Notes - Management

8. Management

 

8.1 Management

 

Management is an activity which is necessary wherever there is a group of people working in an organisation, towards a common goal. It is a process of planning, organising, actuating and controlling the organisation’s operations and activities, effectively and efficiently. Thus, management means to manage men tactfully in the organisation to achieve group goals.

According to Harold Koontz and Heinz Weihrich “Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims”.

 

8.1.1 Features/Characteristics of Management

 

The definitions discussed, point out the following features:

(i)   A Goal Oriented Process: An organisation has a set of goals to achieve, e.g. to earn 20% increase in sales, has to decrease 5% cost, etc. Management unites the efforts of different individuals in the organisation towards achieving these goals.

(ii)  Group Activity: An organisation is a group of different individuals, who work together with team spirit to achieve the objectives of organisation.

(iii) Intangible Force: Management cannot be seen and only be felt through orderly work, discipline, smooth functioning of activities and satisfied and happy employees and customers.

(iv) All Pervasive: Managerial functions and activities are performed in all types of organisations and at all levels.

(v)  Multi-Dimensional: It is a complex activity and entails management of work, of people and of operations.

(vi) Continuous Process: Management is a performance of continuous, composite but separate functions. These functions are simultaneously performed by all managers all the time.

(vii) A Dynamic Function: Management has to adapt itself, to the changing scenario in order to survive.

 

8.1.2 Objectives of Management

 

Objectives are the desired result of any activity for the benefit of organisation, employees and society. These are

• The most important objective of every business is to survive and in order to survive, it should earn enough revenue to cover its costs.
• It is the incentive or reward for carrying out a business. It is a situation when the firm’s revenues are able to cover costs and risks of the business.
• It is an extension of the objective of survival and profit. Business organisations must grow and expand their activities. The success of every business is measured by the growth rate and growth is measured in terms of sales, profits number of products produced and sold, etc.
• Creating employment opportunities for disadvantaged sections of society.
• Providing good quality products at reasonable prices.
• Honest and timely payment of taxes, using eco-friendly techniques of production.

 

8.1.3 Levels of Management

 

Levels of management is a series of managerial positions from top to bottom. Every individual in the organization is responsible to complete a task and is bestowed certain amount of authority.

The authority-responsibility relationship binds all individuals as superiors and subordinates, which gives rise to different levels in the organisation.

 

1. Top Level Management

It consists of members at the highest level in the management hierarchy. This level includes Board of Directors, Chief Executives, Managing Directors, Chairman, President, Vice-President CEO, COO etc.

 

Main role functions of the top level management are as follows.

• To analyse, evaluate and deal with the external environment.
• To determine the objectives and policies of the business.
• To strive for welfare and survival of business.
• To create an organisational framework consisting of authority-responsibility relationship.
• To integrate and coordinate the activities of different departments.
• To be responsible for all activities and arranging financial and non-financial resources.

 

2. Middle Level Management

It consists of members or groups, who are concerned with implementation of the policies laid down by the top management. This level includes Head of the Departments such as Finance Manager, Marketing Manager, Branch and Regional Managers, Departmental and Divisional Heads, Plant Superintendent etc.

 

Main role/functions of the middle level management are as follow

 

• To interpret the policies framed by top management.
• To assign duties and responsibilities to lower level managers.
• To maintain close contacts with operative level so as to evaluate their performance.
• To select and appoint employees for middle and supervisory level.
• To cooperate with other departments for smooth functioning.

 

3. Lower Operational/Supervisory Level Management

It refers to the groups or members, who are concerned with execution of the work. They are also known as first line managers. This level includes Foremen, Clerks, Inspectors etc. They assume importance because they are in direct contact of workers and pass on instructions of the middle management to them.

 

Main role/functions of the lower level management are as follow

 

• To plan and execute day-to-day operations.
• To supervise and control the workers.
• To arrange materials and tools to start the process.
• To make arrangements for training, if required by the workers.
• To represent workers’ grievances and suggestions before the management.
• To ensure safe and proper working conditions, discipline and congenial environment in the factory.

 

8.1.4 Nature of Management

 

Management has been considered as an art by some and science by others. However, it lies somewhere in between, as it has characteristics of both science and art.

 

Management as a Science

 

Management is regarded as science because of the following reasons:

(i)   Systematised Body of Knowledge: It has its own theories and principles. The principles have been developed over a period of time and draws its concepts from various disciplines like economics, sociology, psychology and mathematics. 

               

(ii)  Principles Based on Scientific Observations and Experiments: Like science, management principles are based on scientific enquiry and observations.

 

(iii) Universal Validity and Application: Like science, management principles are universally valid.

 

(iv) Cause and Effect Relationship: They try to establish cause and effect relationship, e.g. if unity of command is not followed, there may be chaos and confusion.

 

Management as an Art

 

Management is regarded as an art because of the following reasons:

(i)   Existence of Theoretical Knowledge: A successful manager practices the art of management in the day-to-day job of managing an enterprise.

 

(ii) Personalised Application: The use of basic knowledge varies from individual to individual, therefore, it is a personalised concept, e.g. two kathak dancers will always differ in demonstrating their art.

(iii) Based on Practice and Creativity: A good manager works through a combination of practice, creativity, imagination, initiative and innovation.

 

Thus, we see that management is both an art and also a science. It is an inexact science, as its principles cannot be exacted as the principles of physics and chemistry. But as science and art, they are not mutually exclusive, but are complementary to each other.

 

Management as a Profession

 

First, we should know what is a profession? Profession refers to that economic activity which is conducted by a person having some special knowledge and skill which is used impartially to serve various sections of the society.

 

The main features of profession are as follows:

(i)   Well Defined Body of Knowledge: There is a specialised knowledge on management. Various principles, techniques and studies form the foundation of management education.

