NTA UGC NET/ JRF Paper 2 - Management (Definition,Characteristics,Principles, Significances and Functions)

Management

Koontz and O'Donnel, "Management is the creation and maintenance of an internal environment in an enterprise where individuals, working in groups, can perform efficiently and effectively toward the attainment of group goals. It is the art of getting the work done through and with people in formally organized groups."

Management is the integrating force in all organized activity. Whenever two or more people work together to attain a common objective, they have to coordinate their activities. They also have to organize and utilize their resources in such a way as to optimize the results.

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

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 Mc Farland, "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."

CHARACTERISTICS OF MANAGEMENT

Management is a distinct activity having the following salient features:

1. Economic Resource

Efficient management is the most critical input in the success of any organized group activity as it is the force which assembles and integrates other factors of production, namely, labour, capital and materials. Inputs of labour, capital and materials do not by themselves ensure production, they require the catalyst of management to produce goods and services required by the society.

2.Goal Oriented :
Management is a purposeful activity. It coordinates the efforts of workers to achieve the goals of the organization. The success of management is measured by the extent to which the organizational goals are achieved. It is imperative that the organizational goals must be well-defined and properly understood by the management at various levels.

3. Distinct Process :
Management is a distinct process consisting of such functions as planning, organizing, staffing, directing and controlling. These functions are so interwoven that it is not possible to lay down exactly the sequence of various functions or their relative significance.

4. Integrative Force :
The essence of management is integration of human and other resources to achieve the desired objectives. All these resources are made available to those who manage. Managers apply knowledge, experience and management principles for getting the results from the workers by the use of non-human resources. Managers also seek to harmonize the individuals' goals with the organizational goals for the smooth working of the organization.

5.System of Authority :
Management as a team of managers represents a system of authority, a hierarchy of command and control. Managers at different levels possess varying degree of authority. Generally, as we move down in the managerial hierarchy, the degree of authority gets gradually reduced. Authority enables the managers to perform their functions effectively.

6.Multi-disciplinary Subject :
Management has grown as a field of study (i.e. discipline) taking the help of so many other disciplines such as engineering, anthropology, sociology and psychology.

7.Universal Application : Management is universal in character. The principles and techniques of management are equally applicable in the fields of business, education, military, government and hospital.

PRINCIPLES OF MANAGEMENT

The Father of Modern Management "Henri Fayol" developed the following principles underlying management of all kinds of organizations :

1. Authority and Responsibility are Related : Fayol held that authority flows from responsibility. Managers who exercise authority over others should assume responsibility for decisions as well as for results. Authority is official as well as personal.

2.Unity of Command : This principle holds that one employee should have only one boss and receive instructions from him only. every organization, each subordinate should have one superior whose command he has to obey.

3. Unity of Direction : All managerial and operational activities which relate a distinct group with the same objective should be directed by "one head and one plan.

4. Scalar Chain of Command : According to Fayol scalar chain is the chain of superiors ranging from the ultimate authority to the lowest ranks. The line of authority is the route followed via every link in the chain by all communication which start from or go to the ultimate authority.

5. Division of Work : Acc. to FAYOL, the work of every person in the organization should be limited as far as possible to the performance of a single leading function.

6. Discipline : Discipline is a sine qua non for the proper functioning of an organization. According to Fayol, discipline can best be maintained by :

(i) Having good superiors at all levels;

(ii) Agreements (made either with the individual employees or with a union as the case may be) that are as clear and fair as possible;

(iii) Penalties judiciously imposed.

7. Subordination of Individual Interest to General Interest : The interest of the organization is above the interests of the individual and the group. It can be achieved only when managers in high positions in the organization set an example of honesty, integrity, fairness and justice.

8. Remuneration : Employees should be paid fairly and equitably. Differentials in remuneration should be based on job differentials, in terms of qualities of the employee, application, responsibility, working conditions and difficulty of the job. It should also take into account factors like cost of living, general economic conditions, demand for labour and economic state of the business.

9. Centralisation : Fayol believed in centralisation. He, however, did not contemplate concentration of all decision making authority in the top management.

10. Order : Acc. to Fayol, right person on the right job and everything in its proper place. This kind of order, depends on precise knowledge of human requirements and resources of the concern and a constant balance between these requirements and resources.

11. Equity : It means that subordinates should be treated with justice and kindliness. This is essential for eliciting their devotion and loyalty to the enterprise.

12. Stability of Tenure of Personnel : The managerial policies should provide a sense of reasonable job security. The hiring and firing of personnel should depend not on the whims of the superiors but on the well-conceived personnel policies.

13. Initiative : It focuses on the ability, attitude and resourcefulness to act without prompting from others. Managers must create an environment which encourages their subordinates to take initiative and responsibility.

14. Esprit de Corps : Cohesiveness and team spirit should be encouraged among employees. An environment should be created in the organization which will induce people to contribute to each other's efforts in such a way that the combined effort of all together promotes the achievement of the overall objectives of enterprise.

The other important principles of management as developed by pioneer thinkers on the subject are :

(a) Separation of planning and execution of business operations.

(b) Scientific approach to business problems.

(d) Economizing production costs and avoiding the wastage of resources.

