Introduction to management

“Success in management requires learning as fast as world is changing.”

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

Management is a very popular term and has been used extensively for all types of activities and
mainly for taking charge of different activities in any enterprise. It is essential wherever there is a
group of people working in the organisation. Management aims at guiding their efforts towards
achieving a common objective - A GOAL.

Management has to see that tasks are completed and goals are achieved (effectiveness) with least
amount of resources at a minimum cost (efficiency).

Thus, it is a process of getting things done with the aim of achieving goals effectively and
efficiently. We can analyse the meaning of the definition by understanding the meaning of few
terms.

PROCESS - the primary functions or activities that management performs to get things done.

EFFECTIVENESS - means finishing the tasks on time.

EFFICIENCY - Doing the task correctly and with minimum cost.

Management is essential for all organisations big or small, profit or non-profit, services or
manufacturing. Management is necessary so that individuals make their best contribution towards
group objectives. Management consists of a series of interrelated functions that are performed by all
managers. The time spent by managers in different functions however is different.

Managers at the top level spend more time in planning and organising than managers at lower levels
of the organisation.

Management is required in all kinds of organisations whether they are manufacturing computers or
handlooms, trading in consumer goods or providing hairstyling services and even in non-business
organisations.

Management has achieved an enviable importance in recent times. We are all intimately associated
with many kinds of organizations, the most omnipresent being the government, the school and the
hospital. In fact, more and more of major social tasks are being organized on an institution basis.

Medical care, education, recreation, irrigation, lighting, sanitation, etc., which typically used to be
the concern of the individual or the family, are now the domain of large organizations.

Although, organizations other than business do not speak of management, they all need
management. It is the specific organ of all kinds of organizations since they all need to utilize their
limited resources most efficiently and effectively for the achievement of their goals. It is the most
vital forces in the successful performance of all kinds of organized social activities.

The emergence of management in modern times may be regarded as a significant development as

the advancement of modern technology. It has made possible organization of economic activity in
giant organizations like the Steel Authority of India and the Life Insurance Corporation of India. It
is largely through the achievements of modern management that western countries have reached the
stage of mass consumption societies, and it is largely through more effective management of our
economic and social institutions that we can improve the quality of life of our people. It is the
achievements of business management that hold the hope for the huge masses in the third world
countries that they can banish poverty and achieve for themselves decent standards of living.
EFFECTIVENESS VS EFFICIENCY:

Effectiveness versus Efficiency .These two terms are different but they are interrelated.

For management, it is important to be both effective and efficient. Effectiveness and efficiency are
two sides of the same coin. But these two aspects need to be balanced and management at times, has
to compromise with efficiency.

For example, it is easier to be effective and ignore efficiency i.e., complete the given task but at a
high cost. Suppose, a company’s target production is 5000 units in a year. To achieve this target the
manager has to operate on double shifts due to power failure most of the time. The manager is able
to produce 5000 units but at a higher production cost.

In this case, the manager was effective but not so efficient, since for the same output, more inputs
(labour cost, electricity costs) were used.

At times, a business may concentrate more on producing goods with fewer resources i.e., cutting
down cost but not achieving the target production. Consequently, the goods do not reach the market
and hence the demand for them declines and competitors enter the market.

This is a case of being efficient but not effective since the goods did not reach the market.
Therefore, it is important for management to achieve goals (effectiveness) with minimum resources
i.e., as efficiently as possible while maintaining a balance between effectiveness and efficiency.

