UNIT I

Concept of management
“Management is the art of getting things done through and with people in formally organized
groups.”- Harold Koontz
It involves making decisions, setting strategies, allocating resources and overseeing the
efforts of individuals and teams to ensure the efficient and effective achievement of desired
outcomes.
Management can be applied in various settings like businesses, non-profit organizations,
government agencies, educational institutions, healthcare facilities and many more. Effective
management is crucial for achieving organizational objectives, optimizing resources and
enhancing productivity in a competitive environment.
Here are various categories that describe management in multiple contexts.
Management as a Process
As a process, management aims at increasing productivity and efficiency in an organization.
The purpose is to strengthen the client base, improve the knowledge, skills and capacity of
employees to achieve particular targets and goals. Management is also a never-ending
process that brings different teams and individuals together. Everyone works in harmony to
achieve common objectives.
Management as an Activity
As an activity, management looks at the daily tasks and accomplishments of an employee. It
helps them prioritize activities and monitor progress, which further helps them grow in their
roles. It prevents miscommunication and task repetition as everyone is aware of their roles
and responsibilities. There is clarity and accountability—the cornerstones of business growth
and success.
Management as a Profession
Management as a profession has been popularized by courses and academic institutions
across the globe. Several organizations prefer individuals with a Master of Business
Administration (MBA) degree. Specialized knowledge (such as an MBA degree) provides an
individual with a competitive edge, making them more desirable for managerial roles.
Therefore, management has evolved as a body of knowledge that continues to solve various
workplace problems.

Definitions of management
Many management experts have tried to define management. But, no definition of
management has been universally accepted. Let us discuss some of the leading definitions of
management:

Peter F. Drucker defines, “management is an organ; organs can be described and defined only
through their functions”.

According to Terry, “Management is not people; it is an activity like walking, reading,

swimming or running. People who perform Management can be designated as members,
members of Management or executive leaders.”

Ralph C. Davis has defined Management as, “Management is the function of executive
leadership anywhere.”

According to McFarland, “Management is defined for conceptual, theoretical and analytical

purposes as that process by which managers create, direct, maintain and operate purposive
organization through systematic, co-ordinated co-operative human effort.”
Henry Fayol, “To mange is to forecast and plan, to organize, to compound, to co-ordinate and
to control.” Harold Koontz says, “Management is the art of getting things done through and
within formally organized group.”

William Spriegal, “Management is that function of an enterprise which concerns itself with
direction and control of the various activities to attain business objectives. Management is
essentially an executive function; it deals with the active direction of the human effort.”

Kimball and Kimball, “Management embraces all duties and functions that pertain to the
initiation of an enterprise, its financing, the establishment of all major policies, the provision
of all necessary equipment, the outlining of the general form of organization under which the
enterprise is to operate and the selection of the principal officers.”

Sir Charles Reynold, “Management is the process of getting things done through the agency
of a community. The functions of management are the handling of community with a view of
fulfilling the purposes for which it exists.”

Classical Definition: Management can be defined as the process of planning, organizing,

leading, and controlling resources (people, finances, materials, and information) to achieve
organizational goals efficiently and effectively. This definition emphasizes the functions of
management and their role in achieving objectives.

Modern Definition: Management is the art and science of coordinating and supervising the
efforts of individuals and groups within an organization to achieve its objectives. This
definition underscores the interpersonal and leadership aspects of management.

Objectives of Management

The objectives of management are the fundamental goals and purposes that guide the actions,
decisions and efforts of managers within an organization. These objectives are designed to
ensure the effective and efficient functioning of the organization while achieving its broader
mission and vision. The specific objectives of management can vary based on the
organization's type, industry, size and other contextual factors. Some common objectives of
management are:

1. Goal Achievement: The primary objective of management is to help the organization

achieve its goals. This might involve increasing profitability, expanding market share,
launching new products or achieving specific growth targets.
2. Resource Optimization: Management aims to efficiently and effectively allocate and
utilize resources including human resources, financial capital, technology and materials.
This objective ensures that resources are not wasted and are used in ways that generate
the best results.
3. Maximizing Productivity: Management seeks to enhance productivity by improving
processes, streamlining workflows and optimizing resource allocation. Increased
productivity often leads to higher profitability and competitiveness.
4. Adaptation to Change: Management helps organizations adapt to changing internal and
external environments. This involves monitoring industry trends, technological
advancements, market shifts and consumer preferences to make timely adjustments.
5. Innovation and Creativity: Management fosters an environment that encourages
innovation, creativity and the generation of new ideas. This objective helps organizations
stay competitive and responsive to market demands.
6. Quality and Customer Satisfaction: Management focuses on maintaining and
improving product quality to ensure customer satisfaction. Satisfied customers lead to
repeat business, positive word-of-mouth, and a strong reputation.
7. Employee Development and Engagement: Management aims to develop and engage
employees through training, career growth opportunities and a positive work
environment. Engaged employees are more productive and contribute to organizational
success.
8. Risk Management: Management is responsible for identifying and mitigating risks that
could impact the organization's objectives. This involves making informed decisions and
implementing strategies to minimize potential negative outcomes.
9. Long-Term Sustainability: Management aims to ensure the organization's long-term
sustainability by making decisions that balance short-term gains with the preservation of
resources and the organization's ability to thrive over time.
10. Financial Performance: Management seeks to achieve financial stability, profitability
and healthy financial ratios that enable the organizations to reinvest, grow, and fulfil its
commitments.
11. Stakeholder Management: Management works to build and maintain positive
relationships with stakeholders including shareholders, employees, customers, suppliers,
and the community.
12. Compliance: Management ensures that the organization operates within legal and
regulatory frameworks, adhering to laws and regulations relevant to its industry.
13. Ethical Conduct: Management upholds ethical standards and ensures that organizational
activities are conducted with integrity, honesty and social responsibility.
14. Conflict Resolution: Management seeks to address conflicts and disputes among
employees, teams or departments to maintain a harmonious work atmosphere and
prevent disruptions.
15. Effective Communication: Management aims to establish clear lines of communication
throughout the organization to facilitate information sharing, collaboration and decision-
making.