 

(ii)  Restricted Entry: For doctors, lawyers, CAs, they need a degree to enter into their respective profession. However, for a manager, it is not compulsory to have an MBA degree. However, more and more companies are recruiting people with professional degrees.

 

(iii) Ethical Code of Conduct: Members of a profession have to abide by the code of conduct of their profession. There is no code of conduct prescribed for management education. But these days, corporate social responsibilities, care for environment and business ethics, are the guiding force for business organisations for their survival and growth.

 

(iv) Professional Association: Doctors have to be the member of Medical Council, lawyers have to be the member of Bar Council. For managers. All India Management Association (AIMA) has been established, but it is not compulsory to be a member of the same.

 

(v) Service Motive: The main motive of a profession is to serve the society. There is no such code for managers. However, concerns are more and more focusing on social responsibility aspect.

On the basis of above discussion, it can be said that management does fulfil some of the characteristics of the profession, but not all. Therefore, we can say, in India management as a profession is still in its infancy stage

 

8.1.5 Principles of Management

 

The principles of management are statements of fundamental truth, which can be used by managers as guidelines for decision-making and action under different situations. Management principles are the basic elements of management theory. A principle may be either descriptive (which merely describes the relationship between the variables) or prescriptive (which are stated to indicate what a manager should do). They are used for conduct in work places under certain situations. They help managers to take and implement decisions.

 

• According to George R Terry, “A principle is a fundamental statement or truth providing guide to thought and action.”
• According to Koontz and O’ Donnell, “Management principles are fundamental truth of general validity Fayol and Taylor’s are two classical proponents of the principles of management.”

 

8.2 Henry Fayol’s Principles of Management

 

Henry Fayol, the French industrialist and mining engineer, had the opportunity to search for sound management principles. Based on his experience, Fayol wrote a book entitled General and Industrial Administration. He is known as the father of general management. Henry Fayol listed and explained fourteen principles of management which are as under

 

Management principles given by Henry Fayol are as follows:

 

(i)      Division of Work: Fayol advocated the division of work. According to him, if work is divided into small tasks, then it will help in taking advantage of specialisation.

 

(ii)     Authority and Responsibility: Authority mean the right to give orders and obtain obedience. On the other hand, responsibility means obligation to complete the assigned task on time. According to Fayol, there must be a balance between authority and responsibility. Excess of authority without matching responsibility may mean, bringing out negative results.

 

(iii)    Discipline: It is the sincerity and obedience towards organisational rules and regulations, as these are necessary for the smooth functioning of an organisation.

 

(iv)    Unity of Command: The principle of unity of command states that each participant in a formal organisation should receive orders and be responsible to only one superior. If any employee receives orders from two superiors, at the same time, the principle of unity of command is violated.

 

(v)     Unity of Direction: It implies that there should be one head and one plan for a group of activities, having the same objective.

 

(vi)    Order: As per this principle, there should be an orderly arrangement of men and material, which implies that there is a fixed place for everything and everyone in the organisation.

 

(vii)   Remuneration of Employees: The quantum and methods of remuneration payable to the employees should be fair and Reasonable

 

(viii)  Subordination of Individual Interest to General Interest: The employees having diverse individual interests, should integrate their efforts to achieve organisational objectives.

 

(ix)    Centralisation and Decentralisation: The concentration of decision-making authority is called centralisation, whereas, its dispersal among more than one person is known as decentralisation. According to Fayol, ‘an organisation should strive to achieve a proper balance between centralisation and decentralisation’.

 

(x)     Scalar Chain: It refers to the chain of authority and communication that runs from top to bottom and should be followed by managers and their subordinates.

 

 

         Fayol suggested ‘gang plank’, which permits the direct communication between C and F in case of emergency. Otherwise in normal conditions, C and F can communicate via B, A, E and then F.

 

(xi)    Stability of Personnel: Fayol suggested, when an individual gets selected for a post, then he should be given appropriate time to prove his abilities.

 

(xii)   Initiative: Fayol suggested that employees at all levels should be encouraged to take initiative. This will motivate them and they will work hard for the betterment of the organisation.

 

(xiii)  Esprit De Corps: It means unity is strength. Fayol emphasised on teamwork. He suggested that every employee must consider himself as the part of a team. This spirit brings harmony in the groups and they strive to work hard to achieve the targets of an organisation.

 

(xiv)  Equity: This principle emphasises kindliness and justice in the behaviour of managers towards workers. It will bring loyalty and devotion in the behaviour of employees.

 

8.2.1 FW Taylor’s Scientific Management

 

Frederick Winslow Taylor, an American engineer pioneered the scientific thought and his contribution is termed as ‘scientific management’.

According to FW Taylor, ‘Scientific management consists in knowing what you (i.e. management) want men to do exactly and seeing to it that they do it in the best and the cheapest manner’.

 

 

Principles of Scientific Management

The principles given by Taylor to support the concept and practice of scientific management are:

(i)   Science, not Rule of Thumb: Any kind of unscientific approach should be discarded and only scientific practices should be adopted.

 

(ii)  Harmony, not Discord: There should be unity in all actions arid all differences should be removed.

 

(iii) Cooperation, not Individualism: Individual objectives should be sublimed with priority given to achievement of group objectives.

 

(iv) Maximum, not Restricted Output: In Taylor’s view, all workers should aim for maximum output.

 

(v)  Development of Personnel to his Greatest efficiency: Management should try to build the capabilities of their employees, thus, promoting both employer’s and employees’ prosperity.

 

(vi) Mental Revolution: ‘Mental revolution’ as suggested by Taylor, is fundamental to scientific management. Mental revolution means changes in the attitude of both the employees and employers.