Usually high efficiency is associated with high effectiveness which is the aim of all managers. But
undue emphasis on high efficiency without being effective is also not desirable. Poor management
is due to both inefficiency and ineffectiveness.
 History of Management

Management is seen as a late-modern conceptualisation by some. Others detect management-

like-thought back to Sumerian traders and to the builders of the pyramids of ancient Egypt.
Slave-owners through the centuries faced the problems of exploiting/motivating a dependent
but sometimes unenthusiastic or recalcitrant workforce, but many pre-industrial enterprises,
given their small scale, did not feel compelled to face the issues of management
systematically. However, innovations such as the spread of Hindu numerals (5th to 15th
centuries) and the codification of double-entry book-keeping(1494) provided tools for
management assessment, planning and control.
Also, Machiavelli wrote about how to make organisations efficient and effective. The
principles that Machiavelli set forth in Discourses (1531) can be adapted to apply the
management of organisations today
Given the scale of most commercial operations and the lack of mechanized record-keeping
and recording before the industrial revolution, it made sense for most owners of enterprises in
those times to carry out management functions by and for themselves. But with growing size
and complexity of organizations, the split between owners (individuals, industrial dynasties
or groups of shareholders) and day-to-day managers gradually became more common.

Etymology -
The English verb "manage" comes from the Italian maneggiare (to handle, especially tools or
a horse), which derives from the two Latin words manus (hand) and agere (to act). The
French word for housekeeping, ménagerie, derived from ménager ("to keep house") also
encompasses taking care of domestic animals. Ménagerie is the French translation
of Xenophon's famous book Oeconomicus[12](Greek: Οἰκονομικός) on household matters
and husbandry. The French word mesnagement (or ménagement) influenced the semantic
development of the English word management in the 17th and 18th centuries.

Early writing -
Management (according to some definitions) has existed for millennia, and several writers
have produced background works that have contributed to modern management theories.
Some theorists have cited ancient military texts as providing lessons for civilian managers.
For example, Chinese general Sun Tzu in his 6th century BC work The Art of
War recommends being aware of and acting on strengths and weaknesses of both a manager's
organization and a foe's. The writings of influential Chinese Legalist philosopher Shen
Buhai may be considered to embody a rare pre-modern example of abstract theory of
administration.
Various ancient and medieval civilizations produced "mirrors for princes" books, which
aimed to advise new monarchs on how to govern. Plato described job specialization in 350
B.C., and Alfarabi listed several leadership traits in A.D. 900. The
Indian Arthashastra by Chanakya (written around 300 BCE), and The Prince by Italian
author Niccolò Machiavelli (c. 1515).
Written in 1776 by Adam Smith, a Scottish moral philosopher, The Wealth of Nations
discussed efficient organization of work through division of labour. Smith described how
changes in processes could boost productivity in the manufacture of pins. While individuals
could produce 200 pins per day, Smith analysed the steps involved in manufacture and, with
10 specialists, enabled production of 48,000 pins per day.

Classical economists such as Adam Smith(1723–1790) and John Stuart Mill (1806–1873)

provided a theoretical background to resource-allocation, production, and pricing issues.
About the same time, innovators like Eli Whitney (1765–1825), James Watt (1736–1819),
and Matthew Boulton (1728–1809) developed elements of technical production such
as standardization, quality-control procedures, cost-accounting, interchangeability of parts,
and work-planning. Many of these aspects of management existed in the pre-1861 slave-
based sector of the US economy. That environment saw 4 million people, as the
contemporary usages had it, "managed" in profitable quasi-mass production.
Salaried managers as an identifiable group first became prominent in the late 19th century.