Functions of management/Management Process

The term "functions of management" refers to the fundamental activities and responsibilities
that managers perform to ensure the effective and efficient operations of an organization.
These functions provide a structured framework for managing people, resources and
processes to achieve the organization's goals and objectives. The functions of management
encompass several key activities that managers engage in to facilitate the success of the
organization. The below management thinkers define various management function.
Management functions by Henry Fayol

Henri Fayol, a management theorist, outlined five key management functions that are often
referred to as the "functions of management." These functions provide a systematic approach
to understanding the core activities that managers perform to achieve organizational goals.
Fayol's management functions are:

1. Planning: Planning involves defining goals, setting objectives and developing strategies
to achieve them. It's about deciding in advance what needs to be done, how it will be
done and the resources required. Planning provides direction and helps managers to
anticipate potential challenges.
2. Organizing: Organizing is the process of arranging resources, tasks and people to ensure
that activities are carried out effectively. This function involves creating a structure,
defining roles and responsibilities and establishing clear lines of authority and
communication.
3. Commanding (Leading): Commanding also referred to as leading, focuses on guiding
and motivating employees to achieve organizational objectives. Managers provide
direction, set expectations and inspire individuals and teams to work collaboratively and
productively.
4. Coordinating: Coordinating involves harmonizing the efforts of different individuals,
departments and teams to ensure that they work together towards common goals.
Effective coordination minimizes conflicts, maximizes efficiency and promotes synergy
among various parts of the organization.
5. Controlling: Controlling is the process of monitoring ongoing activities to ensure that
they are in line with the established plans and objectives. If deviations occur, corrective
actions are taken to bring performance back on track. Controlling helps maintain
organizational effectiveness and efficiency.

Management functions by Luther Gulick

Luther Gulick a public administration expert, developed a concept called "POSDCORB,"

which represents the essential functions of management in a government or administrative
context. Each letter in "POSDCoRB " stands for a different function.

1. Planning: This involves setting organizational goals, defining strategies to achieve those
goals and determining the necessary resources to execute those strategies. Planning helps
managers anticipate future challenges and opportunities.
2. Organizing: Organizing is the process of designing the structure of an organization. This
includes establishing roles, responsibilities and relationships among employees.
Organizing also entails creating systems and processes for efficient workflow.
3. Staffing: Staffing involves selecting, training, developing and retiring of employees to
fill various roles within the organization. Managers must ensure that the right people are
in the right positions to achieve organizational objectives.
4. Directing: Directing refers to the process of guiding and supervising employees' work to
achieve the organization's goals. This includes providing instructions, motivation and
leadership to ensure that tasks are performed effectively.
5. Coordinating: Coordinating involves harmonizing the efforts of different departments,
teams and individuals to ensure that their activities align with the overall goals of the
organization. It helps prevent duplication of efforts and promotes collaboration.
6. Reporting: Reporting includes keeping track of progress and results as well as
communicating this information to stakeholders. Managers need to generate regular
reports to provide transparency and accountability.
7. Budgeting: Budgeting involves allocating resources such as finance , time and materials
to various activities and projects within the organization. It helps ensure that resources
are used efficiently and effectively.

Management functions by Koontz and O’Donnell

1. Planning: This function involves setting goals, defining strategies, and determining the
course of action needed to achieve objectives. Planning includes decision-making, setting
priorities, and allocating resources effectively.
2. Organizing: Organizing entails structuring the resources and tasks within the
organization to ensure the effective implementation of plans. This includes establishing
roles and responsibilities, creating organizational charts, and designing workflows.
3. Staffing: Staffing involves recruiting, selecting, training, and developing employees to
ensure that the organization has the right people in the right roles. This function is
integral to achieving organizational objectives through a capable workforce.
4. Directing: It involves guiding, motivating, and inspiring employees to work towards the
achievement of organizational goals. Managers provide direction, communicate
expectations, and foster a positive work environment.
5. Controlling: Controlling focuses on monitoring activities, evaluating performance, and
comparing actual results with planned objectives. If deviations occur, corrective actions
are taken to ensure that the organization stays on track.

