aims at providing good quality products at reasonable price.
 To achieve this managers try to eliminate wastages.
 Here management aims to serve society and not just making profits.
27
 Importance of Management 28

 Former President of USA once said Government without

management is like house built on sand.
 Management is the most dynamic life changing element of
every business.
 Let us understand the importance of management…!!
 Importance of Management 29
 1. Achievement of group objectives:
 Organisation is a group of people working together for a common objective, hence
management creates mutual understanding between people, coordinates it and
develop team spirit for achieving common goal.

 2. Optimum utilization of resources:

 Management brings together (5M) Men, Materials, Machine,method, Money and all
other resources in right proportion for optimum utilization to increase productivity and
profit.

 3. Minimum Cost:
 In the era of cut throat competition, a business can be successful only when it is able
to provide required products and services at lowest cost.
 To reduce cost management has to effectively and efficient use resources.
 Eg – better planning, waste management, regular supervision and control.
 Eg – Cadbury removed silver foil layer.
 Importance of Management 30
 4. Survival and Growth:
 Modern business operates in rapidly changing environment, enterprise
has to adapt itself a per changing needs of market and society.
 Managers continuously monitor changing environment and take
necessary steps for overcoming uncertainties of future by grabbing
opportunities and minimizing threats

 5. Higher standard of Living:

 Management is important for Business as well as society as by providing good quality
of goods and services at low cost it raises standard of living of people.

 6. Generation of Employment:
 By setting new Plants or enterprises and expansion, management provides
employment of thousands of people.
 People earns their livelihood by working in these organsations.
 Importance of Management 31
 7. Development of Nation:
 Management is the most crucial factor in Economic and social development.
 Development of nation depends on quality of management of resources.
 Hence it has been said “ there is no under-developed countries, there are
only under managed ones.
 Management promotes peace and prosperity.
LEVELS OF MANAGEMENT 32
 Levels of Management 33
 1. TOP LEVEL MANAGEMENT
 Top level management consist of board of directors, CEO,CFO, MD, GM,
Secretary etc.
 The main functions of top level management are –
 1. To ANALYSE and INTERPRET the changes in the external environment.
 2. To establish long term Goals, plans, Policies, strategies.
 3. To formulate and approve MASTER BUDGET.
 4. Design Organisation STRUCTURE.
 5. To Provide Direction and leadership.
 6. To exercise review and control.
 7. To decide distribution of profit.
 8. To coordinate and integrate activities of department.
 Levels of Management 34
 2. MIDDLE LEVEL MANAGEMENT
 It comprises of departmental and sectional heads.
 Eg – production manager, sales manager, finance manager, personal
manager, branch manager etc.
 The main function of middle level management are –
 1. To interpret the plans of top management to lower and working class
group.
 2. To monitor and control operating performance.
 3. To cooperate and integrate among departments.
 4. To train and motivate supervisors.
 5. To lay down rules and regulations for supervisors and working staff.
 Levels of Management 35
 3. LOWER LEVEL OR OPERATING LEVEL OR
SUPERVISORY LEVEL MANAGEMENT
 This is the FIRST or say the LOWEST level of management.
 It consist of –
 SUPERVISORS – FOREMEN – SALES OFFICERS – ACCOUNTS OFFICER – PURCHASE
OFFICERS ETC.
 These managers deals with non managers or say skilled semi skilled or
unskilled staff.
 They are the channel of communication between Top managers and
workforce.
 Levels of Management 36
 The main functions of LOWER level management are –
 1. To plan day to day production as per goals of top management.
 2. To assign jobs to workers and make arrangement for their training and
development.
 3. To issue orders and instructions.
 4. To supervise and control workers.
 5. To arrange for materials and tools.
 6. To maintain discipline and good human relations.
 7. To take feedback from workers.