NATURE AND SIGNIFICANCE OF MANAGEMENT

Definition of Management

“Management is defined as the process of planning, organizing, actuating and

controlling an organization’s operations in order to achieve coordination of the
human and material resources essential in the effective and efficient
attainment of objectives.”
Robert L. Trewelly and M. Gene Newport
“Management is the process of working with and through others to
effectively achieve the organizational objectives by efficiently using limited
resources in the changing environment.”
Kreitner

Simple Words: Management is a process of getting things done with

aim of achieving goals effectively and efficiently.

Concept of Management
Management is a process that aims to bring the efforts of the people working
in the organization to achieve a common objective effectively and efficiently.

• Process: The term process refers to the primary activities performed in

an organization by the management to achieve the objective. It includes
planning, organizing, staffing, directing and controlling.

• Effectively: The term effectively refers to completion of the given task

in the allotted time frame. In simple words it is concerned with end
result.

• Efficient: The term efficient means completing the task within minimum
cost as well as optimum utilization of resources. It means doing task
correctly with minimum cost. It defines relationship between inputs and
outputs. Input resources are mainly money, material, machines, man
which need to be used efficiently to achieve desired output (Finished
product or service)
 Basis Effectiveness Efficiency

It refers to completing the

It refers to the process of
assigned task with minimum
Meaning completing the assigned task
wastage and at a minimum
within the given time frame.
cost.

To achieve the targets on Optimum use of resources

Objective
time. and at minimum cost.

Main Producing target production Production target production

element on time at minimum cost.

It simply means doing things

Simple It simply means doing right in a right way i.e., correctly in
Words things a faster and cost-efficient
manner

EFFIECENCY VS EFFECTIVENESS

1. These two terms are different, but they are interrelated.

2. These are two sides of the same coin.
3. Both need to be balanced and managed at times and are important.

Example: Suppose a company’s target production is 5000 units in a year.

To achieve the above target the manager operates double shift, using a
generator due to power failure. At last manager can achieve the target but
at higher production cost. In this case the manager is effective but not
efficient.

At times. a business concentrates on producing goods with less resources

i.e., cutting down costs but not achieving the target production. Due to
this, the product does not reach the market on time and competitors
enter the market. In this case the manager is efficient but not effective.
Characteristics of Management

1. Goal Oriented Process: Every organization has its own set of basic goals
to achieve as an existence. It is through management that the efforts of
the people working in the organization are directed towards
accomplishment of these objectives. Hence, we can say management is
a goal-oriented process. It is fruitless to operate if an organization
doesn't have a set goal. These goals should be simple and clearly stated.

For example:

Retail store: The goal of the retail store may be to increase sales.

NGO(Education): The goal is to impart education to children with

special needs.
2. All Pervasive: Management is a universal process. It is necessary in all
types of organization, whether big or small, and is performed at every
level of authority; top, middle or lower. The five activities of
management are the same and common for all the organizations
whether economic, social or political. It’s just that the methodology
differs but the basics and foundation remain the same.

For Example:

A petrol pump needs to be managed as much as a hospital or a school.

Managing work will be same in India, Germany, US etc. The difference

may be due to differences in culture, tradition and history.

3. Multidimensional: Management has three important dimensions.

These are as follows:
• Management of work: Every enterprise has a purpose behind its
existence. The major purpose is performance of certain works for
accomplishment of end results. Management converts the work
to be performed in terms of goals and helps in achieving them.

For example:

• A Hospital operates for the treatment of patients.

• A Supermarket exists for the fulfillment of day to day demands of

people.

• In a Factory, a product is manufactured.

• Management of people: Management unites the efforts of the

group of individuals working in the enterprise so that they can
work together as a team. Human resource or manpower is said to
be the biggest asset of an organization. The task of a management
is to get things done by individuals as well as groups of people.

Managing people has two dimensions:

1. It implies dealing with employees as individuals with diverse

needs and behavior.
2. It also means dealing with individuals as a group of people.
 • Management of operations: Every enterprise has some basic
product or service to deliver which requires a production process,
and a set of operations where the inputs are converted to final
product with the help of technology, this is management of
operations.

4. Continuous Process: Management is a continuous process as it

consists of a series of interrelated activities. These functions should be
performed in a systematic and orderly manner and in a proper sequence. It is
a never-ending process. The activities include functions like planning,
organizing, directing, staffing and controlling. These functions are different but
need to be performed simultaneously by all managers.

5. A Group Activity: Management is a group activity as it is concerned with

the efforts of a group of individuals. Every member of the organization has a
different purpose for joining the organization but as members of the
organization they work towards a common goal. This requires teamwork and
coordination of individuals which unites the efforts of the members in the
group and directs them towards attainment of a common objective.

6. A Dynamic Function: Management is a dynamic function and has to

adapt itself to the changing environment. An organization interacts with its
external environment which consists of various social, economic and political
factors. In order to be successful an organization must change itself and its
goals according to the needs of the environment.

For Example:
McDonalds: It made major changes in its Menu card to survive in India.

7. Intangible Force: Management is an invisible force. It cannot be seen,

but it can be felt through the achievement of objectives. The effect of
management is noticeable in an organization where targets are met according
to the plans, employees are happy and satisfied and there is no chaos. This is
vice-versa for bad Management.
Objectives of Management

Objectives are the desired results that drive the management to work towards
it. There are three objectives of management:

1. Organizational Objectives: Organizational Objectives are those

objectives that are set by the management of an organization within a
predetermined time period. An organization has different types of
objectives to achieve, these objectives are determined in consideration
to the different interests of the stakeholders. The main objective of an
organization is optimum utilization of resources in the most effective
and efficient manner. It is further divided into three parts- survival, profit
and growth.

• Survival: Ensuring survival in the market in the long run by taking

positive decisions in respect of business activities is the primary
objective of management. Earning enough revenues to cover the
cost of production is of utmost importance to an organization.

• Profitability: Any person or individual who runs a business has

the ultimate objective of earning profit. Management ensures to
earn sufficient profit to meet its various needs. Profit provides vital
 incentive for continued successful operations of the organizations.
Management makes best use of men, money, material, machinery
and other resources in order to earn profit. Good amount of profit
provides better return to investors in terms of dividend, interest
etc.

• Growth: Management should aim towards continuously

improving the performance of the organization. It is the general
objective of management to secure maximum results through
minimum resources to increase prosperity and growth. Growth of
an organization can be measured in various ways and depending
upon various parameters. The growth indicators can vary from
organization to organization. Some may consider an increase in
sales volume, some may look for an increasing number of
products, etc.

2. Social Objectives: Any organization that operates doesn't solely have

an objective of profit making. It also has some social obligations or social
objectives to fulfill towards society. This may differ from organization to
organization.

For example:

Some aim at providing basic infrastructure to the people living around.

Some aim at providing maximum employment,

Some aim at producing products that are environmentally friendly.

3. Personal Objectives: Every individual joins an organization to pursue

their own personal objectives. Some join for a good package of salary, some
join for greater recognition, some just for survival. So, this depends on
individual to individual. It is important for an organization to identify the
personal objectives to integrate/reconcile it with the organizational objectives
to bring harmony in the organization.