Levels of Management
The term "level of management" refers to the hierarchical positions and roles within an
organization that are responsible for different scopes of decision-making, authority and
responsibilities. In any organization there are typically multiple layers or levels of
management that are designed to facilitate the efficient functioning of the organization and
the achievement of its goals. These levels of management are often categorized based on the
nature and extent of their responsibilities.
The concept of management levels helps in clarifying the distribution of responsibilities,
authority and decision-making within an organization's hierarchy. Each level of management
serves a distinct purpose and contributes to the overall functioning of the organization.
Effective coordination and communication between these levels are crucial for the
organization's success. The three primary levels of management are:
 1. Top-Level Management (Strategic Management):
o Top-level managers are at the highest level of the organizational hierarchy.
o They are responsible for setting the overall direction, vision and long-term goals
of the organization.
o Top-level managers make decisions that have a broad impact on the entire
organization and their focus is on strategic planning and decision-making.
o Examples of top-level managers include CEOs, presidents, chief officers (such as
Chief Financial Officer or Chief Marketing Officer) and members of the board of
directors.

2. Middle-Level Management (Tactical Management):

o Middle level managers are situated between top-level and lower-level managers.
o They are responsible for implementing the strategies and plans developed by top-
level management.
o Middle-level managers oversee specific departments, divisions or units and
ensure that their operations are aligned with the organization's goals.
o Their focus is on translating strategic goals into actionable plans, allocating
resources and coordinating activities.
o Examples of middle-level managers include department heads, regional managers
and divisional managers.

3. Lower-Level Management (Operational Management):

o Lower-level managers are closest to the day-to-day operations of the
organization.
o They are responsible for supervising and directing the work of individual
employees or small teams.
o Operational managers focus on executing tasks, processes and projects to achieve
specific objectives set by higher-level management.
o Their responsibilities include managing resources, maintaining quality and
ensuring efficiency.
o Examples of lower-level managers include team leaders, supervisors and shift
managers.

Comparison of three management level

Managerial functions at different levels

Managerial functions are the core activities that managers perform to ensure the efficient and
effective operation of an organization. These functions are generally categorized into four
key areas: planning, organizing, leading, and controlling. These functions are carried out at
different levels of management within an organization: top-level management, middle-level
management, and lower-level management as follows:
1. Top-Level Management: Top-level managers are responsible for making strategic
decisions that affect the overall direction and goals of the organization. They focus on long-
term planning and establishing organizational policies. The key managerial functions at this
level include:

• Planning: Top-level managers engage in strategic planning, setting the overall goals and
objectives of the organization. They analyze market trends, competition and internal
strengths and weaknesses to make informed decisions.
• Organizing: They design the organizational structure, allocate resources and establish
lines of authority and communication. They ensure that the organization's structure
supports its strategic goals.
• Leading: Top-level managers provide leadership by articulating the organization's vision
and mission to employees. They create a strong corporate culture and motivate the entire
organization to work toward common objectives.
• Controlling: These managers monitor the overall performance of the organization
against strategic goals. They use key performance indicators (KPIs) to assess progress
and take corrective actions when necessary.

2. Middle-Level Management: Middle-level managers bridge the gap between top-level

management and lower-level employees. They focus on implementing the strategies and
policies set by top management. Their key managerial functions include:

• Planning: Middle-level managers translate the strategic goals into operational plans for
their departments or units. They allocate resources and set departmental objectives
aligned with the organization's goals.
• Organizing: They organize resources, allocate tasks and coordinate the activities of
different teams or divisions within the organization. They ensure that each department
functions efficiently.
• Leading: Middle managers lead and guide their teams toward achieving the
departmental goals. They provide direction, support, and feedback to employees,
fostering a productive work environment.
• Controlling: Middle managers monitor the progress of their departments against the
established plans and objectives. They ensure that operations are on track and take
corrective actions if deviations occur.

3. Lower-Level Management: Lower-level managers are responsible for overseeing the

day-to-day operations and implementing the plans set by middle-level managers. Their key
managerial functions include:
 • Planning: Lower-level managers develop detailed plans to achieve the objectives set by
middle management. They create schedules, assign tasks and allocate resources within
their specific areas.
• Organizing: They organize work schedules, assign tasks to employees and ensure that
resources are used efficiently to accomplish the tasks.
• Leading: Lower-level managers lead and supervise front-line employees. They provide
guidance, training and support to ensure that tasks are carried out effectively.
• Controlling: They monitor the performance of their teams in terms of quality,
productivity and adherence to established procedures. They address any issues or
challenges that arise during daily operations.

Organizational level and Managerial skills

Managerial skills are the abilities and competencies that managers use to carry out their
responsibilities and tasks effectively. These skills are often categorized into three main
categories: technical skills, interpersonal skills/Human Skills and conceptual skills. The
importance of these skills can vary at different organizational levels.