By about 1900 one finds managers trying to place their theories on what they regarded as a
thoroughly scientific basis (see scientism for perceived limitations of this belief). Examples
include Henry R. Towne's Science of management in the 1890s, Frederick Winslow
Taylor's The Principles of Scientific Management (1911), Lillian Gilbreth's Psychology of
Management (1914), Frank and Lillian Gilbreth's Applied motion study (1917), and Henry L.
Gantt's charts (1910s). J. Duncan wrote the first college management-textbook in 1911. In
1912 Yoichi Ueno introduced Taylorism to Japan and became the first management
consultant of the "Japanese-management style". His son Ichiro Ueno pioneered
Japanese quality assurance.
The first comprehensive theories of management appeared around 1920. The Harvard
Business School offered the first Master of Business Administration degree (MBA) in 1921.
People like Henri Fayol (1841–1925) and Alexander Church described the various branches
of management and their inter-relationships. In the early 20th century, people like Ordway
Tead (1891–1973), Walter Scott and J. Mooney applied the principles of psychology to
management. Other writers, such as Elton Mayo (1880–1949), Mary Parker Follett(1868–
1933), Chester Barnard (1886–1961), Max Weber (1864–1920), who saw what he called the
"administrator" as bureaucrat), Rensis Likert (1903–1981), and Chris Argyris(born 1923)
approached the phenomenon of management from a sociological perspective.
Peter Drucker (1909–2005) wrote one of the earliest books on applied management: Concept
of the Corporation (published in 1946).
H. Dodge, Ronald Fisher (1890–1962), and Thornton C. Fry introduced statistical techniques
into management-studies. In the 1940s, Patrick Blackett worked in the development of
the applied-mathematics science of operations research, initially for military operations.
Operations research, sometimes known as "management science" (but distinct from
Taylor's scientific management), attempts to take a scientific approach to solving decision-
problems, and can apply directly to multiple management problems, particularly in the areas
of logistics and operations.
Some of the more recent developments include the Theory of Constraints, management by
objectives, reengineering, Six Sigma and various information-technology-driven theories
such as agile software development, as well as group-management theories such as Cog's
Ladder.
 Evolution of Management thought

Management practise is as old as human civilisation when people started living together in
groups. Every human group required management and the history of human beings is full of
organisational activities and early contributions which were relevant for management also
came from people related with public administration. However the study of how managers
achieve results is predominantly a twentieth century phenomenon. Initially, the contributions
in development of management thought came from people discharging managerial
responsibilities or closely related to business operations. However, these contributions were
not systematic. Over the period of time, growing competition and complexity of managing
large business organisations provided impetus for developing systematic management
concepts and principles. This phenomenon attracted the attention of a wide variety of
intellectuals- economists, sociologists, mathematicians and management practitioners- to
study the organisations and processes through which these organisations could be made more
effective. Each of these groups of intellectuals viewed the processes in a particular way and
made recommendations. This led to the emergence of a variety of orientations and
approaches in management; some making clear demarcations from others;

S. No MANAGEMENT THOUGHT PERIOD

1. Early contributions Up to 19th century
2. Scientific management 1900-1930
3. Administrative management 1916-1940
4. Human relations approach 1930-1950
5. Social systems approach 1940-1950
6. Decision theory approach 1945-1965
7. Management science approach 1950-1960
8. Human behaviour approach 1950-1970
9. Systems approach 1960s onwards
10. Contingency approach 1970s onwards
Early contributions -

Before the systematic study of management contributions in the field come from a variety of
sources: existence of organisation and administration in Egypt in 1300 B.C., Confucius’s
suggestions for proper public administration before Christ, Kautilya’s principles of state
administration in 320 B.C., Roman catholic church’ concept of staff personnel, systematic
administration as a source od strength during 16th to 18th centuries of the cameralists. These
contributions provided insights about how resources could be used more effectively.
However these contributions were outside the field of business and other economic
organisations. In the field of business organisations, some stray contributions have come from
Robert Owen, James Watt, Charles Babbage and Henry Town. Their contributions came bit
by bit and in a haphazard manner and have failed to stimulate to study of management as a
distinct discipline. However their ideas created awareness about managerial problems. By
the end of 19th century the stage was set for taking systematic study of management.

Chanakya (350-283 B.C.) produced 3 famous works: Artha Sastra, Chanakya neeti and
Chanakya sutra. He identified seven pillars for effective state administration: the king, the
minister, the country, the fortified city, the treasury, the army and the ally. These can be
treated as pillars of management.

Scientific management -

The concept of management was introduced by Frederick Winslow Taylor(1856-1915) in

USA in the beginning of the 20th century. This concept was further carried on by Frank and
Lillian Gilbreth,Henry Gantt, etc. Taylor has defined scientific management as follows:

Scientific management is concerned with knowing exactly what you want men to do and then
see in that they do it in the best and cheapest way.

