CH-1

NATURE AND SIGNIFICANCE OF MANAGEMENT

1. Management – Management is a process of getting things done with

the aim of achieving goals effectively and efficiently. Management is a
distinct process consisting of planning, organizing, activating and
controlling, performed to determine and accomplish the objectives by the
use of the people and resources.

Basis of Effectiveness Efficiency

Difference
Meaning It refers to competition of task It refers to completion of task
on time. correctly with minimum cost
and no wastage of resources.
Objective It is concerned with the It is concerned with cost
achievement of end result. benefit analysis utilizing
minimum resources and
getting maximum benefits.
Consideration Producing target production on Producing target production
time. to its minimum cost.
Focus The quality of the end product The focus is on the optimum
and its completion, within the utilization of resources. tTere
given time. is a continuous cost benefit
analysis i.e., more benefit at
the lower cost.

2. Characteristics of Management-
a) Management is a Goal Oriented Process- An organisation has set a
basic of goals which are the basic reasons for its existence. Management
integrates the efforts of different individuals in the organisation towards
the achieving of these goals.
b) Management is all pervasive- Management is a universal
phenomenon. The use of management is not restricted to business only,
it is applicable to profit-making non-profit making, business or non
 business organisations; even the hospital, school, hostel, club and even
house has to be managed properly.
c) Management is Multidimensional-
1)Management of Work- All organisations exist for the performance of
some work or goals. Management activities aim at achieving goals or
work/tasks that are to be accomplished.
2)Management of People- The task of management is to make people
work towards achieving the organization goals by turning their strengths
effective and their weakness irrelevant.
3)Management of Operations- Organization of any nature, for its survival
has to produce and provide services. This is done by production process,
where raw material, technology etc are transformed into desired output
or produce.
d) Management is a continuous process- The process of management
includes planning, organising, staffing, directing, controlling. These
functions are performed simultaneously and continuously by all the
managers all that time for the achievement of the goals.
e) 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 organization but as members of the
organization they work towards fulfilling the common organization goals.
f) Management is a dynamic function- Management is a dynamic
function and has to adapt itself to the changing or dynamic environment.
g) Management is an intangible force- Management is an intangible,
unseen force. Its functioning is not visible but it results are felt.
3. Objectives of Management-
a) Organizational objectives- Management has to achieve a variety of
objectives in all areas considering the interest of all stakeholders
including shareholders, employees, customers and the government.
1) Survival- Every business wants to survive or continue for a long.
Management must make efforts to ensure long run survival by
generating sufficient revenues to cover its costs.
2) Profit- Management has to ensure that the organisation makes a
profit. Profit provides a vital incentive for the continued successful
operations of the enterprise. Profit is essential for covering cost and
risk of the business.
 3) Growth- A business needs to add its prospects in the long run, for this
it is important for the business to grow. Growth of a business can be
measured in terms of sales volume, increase in number of employees,
the number of products or the increase in capital investment etc

