Management – Concept,

Nature and Importance

By : SHOBHIT KUMAR
 Concept of Management
• Management is a relatively newer discipline
• It has drawn concepts and principles from various other disciplines
like economics, sociology, psychology, anthropology and so on
• The pertinent concern with this is that each discipline has treated
Management from within its own view-point
• Economists look at management from a production prism, sociologist
from a social group or class perspective and governments from an
administrative and implementation angle
• This makes it difficult for management to be defined comprehensively
 Concept of Management
• Management is needed to convert the disorganized resources of men,
machines, materials and methods into a useful and effective
enterprise.
• Management is a pipeline, the inputs are fed at the end and they are
proceeded through management functions and ultimately we get the
end results or inputs in the form of goods, services, productivity,
information and satisfaction.
• In the narrow sense, it signifies the technique of taking work from
others. In this way a person who can take work from others is called
manager. In the wider sense, the management is an art, as well as
science, which is concerned with the different human efforts so as
achieve the desired objective.
Concept of Management
 Concept of Management - Divisions
• Management as process / activity
• Management as noun / group of personnel
• Management as a discipline
 Management as Process
• Management scholars like Kimball, Koontz, O'Donnell, Newmann,
Summer, Stanley Vance, Theo Haimann, F.C. Hooper and E.F.T Breach
all call it a process. It is evident from the following definitions also:
• According the Kimball, management may be broadly defined as the
art of applying the economic principles that underlie the control of
men and materials in the enterprise under consideration
• According to Koontz, "Management is the art of getting things done
through and with people in formally organized groups”
• According to Theo Haimann, "Management is the function of getting
things done through people and directing the efforts of individuals
towards a common objective"
 Management as Process
• According to Sisks, "Management is the process of working with one
another to effectively achieve organizational objectives by efficiently
using limited resources in changing environment”
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• A process can be defined as a systematic method of handling
activities
• But the management process is often considered a complex one –
An identifiable flow of information through interrelated stages of
analyses directed towards the achievement of an objective or set of
objectives
• The activities through which these objectives can be achieved are
classified into operational and managerial
 Management as Process
• Operational activities are those which are of operative nature –
through which actual work is accomplished (machine handling by
workers, putting finished product cartons in godown etc.)
• Managerial activities, on the other hand, are performed to get
thongs done by others (supervisor instructing a worker to do
something, call center team lead overlooking daily activities at a BPO,
etc.)
• Managerial activities are different from operational activities in that
they are supervisory in nature and intended to get things done by
others.
• Thus, Management can be defined as the process of ‘getting work
done by others or through efforts of others’
 Management as Process - Orientations

• Production or Efficiency oriented

• Decision oriented
• People oriented
• Function oriented
 Management – Production / Efficiency oriented
definition
• Theorists have put forth management as concerned with generating
efficiency in organizational settings
• Taylor has defined management as the art of knowing what you want
to do and then seeing that it is done in the best and cheapest way
• This definition of management emphasizes the relationship between
efforts and results as its primary objective but does not lay down how
to achieve this causality can be achieved
• This is where the definition falters
 Management – Decision oriented definition
• Stanley Vance defined management as simply the process of decision
making and control over the action of human beings for the expressed
purpose of attaining pre-determined goals
• Decision theorists have seen management in terms of decision
making
• Whatever a manager does is through decision making
• This definition suggests that decision making powers provide a
dynamic force for managers to transform the resources of business
organizations into productive, cooperative concerns
• The flaw of this decision is that it does not provide the processes in
which context decision making is applied
 Management – People oriented definition
• In this group of definitions, management is defined as a process of
coordinated efforts of people in organizational settings
• Management is the direction of people and not of things
• Lawrence Appley defines management as the accomplishment of
results through the efforts of other people
• Koontz has defined management as the art of getting things done
through and with people in formally organized groups
• These definition offer a better definition of management but the
flaw arises in that they do not specify functions or activities
involved in the process of getting things done by or with the
cooperation of other people
 Management – Function oriented definition
• This group of definitions puts emphasis on the various functions
performed by managers in organizations though there is no
uniformity in these functions in various definitions
• McFarland states that management is defined for conceptual,
theoretical and analytical purposes as that process by which
managers create, direct, maintain and operate purposive
organizations through systematic, coordinated and cooperative
human efforts
• These definitions are more relevant to understand the exact nature
and scope of management
• Management is a process involving planning, organizing, directing
and controlling human efforts to achieve stated objectives in an
organization
 Management as Activity
• According to this approach management consists of those activities,
which are performed by managers in attaining the predetermined
objectives of the business. This approach may be referred to Henry
Fayol, who classified management activities into the following
categories:

