Ch 1 NATURE AND

SIGNIFICANCE OF
MANAGEMEN
 • Management is the process of planning, organising,
directing and controlling activities and using
resources of an organization for accomplishing the
organizational goals efficiently and effectively in an
ever-changing environment.
• Management simply means getting things done
through other people.
Introduction • Management is essential for all organizations big or
small, profit or non-profit, services or manufacturing.
• No organization can work smoothly and efficiently
without management. The success of an organization
largely depends upon the efficiency of its
management.
• The goal should be achieved efficiently and
effectively.
#Effectiveness Vs Efficiency
Effectiveness: The term Effectiveness
Effectiveness and efficiency are two
means the ability to achieve goals. It
sides of the same coin. But these two
is about doing the right task,
aspects need to be balanced in every
completing the assigned job on time, no
organization.
matter whatever the cost.

Efficiency: The term Efficiency means

Effectiveness and Efficiency together
the ability to achieve goals
leads to higher profit and prosperity of
with minimum resources. It is about
an organization. And failure of an
doing the job in cost
organization is due to inefficiency and
effective manner and getting maximum
ineffectiveness.
output with minimum input.
• Therefore, it is important to the
management to achieve goals
(effective) with
minimum resources (efficiency).
Difference between Effectiveness and Efficiency 

Difference Effectiveness Efficiency

Meaning Achieving targets on Targets are achieved
time with minimum
resources and cost
Focus Completion of work Optimum utilization of
resources
Purpose It is concerned with end It is concerned
result with cutting down
the cost
#Characteristics
or Features of
Management
1. Management is a goal-oriented process: Management always aims at achieving the
organizational objectives. Management unites the efforts of different individuals in
the organization towards achieving common goals.
2. Management is Pervasive: Management is a universal phenomenon. Whether it is a
profit or non-profit organization, big or small, all require management to handle
their operations effectively and efficiently.
3. Management is multi-dimensional: Management includes three main activities.
They are:
• Management of work- All organizations are engaged in doing some work in order to
accomplish some task. Management manages these works to accomplish desired
result.
• Management of people: Human resources are the most valuable asset
to any organization. Management involves getting work done through
people.
• Management of operations: Management of operations refers to
management of production process (in case of an industry)
and activities of buying and selling in case of a trading concern.
4. Management is a continuous process: Management is a continuous or never ending
process. Management functions like planning, organizing, staffing, directing and
controlling are performed by all managers on a continuous basis.

5. Management is a group activity: Management always refers to a group of people

involved in managerial activities. The management functions cannot be performed in
isolation (alone).

6. Management is a dynamic function: Management is a dynamic function and has to

adapt itself to the changing environment. An organisation must change itself and
its goals according to the needs of the environment.

7. Management is an intangible: Management function cannot be physically seen but

its presence can be felt.
#OBJECTIVES
OF
MANAGEMENT
• Management objectives can be classified
into.
1. Organisational objectives-It aims
maximum growth and prosperity of the
organisation.
2.Social objectives-It deals with
commitment of the firm towards the
society.
3.Personal objectives-Its aim is to improve
the satisfaction level of employees.
 Organisational
Objectives
• The three important organizational objectives of a
manager are:
I) Survival: The basic objectives of any business is
survival. In order to survive, an organization must earn
enough revenues to cover costs.
II) Profit: Management must ensure that the
organization makes a decent profit because it is a
lifeblood of an organization. Profit is essential to cover
cost and risk of the business. 
III) Growth: The success of any organization is measured
by the growth rate and growth is measured in terms of
sales, number of branches, number of products,
number of employees, etc.
 Social objectives: Business organizations are the part of the society. They
earn by using the resources of society so they must do something for
society also. For ex employment generation, supply of quality goods, etc.
 Personal Objective: Personal objectives are concerned with the
employees of the organization. As employees are most important
resources of every company, satisfied and motivated employees
contribute maximum for the organization. For ex Competitive salary and
perks, Bonus, etc.
#Importance or
Significance of
Management
1. Helps in achieving group goals: Management
gives a common direction to individual effort
in achieving group goals of an organization.
Group goals is more important than the
individual objectives.
2. Management increases efficiency: The aim of a
manager is to reduce costs and increase
productivity through better planning,
organizing, directing, staffing and controlling
the activities of the organization.
3. Management creates a dynamic
organization: Appropriate changes must be
introduced in the organization as and when it is
needed. Management helps the employees to
adapt such changes through proper training
and motivation.
4. Management helps in
achieving personal objectives: A manager
motivates and leads his team in such a
manner that individual members are able
to achieve personal goals
while contributing to the overall
organizational objective.

