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Module 1
Importance and Definition of Management:

Giving precise definition of management is not so simple because the term management is used
in a variety of ways. Being a new discipline it has drawn concepts and principles from a number
of disciplines such as Sociology, Economics, Psychology, Statistics, Anthropology and so on. The
contributors from each of these groups have viewed management differently.
For example, economists have treated management as ‘a factor of production’; Sociologists
treated it as ‘a group of persons’. Hence, taking all these viewpoints, it becomes difficult to define
management in a comprehensive way and no definition of management has been universally
accepted. Various contributors gave many definitions; one popular definition is given by Mary
Parker Follet.
According to Follet management is ‘the art of getting things done through people’. This
definition clearly distinguishes between manager and other personnel of the organization.
A manager is a person who contributes to the organization’s goal indirectly by directing the
efforts of others, not by performing the task by him. A person who is not a manager makes his
contribution to the organization’s goal directly by performing the tasks by himself.
A better definition is given by George R Terry who defines management as “a process
consisting of planning, organizing, actuating and controlling performed to determine and
accomplish the objectives by the use of people and resources”. According to him, management
is a process-a systematic way of doing thing using four managerial functions namely planning,
organizing, actuating and controlling. ‘Planning’ means thinking of the manager’s action in
advance. The actions of the managers are based on logic, plan or some method rather than
hunch. ‘Organizing’ means coordinating machines, materials and human resources of the
organization. ‘Actuating’ means motivating, directing the subordinates. ‘Controlling’ means that
manager must ensure that there is no deviations from plans. This definition also indicates that
managers use people, materials and other resources to accomplish the organizations objectives.
The objectives may vary with each organization.
For example the objective of a technical or management institute might be to provide quality
education according to the needs of the industry.

NATURE OF MANAGEMENT
The principles, concepts and techniques of management have changed over the
periodbof time. Various contributions to the field of management have changed its nature. The
nature of management can be described as follows:
(1) Multidisciplinary: Management is multidisciplinary. It draws freely ideas and concepts from
the disciplines like economics, sociology, psychology, statistics, operations research etc.
Management integrates the ideas taken from various disciplines and presents newer concepts,
which can be put into practice. The integration of these ideas is the major contribution of
management.
(2) Dynamic nature of principles: A principle is truth, which establishes cause and effect
relationships of a function. Principles are developed by integration of ideas from various
disciplines supported by practical evidence. These principles are flexible and change with the
Harish T.S
Asst.Prof, Dept. of ECE,
JNNCE.
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environment in which organization works. Continuous researches are being carried on to

establish new principles; many older principles are changed by new principles. There is nothing
permanent in management.
(3) Relative not absolute principles: Management principles are relative and not absolute. They
must be applied according to the need of the organization. Each organization is different from
other. The principles of management should be applied in the light of prevailing conditions.
(4) Management – science or art: There is controversy whether management is science or art.
Earlier management was regarded as art but now it is both science and art. This aspect has been
discussed in detail in this chapter.
(5) Universality of management: Management is universal phenomena. Though universal yet
management principles are not universally applicable but are to be modified according to the
needs of the situation.

Functions of Management:

