Chapter One

Overview of Management
1.1 Introduction
Every human being has several needs and desires. But no individual can satisfy all his wants.
Therefore, people work together to meet their mutual needs which they cannot fulfill
individually. Moreover, man is a social being as he likes to live together with other people. It
is by working and living together in organized groups and institutions that people satisfy their
economic and social needs. As a result there are several types of groups, e.g., family, school,
government, army, a business firm, and the like. Such formal groups can achieve their goals
effectively only when the efforts of the people working in these groups are properly
coordinated and controlled. The task of getting results through others by coordinating their
efforts is known as management. Just as the mind coordinates and regulates all the activities
of a person, management coordinates and regulates the activities of various members of an
organization

1.2. Definition of management

It is very difficult to give a precise definition of the term 'management'. Different scholars
from different disciplines view and interpret management from their own angles. The
economists consider management as a resource like land, labor, capital and organization. The
bureaucrats look upon it as a system of authority to achieve business goals. The sociologists
consider managers as a part of the class elite in the society.
Some of the common definitions of management are the following:

1. Management is the process of coordinating all resources through the five functions of
planning, organizing, staffing, directing (leading) and controlling to achieve
organizational goals /desired objectives.
2. Management is the art of getting things done through other people by making the
atmosphere conducive for others.
3. Management is the utilization of scientifically derived principles to examine and improve
collective efforts /production.
Basically management is concerned with productivity. This implies effectiveness and
efficiency. Effectiveness-implies making the right decisions and successfully implementing
them-“Doing the right thing”. Efficiency means using resources wisely and in a cost effective
way i.e. “doing things right”

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Management can be seen as;
1. As an activity 4. team
2. process 5. an academic discipline
3. Economic resource 6. a group
1. As an activity
Management is an activity just like playing, studying, teaching etc. As an activity
management has been defined as the art of getting things done through the efforts of other
people. Management is a group activity wherein managers do to achieve the objectives of the
group. The activities of management are: interpersonal activities, decisional activities and
informative activities

2. Management as a Process

Management is considered a process because it involves a series of interrelated functions. It

consists of getting the objectives of an organization and taking steps to achieve objectives.
The management process includes planning, organizing, staffing, directing and controlling
functions. Management as a process has the following implications:
(i) Social Process: Management involves interactions among people. Goals can be achieved
only when relations between people are productive. Human factor is the most important part
of the management.
(ii) Integrated Process: Management brings human, physical and financial resources together
to put into effort. Management also integrates human efforts so as to maintain harmony
among them.
(iii) Continuous Process: Management involves continuous identifying and solving problems.
It is repeated every now and then till the goal is achieved.
(iv) Interactive process: Managerial functions are contained within each other. For example,
when a manager prepares plans, he is also laying down standards for control.
3. Management as an Economic resource: Like land, labor and capital, management is an
important factor of production. Management occupies the central place among productive
factors as it combines and coordinates all other resources. This is shown in Fig. 1.1.

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4. Management as a team: As a group of persons, management consists of all those who
have the responsibility of guiding and coordinating the efforts of other persons. These
persons are called as managers who operate at different levels of authority (top, middle,
operating). Some of these managers have ownership stake in their firms while others have
become managers by virtue of their training and experience. Civil servants and defence per-
sonnel who manage public sector undertakings are also part of the management team. As a
group managers have become an elite class in society occupying positions with enormous
power and prestige.

5. Management as an academic discipline; Management has emerged as a specialized

branch of knowledge. It comprises principles and practices for effective management of
organizations. Management has become as very popular field of study as is evident from the
great rush for admission into institutes of management. Management offers a very rewarding
and challenging career.

6. Management as a group; Management means the group of persons occupying managerial

positions. It refers to all those individuals who perform managerial functions. All the
managers, e.g., chief executive (managing director), departmental heads, supervisors and so
on are collectively known as management.

1.3. Nature and Characteristics of Management

The salient features which highlight the nature of management are as follows:
(i) Management is goal-oriented: Management is not an end in itself. It is a means to
achieve certain goals. Management has no justification to exist without goals. Management
goals are called group goals or organizational goals. The basic goal of management is to
ensure efficiency and economy in the utilization of human, physical and financial resources.

