MANAGEMENT

1. Management is the process of planning, organizing, staffing, directing, and

controlling the resource of enterprise (company).

2. Effectiveness in management is concerned with doing the right task,

completing activities and achieving goals on time.

3. Efficiency means doing the task correctly with minimum cost.

4. “Management is the process of designing and maintaining an environment

in which individuals, working together in groups, efficiently accomplish
selected aims.” - Harold Koontz

Nature/ Features/ Characteristics Of Management:

1. Management is Goal-Oriented: The purpose of management is to achieve
the goals of the organization. Different organisations have different goals.
For example, the goal of a retail store may be to increase sales, but the
goal of The Charitable Society of India is to impart education to children
with special needs. Management unites the efforts of different individuals
in the organisation towards achieving these goals.

2. Management is Pervasive: The activities involved in managing a firm are

common to all organizations whether economic, social or political. The
activities in all kinds of organization everywhere is the same but only how
they do it is different.

3. Management is Multi-dimensional: Management is a complex activity

that has three main dimensions. These are:

a. Management of work: All organisations exist for the performance of

some work. In a factory, a product is manufactured, in a garment store
a customer’s need is satisfied and in a hospital a patient is treated.
Management translates this work in terms of goals to be achieved and
assigns the means to achieve it.

b. Management of people: Managing people has two dimensions

 i. it implies dealing with employees as individuals with diverse
needs and behavior;
ii. it also means dealing with individuals as a group of people.

c. Management of operations: It involves conversion of inputs into

outputs. This is interlinked functions that links both the management
of work and the management of people.

4. Management is a Continuous Process: Management is a continuous

process of planning, organizing, staffing, directing and controlling which
bring the management cycle back to planning.

5. Management is a Group Activity: Management is an integral part of a

group activity; it requires team work and coordination to achieve
organizations goals.

6. Management is a Dynamic Function- Management is dynamic and has to

be according to the changing environment which consists of social,
economic and political factor.

7. Management is an Intangible Force- Management is intangible force that

cannot be seen but can be felt in the way the organisation functions) If
targets are met, employees are happy and satisfied, that means management
is effective.

FUNCTIONS OF MANGEMENT
1. Planning
a. It is the function of determining in advance what is to be done and
who is to do it.
b. This implies setting goals in advance and developing a way of
achieving them efficiently and effectively.
c. Planning cannot prevent problems, but it can predict them and prepare
contingency plans to deal with them if and when they occur.
2. Organising
a. Organising involves the grouping of the required tasks into
manageable departments and the establishment of authority and
reporting relationships within the organisational hierarchy.
b. It is the management function of assigning duties, grouping tasks,
establishing authority and allocating resources required to carry out a
specific plan.
c. Once a specific plan has been established for the accomplishment of
an organisational goal, the organising function examines the activities
and resources required to implement the plan.
d. It determines what activities and resources are required.
e. It decides who will do a particular task, where it will be done, and
when it will be done.

3. Staffing
a. It means placing the right people for the right job.
b. It is an important aspect of management as it makes sure that the right
people with the right qualifications are available at the right places
and times to accomplish the goals of the organisation.
c. This is also known as the human resource function and it involves
activities such as recruitment, selection, placement and training of
personnel.

4. Directing
a. It involves leading, influencing and motivating employees to perform
the tasks assigned to them.
b. Motivation and leadership are two key components of direction.
c. Motivating workers means simply creating an environment that
makes them want to work.
d. Leadership is influencing others to do what the leader wants them to
do.
e. A good manager directs through praise and criticism in such a way
that it brings out the best in the employee.

5. Controlling
a. It is the management function of monitoring organisational
performance towards the attainment of organisational goals.
 b. The task of controlling involves establishing standards of
performance, measuring current performance, comparing this with
established standards and taking corrective action where any
deviation is found.
c. It determines what activities and outputs are critical to success and
how and where they can be measured and who should have the
authority to take corrective action.