A function is a group of similar activities. There is divergence of view on “What functions are
undertaken by managers in organizations?” Some management experts classify these functions
into four types as follows:
(1) Planning: Planning is the primary function of management. It is looking ahead and preparing
for the future. It determines in advance what should be done. It is conscious determination of
future course of action. This involves determining why to take action? What action? How to take
action? When to take action? Planning involves determination of specific objectives, programs,
setting policies, strategies, rules and procedures and preparing budgets. Planning is a function,
which is performed by managers at all levels – top, middle and supervisory. Plans made by top
management for the organization as a whole may cover periods as long as five to ten years,
whereas plans made by low-level managers cover much shorter periods.
(2) Organizing: Organizing is the distribution of work in group-wise or sectionwise for effective
performance. Once the managers have established objectives and developed plans to achieve
them, they must design and develop a human organization that will be able to carry out those
plans successfully. Organizing involves dividing work into convenient tasks or duties, grouping of
such duties in the form of positions, grouping of various positions into departments and sections,
assigning duties to individual positions and delegating authority to each position so that the work
is carried out as planned.
According to Koonz O’Donnel, “Organization consists of conscious coordination of people
towards a desired goal”. One has to note that different objectives require different kinds of
organization to achieve them. For example, an organization for scientific research will have to be
very different from one manufacturing automobiles.
(3) Staffing: Staffing involves managing various positions of the organizational structure. It
involves selecting and placing the right person at the right position. Staffing includes identifying
the gap between manpower required and available, identifying the sources from where people
will be selected, selecting people, training them, fixing the financial compensation and appraising
them periodically. The success of the organization depends upon the successful performance of
staffing function.
Harish T.S
Asst.Prof, Dept. of ECE,
JNNCE.
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(4) Directing: Planning, organizing and staffing functions are concerned with the preliminary
work for the achievement of organizational objectives. The actual performance of the task starts
with the function of direction. This function can be called by various names namely “leading”,
“directing”, “motivating”, “activating” and so on.
Directing involves these sub functions:
(a) Communicating: It is the process of passing information from one person to another.
(b) Leading: a manager guides and influences the work of his subordinates by this process.
(c) Motivating: It is arousing desire in the minds of workers to give their best to the enterprise.
(5) Controlling: Planning, organizing, staffing and directing are required to realize organizational
objectives. To ensure that the achieved objectives confirm to the preplanned objectives, control
function is necessary. Control is the process of checking to determine whether proper progress
is being made towards the objectives and goals and acting if necessary to correct any deviations.
Controlling involves 3 main functions:
(a) Establishing standards of performance.
(b) Measuring current performance and comparing it against the established standard.
(c) Taking action to correct any performance that does not meet those standards.

LEVELS OF MANAGEMENT

People in an organization are arranged in an hierarchy and they all have the relationship
of superior-subordinates. Every manager in an organization performs all five management
functions. The relative importance of these functions varies along the managerial levels. There
may be as many levels in the organization as the number of superiors in a line of command. Some
of these levels are merged into one on the basis of nature of functions performed and authority
enjoyed. E.F.L. Brech has classified management levels into three categories – Top Management,
Middle Management and Supervisory/Lower Level as shown in fig. below

Top management of an organization consists board of directors, chairman and chief executive
officer. Top-level management determines goals and objectives. It performs overall planning,
organizing, staffing, directing and controlling. It integrates organization with environment,
balances the interest groups and is responsible for overall results.
Middle management stands between top management and supervisory management level.

Harish T.S
Asst.Prof, Dept. of ECE,
JNNCE.
 4

Middle level management establishes programs for department and carries out functions for
achieving specific goals. The other functions of middle level management are training and
development of employees, integrating various parts of the department. Supervisory
management is concerned with efficiency in using resources of the organization. A supervisor is
an executor of policies and procedures making a series of decisions with well-defined and
specified premises.

ROLES OF A MANAGER
A manager performs planning, organizing, directing and controlling to achieve the
organizational objectives. It has been questioned whether these functions provide an adequate
description of the management process. As against these management functions.
The role of a manger is classified into three broad categories as shown below:
Interpersonal role:
This role is concerned with his interacting with people both organizational members and
outsiders. There are three types of interpersonal roles:
(1) Figure head role: In this role manager has to perform duties of ceremonial nature such as
attending social functions of employees, taking an important customer to lunch and so on.
(2) Leader role: Manager’s leader role involves leading the subordinates motivating and
encouraging them.
(3) Liaison: In liaison role manager serves as a connecting link between his organization and
outsiders. Managers must cultivate contacts outside his vertical chain to collect information
useful for his organization.

Information roles:
It involves communication. There are three types of informational
roles:
(1) Monitor: In his monitoring role, manager continuously collects information
about all the factors which affects his activities. Such factors may be within
or outside organization.
(2) Disseminator: In the disseminator role, manager possesses some of his
privileged information to his subordinates who otherwise not be in a position
to collect it.
(3) Spokesperson: As a spokesperson manager represents his organization while
interacting with outsiders like customers, suppliers, financers, government and
other agencies of the society.