The principles of scientific management are:

1. Science, not rule of thumb

2. Harmony, not discord
3. Cooperation, not individualism
4. Development of each and every individual
The techniques of scientific management given by Taylor were Functional foremanship,
standardisation, work study including time study, motion study, method study and fatigue
study.
Administrative management -

Henry Fayol is considered the father of operational modern management theory . His
contributions are generally termed as operational management or administrative management.
Fayol looked at the problems of managing an organisation from top management point of
view. He used the term ‘administration’ instead of ‘management’.

Fayol has divided his approach of studying management into three parts:

(i) managerial qualities

(ii) general principles of management, and
(iii) elements of management.

Fayol was the first person to identify the qualities required in a manager. According to him
there are six types of qualities; physical, mental, moral, educational, technical and
experience.

Fayol has given fourteen principles of management which provide general guidelines for
managerial actions. They can be applied in any organisation : business or non- business,
public or private sector.

Fayol holds that management should be viewed as a process consisting of five elements. He
has regarded these elements as functions of management. These are Planning, Organising,
Commanding, Coordination and Controlling.

Human relations approach -

Hawthorne experiments were conducted to analyse the effect of physiological variables on

the productivity of workers at Hawthorne plant of General Electric Company of USA by
Elton Mayo(psychologist), Whitehead and Roethlisberger(sociologists), and William
Dickson(company representative). The experiments conducted were:

1. Illumination experiment
2. Relay assembly test room experiments
3. Mass interviewing programme
4. Bank wiring observation room experiments
Hawthorne Experiments found that there were many human factors that affected productivity
of workers more than the physiological factors. Therefore the findings of Hawthorne
experiments were termed as ‘human relations approach’.

The major findings of the experiment were as follows:

1. An organisation is basically influenced by social factors.

 2. Workers create informal groups which determine the norm of behaviour of members.
3. Conflicts may be solved with the help of informal group.
4. Leadership is important to direct group behaviour in an organisation.
5. Supervisory climate is important. Friendly, attentive and concerned supervision helps.
6. Proper communication and participation of workers increases productivity of workers.

Social systems approach -

Social systems approach of management has extended the implications of human relations
approach further. This approach was introduced by Vilfredo Pareto, a sociologist. His ideas
were later developed by Chester Barnard who synthesised the concept of social systems
approach. Main features are:

1. An organisation is a social system, a system of cultural relationships.

2. Relationships exist among the external as well as internal environment of the
organisation
3. Cooperation among group members is necessary for the achievement of
organisational objectives.
4. For effective management, efforts should be made for establishing harmony between
the goals of the organisation and the goals of the various groups therein.
The contributions of Chester Barnard, a management professional are overwhelming. His
book ‘The functions of the executive’ is regarded as the most influential book on the
management during the pre modern management era.

Decision theory approach -

Decision theory approach looks at the basic problem of management around decision making.
Major contributions in this approach have come from Simon. Other contributors are March,
Cyert, Forrester, etc. The major emphasis of this approach is that decision making is the job
of every manager. The manager is a decision maker and organisation is a decision making
unit. Therefore, the basic problem in managing is to make rational decisions. From this point
of view it has the following features:

1. Management is essentially decision making

2. The members of the organisation are decision makers and problem solvers
3. Organisation can be treated as a combination of various decision centres.
4. Quality of decision affects the organisational effectiveness.
5. All factors affecting decision making are the subject matter of study of management.
Besides processes and the techniques involved in the decision making, other factors affecting
the decisions are information systems and social and physiological aspects of decision
makers.

Management science approach -

Management science approach, also known as quantitative, mathematical, or operations

research. Approach, visualizes management as a logical entity, the action of which can be
expressed in terms of mathematical symbols, relationships and measurement of data. The
major features are:

1. Management is regarded as the problem solving mechanism with the help of

mathematical tools and techniques
2. Management problems can be described in terms of mathematical symbols and data.
3. This approach covers decision making, systems analysis and some aspects of human
behaviour approach.
4. Operations research, mathematical tools and quantitative techniques are the basic
methodologies to solve managerial problems.
Management science approach is a fast developing one in analysing and understanding
management. This has contributed significantly in developing orderly thinking management
which has provided exactness in management discipline. However it is very difficult to call it
a separate school of management because it does not provide the answer for the total
managerial problems because many managerial activities are not really capable of being
quantified because of involvement of human beings who are governed by many irrational
factors as well.