IMPORTANCE OF THE FUNCTIONS OF MANAGEMENT

1. PLANNING
a. Planning provides directions: Planning ensures that the goals or
objectives are clearly stated so that they act as a guide for deciding
what action should be done.
b. Planning reduces the risks of uncertainty: Planning is an activity
which enables a manager to look ahead and anticipate changes.
c. Planning reduces overlapping and wasteful activities: Planning
serves as the basis of coordinating the activities and efforts of
different divisions, departments and individuals. It helps in avoiding
confusion and misunderstanding. Useless and redundant activities are
minimised or eliminated.
d. Planning promotes innovative ideas: Since planning is the first
function of management, new ideas can take the shape of concrete
plans.
e. Planning facilitates decision making: Planning helps the manager to
look into the future and make a choice from amongst various
alternative courses of action. The manager has to evaluate each
alternative and select the most viable proposition.

2. ORGANIZING
a. Benefits of specialization: Organizing leads to a systematic
allocation of jobs amongst the work force. This reduces the workload
as well as enhances productivity because of the specific workers
performing a specific job on a regular basis. Repetitive performance
of a particular task allows a worker to gain experience in that area and
leads to specialization.
 b. Clarity in working relationships: The establishment of working
relationships clarifies lines of communication and specifies who is to
report to whom. This removes ambiguity in transfer of information
and instructions.
c. Optimum utilisation of resources: Organising leads to the proper
usage of all material, financial and human resources. The proper
assignment of jobs avoids overlapping of work and also makes
possible the best use of resources.
d. Adaptation to change: The process of organising allows a business
enterprise to accommodate changes in the business environment
e. Effective administration: Organising provides a clear description of
jobs and related duties. This helps to avoid confusion and duplication.

3. STAFFING
a. helps in discovering competent personnel for various jobs;
b. ensures higher performance, by putting right person on the right job;
c. ensures the continuous survival and growth of the enterprise through
the succession planning for managers
d. helps to ensure optimum utilization of the human resources.
e. By avoiding overmanning, it prevents under-utilisation of personnel
and high labour costs.
f. improves job satisfaction and morale of employees through objective
assessment and fair reward for their contribution.

4. DIRECTING
a. Directing helps to initiate action by people in the organisation towards
attainment of desired objectives.
b. Directing integrates employees efforts in the organisation in such a
way that every individual effort contributes to the organisational
performance.
c. Directing guides employees to fully realise their potential and
capabilities by motivating and providing effective leadership.
d. Directing facilitates introduction of needed changes in the
organisation.
e. Effective directing helps to bring stability and balance in the
organization since it fosters cooperation and commitment among the
people and helps to achieve balance among various groups, activities
and the departments.
 5. CONTROLLING
a. Accomplishing organizational goals: It guides the organisation and
keeps it on the right track so that organisational goals might be
achieved.
b. Judging accuracy of standards: A good control system enables
management to verify whether the standards set are accurate and
objective.
c. Making efficient use of resources: By exercising control, a manager
seeks to reduce wastage and spoilage of resources. Each activity is
performed in accordance with predetermined standards and norms.
d. Improving employee motivation: A good control system ensures
that employees know well in advance what they are expected to do
and what are the standards of performance on the basis of which they
will be appraised. It, thus, motivates them and helps them to give
better performance.
e. Facilitating coordination in action: Controlling provides direction
to all activities and efforts for achieving organisational goals.

14 PRINCIPLES OF MANAGEMENT BY HENRY FAYOL

1. Division of Work
a. Work is divided into small task which is done by a trained specialist.
b. This division of work leads to specialisation
c. According to Fayol, division of work helps to produce more and
better work is seen in the same effort/
d. Thus we see separate department in the companies for finance
marketing production etc.

2. Authority and Responsibility:

a. The concept of Authority and Responsibility are closely related.
b. Authority was defined by Fayol as the right to give orders and the
power to obtain obedience.
c. Responsibility means being accountable, and is therefore naturally
associated with authority
d. Whoever gets the authority automatically has the responsibility too.
e. The managers should have the power to give orders. But they should
also remember with authority comes responsibility.
3. Discipline:
a. Discipline is obeying the organisational rules which are necessary for
the working for the organisation.
b. According to Fayol, discipline requires good superiors at all levels.
c. Penalties should be applied judiciously to encourage this common
effort)

4. Unity of Command:
a. According to Fayol, there should be one and only one boss for every
individual employee.
b. If an employee gets order from two supervisors at the same time the
principle of unity of command is violated.
c. This is to prevent confusion regarding task to be done,

5. Unity of Direction:
a. Teams, which have the same goal, should work under one directions
manager's direction.
b. They should use one plan.
c. This will guarantee that the action is coordinated properly.
d. Unity of direction means the entire firm will move in the same
direction.
6. Subordination of Individual Interest to General Interest:
a. The interests of any one employee should never be given more
importance than the interest of the group.
b. Even the manager's interest comes after the group.

