UNIT – 1

NATURE OF MANAGEMENT

MEANING OF MANAGEMENT

Management is a process of planning, decision making, organizing, leading,

motivation and controlling the human resources, financial, physical, and
information resources of an organization to reach its goals efficiently and
effectively.

Definition of Management?
A ‘Management Is a distinct process consisting of planning, organizing,
actuating and controlling; utilizing in each both science and art, and followed in
order to accomplish pre-determined objectives."
‘Management is a problem-solving process of effectively achieving organizational
objectives through the efficient use of scarce resources in a changing environment .

Importance of Management
1. It helps in Achieving Group Goals - It arranges the factors of production,
assembles and organizes the resources, integrates the resources in effective
manner to achieve goals. It directs group efforts towards achievement of pre-
determined goals.
2. 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.
3. 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.
4. 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 fulfillment 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.
5. 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.
6. 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.

Nature of Management

(i) Management is a goal-oriented process: Every organisation has formed

for some specific purpose. The goal of management should be to achieve
these purposes. These should be simple and clearly stated.

(ii) Management is all pervasive: The activities involved in managing an

organization are common to all whether it is performed economic, social or
political activity. A petrol pump needs to be managed as much as a hospital
or a school. Management is not only required for

(iii) Management is multidimensional: Management is a complex activity

that has three main dimensions. These are:

(a) Management of work:

(b) Management of people:
(c) Management of operations:
 (iv) Management is a continuous process: The process of management is a
series of continuous, composite, but separate functions (planning,
organizing, directing, staffing and controlling).

(v) Management is a group activity: An organization is a group of diverse

individuals with different needs. Every member of the group has a different
purpose for joining the organization but as members of the organization they
work towards fulfilling the common organizational goal. This requires team
work and coordination of individual effort in a common direction.

(vi) Management is a dynamic function: Management is a dynamic

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

(vii) Management is an intangible force: Management is an intangible

force that cannot be seen but its presence can be felt in the way the
organization functions.

Functions of Management

1. Planning
Planning is an important function of management because it sets the pace for
all subsequent steps in the managerial process. You need to develop a
roadmap for the future—predefined steps—to accomplish organizational
goals. In this step, you’ll have to evaluate methods and strategies to
determine how you’ll progress toward your goal.

2. Organizing
This is where you put your plan into action by establishing a system of
authority or hierarchy in the context of your organizational structure.
Determine the tasks that need to be completed to achieve your goals before
assigning them to your staff. As opposed to the traditional ways of working
where a manager made all the decisions, today’s business world is more
 dynamic and flexible. Every member of the organization—regardless of
position—shares accountability and responsibility.

3. Staffing
This is another important function of management. You have to assign tasks
based on each team member’s knowledge, skills and abilities. You have to
be careful here because you may have to hire new talent for specific tasks
that require specific technical expertise. Assessing the needs of your
employees in terms of incentives, training and development and
compensation are critical for the success of this step.

4. Directing
Directing is concerned with supervising your team’s progress. In this step,
you have to keep an open channel of communication and get regular updates
to stay on top of things. A great way to do this is by giving and receiving
feedback to address any problem areas and improve performance. This is
where you have to act as a leader, navigate conflict and motivate your
employees to take initiative.

5. Controlling
This is where you have to measure the progress of each step established in
the planning stage against your organizational goals. This step requires you
to coordinate with your employees to ensure that they’re moving in the right
direction and in the right manner. According to Gulick’s 7 functions of
management, controlling can be understood in terms of coordinating,
reporting and budgeting.

Levels of Management
1. Administrative, Managerial, or Top Level of Management
This level of management consists of an organization’s board of directors and
the chief executive or managing director. It is the ultimate source of power and
authority, since it oversees the goals, policies, and procedures of a company. Their
main priority is on the strategic planning and execution of the overall business
success.
The roles and responsibilities of the top level of management can be summarized
as follows:

 Laying down the objectives and broad policies of the business enterprise.
 Issuing necessary instructions for the preparation of department-specific
budgets, schedules, procedures, etc.
 Preparing strategic plans and policies for the organization.
 Appointing the executives for middle-level management, i.e. departmental
managers.
 Establishing controls of all organizational departments.
 Since it consists of the Board of Directors, the top management level is also
responsible for communicating with the outside world and is held accountable
towards an organization’s shareholders for the performance of the enterprise.
 Providing overall guidance, direction, and encouraging harmony and
collaboration.

2. Executive or Middle Level of Management

The branch and departmental managers form this middle management level.
These people are directly accountable to top management for the functioning of
their respective departments, devoting more time to organizational and directional
functions. For smaller organizations, there is often only one layer of middle
management, but larger enterprises can see senior and junior levels within this
middle section.

The roles and responsibilities of the middle level of management can be

summarized as follows:

 Executing the plans of the organization in accordance with the policies and
directives laid out by the top management level.
 Forming plans for the sub-units of the organization that they supervise.
 Participating in the hiring and training processes of lower-level management.
 Interpreting and explaining the policies from top-level management to lower-
level management.
 Sending reports and data to top management in a timely and efficient manner.
 Evaluating the performance of junior managers.
 Inspiring lower level managers towards improving their performance.
3. Supervisory, Operative, or Lower Level of Management
This level of management consists of supervisors, foremen, section officers,
superintendents, and all other executives whose work must do largely with HR
oversight and the direction of operative employees. Simply put, managers at the
lower level are primarily concerned with the execution and coordination of day-to-
day workflow that ensure completion of projects and that deliverables are met.