Human behaviour approach -

Human behaviour approach is the outcome of the thoughts developed by behavioural

scientists who have looked at the organisation as collectivity of people for achieving certain
specified objectives. Since management involves getting things done by people , the study of
management must revolve around human behaviour. This approach also known as
‘behavioural science’ or ‘human resource’ approach integrates the existing and newly
developed theories for study of human behaviour. Among the many social psychologists who
have contributed to this approach are Maslow, Herzberg, McGregor, Likert, Bennis, Fiedler
and others. Major propositions of this approach are:

1. People do not dislike work. The job itself is a source of motivation and satisfaction
 2. Most people can have a greater deal of self control, self direction and creativity than
required in their current job.
3. The managers basic job is to use the untapped human potential in the organisation.
4. The manager should create a healthy environment wherein all subordinates can
contribute their best.
5. The manager should provide environment for self direction by subordinates.
6. Operating efficiency can be improved by expanding subordinates’ influence.

Systems approach -

Systems approach has attracted the maximum attention of thinkers in management

particularly in the present era. It is an integrating approach which considers management in
its totality based on empirical data. The basic idea of system approach is that of an
organisation must rely on a method of analysis involving simultaneous variations of mutually
dependent variables.

A system is an integrated set of elements that are organised according to plan and function as
a whole. Features of a system are:

1. A system is basically a combination of various parts or subsystems.

2. Parts and subparts of a system are mutually related to each other. The relationship is
in the context of the whole.
3. A system is not merely the totality of parts and subparts but their arrangement is more
important.
4. A system can be identified because it has a boundary
5. The boundary of a system classifies it into two parts: open system and closed system.
6. System transforms inputs into outputs. This is necessary for survival of the system.

Contingency approach -

Contingency or situational approach is an important addition to the paradigm of modern

management theory and approach. In one way this is an extension of the systems approach.
The basic idea of contingency approach is that there cannot be a particular management
action which will be suitable for all situations. Rather an appropriate action is one which is
designed on the basis of external environment and internal states and needs . Thus
contingency approach suggests ‘what should be done in response to an event in the
environment’. The features are as follows:

1. Management action is contingent on certain actions outside the system or subsystem.

2. Organisational action should be based on the behaviour of action outside the system.
3. Organisation- environment relationship is specific in each case.
 Meaning of Management

Management issues are fundamental to any organisation: How do we plan to get things done,
organize the company to be efficient and effective, lead and motivate employees, and put in place
controls to make sure our plans are followed and our goals are met?

Good management is basic to starting a business, growing a business, and maintaining a business
once it has achieved some measures of success.

Management is the organizational process that includes strategic planning, setting objectives,
managing resources, deploying the human and financial assets needed to achieve objectives, and
measuring results. Management also includes recording and storing facts and information for later
use or for others within the organisation. Management functions are not limited to managers and
supervisors. Every member of the organisation has some management and reporting functions as
part of their job

Management (or managing) is the administration of an organization, whether it be a business, a not-

for-profit organization, or government body. Management includes the activities of setting
the strategy of an organization and coordinating the efforts of its employees (or of volunteers) to
accomplish its objectives through the application of available resources, such
as financial, natural, technological, and human resources. The term "management" may also refer to
those people who manage an organization.

Management is an individual or a group of individuals that accept responsibilities to run an

organisation. They plan, organise, direct and control all the essential activities of the organisation.
Management does not do the work themselves. They motivate others to do the work and co-ordinate
(i.e. bring together) all the work for achieving the objectives of the organisation.
Management uses all the resources for achieving the objective of the organisation such as high
sales, maximum profits, business expansions, etc.

Management involves identifying the mission, objective, procedures, rules and manipulation of

the human capital of an enterprise to contribute to the success of the enterprise.

Management is the integrating force in all organized activity, whenever two or more people work
together to attain a common objective, they have to coordinate their activities; they also have to
organise and utilize their resources in such a way as to optimize the results.