1. Top-Level Management:
o Conceptual Skills: At the top level, managers need strong conceptual skills to
understand the organization's environment, develop long-term strategies and make
complex decisions that shape the organization's direction.
o Interpersonal Skills: Top-level managers interact with other top executives,
stakeholders and external partners. They need strong interpersonal skills to build
relationships, negotiate and communicate the organization's vision and strategy
effectively.
o Technical Skills: While less emphasized at this level, some degree of technical
knowledge is still important for understanding the industry, market trends and the
organization's core functions.
2. Middle-Level Management:
o Conceptual Skills: Middle managers need conceptual skills to translate the
organization's strategic goals into actionable plans for their departments. They
must understand how their department fits into the bigger picture.
o Interpersonal Skills: Middle managers work as liaisons between top-level
managers and lower-level employees. They need strong interpersonal skills to
communicate goals, motivate teams and resolve conflicts.
o Technical Skills: Middle managers require more technical skills than top-level
managers. They must have a deep understanding of the specific functions within
 their department as they are responsible for overseeing the execution of plans and
projects.
3. Lower-Level Management:
o Conceptual Skills: While less critical at this level, some degree of conceptual
understanding is still necessary for lower-level managers to see how their tasks
contribute to the overall departmental goals.
o Interpersonal Skills: Lower-level managers work directly with employees. They
need excellent interpersonal skills to provide clear instructions, offer guidance and
address concerns.
o Technical Skills: Technical skills are highly important for lower-level managers.
They need a strong grasp of the day-to-day tasks and processes within their
department to ensure that operations run smoothly.

Importance/Significance/Need of management

• It helps in Achieving group goals - It arranges, organizes and integrates the factors of
production in effective manner to achieve goals. It directs group efforts towards
achievement of pre-determined goals. By defining objective of organization clearly there
would be no wastage of time, money and effort. Management converts disorganized
resources of men, machines, money etc. into useful enterprise. These resources are
coordinated, directed and controlled in such a manner that enterprise work towards
attainment of goals.
• Optimum utilization of resources - Management utilizes all the physical & human
resources productively. This leads to efficacy in management. Management provides
maximum utilization of scarce resources by selecting its best possible alternate use in
industry from out of various uses. It makes use of experts, professional and these services
leads to use of their skills, knowledge and proper utilization and avoids wastage. If
employees and machines are producing its maximum there is no under employment of
any resources.
• Reduces costs - It gets maximum results through minimum input by proper planning and
by using minimum input & getting maximum output. Management uses physical, human
and financial resources in such a manner which results in best combination. This helps in
cost reduction.
• Establishes sound organization - No overlapping of efforts (smooth and coordinated
functions). To establish sound organizational structure is one of the objective of
management which is in tune with objective of organization and for fulfilment of this, it
establishes effective authority & responsibility relationship i.e. who is accountable to
whom, who can give instructions to whom, who are superiors & who are subordinates.
Management fills up various positions with right persons, having right skills, training and
qualification. All jobs should be cleared to everyone.
• Establishes equilibrium - It enables the organization to survive in changing
environment. It keeps in touch with the changing environment. With the change is
external environment, the initial co-ordination of organization must be changed. So it
adapts organization to changing demand of market/changing needs of societies. It is
responsible for growth and survival of organization.
• Essentials for prosperity of society - Efficient management leads to better economical
production which helps in turn to increase the welfare of people. Good management
makes a difficult task easier by avoiding wastage of scarce resource. It improves standard
of living. It increases the profit which is beneficial to business and society will get
maximum output at minimum cost by creating employment opportunities which generate
income in hands. Organization comes with new products and researches beneficial for
society.
 Characteristics/Features of management

• Goal-oriented process
An essential aspect of management is to combine individual efforts and direct them towards
achieving organisational goals. These goals differ from organisation to organisation. For
example, an organisation can have a profit motive whereas a social work organisation might
have a goal of eradicating illiteracy among children. Management recognises these goals and
aims to fulfil them.

• Pervasive
Management is a requirement and essential for the functioning of all kinds of organisations-
social, economic or political. Without management, the processes of an organisation would
be chaotic and unordered. Further, it is equally essential for organisations across all countries.
However, the only difference lies in the how management is implemented within an
organisation.

• Multidimensional
Management has three dimensions:
i. Work management: Every organisation exists for completion of some work. This work
varies from producing clothes in clothing sector to treating patients in hospitals.
Management looks at this work as goals to be achieved and works towards these goals.
Further, this is done in terms of problems to be solved, decisions to be made, plans to be
established, budgets to be prepared, responsibilities to be assigned and authority to be
delegated.
ii. Management of people: Another dimension of management is concerned with getting
work done from people, by assigning work to worthy employees who can work
effectively towards the realisation of organisational goals. This is achieved by ensuring
that the strength is highlighted and the weakness is driven out of the equation. It further
has two dimensions- a) dealing with people as individuals with diverse needs and
behaviours and b) dealing with individuals perceiving them as a part of a wider group of
people.
iii. Management of operations: As every organisation aims at the completion of work, they
also have a particular product or service to provide with respect to their domain of
operation. Note that this is met with the help of a production process. Management also
looks after a production process of an organisation that transforms the input with the help
of technology required into the output for consumption. Interestingly, this is linked to
both management of work and people.