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The success of management is measured by the extent to which the established goals are
achieved. Thus, management is purposeful.
(ii) Management is universal: Management is an essential element of every organized
activity irrespective of the size or type of activity.
(iii) Management is a continuous process: The cycle of management continues to operate
so long as there is organized action for the achievement of group goals. Management is an
on going process and is also a never ending process. Because every activity starts with
planning and if any deviation takes place on the on-going process, planning sought again.
Management is dynamic and the cycle continues.
(iv) Management is multi-disciplinary: Management techniques, principles and theories are
drawn from other disciplines such as engineering, anthropology, sociology and psychology. It
depends upon wide knowledge and practices derived from various disciplines. Management
as a field of study has grown, taking the help of so many other disciplines.
(v). Management is intangible force: Management is evidenced by the results of its efforts
through others. Management is an unseen or invisible force. It cannot be seen, but its
presence can be felt in the form of results in every type of organization. Managers arranges
the human and other resources and uses these resources according to the priority of objective
through their functions. The functions performed to achieve’ these objectives can be felt and
unseen. Thus, feeling of management is result oriented.
(vi). Management is situational: There is no best way of doing things. The application of
knowledge to realistic in order to attain results. A manager must have taken into account
conditions and situation to solve a particular problem. A problem could be solved by
keeping an eye on the situation. Management is situational or contingent.
(vii).Management is goal oriented: Management co-ordination is the efforts of human
resource by employing other resources of the organization to achieve the stated objective:
Effort is directed towards the accomplishment of pre-determined goals. So, all activities of
management are goal oriented. The success of every activity of management is measured by
the extent to which the organizational goals are achieved. Objectives or goals provide
justification for the existence of an organization
(viii).Management is an integrative force: The essence of management lies in the
integration of human and other resources to achieve the stated objectives. Management
integrates the efforts and coordinate efforts into a team. Management is a unifying force and
applies this integrative force to achieve the desired objectives of the organization.

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(ix).Management is a system of authority: Management provides the direction of every
activity of an organization. Management forms a system of authority or a hierarchy of
command to control the activities and give smooth direction. Authority enables the managers
to perform their functions effectively. Management forms a chain of command and authority
and is delegated to perform the task effectively.
(x).Management is a science or an art: Management has a systematic body of knowledge
as well as practical application of such knowledge. Management consists of well-defined
concepts, principles and techniques which have wide application. So, it is treated as a
science. The application of these concepts and practices requires a lot of skill and knowledge
on the part of the manager. So, this is viewed as an art. Management is both a science and an
art.
(xi) Management is an economic resource: Management is an important economic
resource with land, labor and capital. Efficient management is the most critical input in the
success of any organized group activity as it is the force which assembles and integrates the
resources of the organization properly. Thus, management is an organization.
(xii) Management is a group and social phenomena: Management involves the use of
group effort in the pursuit of common objectives. Group activity is found in all areas of
human activity, and it is the integrative efforts of human being that make possible for the
organization to achieve desired objectives. Management is done by people through people
and for the people. It is a social process also because it is concerned with interpersonal
relationship. It is the pervasiveness of the human element which gives management its
special character as social phenomena.

1.4. Managerial functions

Regardless of the type of firm and the organization level, all managers perform certain basic
functions .This managerial functions are planning, organizing, staffing, directing/leading and
controlling.
(i) Planning: Planning involves selecting mission and objectives and the actions to achieve
them; it requires decision-making that is, choosing further course of action from among
alternatives. It is the determination of a course of action to achieve the desired results.
Planning is a pervasive, continuous and never ending activity. It leads to move effective and
faster achievements in any organization and enhances the ability of the organization to adopt
to further eventualities. The planning involves selection of: (a) objectives; (b) policies; (c)
procedures; and (d) programmes.
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This also involves taking the decision-about choosing the best one out of several alternatives
available to the management. Planning involves the determination of future course of action,
that is, why in action, what is to be done, how to be done and when to be done. The answers
to all such questions constitute planning functions. The planning function involves the
following steps:
 Determination of the objectives,
 Searching of alternative courses of action,
 Evaluation of alternatives,
 Formulation of a plan, policies and procedures,
 Preparation of concrete formation of plan on the basis of schedules programmes &
budgets
(ii) Organizing: is the part of management that involves establishing an internal structure of
roles for the people to fill in an organization. Organization is considered as a process of
integrating, balancing, unifying and coordinating activities of the employees for the
accomplishment of pre-determined activities. Organization helps in establishing
relationships among the members of the enterprise. The relationship is created in terms
of authority and responsibility. "Organization involves identification and grouping
among the individuals and creating authority and responsibility relationship among them
for the accomplishment of organizational objectives." Thus organization involves the
following steps:
1. Identification of activities
2. Grouping of activities,
3. Assignment of work,
4. Obligation of authority to subordinate,
5. Establishing relationship through the organization.
Organizational functions contribute to the efficiency of the organization through employing
human and other resources of the organization.
(iii) Staffing: Staffing involves managing the process created by organization process.
Staffing involves filling and keeping filled the positions in the organization structure. This is
done by identifying work-force requirements; inventorying the people available, manpower
planning and recruiting, selecting, placing, promoting, appraising, planning the careers of,
compensation, and training or otherwise developing both candidates and current work force
so that tasks are accomplished effectively and efficiently. The manager performs the duty of