Management will make the organisation effective by the maximum utilization of the factors. It will
assess the quantum of the need of each fact and there with a scientific outlook, it will continue its
process to achieve the desired goal.

Management as a process: Management is a process. It includes the process of planning,

controlling, coordinating, motivating, and staffing. These processes are the series of interrelated
sequential functions. Processes refer to accomplish these mentioned activities.

Management is the efforts of organizational members to accomplish the organizer’s objectives.

Management as a discipline: The term management is used as a subject of instructions. It is a

specific branch of knowledge which is studied in campuses and schools like economics, sociology,
mathematics, political science etc. the scholars of management have found that the information and
management are used in practical life for better functioning.

The scope of management is being increased day to day as a discipline

 Definitions of Management

Management has been defined in various ways. Simply stated, “Management is the art of getting
things done through others.” This is a very popular definition. It reveals that a manager
accomplishes objectives by guiding the efforts of other people.

Some modified and improved the above definition.

HAROLD KOONTZ -

“Management is the art of getting things done through and with people in formally organised
groups.”

PETER F. DRUCKER-

“Management is a multipurpose organ that manages a business and manages managers and manages
workers and work.”

This definition reveals three tasks of a manager: to create economic results, to make a productive
enterprise out of material and human resources, and to make work effectively.

KOONTZ & O’DONNELL -

“Management is the creation and maintenance of an internal environment in an enterprise where

individuals, working in groups, can perform efficiently and effectively towards the individuals,
working in groups, can perform efficiently and effectively towards the attainment of group goals.”

This definition contains three main elements: managers are responsible for creating an environment
conductive to group performance, managers operate through individuals and groups of persons, and
the aim of management is to achieve effectiveness and efficiency in the accomplishment of
common objectives.
AMERICAN MANAGEMENT ASSOCIATION -

“Management is guiding human and physical resources into dynamic organisational units which
attain their objectives to the satisfaction of those served and with a high degree of moral and sense
of attainment on the part of those rendering service.”

This definition puts a balanced focus on the goals of organisation and those of its members.

ROBERT L. TREWELLY & M. GENE NEWPORT -

“Management is defined as the process of planning, organising, actuating and controlling an

organisation’s operations in order to achieve coordination of the human and material resources
essential in the effective and efficient attainment of objectives.”

HENRI FAYOL -

“Management is to manage is to forecast and to plan, to organise, to command, to co-ordinate and

to control.”
 Functions of Management

Planning -

Planning is deciding in advance what to do and how to do. Planning thus involves setting objectives
and developing appropriate courses of action to achieve these objectives.

It is one of the basic managerial functions. Planning seeks to bridge the gap between where we are
and where we want to go. It is deciding in the present about the future objectives and the courses of
action for their achievement.

A plan is a blueprint of the course of action to be followed in future. Planning involves forecasting
because in order to plan the future course of action, it is essential to anticipate the future.

“Planning is deciding in advance what is to be done. It involves the selection of objectives, policies,
procedures, and programmes from among alternatives.”

This definition indicate that planning involves the determination of objectives and results, the
selection of the best possible course of action to achieve the desired results, the time sequence of
activities and the resources required to perform the activities.

It involves:

 Determining of long and short range objectives

 Development of strategies and courses of actions to be followed for the achievement of
these objectives; and
 Formulation of policies, procedures, and rules, etc., for the implementation of strategies,
and plans.
Organising -

Organising can be defined as a process that initiates implementation of plans by clarifying jobs and
working relationships and effectively deploying resources for attainment of identifies and desired
results.

Organising essentially implies a process which coordinates human efforts, assembles resources and
integrates both into a unified whole to be utilised for achieving specified objectives.

Organising is thus the basic process of combining and integrating human, physical and financial
resources in productive interrelationships for the achievement of enterprise objectives. It aims at
combining employees and interrelated tasks in an orderly manner so that organisational work is
performed in a coordinated manner, and all efforts and activities pull together in the direction of
organisational goals.