7. Remuneration of Employees-
a. Fair remuneration should be given to everyone.
b. This ensures employee satisfaction.
c. Remuneration includes both financial and non-financial
compensation,
d. There are many variables which should be considered before deciding
a worker's rate of pay,
e. Some of the variables are as follows-
 i. Cost of living.
ii. Supply of qualified personnel.
iii. General business conditions.
iv. Success of the business.

8. Centralisation and Decentralisation:

a. The concentration of decision-making authority is called
centralisation whereas when decision-making is among more than one
person it is known as decentralization.
b. Fayol defined centralisation as lowering the importance of the
subordinate role.
c. Decentralisation is increasing the importance.
d. The degree of centralisation or decentralisation should be adopted
depends on the organisation in which the manager is working.

9. Scalar Chain:
a. An organisation consists of superiors and subordinates.

b. The formal lines of authority from highest to lowest ranks are known
as scalar chain.
c. Each manager, from the first line supervisor to the president, has
certain amount of authority
d. The president possesses the most authority; the first line supervisor
the least.
e. Lower-level managers should always keep upper level managers
informed of their work activities.
f. The existence of a scalar chain and following it are necessary if the
organisation is to be successful.

10. Order:
a. The workplace should be clean and safe for all employees.
b. Everything should be in its place,
c. All the people related to a specific type of work should be treated as
equally as possible.
d. This is good for Efficiency and coordination.
11. Equity:
a. All employees should be treated as equally as possible
b. Managers must always be fair to staff
c. They are expected to maintain discipline when needed and act with
kindness when it seems right.

12. Stability of Personnel:

a. Employee turnover should be minimised to maintain organisational
efficiency
b. Personnel should be selected and appointed after due and rigorous
procedure.
c. But once selected they should kept at their post / position for a
minimum fixed tenure. They should be given reasonable time to show
results.
d. Adhocism leads to instability/insecurity among the employees
e. New recruitment, selection and training on regular basis will cost high
for the organisation,

13. Initiative
a. Workers should be encouraged to develop and carry out their plans
for improvement.
b. Initiatives should be encouraged but not going against the established
practices of the company, just to be different.
c. A good company should have an employee suggestion system which
results in cost and time reduction
d. They should be awarded.

14. Esprit De Cops:

a. Organisations should always attempt to promote team spirit and unity.
b. Management should inspire harmony and general good feelings
among the workers
SIGNIFICANCE OF PRINCIPLES OF MANAGEMENT
1. Providing managers with useful insights into reality: Adherence to the
principle of management provides manager with the knowledge, ability and
understanding of managerial situations and circumstances. It will also
enable managers to learn from past mistakes and conserve time by solving
recurring problems quickly.

2. Optimum utilisation of resources and effective administration:

Optimum utilisation means that the resources should be put to use in such a
manner that they should give maximum benefit with minimum cost. As a
result the wastages associated with a trial-and-error approach are overcome.

3. Scientific decisions: Decisions must be based on facts, thoughtful and

justifiable in terms of the intended purposes. They must be timely, realistic
and subject to measurement and evaluation. Management principles help in
thoughtful decision-making. They emphasise logic rather than blind faith.
Management decisions taken on the basis of principles are free from bias
and prejudice.

4. Meeting changing environment requirements: It is generally seen that

individuals in an organisation resist change as it often means moving from
a familiar, secure environment into a newer and more challenging one.
Management principles helps people adapt to these changes so that the
organisation is able to maintain its competitive edge.

5. Increases Efficiency: The aim of a manager is to reduce costs and increase

productivity through better planning, organising, directing, staffing and
controlling the activities of the organisation.

6. Achieving group goals: Management principles is required for achieving

the goals of the organisation. The task of a manager is to give a common
direction to the individual effort in achieving the overall goal of the
organisation.