5. Management helps in the development

of society: Efficient management ensures
the supply of quality goods at reasonable
price, decent salary to employees,
employment opportunities, ensures
pollution free environment and pay taxes
honestly.
#Nature of Management
 • Art can be defined as systematic body
of knowledge which requires skill,
creativity and practice to get
MANAGEMENT  perfection.
AS AN ART
The basic features of
an art are as follows
1. Existence of theoretical knowledge: Art is
based on its theoretical knowledge. In
every art(example music, dance etc.), there
is  systematic and organized study materials
available to acquire theoretical knowledge
2. Personalised application: Theoretical base
may be same for every artist, but each one
has his own style and approach towards
his job. Eg: Two actors will differ in
demonstrating their art.
3. Based on practice and creativity: The artist
requires practice of art to become more fine
and perfect. Without practice artists lose
their perfection.
Management can be said to be an art since it satisfies the
following criteria:

There is a lot of literature available in various areas of management

which the manager has to specialise in. So, There is an existence
of theoretical knowledge.

A manager applies the acquired knowledge in a personalised and

skillful manner.

A good manager works through a combination of practice,

creativity, imagination, initiative and innovation. He achieves
perfection through practice.
CONCLUSION

On the basis of above discussion, we have observed that the field of

management fulfils all features of art.

Therefore, we can say, management is an art.

Management as a
science:
• Science is a systematically
organized body
of knowledge. It is based on
logically observed findings,
facts and events.
The basic features of an science are as follows
1) Systematic body of knowledge: Science is
a systematic body of knowledge. In
science, there is systematic study
materials available to acquire the
knowledge of science.
2) Principles based on
Experimentation: Scientific principles are
first developed through observation and
then tested through repeated
experimentation.
3) Scientific principles have universal validity
and that can be applied in all situations
and will be the same result.
Management can be said to be an science
since it satisfies the following criteria:
• Systematic body of knowledge-Management is also a systematic body
of knowledge.
• Experimentation & Observation-Principles are based on observation &
experimentation.
• Universal application-Their application and use is not universal.
CONCLUSION
• Management cannot be compared
with the principles of physical
science like Physics, Chemistry.
Therefore, management is an
inexact or soft science or pseudo-
science.
• Management is both science as well
as art.
MANAGEMENT AS A PROFESSION

• Profession can be defined

as an occupation backed
by specialised knowledge
and training in which entry
is restricted.
The main features of
profession
1) Well-defined body of knowledge: All professions are
based on a well- defined body of knowledge that can
be acquired through instruction.
2) Restricted entry: Management requires formal
education and training provided by formal institutions
like Universities, Professional Organizations such
as Institute of Chartered Accountants of India, IIM, etc.
3) Professional Association: For all the professions,
special associations are established and every
professional has to get himself registered with his
association before practising that profession.
4) Ethical code of conduct: All professions are bound by a
code of conduct which guides the behaviour of
its members.
5) Service Motive: The primary objective of a profession
is providing service to the society. They charge fees for
their services.
Management can be said to be an profession since it satisfies
the following criteria:

Management is based on a systematic body of knowledge.

There is no restriction on anyone being appointed as manager in

any business enterprise.

There are various management associations are set up at national and

international levels. Eg: AIMA, National Institute of Personal
Management, etc.
CONCLUSION

• We can conclude that presently

all the features of profession are
not present in management but
very soon, these will be included
in the management So we can
say management is on the path of
becoming a profession.
#LEVELS OF MANAGEMENT
• Levels of management refers to the arrangement of managerial positions in an organization.
• There are generally three levels of management.
Top Level Management
Middle Level Management
Lower Level Management
 Top level management consists of managers at the highest level in the
management hierarchy.