Organisation thus involves the following functions:

 Identification and division of work - identification of activities required for the achievement
of objectives and implementation of plans.
 Departmentalisation - grouping the activities so as to create self-contained jobs.
 Assignment of duties - assignment of jobs to employees.
 Establishing reporting relationships - establishing of a network of coordinating relationships.
Staffing -

Staffing is putting people to jobs. Staffing is the part of the process of management which is
concerned with obtaining, utilising and maintaining a satisfactory and satisfied work force. Staffing
may involve any combination of employees including daily wages, consultants and contract
employees.

Staffing has been described as the managerial function of filling and keeping filled the positions in
the organisation structure.

Its purpose is to establish and maintain sound personal relations at all levels in the organisation and
to provide personal and social satisfaction which personnel want.

As the importance of human factor in organisational effectiveness is being increasingly recognised,

staffing is gaining acceptance as a distinct function of management.

Its functions are:

 Manpower planning involving determination of the number and the kind of personnel
required.
 Recruitment for attracting adequate number of potential employees to seek jobs in the
enterprise.
 Selection of the most suitable persons for the jobs.
 Placement, induction and orientation.
 Transfers, and promotions
 Training and development of employees.
Directing -

Directing refers to the process of instructing, guiding, counselling, motivating and leading people in
the organisation to achieve its objective.

It is one of the key managerial functions performed by every manager. Directing is a managerial
process which takes place throughout the life of an organisation. Directing is not mere issue of
communication but encompasses many elements like supervision, motivation and leadership.

Directing is that part of the management process which actuates the member of an organisation to
work effectively for the attainment of organisational goals. It may be defined as the process of
telling people what to do and ensuring that they do it to the best of their ability. It includes making
assignments, issuing orders and instructions, providing guidance and inspiration to subordinates for
the achievement of organisational objectives.

Directing consists of the following elements:

 Issuing orders and instructions that are clear, complete and within the capabilities of
subordinates;
 Continuing guidance and supervision of subordinates to ensure that they carry out their
assignment effectively and efficiently;
 Motivating subordinates to work hard for meeting the expectation of management;
 Maintaining discipline and rewarding those who perform well; and
 Providing leadership to subordinates so that they follow the right path.
Controlling -

Controlling is one of the important functions of a manager. In order to seek planned results from the
subordinates, a manager needs to exercise effective control over the activities of the subordinates.
Controlling means ensuring that activities in an organisation are performed as per plans.

Controlling also ensures that an organisation’s resources are being used effectively and efficiently
for the achievement of predetermined goals. Controlling is thus, a goal oriented function.

Controlling involves comparing operating results with plans and taking corrective action when
results deviate from plans. It is a mechanism by which someone or something is guided to follow
the predetermined course. As a plan is put into operation, it becomes necessary to check results to
find out whether the work is proceeding along the right lines. In case of any deviations, necessary
corrective action is taken to ensure that in future the work proceeds in the desired manner.

Controlling helps in formulation of future plans in the light of the problems that were identified and,
thus, helps in better planning in the future periods. Thus, controlling only completes one completes
one cycle of management process and improves planning in the next cycle.

Thus controlling involves the following process:

 Measurement of performance against predetermined goals

 Identification of deviations from these goals.
 Corrective action to rectify deviations.
 Need for management in an organisation

Successful organisations do not achieve their goals by chance but by following a deliberate process
called management.

Management is essential for all organisations big or small, profit or non-profit, services or
manufacturing. Management is necessary so that individuals make their best contributions towards
group objectives.

The success and growth of an organisation depends largely upon the efficiency and effectiveness of
its management. In the absence of management, an organisation is merely a collection of men,
money, materials and machinery.

A business cannot survive without management because management is its means of support.
Management is concerned with acquiring maximum prosperity with minimum efforts. Management
is essential wherever group efforts are required to be directed towards achievements of common
goals.

Business is basically a group activity and management plays an important role in making it more
effective. The group as a whole cannot realise its objectives unless and until there is mutual
cooperation among the members of the groups.