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job analysis, job description, appraisal of efficiency, etc, which come under the staffing
function. Since every manager is concerned with management of human resource, he must
perform the staffing function. In most of the organizations, personnel department is set up to
provide the necessary help to managers in performing their staffing functions efficiently."The
managerial function of staffing involves managing the organization structure through proper
and effective selection appraisal, and development of personnel to fill the roles designed into
the structure.
(iv) Directing: Direction may be defined as a function which is related with instructing,
guiding and inspiring human factor in the organization to achieve organizational objectives. It
is not only a process of direction, but it includes the process of guiding and inspiring them.
'Direction consists of the process and techniques utilizing in issuing instructions and making
certain that operations are created out as originally planned. Direction functions consist of
three elements: (i) Communication, (ii) Leadership and supervision, (iii) Motivation

"Directing involves determining the course, giving orders and instructions and providing
dynamic leadership". Simply direction involves issuing instructions to the subordinates,
guiding, motivating and supervising them.

(v) Controlling: Controlling deals with the measurement and correction of the performance
of subordinates against the pre-determined standards. . Controlling is measuring & correcting
organizational performance to ensure events conform to plans. It involves measuring
performance against goals and plans, showing where deviations from standards exist, and
helping to correct them. In short, controlling facilitates the accomplishment of plans. Control
activities generally relate to the measurement of achievement. Control process comprises:
i) Fixing appropriate standard for measuring work performance;
(ii) Comparing actual and planned work;
(iii) Finding variances between two and reasons for the variance; and
(iv) Taking corrective actions :
Control keeps a check on other functions for ensuring successful functioning of
management. It brings to light all bottlenecks to move performance and operates as a
straight pointer to the needs of the situation. A manager has to perform his functions in the
organization, whatever the level of manager or the objective of the organization is.

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1.5 Levels of management

Every organization, irrespective of its size, has many managerial positions in its structure.
These positions are created through the process of delegation of authority from top to lower
levels. Each position is marked by authority, responsibility, functions, roles and
relationships. The contents and nature vary, depending in the level at which the position lies.
As one moves upward in the organization, the managerial position plays an important role,
larger the contribution, greater the authority and higher the responsibility. These managerial
positions lying in the chain of command may be classified into various groups or levels of
management.

Broadly speaking, an organization has two important levels of management, namely

functional and operative. The functional level is concerned with the process of determining
primary objectives, formulating basic policies, making vital decisions and controlling and
coordinating activities of personnel. The operative level of management is related to
implementation of plans and decisions, and pursuit of basic policies for achieving the
objectives of the organization.

Generally, the levels of management consisting of various managerial positions in the

structure of an organization differ from one organization to another, depending on the size of
business activity, philosophy of management, span of control and other related factors. But,
in a joint stock company, for conducting its business efficiently, managerial personnel may
be placed in three levels, that is, top, middle and lower or supervisory level.

1. Top level management

The top level management is generally occupied by the ownership group. In a joint stock
company, equity shareholders are the real owners of the company. Thus, they elect their
representatives as directors; form a board, known as board of directors, which constitutes the
top level of management. Besides the board, other functionaries including managing director,
general manager or Chief executive to help directors, are included in this level. It is the
highest level in the managerial hierarchy and the ultimate source of authority in the
organization. The top level managers are accountable to the owners and responsible for
overall management of the organization. The major functions of the top level management
are as under:

(i) To make a corporate plan for the entire organization covering all areas of operations.

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(ii) To decide upon the matters which are vital for the survival, profitability and growth of the
organization such as introduction of new product, shifting to new technology and opening
new plant
(iii) To decide corporate goals
(iv) To decide structure of organization, creating various positions there in
(v) To exercise overall managerial control through the process of reviewing over all
financial and operating results
(vi) To make decisions regarding disposal and distribution of profits
(vii) To select key officials and executives for the company
(vii) To coordinate various sub-systems of the organization
(viii) To maintain liaison with outside parties having a stake in business such as government,
trade union and trade associations etc.
(ix) To formulate basic policies and providing direction and leadership to the organization as
a whole.
2. Middle level management

In order to fill up the gap which exists between functional and operative level, some
managerial positions are created at the middle level of management. Middle level
management consists of departmental managers, deputy managers, foreman and
administrative officers etc. These executives are mainly concerned with the over all
functioning of their respective departments. They act as a link between top and lower level
managers. The activities of middle level managers’ centers around determining departmental
goals and devising ways and means for accomplishing them.
The main functions performed by these managers are as under:

 To prepare departmental plan covering all activities of the department within the basic
framework of the corporate plan.