Decisional roles:
Decisional role involves choosing most appropriate alternative among all so that organizational
objectives are achieved in an efficient manner. In his decisional role manager perform four roles:
Entrepreneur: As an entrepreneur, a manager assumes certain risks in terms of outcome of
an action. A manager constantly looks out for new ideas and seeks to improve his unit by
adopting it to dynamic environment.

Harish T.S
Asst.Prof, Dept. of ECE,
JNNCE.
 5

Disturbance handler: In this role manager works like a fire-fighter manager contains forces
and events which disturb normal functioning of his organization. The forces and events may
be employee complaints and grievances, strikes, shortage of raw materials etc.
Negotiator: In his role of negotiator, manager negotiates with various groups in the
organization. Such groups are employees, shareholders and other outside agencies.

Fig: functions and roles of manager.

In planning, a manager performs informational and decisional role, as he has to collect

information on the basis in which he makes decisions. Similarly, in performing, other functions
some or the other roles are performed by manager.

MANAGEMENT: A SCIENCE OR ART

There is great controversy whether management is science or art. It is an art in the sense of
possessing of managing skill by a person. It is a science also because of developing principles or
laws which are applicable in a place where a group of activities are coordinated. In fact
anagement is both science and art as it clear from the following discussion.

Management as science: Science is a systematized body of knowledge. We call a discipline

scientific if its
(1) Methods of inquiry are systematic and empirical.
(2) Information can be ordered and analyzed; and
(3) Results are cumulative and communicable.

Harish T.S
Asst.Prof, Dept. of ECE,
JNNCE.
 6

‘Systematic’ means, being orderly and unbiased. Moreover, enquiry must be empirical and not
merely an armchair speculation. Scientific information collected in the raw form is finally ordered
and analyzed with statistical tools. It is communicable which permits repetition of study. When
study is replicated then the second try produces the results similar to the original. Science is also
cumulative in that what is discovered is added to that which has been found before. We build
upon the base that has been left by others.
Science denotes two types of systematic knowledge; natural or exact and behavioural or inexact.
In exact or natural science (such as physics and chemistry) we can study the effect of any one of
many factors affecting a phenomenon. For example, we can study in the laboratory, the effect of
heat on density by holding other factors (like humidity, pressure etc.) constant, whereas in
behavioural or in exact science it is not possible. In management we have to study man and
number of factors affecting him. For example, we cannot study the effect of monetary incentives
on workers productivity, because in addition to monetary incentives other inseparable factors
like leadership styles, workers need hierarchy and leadership styles will also have simultaneous
effect on productivity.

At the most we may get only rough idea of the relationship between monetary incentives and
productivity. Therefore, management is in the category of behavioural science. Management is
an art: Management is the art of getting things done through others in dynamic situations. A
manager has to coordinate various resources against several constraints to achieve
predetermined objectives in the most efficient manner.
Manager has to constantly analyze the existing situation, determine objectives, seek alternatives,
implement, and control and make decision. The theoretical lessons on principles, concepts and
techniques learnt by a manager in classroom is not enough to get the aimed results unless he
possess the skill (or art) of applying such principles to the problems. The knowledge has to be
applied and practised. It is like the art of musician or painter who achieves the desired results
with his own skill which comes by practice. Management uses both scientific knowledge and art
in managing an organization. As the science of management increases so should the art of
management. A balance between the two is needed.

MANAGEMENT: A PROFESSION
According to McFarland, “Profession” possesses the following characteristics:
(1) Existence of an organized knowledge.
(2) Formalized method of acquiring training and expertise.
(3) Existence of professional association.
(4) Existence of an ethical code to regulate the behaviour.
(5) Charging of fees based on service with due regard to social interest.
Management does not possess all the above characteristics of profession. Management has no
fixed norms for managerial behaviour. There is no uniform code of conduct or licensing of
managers. There are no restrictions to individuals to possess an academic degree. Unlike medical
Harish T.S
Asst.Prof, Dept. of ECE,
JNNCE.
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or legal professionals, a manager need not possess an academic degree. In the light of absence
of these characteristics, management cannot be called as profession. However,
‘professionalization’ of management started and it is essential nowadays to acquire some
professional knowledge or training.