• Continuous process
We now know that there are various functions of management as planning, organising,
directing, staffing and controlling. As a matter of fact, a manager performs all these functions
simultaneously. Although these functions are separate, management is concerned with
performing all of them simultaneously all the time. Consequently, management is a dynamic
and continuous process.

• Group activity
An organisation consists of a large number of individuals having different reasons and
purposes to join. Again these individual differ based on their needs and behaviours. However,
it is important to realise that these diverse individuals work together towards the achievement
of the organisational goals. Management diverts the individual efforts towards the right
direction. Further, effective management enables all the individuals to grow and develop as
their needs and opportunities change.
• Dynamic function
An organisation has to adapt to the environment in order to succeed. Thus management is
dynamic in nature and adapts to the ever-changing social, economic and political conditions.
A famous example of this is how McDonald’s had to change its menu to serve and emerge as
a major fast food giant in the Indian market.

• Intangible force
Management cannot be touched or it isn’t tangible. However effective management can be
easily felt. Evidently, if there is order instead of chaos within an organisation, the employees
are happy and the organisational goals are being organised it can be easily said that there
exists good management.

• Composite process
Management consists of series of functions which must be performed in a proper sequence.
These functions are not independent of each other. They are inter-dependent on each other.
As the main functions of management are planning, organising, staffing, directing and
controlling; organising cannot be done without doing planning, similarly, directing function
cannot be executed without staffing and planning and it is difficult to control the activities of
employees without knowing the plan. All the functions inter-dependent on each other that is
why management is considered as a composite process of all these functions.

• Balancing effectiveness and efficiency

Effectiveness means achieving targets and objectives on time. Efficiency refers to optimum
or best utilisation of resources. Managements always try to balance both and get the work
done successfully. Only effectiveness and only efficiency is not enough for an organisation: a
balance must be created in both.

Scope of management
Its scope is quite large as it requires organization in every aspect. We can divide its scope into
two sections for better understanding.
Activities
• Planning
• Organization
• Coordination
• Directing
• Controlling

Branches
• Marketing Management
• Production Management
• Office Management
• Personnel Management
• Financial Management

• Marketing Management
Marketing management is the organization, planning, direction and controlling the people’s
activities operating in the marketing department of an organization while aiming to achieve
the enterprise’s objectives. You can consider it as a process of finding and assessing the
customers’ requirements to fulfil them through products or services. It aims to make the final
consumer aware of the products or services to make them interested in the same with a focus
on profitability. Marketing management ensures that the available resources are used
optimally to get the best possible results. Some of the aspects of marketing management
covers are sales promotion, market research, branding, marketing policy, distribution
channels, market analysis, after-sales service, sale-mix, and many others.

• Production Management
Production refers to creating utilities. Their creation happens when we convert raw materials
into our desired finished products. So, production management is the section of management
which by scientific regulation and planning runs that division of the organization which is
responsible for actually translating the raw materials into finished products. Without
production a business won’t generate its products that’s why production management is so
vital for its success. Production management handles the planning and regulation of the
production process because, without them, the final product wouldn’t satisfy the customers,
causing the business to close its doors. Some of the business aspects production management
covers are quality control, plant layout, production type, simplification, research and
development, etc.

• Office Management
Office management deals with controlling and coordinating all office activities to achieve the
business’s goals. It organizes the office and its tasks so that the management can achieve its
objectives efficiently. You can say that it is a service department for all other sections of the
business. The administration’s efficiency affects the business’s success significantly, which
depends on the information the office supplies to the administration. Moreover, the amount
of paperwork an office has to do risen substantially because of enhanced regulations,
complexities, technologies, expansion, etc. These factors have increased the importance of
office management in the current day and age.

• Personnel Management
Personnel management involves activities and processes that use and control the enterprise’s
manpower. Human resources are among the most vital factors determining an organization’s
success. It deals with operative and managerial functions. Some of the managerial functions
in personnel management are directing employees, personnel planning, and control.
Similarly, some operative functions in personnel management are determining equitable and
appropriate compensation for employees, procuring the right quantity and type of people,
ensuring proper working conditions, integrating the personnel’s interests with that of the
enterprise, and much more. Without effective personnel management, it would be impossible
for an organization to succeed. That’s why it’s one of the most significant branches of
management and demands a lot of attention.