 To establish departmental goals and to decide upon various ways and means for
achieving these goals to contribute to organizational goals.
 To perform all other managerial functions with regard to departmental activities for
securing smooth functioning of the entire department.
 To issue detailed orders and instructions to lower level managers and coordinate the
activities of various work units at lower level. Middle level managers explain and
interpret policy decisions made at the top level to lower level managers.
3. Lower level or supervisory level management

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 Lower-level management is known as supervisory management, because it is concerned
mainly with personal oversight and direction of operative employees. It consists of factory
supervisors, superintendents, foremen, sales supervisors, accounts officers etc. They directly
guide and control the performance of rank and file workers. They issue orders and
instructions and guide day to-day activities. They also represent the grievances of the workers
to the higher levels of management.
Supervisory management performs the following functions:
 Planning of day to day work
 Assignment of jobs and issuing orders and instructions (iii) Supervising and
guiding workers
 Maintaining close personal contacts with workers to ensure discipline and team-work
 Evaluating operating performance
 Sending reports and statements to higher authorities
 Communicating the grievances and suggestions of workers to higher authorities.

1.6. 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 specialized knowledge
and proficiency in the mechanics of particular job. Ability in programming and operating
computers is, for instance, a technical skill. There are two things a manager should understand
about technical skills. In the first place, he must know which skills should be employed in his
particular enterprise and be familiar enough with their potentiality to ask discerning questions
of his technical advisors. Secondly a manager must understand both the role of each skill
employed and interrelations between the skills.

(ii) Human Skills

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Human skills consist 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. Such skills require a sense of feeling for others and capacity to look at
things from others point of view. Human skills are reflected in the way a manager perceives
his superiors, subordinates and peers. An awareness of the importance of human skills should
be part of a manager’s orientation and such skills should be developed throughout the career.
While technical skills involve mastery of 'things' human skills are concerned with
understanding of 'People'.

(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 visualize the entire picture or to consider
a situation in its totality. Such skills help the manager to conceptualize the environment, to
analyze the forces working in a situation and take a broad and farsighted view of the
organization. Conceptual skills also include the competence to understand a problem in all its
aspects and to use original thinking in solving the problem. Such competence is necessary for
rational decision-making.

Thus technical skills deal with jobs, human skills with persons and conceptual skills with
ideas. These types of skills are interrelated. But the proportion or relative significance of
these skills varies with the level of management as shown in the figure1.2.

Fig. 2
Managerial Skills
Technical skills are most important at the supervisory or operating level where a close
understanding of job techniques is necessary to guide workers. As one moves up the
management hierarchy, technical skills become less important. Higher level managers’ deal
with subordinate managers and specialized technical knowledge is comparatively less
important for them. Conceptual skills are very important for top management in formulating
long-range plans, making broad policy decisions, and relating the business enterprise to its
industry and the economy. Thus, the relative importance of conceptual skills increases as we

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move to higher levels of management. This would be self evident as management is the
process of getting things done through people. Human skills are equally important at all
levels of management because every manager has to deal with people.

1.7 Management Roles

Management is a critical variable and the. Success is dependent upon the managerial talent
and abilities of managers. It is the manager's responsibility to get physical resources utilized
through employees effectively and efficiently for achieving pre-determined objectives. Every
manager has to perform certain basic functions and play his role to get better results. The role
of the manager is identified in terms of his position and pattern of behavior which he is
expected to adopt in relation to his subordinates, peers and other superiors. A role consists of
the behavior patterns expected of a manager within an organization or a functional unit. A
manager moves up vertically to a higher position as his work-load increases and job contents
change. Henry Mintzberg1 conducted a comprehensive survey on the subject of managerial
roles and integrated his findings with the results of a study of five practicing Chief
Executives. He identified ten basic roles performed by managers at all levels from foreman to
chief executives and clarified into three, heads: (i) Interpersonal, (ii) informational, and (iii)
Decisional. Mintzberg identified the basic of study of behavior of executives at work. The ten
managerial roles are given below:

(A) Interpersonal roles: Managers need to interact with subordinates to get things done by
them, and also communicates with superiors, peers, leaders, customers, government and other
agencies whose interest is involved in the business. Managers interact with the people in the
organization and playas an interpersonal role to run the organization smoothly. Interpersonal
role helps to establish effective and congenial interpersonal relationships and personal rapport
with the parties. Such role involves the following three types:

(1) Figurehead Roles

Manager performs symbolic duties by the status of his office, to carry out a variety of
duties. A manager assumes this role because of the position occupied. Manager works in a
line of authority. As a symbol of formal authority, he performs various ceremonial duties,
e.g. making speech, bestowing honors, welcoming officials and signing various
documents.