PLANNING
Planning is deciding in advance what to do, how to do it, when to do it and who is to do it. It
bridges the gap from where we are and to where we want to go. It is in essence the exercise of
foresight. Planning is deciding in advance, what is to be done. It involves the selection of
objectives, policies, procedures and programmes from among alternatives.
Planning is that function of the manager in which he decides in advance, what he will do. It is a
decision making process of a special kind. It is an intellectual process in which creative mind and
imagination are essential. Planning is an attempt to anticipate the future in order to achieve
better performance.

Benefits of Planning:
(1) Planning focus managers to think ahead.
(2) It leads to development of performance standards.
(3) Having to formulate plans forces management to articulate clear objectives.
(4) Planning makes organization to be better prepared for sudden developments.

Features of planning:
(1) Planning is primarily concerned with looking into future. It requires forecasting
the future.
(2) Planning involves selection of suitable course of action. It means there are
several ways to achieving objectives.
(3) Planning is undertaken at all levels of the organization because managers at
all level are concerned with determination of future course of action.
(4) Planning is flexible. Planning involves selection of best course of action under
specific environment. If environment changes an adjustment is needed between
various factors of planning.
(5) Planning is pervasive and continuous managerial function.

Importance of planning:
Planning is of great importance in all types of organization whether business or nonbusiness,
private or public, small or large. The organization, which thinks much ahead about what it can do
in future, is likely to succeed as compared to one, which fails to do so. Without planning, business
decisions would become random, ad hoc choices.
Harish T.S
Asst.Prof, Dept. of ECE,
JNNCE.
 8

Planning is important because of the following reasons:

Primacy of planning: Planning is the first and foremost function of management, other functions
follow planning. Planning establishes the objectives and all other functions are performed to
achieve the objectives set by the planning process.
To minimize risk and uncertainty: In the changing dynamic environment where social and
economic conditions alter rapidly, planning helps the manager to cope up with and prepare for
changing environment.
To focus attention on objectives: Planning focuses on organizational objectives and direction of
action for achieving these objectives.
To facilitate control: Control involves the measurement of actual performance, comparing it with
the standards and initiating corrective action if there is deviation. Control ensures that the
activity confirm to plans. Hence, control can be exercised if there are plans.
To increase organizational effectiveness: Effectiveness implies that the organization is able to
achieve its objectives within the given resources. The resources are put in a way which ensures
maximum contribution to the organizational objectives. Effectiveness leads to success.

TYPES OF PLANS
Corporate and functional planning: The planning activities at the corporate level which cover
the entire organizational activities are known as corporate planning. The focus in corporate
planning is to determine long term objectives as a whole and to generate plans to achieve these
objectives bearing in mind the probable changes in dynamic environment.

Strategic and operational planning: Strategic planning sets future directions of the organization
in which it wants to proceed in future. Strategic planning involves a time horizon of more than
one year and for most of the organization it ranges between 3 and 5 years. Examples of strategic
planning may be diversification of business into new lines, planned grown rate in sales etc.
Operational planning also known of tactical planning on the other hand involves deciding the
most effective use of resources already allocated to achieve the organizational objectives.

Long and short term planning: The long term planning is strategic in nature and involves more
than one-year period and can extend to 15 to 20 years or so. Short term planning usually covers
one year. Short term plans are made with reference to long term plans because short term plans
contribute to long term plans.

Proactive and reactive plans: Proactive planning involves designing suitable courses of action in
anticipation of likely changes of environment. Managers adopting proactive changes do not wait
for environment to change, but take action in advance of environmental changes. For this,
continuous scanning of environment is necessary. In reactive planning response comes after
environmental changes take place. By the time organization responds to change in environment

Harish T.S
Asst.Prof, Dept. of ECE,
JNNCE.
 9

there may be further change in environment. Hence this type of planning is suitable in the
environment which is fairly stable over a long period of time.

Plans are classified into standing plans and single use plans as shown in fig below. Standing plans
provide guidelines for further course of action and are used over a period. Standing plans are
designed for situations that recur often enough to justify a standardize approach.
On the other hand single use plans are designed for specific end; when that end is reached, the
plan is dissolved or formulated again for next end. Examples of such plans are project, budgets,
quotas, targets etc. Single use plans are generally derived from standing plans. Organization set
their mission and objectives, out of which strategic actions are determined.