• Financial Management
An enterprise’s finances matter a lot. Financial management focuses on managerial activities
that utilize and procure the finances of a business. The finances of an enterprise can become
highly complicated that’s why effective financial management becomes crucial for its goal
achievement. The primary functions of this management branch are ensuring fair returns to
stakeholders, estimating capital requirements, laying down suitable and optimal capital,
etc. Apart from the above functions, financial management handles the coordination of tasks
within departments, preparation and analysis of financial statements, negotiation with
external parties and creating an effective dividend policy. Sometimes, organizations hire
service providers to help them with their finances (chartered accountant, actuary, etc.). Those
service providers would fall under financial management too.
Nature of management
The nature of management is not a simple aspect it has various parameters of its own. The
organization is been working on these Parameters to achieve their predetermined goals.

• Multi-Disciplinary
Management is basically multi-disciplined. This implies that management has developed
from different disciplines like physiology, sociology, etc. Management integrates
Knowledge, idea & concepts from the above discipline & present a newer concept that can be
put into practice for managing the operation. According to sociology human element plays a
very important role in the organization. So by using, this concept one can motivate & lead the
human element in the organization to achieve goals according to psychology make –up of
humans plays important role in productivity thus by understanding workers’ attitudes one can
increase productivity in the organization.

• Dynamic Nature of Principle

Management has certain principles that are based on Practical evidence however these
principles are flexible in nature & change according to the changes in the environment. With
the continuous development of the speed there in fields, older principles are to be changed by
a new principles.

• Relative not absolute principle

Management principle is relative but not outdated means these are applied according to the
need of an organization. Each organization may be different from others in a variety of
aspects including the age of the organization, place, society, and cultural factors

• Management Science & art

As a science, management use systematic body of knowledge, principles based on
experimentation and universal validity of the principles. As an art, management is an
application of knowledge in different situations, highly personalized activity and varies from
manager to manager and it is action-oriented to achieve organizational objectives.

• Management as a Profession
Managers require to control managerial expertise and education and have to adhere to a
verified law of demeanour and stay informed of their human and social responsibilities.

• The Universality of Management

Management is a universal phenomenon. However, the management principle is not
universally applicable but is to be modified according to the needs of the situation. The nature
of management suggested that it is a multidisciplinary phenomenon its principles are flexible,
relative & absolute.

• Management as Art, Science & Profession

To decide whether management is science, art or profession, one has to comprehend the
characteristics and definitions of science, art and profession and associate them with
management definition and traits.

Management is an Art
To manage effectively, one must have not only the necessary abilities to lead but also a set of
critical skills acquired through time, experience, and practice. The art of managing is a
personal creative attribute of the manager, which is more often than not, enriched by
education, training, experience. The art of managing involves the conception of a vision of an
orderly whole created from chaotic parts and the communication and achievement of this
vision. Managing is the “art of arts” because it organizes and uses human talent.

Elements of art in management

• Practical Knowledge
• Personal Skill
• Creativity
• Perfection through practice
• Goal-Oriented

Practical Knowledge
Art requires practical knowledge, learning of theory is not sufficient. Art applies theory to the
field. Art teaches the practical application of theoretical principles. For example-Learning
how sing does not make you a musician; one must know all composition and be able to use
them. Similarly, a person may have a degree that says he knows what a manager does but it
doesn’t know how to apply management knowledge in real-life situations he will not be
regarded as manager.

Personal Skill
A manager will not depend on his theoretical knowledge or solution alone, he or she must
have some qualities that make him or her unique.

Creativity
An Artist’s work is not limited to his practical knowledge. He thinks outside the box and
creates things extraordinary. Management is also creative like any other art. Management is
all about finding a new way to be well different from others.

Perfection through practice

Every artist becomes better through item and practice. they learn from their mistakes.
Similarly, managers become more expert as he spends more time in management thought.

Goal-Oriented
Art is result-oriented. Management works are also a goal or result-oriented.

Management as a Science
Science is obtaining information about a particular object by a systematic pattern of
observation, study, practice, experiments, and investigation. The management process also
follows the same pattern. Gathering data and facts, analyzing them and making a decision
based on analysis, are the basic functions of the management. Management follows a
systematic method to find a possible solution for a problem. The science underlying
managing is indeed inexact or a soft science at best.

It is not as “Science” as physical sciences such as chemistry or biology which deal with non-
human entities. The inclusion of the human element in managing makes this discipline not
only complex but also debatable as pure science. Human behaviour is unpredictable; people
think, act or react differently under identical circumstances. And so, management can never
become as pure science. However, the study of the scientific foundations of management
practice can improve one’s management skills. Managers who attempt to manage without
management science have to trust their intuition or luck at their peril rather than their
expertise or skill. Thus, they have to turn for meaningful guidance to the accumulated
knowledge of managing.

Elements of Science in Management

• Concepts
• Methods and principles
• Theories
• Organized knowledge
• Practice

Concepts
The scientific approach requires a clear “concepts” of mental images of anything formed by
generalization from particulars. Managing has concepts to deal with situations.

Methods and principles

“Scientific method” involves the determination of facts through observation. This leads to the
development of “principles” which have value in predicting what will happen in similar
circumstances. Similarly, management requires observation and sets standards or principles
according to it.