(e) Fuller utilization of the operational capacity and emphasis on higher productivity.

(f) Standardisation of tools, machines, materials, methods, timings and products.

(g) Evaluation of results according to criteria of standard levels of performance.

(h) Understanding and co-operation among the members of the organization set-up.

SIGNIFICANCE OF MANAGEMENT

Management is concerned with acquiring maximum prosperity with a minimum effort. Management is essential wherever group efforts are required to be directed towards achievement of common goals.

Koontz and O' Donnel have rightly observed "there is no more important area of human activity than management since its task is that of getting things done through othersachievement of common goals.

The following points further highlight the significance of management :

1. Achievements of Group Goals - Management creates team work and team spirit in an organization by developing a sound organization structure.

2. Optimum utilization of Resources - Managers create and maintain an environment conducive to highest efficiency and performance. Through the optimum use of available resources, management accelerates the process of economic growth.

3. Minimisation of cost : Every business enterprise must minimise the cost of production and distribution. Only those concerns can survive in the market, which can produce goods of better quality at the minimum cost. Production control, Budgetary control, Cost control, Financial control, Material control etc Teachinques are used for reducing cost.

4. Change and Growth : A business enterprise operates in a constantly changing environment. Changes in business environment create uncertainties and risk and also produce opportunities for growth. An enterprise has to change and adjust itself in the everchanging environment. .

5. Efficient and Smooth Running of Business : Management ensures efficient and smooth running of business, through better planning, sound organization and effective control of the various factors of production.

6. Higher Profits : Profits can be enhanced in any enterprise either by increasing the sales revenue or reducing costs. To increase the sales revenue is beyond the control of an enterprise. Management by decreasing costs increases its profits and thus provides opportunities for future growth and development.

7. Provide Innovation : Management gives new ideas, imagination and visions to an enterprise.

8. Social Benefits : Management is useful not only to the business firms but to the society as a whole. It improves the standard of living of the people through higher production and more efficient use of scarce resources. By establishing cordial relations between different social groups, management promotes peace and prosperity in society.

9. Useful for Developing Countries : Management has to play a more important role in developing countries, like India. In such countries, the productivity is low and the resources are limited. It has been rightly observed, "There are no under-developed countries. They are only under-managed ones".

10. Sound Organization Structure : Management establishes proper organization structure and avoids conflict between the superiors and subordinates. This helps in the development of spirit of cooperation and mutual understanding, and a congenial environment is provided in the organization.

Budget Laptop for Student

MANAGEMENT FUNCTIONS Or PROCESS OF MANAGEMENT

There is enough disagreement among management writers on the classification of managerial functions.

Newman and Summer recognize only four functions-Organizing, Planning, Leading and Controlling.

Henri Fayol identifies five functions of management- Planning, Organizing, Commanding, Coordinating and Controlling.

Luther Gulick states seven such functions under the catch word "POSDCORB' which stands for Planning, Organizing, Staffing, Directing, Coordinating, Reporting and Budgeting.

Warren Haynes and Joseph Massie classify management functions - Decision-making, Organizing, Staffing, Planning, Controlling, Communicating and Directing.

For our purpose, we shall designate the following six as the functions of a manager:

1.Planning,

2.Organizing,

3.Staffing,

4.Directing,

5.Coordinating

6.Controlling.

Planning -

Planning is concerned with 'what', 'How, and 'When' of performance. It is deciding in the present about the future objectives and the courses of action for their achievement. It thus involves:

(a) Determination of long and short-range objectives;

(b) Development of strategies and courses of actions to be followed for the achievement of these objectives; and

Organzing

a.Identification of activities required for the achievement of objectives and implementation of plans.

(b) Grouping the activities so as to create self-contained jobs.

(d) Delegation of authority so as to enable them to perform their jobs and to command the resources needed for their performance.

(e) Establishment of a network of coordinating relationships

Staffing

Staffing is a continuous and vital function of management.

(a) Manpower planning involving determination of the number and the kind of personnel required.

(b) Recruitment for attracting adequate number of potential employees to seek jobs in the enterprise.

(d) Placement, induction and orientation.

(e) Transfers, promotions, termination and layoff.

(f) Training and development of employees.

It need hardly any emphasize that no organization can ever be better than its people, and managers must perform the staffing function with as much concern as any other function.

Directing :

Directing is the function of leading the employees to perform efficiently, and contribute their optimum to the achievement of organizational objectives. The function of directing thus involves the following sub-functions :

(a) Communication

(b) Motivation

Coordination

Coordinating is the function of establishing such relationships among various parts of the organization that they all together pull in the direction of organizational objectives.

Coordination, as a management function, involves the following sub-functions:

(a) Clear definition of authority-responsibility relationships

(b) Unity of direction

(d) Effective communication

(e) Effective leadership

Controlling :

Controlling is the function of ensuring that the divisional, departmental, sectional and individual performances are consistent with the predetermined objectives and goals.

controlling involves the following process :

(a) Measurement of performance against predetermined goals.

(b) Identification of deviations from these goals.

Management is an integral process and it is difficult to put its functions neatly in separate boxes. Management functions tend to coalesce, and it sometimes becomes difficult to separate one from the other.