Vision:
 A vision describes a firm’s aspirations, beliefs and values, and shapes organization's
strategy.
 A vision should be brief, focused, clear and inspirational to an organization's employees.

Harish T.S
Asst.Prof, Dept. of ECE,
JNNCE.
 10

 It should be linked to customers’ needs and convey a general strategy for achieving the
mission.

Mission:
 Mission is the unique aim of an organization that sets it apart from others of its type.
 It is an organization's specialization in some area—service, product or client, which
decides the organization's scope of business.
 A firm’s mission guides the development of strategies.
 It establishes the context within which daily operating decisions are made and sets limits
on available strategic options.

Objectives:
 Objectives are goals or aims that the management wishes the organization to achieve in
pursuit of its mission.
 These are the end points towards which all business activities like organizing, staffing,
directing and controlling are directed.
 Objectives are the specific targets to be reached by an organization. They are the
translation of an organization's mission into concrete terms against which results can be
measured.

Characteristics of Objectives
 Objectives are multiple in number
 Objectives change over time
 Objectives are either tangible or intangible
 Objectives have a priority
 Objectives are generally arranged in a hierarchy
 Objectives sometimes clash with each other

Requirement of Sound Objectives

 Objectives must be both clear and acceptable
 Objectives must support one another
 Objectives must be precise and measurable
 The more precise and measurable the goal, the easier it is to decide how to achieve
it.
 Precise and measurable goals are better motivators of people than general goals.
 Precise and measurable goals make it easier for lower level managers to develop their
own plans for actually achieving those goals.
 It is easier for managers to ascertain whether they are succeeding or failing if their
goals are precise and measurable.
 Objectives should always remain valid
Harish T.S
Asst.Prof, Dept. of ECE,
JNNCE.
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Advantages of Objectives
 They provide a basis for planning and for developing other type of plans such as policies,
budgets and procedures.
 They act as motivators for individuals and departments of an enterprise by pointing the
way to desired performance.
 They eliminate haphazard action which may result in undesirable consequences.
 They facilitate coordinated behaviour of various groups which otherwise may pull in
different directions.
 They function as a basis for managerial control by serving as standards against which
actual performance can be measured.
 They facilitate better management of the enterprise by providing a basis for leading,
guiding, directing and controlling the activities of people of various departments.
 They lessen misunderstanding and conflict and facilitate communication among people
by minimizing jurisdictional disputes.
 They provide legitimacy to organization’s activities.

Strategies:
 Strategy is a term which denotes a response to a competitive environment.
 In a competitive situation, it is not enough to build plans logically from goals unless the
plans take into account the environmental opportunities, threats, organizational
strengths and weaknesses.
 A corporate strategy is a plan that takes these factors into account and provides an
optimal match between the firm and the environment.
 Two important activities involved in strategy formulation are:
 Environmental Appraisal
 Corporate Appraisal

Standing Plans:
 These plans are designed for situations that recur often enough to justify a standardised
approach.
 The major types of standing plans are:
 Policies
 Procedures
 Methods
 Rules

Policy:
A policy is a general guideline for decision-making. It sets up boundaries around decisions,
including those that can be made and shutting out those that cannot.
Harish T.S
Asst.Prof, Dept. of ECE,
JNNCE.
 12

Advantages of Policies
 Policies ensure uniformity of action in respect of various matters at various organisational
points.
 Policies speed up decisions at lower levels.
 Policies make it easier for the superior to delegate more and more authority to his
subordinates
 Policies give a practical shape to the objectives
Disadvantages of Policies
 Policies with broad areas of discretion and initiative lead to inconsistent interpretations
and make the very delegation of authority difficult which they are intended to implement.
Procedures:
 Policies are carried out by means of more detailed guidelines called “procedures”.
 A procedure provides a detailed set of instructions for performing a sequence of actions
involved in doing a certain piece of work.
 The same steps are followed each time that activity is performed.

Difference between Procedures and Policies

Policies Procedure

Policies are general guidelines Procedures are general

to both thinking and action of guidelines to action only usually
people at higher level. for people at lower levels.