b) Social objectives- To perform various activities which are useful and

beneficial for the society like quality goods at reasonable price, creating
employment opportunities and all other activities which bring prosperity
to the society.
c) Personal or individual objectives- Providing best opportunities for
the development and well being of employees working in the
organisation like training and development of workers, proper salaries,
healthy working conditions etc.
4. Importance of Management-
a) Management helps in achieving group goals- The task of manager
is to guide and to give a common direction to the various activities,
individuals and group efforts in achieving the overall goals of the
organisation.
b) Management increases efficiency- The aim of a manager is to reduce
cost and increase productivity through better planning, organising,
staffing, directing and controlling the activities of the organisation.
c) Management creates a dynamic organisation- Management helps
people adapt to these changes so that the organisation is able to
maintain its competitive edge.
d) Management health 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
organisational objective.
e) Management helps in the development of society- It helps in
development of the society by providing quality goods and services,
creating employment opportunities, incorporating new technologies and
always striving for growth and development.
5. Nature of Management-
a) Management as a SCIENCE- Science is described as a body
“representing knowledge gathered by observation and experiment,
critically tested, systematised and brought under general principles.”
 Science consists of principles which can be verified and is based on
cause and effect relation.
1) Systematised body of knowledge- Principles of science can be
understood because of availability of systematic and organised
knowledge.
2) Principles based on experimentation- Scientific principles are first
developed through observations and then tested through
repeated experimentation under control conditions.
3) Universal validity- Scientific principles have universal validity.
b) Management as a ART- Art is concerned with the practical
application of the theoretical knowledge. It is mainly concerned with the
application of knowledge and skill activity in different situations.
1) Existence of theoretical and practical knowledge- Art presupposes
the existence of certain theoretical knowledge in each field of
practice, it may be dance, public speaking, acting, music, etc.
Management is concerned with putting available knowledge into
practice so as to accomplish great determined goals.
2) Personalised application- Management is a practice rather than a
science. It is not knowledge but performance. The test of
management lies in skillful use of one’s technical knowledge and
proficiency to ensure maximum productivity and profitability at
the minimum cost.
3) Based on practice and creativity- As art develops through constant
practice, similarly, management also develops by practice. An
efficient manager can convert a challenge into an opportunity by
mobilising the available resources at his command to make the
best of a challenging situation.
c) Management as a PROFESSION- The rapid development of
businesses and the separation of ownership and management in the
corporate form of enterprises have contributed to the emergence of
management as a distinct profession.
1) Well defined body of knowledge- All professions are based
on a well defined body of knowledge that can be acquired
through instruction or training. It is based on tested and
experimented principles on various business situations.
 2) Restricted entry- The entry to profession is restricted through
an examination or through acquiring an educational/professional
degree.
3) Professional Association- All professions are associated to a
professional association which regulates entry, grants certificates
of practice formulates and enforces code of conduct.
4) Ethical code of conduct- All professions are bound by a code of
conduct which guides the behaviour of its member. The code of
conduct means rules and regulations framed to guide the
behaviour of professionals.
5) Service motive- The basic motive of a profession is to serve
their clients interest by rendering dedicated and committed
service. The task of a lawyer is to ensure that his client gets
justice.
6. Levels of Management-
a) Top Level Management- Board of Directors, Chairman, General
Manager, President, Vice President, Chief Executive Officer (CEO) Chief
Financial Officer (CFO) and Chief Operating Officer.
b) Middle Level Management- Purchase Manager, Sales Manager,
Marketing Manager, Executive Manager, Plant Superintendent,
Divisional Heads, Department head.
c) Lower Level Management(Operational Level Management or
Supervisory Level)- Supervisor, Superintendent, Foremen, Section
Officer, Clerk, Sub-Department Executive, Etc.
TOP LEVEL MIDDLE LEVEL LOWER LEVEL
Determining objectives Integration of policies to low Representing grievances of
level workers
Framing plans and policies Organising activities of Good working conditions
Department
Organising activities Recruitment and selection of Safety of workers
employees of their own
department
Assembling all the resources Motivating people to perform Helping middle level and
their best recruitment and selection
Welfare and survival of Cooperation with other Welcoming suggestion of
organisation departments workers
Liaison with outside world Implementing the plans Maintaining quality standards
framed by top level
Performance appraisal Boosting the morale of
workers
7. Functions of Management(POSDC)-
a) PLANNING- Planning is always the first function performed by every
manager. Planning refers to deciding in advance what to do, how to do,
when to do and who is going to do it. Planning is the base of all other
function of Management.
b) ORGANIZING- Organising is the management function of assigning the
duties, grouping tasks, establishing authority and allocating resources
required to carry out a specific plan.
c) STAFFING- Staffing simply means finding right people for the right jobs.
The very important aspect of management is to make sure that the right
people with the right qualifications are available at the right places and
time to accomplish the goals of the organisation.
d) DIRECTING- Directing involves leading, influencing and motivating
employees to perform the task assigned to them. This required
establishing an atmosphere that encourages employees to do their best.
Directing includes supervising, motivating, communicating and
leadership.
e) CONTROLLING- Controlling is a management function of monitoring
organisational performing towards the attainment of organisational
goals. In this function manager try to match the actual performance
with the planned performance.
8. Coordination- Coordination is a base or primary function of every
manager, Synchronization of efforts from the standpoint of the time and the
sequence of execute.
9. Coordination is known as essence of management-
a) Coordination is needed to perform all the functions of
Management- The process of coordination begins at planning stage
when top management plans for whole organisation.
b) Coordination is required at all level- Top level requires coordination
to integrate all the activities of organisation and lead the efforts of all
the individual involved common direction.
c) Coordination is the most important function of an organisation-
Any company which fails to coordinate activities cannot survive and run
successfully for long period of time.
10. Importance of coordination-
a) Size of the organisation- The need of coordination increases with the
increase in size of organisation because in large organisation there are
more number of person working, each individual has his own needs and
objective.
b) Functional differentiation- The function of an organisation are divide
into different department sections or divisions and each department
work individually by giving more importance to its objective.
c) Specialisation- In large and model organisation there is high degree of
specialisation and the specialist or experts feel that they are the only
qualified people and they always take right decision in the right
direction.
 CH-2
PRINCIPLES OF MANAGEMENT