Theories
Any branch of science has theories. A ‘theory” is a systematic grouping of interdependent
concepts and principles that give a framework to, or ties together, a significant area of
knowledge. Management studies over the years developed many proved theories for making
management more realistic or scientific.

Organized knowledge
Science is organized knowledge. If we compare, management at the present day is a distinct
field of organized knowledge. Concepts, methods, principles, theories, etc. are now the core
of management.

Practice
The theories of managing are the results of practice, and the role of such theories is to provide
a systematic grouping of interdependent concepts and principles that furnish a framework to,
or ties together significant pertinent management knowledge. But it is to be borne in mind
that concepts, methods, principles of management are not as rigid as those of the physical
sciences. They may undergo revision and change under new socio-political and economic
circumstances.
Management is a Science as well as Art
Science teaches us to know while art teaches us to do. To be successful, managers have to
know and do things effectively and efficiently. This requires a unique combination of both
science and art of managing in them. It may, however, be said that the art of managing begins
where the science of managing stops. Since the science of managing is imperfect, the
manager must turn to the artistic managerial ability to perform a job satisfactorily. Thus, it
may be said that managing in practice is an art but the body of knowledge, methods,
principles, etc. underlying the practice is science.
Management as a Profession
The profession can be described as an occupation upheld by specific education and practice,
in which entry is limited. A profession has the following features:

• The well-defined theory of knowledge: All services are based on a well-defined form
of education that can be procured through education.
• Restricted entry: The entrance to a profession is defined through an examination or
through obtaining an educational degree. For instance, to become a chartered accountant
in India an aspirant has to clear a detailed examination regulated by the Institute of
Chartered Accountants of India (ICAI).
• Professional community: All professions are affiliated to a professional association
which controls entry, presents a certificate of training and expresses and supports a
system of government. To be qualified to study in India, lawyers have to become
members of the Bar Council which monitors and regulates their actions.

Or

Management as a Science
Science as a discipline has the following characteristics:
i. Systematic body of knowledge
ii. Principles based on experimentation
iii. Universal validity of the laws and principles
Management satisfies these requirements to a certain extent:
i. Management is a systematic body of knowledge with its own theories and principles.
 ii. The principles of management also evolved through repeated experimentation. But since
management deals with humans, the outcome of the experiments is significantly
unpredictable.
iii. The principles of management do not have a universal applicability and need
modification under different circumstances.
Thus, it can be said that management is not an exact science. It is a social science as it deals
with humans or in the words of Ernest Dale – ‘Management is a soft science’.

Management as an Art
Art implies application of knowledge. It is highly personalized activity to achieve desired
goals. Since, art varies from person to person it is prone to failure. Just like any other art:
i. Management is also application of knowledge in different situations.
ii. Management is a highly personalized activity and varies from manager to manager.
Thus, management is also prone to failure.
iii. Management is action-oriented to achieve organizational objectives.

Management as a Profession
According to McFarland, various characteristics of a professional activity are:
i. based on special skills and knowledge
ii. Formal methods of acquiring these skills.
iii. An apex body which issues guidelines for professionalization of the occupation.
iv. A uniform code of conduct to regulate the members.
v. Providing service for a fee.
vi. Social responsibility

Management is a professional activity like doctors and lawyers. Although every organization
tries to design their ethical codes of behaviour individually, there is absence of a uniform
code of conduct. Thus, management can be considered as a developing profession.

Management as social System

The founding father of this school of thought was Chester Barnard, viewed an organization as
a cooperative system involving collaboration and co-operation among peoples. Hence
Management can be viewed as a social system within an organization. This approach is
closely linked and related with the human behaviour approach. It looks upon management as
a social system, i.e., a system of cultural interrelationships. It describes the cultural
relationships of various social groups and attempts to integrate them into a system. This
perspective emphasizes the interpersonal and social aspects of management recognizing that
organizations are made up of individuals who interact and work together to achieve common
goals.
In essence, management as a social system recognizes that organizations are made up of
people with diverse backgrounds, skills and motivations. Effective management requires an
understanding of these social dynamics and the ability to leverage them to achieve
organizational objectives while promoting a positive and collaborative work environment.
This perspective on management underscores the importance of people skills, communication
and interpersonal relationships in the practice of management. Here are some key points to
consider when viewing management as a social system:

1. Interactions and Relationships: In a social system, management involves various

interactions and relationships among people within the organization. Managers interact
with employees, teams and other stakeholders to coordinate activities, make decisions and
communicate information.
2. Communication: Effective communication is a fundamental element of management as a
social system. Managers must convey goals, expectations and information to employees
and receive feedback to ensure that everyone is on the same page.
3. Influence and Leadership: Managers exert influence and provide leadership within the
organization. They motivate and guide individuals, teams toward achieving common
objectives. Leadership is a critical component of the social dynamics within an
organization.
4. Norms and Culture: Organizations have their own norms, values and culture that
influence how people behave and interact. Managers play a role in shaping and reinforcing
the organizational culture which can impact employee behaviour and performance.
5. Group Dynamics: Management involves understanding group dynamics including how
teams form, develop and work together. Managers must be attuned to group processes,
conflicts and collaboration to ensure effective teamwork.
6. Conflict Resolution: Conflict is a natural part of any social system. Managers must be
skilled in identifying and resolving conflicts constructively to maintain a healthy working
environment.
7. Social Responsibilities: Managers also have social responsibilities to their employees,
stakeholders, and the broader community. This includes ethical considerations, corporate
social responsibility and ensuring the well-being of employees.
8. Feedback and Learning: Management as a social system encourages feedback loops and
continuous learning. Managers should gather feedback from employees and use it to adapt
and improve management practices.
9. Change Management: Implementing change within an organization is often a social
challenge. Managers must consider the impact of change on individuals and teams.by play
a key role in managing resistance and facilitating transitions.
10. Power and Authority: Within the social system of management, there is a
distribution of power and authority. Managers have formal authority, but they also rely on
social influence and relationships to accomplish their goals.

Management v/s Administration

At the initial level management development, both management and administration were
used synonymously. However, Olive Sheldon made distinction between management and
administration in 1923 by stating that “administration is a decision making function while
management is an executing function”. Since then the terminological conflicts between
management and administration attracted the attention of many management thinkers.
According to Theo Haimann, “Administration means overall determination of policies,
setting of major objectives, the identification of general purposes and lying down of broad
programmes and projects”. It refers to the activities of higher level. It lays down basic
principles of the enterprise. According to Newman, “Administration means guidance,
leadership & control of the efforts of the groups towards some common goals”.
Whereas, management involves conceiving, initiating and bringing together the various
elements; coordinating, actuating, integrating the diverse organizational components while
sustaining the viability of the organization towards some pre-determined goals.
In other words, it is an art of getting things done through & with the people in formally
organized groups.
The difference between Management and Administration can be summarized under two
categories: -
1. Functions
2. Usage/Applicability
On the Basis of Functions: -

Basis Management Administration

Meaning Management is an art of getting things done It is concerned with formulation

through others by directing their efforts of broad objectives, plans &
towards achievement of pre-determined policies.
goals.

Nature Management is an executing function. Administration is a decision-

making function.

Process Management decides who should do it & Administration decides what is to

how should he do it. be done & when it is to be done.

Function Management is a doing function because Administration is a thinking

managers get work done under their function because plans & policies
supervision. are determined under it.

Skills Technical and Human skills Conceptual and Human skills

Level Middle & lower level function Top level function

On the Basis of Usage:

Basis Management Administration

Applicability It is applicable to business concerns It is applicable to non-business

i.e. profit-making organization. organizations i.e. government
organizations.

Influence The management decisions are The administration is influenced by

influenced by the values, opinions, public opinion, govt. policies,
beliefs & decisions of the religious organizations, customs etc.
managers.

Status Management constitutes the Administration represents owners of

employees of the organization who the enterprise who earn return on their
are paid remuneration (in the form capital invested & profits in the form
of salaries & wages). of dividend.

One view explained that there is no difference between management & administration. Every
manager is concerned with both - administrative management function and operative
management function as shown in the figure. However, the managers who are higher up in
the hierarchy denote more time on administrative function & the lower level denote more
time on directing and controlling worker’s performance i.e. management.
The Figure above clearly shows the degree of administration and management performed by
the different levels of management

There is another view which showed that administration as a part of management. Some
management thinkers have taken the view that management is broader concept and
administration is its part. According to Brech, management is a generic name of the total
process for the effective and economic planning and regulation of the operation of an
enterprise. Administration is that part of management which concern with the installation and
carrying out the procedures by which it is laid down and communicated and the process of
activities regulated and checked against plans.

Five M’s of Management

The 5M model is used as a management tool to ensure that all necessary resources are considered
and effectively utilized in achieving organizational goals. It helps managers in planning, organizing,
and optimizing resources to improve productivity and efficiency. Keep in mind that while the 5M
model is a useful framework, there are other models and approaches to management that may
focus on different aspects of organizational resources.

Money: Money is the most critical and all-purpose resource because it is used to acquire or
hire other resources. In organization, money is employed to generate more money in the form
of profits or surplus. A business firm or enterprise requires money in the form of fixed capital
and working capital.

Manpower: Manpower refers to the managerial and non-managerial personnel employed in

an organization. Other resources cannot act by themselves and have to be utilised by human
beings. Therefore, human resources mobilize, allocate and utilize the physical and financial
resources of an organization.
Materials: Materials represent the physical raw materials and intermediate products (semi-
finished goods) which are converted and/or assembled into finished products with the help of
certain processes and technology.

Machinery: Machines are the equipment used to process the materials into finished or semi-
finished products. Employment of modern machinery helps to reduce costs and to improve
the quality of output.

Methods: Methods refer to the normal and prescribed ways of doing things and various
operations are performed according to certain systems and procedures. Use of right methods
helps to increase efficiency of operations and contributes to effective management.