7. Development of society: The principles of Management helps to provide

good quality products and services, creates employment opportunities,
adopts new techno-logy for the greater good of the people and leads the
path towards growth and development of society.
 SCIENTIFIC MANAGEMENT BY F.W TAYLOR
1. In the earlier days of the Industrial Revolution, in the absence of an
established theory of factory organisation, factory owners or managers
relied on personal judgment in solving to the problems. This is what is
referred to as ‘rule of thumb’.

2. In this scenario, Taylor emerged as the ‘Father of Scientific Management’.

3. He proposed scientific management as opposed to rule of thumb.

4. Scientific management implies conducting business activities according to

standardised tools, methods and trained personnel in order to increase the
output, improve its quality and reduce costs and wastes.

5. In the words of Taylor, “Scientific management means knowing exactly

what you want men to do and seeing that they do it in the best and
cheapest way”

Principles of Scientific Management

1. Science not Rule of Thumb:
a. Taylor believes that management cannot be a rule of thumb as
different managers follow different rule of thumb.
b. He believed that efficiency can be maximizing only through study and
analysis.
c. Hence, scientific method which involved investigation, work study
should be followed throughout the organization.

2. Harmony, not discord:

a. We all know in organization like factories, managers serve as a link
between the owners and the workers.
b. Since, the managers has to get the work done from the workers, there
is a possibility that manager verses workers conflict takes place.
c. As this conflict help none of them, Taylor emphasize that there should
be a complete harmony between the worker and management as both
are important.
 3. Cooperation, not individualism:
a. There should be complete cooperation between the labor and the
management instead of individualism.
b. Competition should be replaced by cooperation.
c. Both parties should realize that they need each other.
d. Employees should be rewarded for their suggestion and hard work as
it results to betterment of the organization.
e. Workers should also be taken into confidence when taking any
important decision.

4. Development of Each and Every Person to his/her Greatest Efficiency:-

a. According to this principle, Each person should be scientifically
selected and then assigned work as per their physical mental and
intellectual capabilities
b. To increase efficiency, they should be given the required training.
c. This will ensure greatest efficiency and prosperity for both company
and workers.
LEVELS OF MANAGEMENT
1. Top Management:
a. They consist of the senior-most executives of the organisation
b. They are usually referred to as the chairman, the chief executive
officer, chief operating officer, president and vice-president.
c. Top management is a team consisting of managers from different
functional levels, heading finance, marketing etc.
d. Their basic task is to integrate diverse elements and coordinate the
activities of different departments according to the overall objectives
of the organisation.
e. These top level managers are responsible for the welfare and survival
of the organisation.
f. They analyse the business environment and its implications for the
survival of the firm.
g. They formulate overall organisational goals and strategies for their
achievement.
h. They are responsible for all the activities of the business and for its
impact on society.
i. The job of the top manager is complex and stressful, demanding long
hours and commitment to the organisation.
2. Middle Management:
a. It is the link between top and lower-level managers.
b. They are subordinate to top managers and superior to the first line
managers.
c. They are usually known as division heads, for example production
manager.
d. Middle management is responsible for implementing and controlling
plans and strategies developed by top management.
e. At the same time they are responsible for all the activities of first line
managers.
f. Their main task is to carry out the plans formulated by the top
managers. For this they need to:
i. interpret the policies framed by top management,
ii. ensure that their department has the necessary personnel,
iii. assign necessary duties and responsibilities to them,
iv. motivate them to achieve desired objectives, and
v. co-operate with other departments for smooth functioning of the
organisation.
g. At the same time they are responsible for all the activities of first line
managers.

3. Supervisory or Operational Management:

a. Foremen and supervisors comprise the lower level in the hierarchy of
the organisation.
b. Supervisors directly oversee the efforts of the workforce.
c. Their authority and responsibility is limited according to the plans
drawn by the top management.
d. Supervisory management plays a very important role in the
organisation since they interact with the actual work force and pass on
instructions of the middle management to the workers
e. Through their efforts quality of output is maintained, wastage of
materials is minimised and safety standards are maintained.
f. The quality of workmanship and the quantity of output depends on the
hard work, discipline and loyalty of the workers.