Chairman, managing directors, board of directors, chief executive and

general managers are regarded as top level management in a business
organization.
Top Level This level of management is responsible for framing business policies
Management and taking major decisions.

They perform administrative functions more than the managerial

functions.

Functions are Prepares plans and policies, Issues instructions to

departments, Appoint executives in middle levels, Maintain relationship
with outsiders, etc.
 • This level of management consists of different
departmental heads.
• These managers receive orders and instructions from
Middle Level top level managers and pass them to their
Management subordinates.
• These managers are responsible for executing the
plans formulated by top management.
• This level acts as an intermediary between the
top management and the lower level management.
• Functions are Communicating policies to lower
level, Planning the activities of own
department, reporting to top level, etc.
 • This level is also known as Supervisory
Management or Operational Management.
• It consists of foreman, supervisors, finance
and accounts officers, sales officers etc.
Lower Level • They assign specific jobs to the workers,
evaluate their performance and report to
Management the middle level management.
• Functions are Planning day to day
activities, Personal contact with the
employees, Link between middle level and
workers, etc.
#Functions of Management

• The activities which a manager

performs are called functions
of management.
• Regardless of size, nature and
type of organization, all
managers have to perform some
basic functions.
Planning
• It is the first function
performed by all managers
• Planning means deciding in
advance what to do and how
to do it.
• Planning bridges the gap
between where we stand
today and where we want to
reach.
• Planning is a process of
thinking before doing.
 • Organizing refers to identification
and grouping of activities to be
undertaken in the organization
and establishing an
organizational structure to
execute the plan. 
Organizing • It is a process of establishing
relationship among the
members of the enterprise.
• The relationship is created in
terms of authority and
responsibility.
Staffing
• Staffing is the third step or function of
a manager.
• Staffing refers to procure suitable
employees to fill various jobs in the
enterprise.
• Its aim is to place the right person
for the right job and at the right time.
• Staffing includes recruitment of
employees, their selection,
placement, training, promotion,
transfer, remuneration etc.
Directing
• It is concerned with instructing,
guiding, and inspiring people in
the organization to achieve
organizational goals.
• Direction is not only issuing
orders and instructions by
superior to subordinate, but also
guiding, motivating and leading
them.
• Direction is the heart of
management
Controlling
• This is the last function of
management.
• In this function managers
compare the actual performance
with the planned performance
and if there is deviations
between them, then managers
try to find out the reasons of
deviation and suggest corrective
measures to come on the path
of plan. 
#Coordination :The
essence of Management
• Coordination refers to the process of
integrating the activities of different units of
an organization to achieve the organizational
goals.
• Coordination is the base or primary function
of every manager because various
departments of an organization are working
independently and there is need to
coordinate their activities.
• Coordination is needed in all the functions
of management and in all the levels of
management, therefore, coordination is
considered as the essence of management.
Characteristics
of Coordination
1) Coordination integrates group efforts: It refers to the
unification of all the unrelated activities or diverse interest
which must be brought together so as to accomplish the
work effectively.
2) Coordination ensures unity of action: Coordination helps to
maintain unity of action among the activities of one
department with that of another. Eg: Purchase department
should purchase enough material which are necessary for
the production department. Imbalance between these two
departments will cause loss to the organization.
3) Coordination is a continuous process: Management is a
continuous process and coordination is associated with all
other functions of management, so that it is a continuous
process.
4) Coordination is a pervasive function: Coordination requires
at all levels of management and in all departments of the
organization. Hence coordination is pervasive or universal.
5) Coordination is the responsibility of all managers: All
managers in the organization are responsible to coordinate the
activities in their respective levels of management.
Importance of
Coordination
1) Growth in size: As an organization grows in
size, the number of people employed will also
be increased. All individuals differ in their
habits, approaches etc. So that it becomes
necessary to coordinate their efforts to the
common goal.
2) Functional differentiation: The functions of an
organization are divided into various
departments like production, finance,
marketing, human resources etc. Coordination
is needed to ensure unity of action of various
departments.
3) Specialization: Now a days many organizations
appoint specialists in different jobs. They do
not take advice from others. Here also
coordination plays an important role to bring
harmony among these personnel for the
benefit  of the organization