• Technical - referred to production department

• Commercial - relates to buying, selling and exchange
• Financial concerned with maximum utilization of capital
• Security concurred with protection of property and person
• According concerned with maintenance of accounts, presentation and
statistics
• Management concerned to planning, organizing, commanding, coordinating
and controlling
 Management as Noun/Group of Personnel
• According to this approach human factor plays an important role in
accomplishing business objectives. Management is concerned with
those who have been managing the affairs of the business.
Managers are assigned duties and are also granted requisite
authority to perform their duties efficiently and thus, management
is effective direction, coordination and control of individual and
group efforts to accomplish business objectives.
• This approach is advocated by management authorities like Taylor,
Wilson and others.
• As per F.W. Taylor's approach, "Management is the art of knowing
exactly what you want your men to do and then seeing that they do
it in the best and cheapest way."
 Management as a Discipline
• Some times the term 'Management' is used to connote neither the
activity nor the personnel who exercise it, but as a substantive
subject, a body of knowledge and as a subject of study.
Management is being taught in different college and universities as
a distinct subject.
• Thus, management, as such is a process, an activity, a discipline and
as effort to coordination, control and direct individual and group
efforts towards desired goal of any business.
 Concept of Management - Nature
• Management is an activity: Management is an activity which is
concerned with the efficient utilization of human and non-human
resources of production
• Invisible Force: Management is an invisible force. Its existence can be
felt through the enterprise or institution it is managing
• Goal Oriented: Management is goal oriented as it aims to achieve
some definite goals and objectives. According to the Haimann,
"Effective management is always management by objectives".
Managers and other personnel officers apply their knowledge,
experience and skills to achieve the desired objectives
 Concept of Management - Nature
• Accomplishment through the efforts of Others: Managers cannot do
everything themselves. They must have the necessary ability and
skills to get work accomplished through the efforts of others
• Universal activity: Management is universal. Management is required
in all types or organizations. Wherever there are some activities,
there is management. The basic principles of management are
universal and can be applied anywhere and in every field, such as
business, social, religious, cultural, sports, administration,
educational, politics or military
• Art as well as Science: Management is both an art and a science. It is
a science as it has an organized body of knowledge which contains
certain universal truths and an art as managing requires certain skills
which apply more or less in every situation
 Concept of Management - Nature
• Multidisciplinary Knowledge: Though management is a distinct
discipline, it contains principles drawn from many social sciences like
psychology, sociology etc.
• Management is distinct from ownership: In modern times, there is a
divorce of management from ownership. Today, big corporations are
owned by a vast number of shareholders while their management is
in the hands of paid qualified, competent and experienced
managerial personnel
• Need at all levels: According to the nature of task and scope of
authority, management is needed at all levels of the organization, i.e.,
top level, middle and lower level
 Concept of Management - Nature
• Integrated process: Management is an integrated process. It
integrates the men, machine and material to carryout the operations
of the enterprise efficiently and successfully. This integrating process
is result oriented
 Concept of Management - Importance
• Management has assumed importance due to the emergence of large
sized organizations and the complexities they bring with them
• Another aspect that accords management its importance is the
changing nature of society and its various constituents (country,
religion, morality, patriotism, family, economy etc.)
• Urwick has highlighted the importance of management by observing
that no ideology, no ism, or political theory can win greater output
with less efforts from a given complex of human and managerial
resources than sound management. And it is on such greater output
that a higher standard of life, more leisure and more amenities for all
must necessarily be found
 Concept of Management - Importance
• Effective utilization of resources

• Management aims to utilize resources effectively due to the scarcity of

resources premise
• Since demand of society has to be met, the contribution of scarce resources
should be maximum for its general interest
• Management not only decides in which way a particular resource be used,
but also takes action to utilize the particular resource in the best way
 Concept of Management - Importance
• Development of Resources

• Management develops various resources, both human and non-human

• Lawrence Appley has emphasized that management is the development of
people
• Most resource development is carried out in an organized way and
management leads these activities
 Concept of Management - Importance
• To Incorporate Innovations

• Changes are rampant in both technology and social processes and structure
• Such changes have to be incorporated to keep the organization alive and
kicking
• Management helps organizations to strategize for the future by helping them
acquire / develop high levels of competence, specialization and technology
 Concept of Management - Importance
• Integrating various Interest Groups

• Organized efforts of businesses witness pressures from various interest

groups for maximum share in the combined output
• Pressure groups such as shareholders, employees, governments, vendors,
etc. put various demands on the organization
• Management has to balance these pressures so as to ensure optimum
allocation of output / resources
 Concept of Management - Importance
• Stability in Society

• Management provides stability in society by modifying or changing resources/

output in accordance with the changing social environment
• Today, innovation sways society and it is management’s role to provide
integration between traditions and innovations