(2) Leadership Roles.

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The most important role of the manager is to lead, guide and motivate subordinates and get
relationship with these subordinates. The leadership qualities of the manager help him in
influencing the working behaviors of subordinates, contributing to a higher level of
efficiency. The manager motivates the subordinates to achieve the related objectives. He sets
an example and legitimizes the powers of the subordinates. .

(3) Liaison Role

It describes manager’s relationship with the outsiders. The manager serves as a liaison
between the organization and outside agencies, i.e., customers, suppliers, community and
others. A manager has the responsibility to maintain a positive relationship with the outside
agencies. The managers have to undertake liaison to assess the external environment to
enable the organization to cope with it. The managers are indulged in power politics to
negotiate and compromise with internal and external powers.

(B) Informational role

Receiving and transmitting information are integral aspects of a manager's job. Manager
needs information to take decisions and pass necessary orders to others to facilitate their
tasks. To preserve and protect the identity of an. organization and to secure its smooth
functioning, the manager has to scan the external environment on a regular basis and to deal
with outside parties effectively for which he has to gather a lot of relevant information on
various matters concerning the organization.

(i) Monitor Role

The manager initiates and deals with outsiders and insiders and scans the external
environment constantly to get information. It implies seeking and receiving information
about his organization and external events. A manager observes, collects and reviews data on
the meeting of standards. He receives information usually through the networks of contacts.

(ii) Disseminator role

It involves transmitting information and judgments to the members of the organization. The
manger transmits selected information which he has compiled through the role of monitor to
his subordinates. He keeps them well informed regarding any change in the process,
structure, policies and other plans of the organization. The information is disseminated

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among the subordinates by him through formal or informal meetings, memorandums, orders
and instructions issued time to time. It is the manager's responsibility to ensure that
subordinates have the information they need to carry out their duties.

(iii) Spokesperson Role

A manager speaks for his organization. He lobbies and defends his enterprise. Managers act
as spokespersons or representatives of the organization. He keeps outside parties well-
informed on behalf of the organization. He negotiates and enters into compromise with
internal and external parties. They transmit information to people outside their units. They
represent the organization in dealing with outside agencies. In this role, the managers also
speak for their subordinates to the superiors.

(C) Decisional roles

Information is the basic input in decision-making for managers. Managers get information
which they can use for taking decisions and solving problems. . Managers take decision on
the basis of information and get better results.

(i) Entrepreneur Role

It involves initiating change or acting as a change agent. Managers have the responsibility
to improve the overall functioning of the organization. They act as an entrepreneur, take
bold decisions, .seek better results from subordinates, initiates required changes,
implementing them to get better result. He looks' for problems and opportunities for
bringing about changes in his organization and initiates steps to deal with them. He is thus
an initiator and innovator.

(ii) Disturbance Handler Role

Managers handle the problem and crisis properly. This refers to taking charge when the
organization faces a problem or crisis. A manager handles conflicts, complaints and
competitive action. It is only by applying managerial knowledge and playing the role of
conflict handlers, thinking analytically and acting practically.

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(iii) Resource Allocator Role

To manage the organization, all resources are mobilized and utilized efficiently by
managers for the accomplishment of pre-determined objectives. They have to play the role
of resource allocator. The manager decides who will get what' in the organization. He
schedules his own time according to his priorities; he designs his organization, decides who
will do what; and allocates auth take all important decisions.

(iv) Negotiator Role

As a negotiator, a manager bargains with suppliers, dealers, trade unions, etc. Manager
takes charge whenever his organization enters into crucial negotiations with other parties.
Managers work on behalf of the organization unit, and subordinates; not only as a
spokesperson but as a negotiator disputes arise in the organization, the managers take up the
role of indicator, negotiator and arbitrator.

All these roles are important for managers. Generally, interpersonal roles are more
prominent at the top level of management. At the middle, informational roles are more
common. Decisional roles are significantly at the top and lower levels of management.

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