The roles and responsibilities of the lower level of management can be

summarized as follows:

 Assigning jobs and tasks to various workers.

 Guiding and instructing workers in day-to-day activities.
 Overseeing both the quality and quantity of production.
 Maintaining good relations within lower levels of the organization.
 Acting as mediators by communicating the problems, suggestions, and
recommendatory appeals, etc. of workers to the higher level of management,
and in turn elucidating higher-level goals and objectives to workers.
 Helping to address and resolve the grievances of workers.
 Supervising and guiding their subordinates.
 Taking part in the hiring and training processes of their workers.
 Arranging the necessary materials, machines, tools, and resources, etc.
necessary for accomplishing organizational tasks.
 Preparing periodical reports regarding the performance of the workers.
 Upholding discipline, decorum, and harmony within the workplace.
 Improving the enterprise’s image as a whole, due to their direct contact with the
workers.
Roles of Managers

A. Interpersonal Roles of Manager

1. Figurehead

A manager plays a figurehead role when he performs activities such as attending

ceremonial functions which have symbolic nature. Sometimes managers greet
visitors, attend social functions involving employees, and handling out merit
certificates and other awards to outstanding employees.

2. Leader

The leader role of a manager involves leading and motivating his subordinates for
willing contribution. Managers perform leader roles when they perform activities
such as Hiring, Training, motivating, and guiding subordinates.
3. Liaison

In the Liaison role, the manager act as a mediator between the organization and the
outsider.He serves as a connecting link between his units and organizational units,
and sometimes with people from the external environment.

B.Informational Roles of Manager

The informational role of a manager is like serving as a focal point for the
exchange of information. It includes communication, giving, and receiving
information, both within and outside the organization. Information is required at
every level in an organization to make decisions effective.

There are three types of informational roles of a manager in an organization.

 Monitor role
 Disseminator role
 Spokesperson role

1. Monitor

The manager seeks and receives information about those factors which affect his
activities. These factors may be within the organization as well as outside it.

By playing a monitor role, Managers gain an understanding of the Organization

and its environment.

2. Disseminator

In the disseminator role, the manager transmits information to subordinates, peers,

and superiors within the Organization.

The manager has to act as a disseminator and distributes the information to his
subordinates because they may not be in a position to collect it.
3. Spokesperson

In the spokesperson role, the manager represents his organization or unit while
interacting with outsiders.

More precisely, the Spokesperson Speaks on behalf of the Organization and

transmits information on Organization plans, policies, and actions to outsiders.

C.Decisional Roles of Manager

Decisional roles of a manager involve choosing the most appropriate and best
alternative out of the available ones so that the organization achieves its objectives
when the chosen alternative is put into action.

In his decisional roles, the Manager performs four different roles as follows;

 Entrepreneur role
 Disturbance handler role
 Resource allocator role
 Negotiator role

1. Entrepreneur

Manager as an Entrepreneur role, take initiative and make changes or

improvements in the activities of the Organization.

The manager assumes certain risk which is involved in terms of the outcomes of
action because these are affected by a variety of external factors.

External factors are dynamic and change constantly. And manager is required to
bring suitable changes in the organizational processes to align these with the
requirement of the environment.
2.Disturbance handler

As a role of disturbance handler, the manager has in charge and takes corrective
action when Organization faces unexpected crises.

The manager is required to tackle those forces and events which tend to disturb the
organizational equilibrium and normal functioning.

These forces and events may be strikes by Employees and the Trade/Labor Union,
shortage of raw material, employee complaints and grievances, etc.

3. Resource allocator

A manager as the resource allocator role must divide work and delegate authority
among his subordinates. He must decide who will get what work.

The manager allocates resources such as human, physical and financial among his
subordinates.

4. Negotiator

The manager represents the organization in bargaining and negotiations with

outsiders as well as insiders.

In the negotiator role, the manager negotiates with various interest groups in the
organization. Such interest groups are shareholders, employees, and outside
agencies.
Management as an Art, Science and Profession

Management as an Art:
Art is the experienced and personal utilisation of subsisting information to
accomplish solicited outcomes. It can be procured via education, research and
practice. As art is involved with the personal utilisation of data some kind of
inventiveness and creativity is needed to follow the fundamental systems acquired.
The essential characteristics of art are as follows:

 The presence of theoretical knowledge: Art assumes the presence of

specific academic knowledge. Specialists in their particular fields have
obtained specific elementary postulates which are appropriate to a specific
sort of art. For instance, the literature on public speaking, acting or music,
dancing is publicly acknowledged.
 Personalised application: The application of this primary information
differs from person to person. Art, hence, is a highly personalised notion.
 Based on custom and creativity: Art is practical. Art includes the creative
practice of subsisting intellectual knowledge. We know that music is based
on 7 notes. However, what makes the style of a musician different or
distinctive is his performance of these notes in an artistic way that is
uniquely his own solution.

Management as a Science:
Science is an organised collection of knowledge that emphasises definite universal
truths or the action of comprehensive laws. The central characteristics of science
are as follows:

 The organised body of knowledge: Science is a precise entity of

knowledge. Its systems are based on a purpose and consequence association.
 Universal validity: Scientific conventions have global genuineness and
application.
 Systems based on experimentation: Scientific conventions are originally
formed via research and then tested via repeated trial and error under the
regulated situations.
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.

Management is a social process - Since human factor is most important

among the other factors, therefore management is concerned with
developing relationship among people. It is the duty of management to
make interaction between people - productive and useful for obtaining
organizational goals

Distinction between Administration and Management