Policies help in fulfilling the Procedures show us the way to

objectives of the enterprise. implement policies.

Policies are generally broad and Procedures are specific and do

allow some latitude in decision- not allow latitude.
making.

Policies are often established Procedures are always

without any study or analysis. established after thorough study
and analysis of work.

Harish T.S
Asst.Prof, Dept. of ECE,
JNNCE.
 13

Advantages and Limitations of Procedures

Advantages
 They indicate a standard way of performing a task. This ensures a high level of uniformity
of performance in the enterprise.
 They facilitate executive control over performance.

Limitations
 By prescribing one standard way of performing a task, they limit the scope for innovation
or improvement of work performance.
 By cutting across department lines and extending into various other departments they
sometimes result into so much duplication, overlapping and conflict that the actual work
does not get done properly and resources are wasted.

Methods:
 A method is a prescribed way in which one step of a procedure is to be performed.
 The method that is selected for discharging a particular step under the existing conditions
may become outdated in due course of time because of the discovery of better and more
economical methods.
 The need for better and more economical methods of operation is great because of the
pressure of competition.
 Methods help in increasing the effectiveness and usefulness of the procedure.

Rules:
 Rules are detailed and recorded instructions that a specific action must or must not be
performed in a given situation.
 Rules bring in predictability.
 A rule is different from a policy, procedure or method.
 They allow simple screening of violations and legitimize punishment when violated.

Harish T.S
Asst.Prof, Dept. of ECE,
JNNCE.
 14

Limitations in Planning:
1. Planning is an expensive and time-consuming process
2. Planning sometimes restricts the organization to the most rational and risk-free
opportunities
3. The scope of planning is said to be limited in the case of organizations with rapidly
changing situations
4. Establishment of advance plans tends to make administration inflexible
5. There is the difficulty of formulating accurate premises
6. Planning may sometimes face people’s resistance

Decision Making:
Meaning of a decision:
 A decision is a choice between two or more alternatives.
 This implies three things:
i. When managers make decisions they are choosing—they are deciding what to do on
the basis of some conscious and deliberate logic or judgement.
ii. Managers have alternatives available when they are making a decision.
iii. Managers have a purpose in mind when they make a decision.

Harish T.S
Asst.Prof, Dept. of ECE,
JNNCE.
 15

Types of Decisions
 Programmed and Non-Programmed Decisions:
 In the case of programmed decisions, since each manager is guided by the same set of
rules and policies.
 In case of non-programmed decisions, since each manager may bring his own personal
beliefs, attitudes and value judgements to bear on the decision process.

 Major and Minor Decisions

 Degree of Futurity of Decision
 Impact of the Decision on Other Functional Areas
 Qualitative Factors that Enter the Decision
 Recurrence of Decisions
 Routine and Strategic Decisions: Have as a primary purpose of achieving as high a degree
of efficiency as possible in the company’s ongoing activities. Routine decisions require
little deliberation and money and are taken by managers at lower levels, while strategic
decisions require lengthy deliberation and large funds and are taken higher levels
managers.
 Sequential and Bear-by-the-Tail decisions
In a sequential decision, the manager makes a decision one part at a time; when the
results of the first part are known, he can use them in deciding the second part; the results
of the second part help in shaping his decision on the third part, and so on, with each
succeeding part.
 Individual and group decisions
Individual decisions are taken where the problem is of a routine nature, where the analysis
of variable is simple and where definite procedures to deal with the problem already exist.
First important and strategic decisions which may result into some change in the
organisation are generally taken by a group.

Steps in Decision Making:

•Recognition of problem.
•Deciding priorities among problems.
•Problem diagnosis.
•Development of alternative solutions.
•Studying and comparing the affect of alternatives.
•Implement the decision into action.
•Study the result (Follow up action).

Harish T.S
Asst.Prof, Dept. of ECE,
JNNCE.
 16

Harish T.S
Asst.Prof, Dept. of ECE,
JNNCE.
 17

Harish T.S
Asst.Prof, Dept. of ECE,
JNNCE.
 18

Harish T.S
Asst.Prof, Dept. of ECE,
JNNCE.