Management creates teamwork and team spirit in an organisation by developing a sound

organisational structure. It brings the human and material resources together and motivates the
people for the achievement of goals.
Some of the reasons that have made management so important:

 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. By defining objective of
organization clearly there would be no wastage of time, money and effort. Management
converts disorganized resources of men, machines, money etc. into useful enterprise. These
resources are coordinated, directed and controlled in such a manner that enterprise work
towards attainment of goals.

 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. It makes use of experts, professional and these services leads to use of their
skills, knowledge, and proper utilization and avoids wastage. If employees and machines are
producing its maximum there is no under employment of any resources.
 Establishes Sound Organisation: To establish sound organizational structure is one of the
objective of management which is in tune with objective of organization and for fulfilment
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.
Management fills up various positions with right persons, having right skills, training and
qualification. All jobs should be cleared to everyone.

 Essentials for Prosperity of Society: Efficient management leads to better economical

production which helps in turn to increase the welfare of people. It increases the profit
which is beneficial to business and society will get maximum output at minimum cost by
creating employment opportunities which generate income in hands. Organization comes
with new products and researches beneficial for society.

Levels of Management
Levels of Management refers to a line of demarcation between various managerial positions
in an organization. The number of levels in management increases when the size of the
business and work force increases and vice versa. The level of management determines a
chain of command, the amount of authority & status enjoyed by any managerial position.

The levels of management can be classified in three broad categories:

1. Top level management

2. Middle management
3. Supervisory or operational management

Top management -

 They consist of the senior most executives of the organisation. they are usually
referred to as chief executive officer, chief operating officer, president and vice
president.
 Top level management is a team consisting of managers from different functional
levels.
 Their basic task is to integrate diverse elements and coordinate the activities of
different departments according to overall objectives of the organisation.
 These top level managers are responsible for the welfare and survival of the
organisation. They analyse the business environment and its implications for the
survival of the firm.
 They formulate overall organisational goals and strategies for their achievement.

Middle management -
  Middle management is the link between top and lower level managers. They are
subordinate to top managers and superior to first line managers.
 Middle level management is responsible for implementing and controlling plans and
strategies developed by top management.
 They are also responsible for all the activities of the first line managers.
 Their main task is to carry out the plans formulated by the top managers.
 For this they need to interpret the policies framed by top management, ensure that
their department has the necessary personnel, assign necessary duties and
responsibilities and motivate them to achieve desired objectives.

Supervisory or operational management -

 Foremen and supervisors constitute the lower level in the hierarchy of the
organisation.
 Supervisors directly oversee the efforts of the workforce. Their authority and
responsibility is limited according to the plan drawn by the top management.
 Supervisory management plays a very important role in the organisation since they
interact with the actual workforce and pass on instructions of the middle management
to the workers.
 Through their efforts quality of output is maintained, wastage of materials is
minimised and safety standards are maintained.

Pioneers of Management
  F.W. Taylor:

Frederick Winslow Taylor (March 20, 1856 – March 21, 1915) was an American mechanical
engineer who sought to improve industrial efficiency. He was one of the first management
consultants. His pioneering work in applying engineering principles to the work done on the
factory floor was instrumental in the creation and development of the branch of engineering
that is now known as industrial engineering. Taylor made his name in, and was most proud of
his work in, scientific management; however, he made his fortune patenting steel-process
improvements. Taylor was also an athlete who competed nationally in tennis and golf. Taylor
is regarded as the father of scientific management, and was one of the first management
consultants and director of a famous firm. Taylor was an accomplished tennis and golf player.
He and Clarence Clark won the inaugural United States National tennis doubles
championship at Newport Casino in 1881, defeating Alexander Van Rensselaer and Arthur
Newbold in straight sets. In the 1900 Summer Olympics, Taylor finished fourth in golf.

Taylor's methods have been challenged by socialist intellectuals. The arguments put forward
relate to progressive defanging of workers in the workplace and the subsequent degradation
of work as management, powered by capital, uses Taylor's methods to render work
repeatable, precise yet monotonous and skill-reducing. James W. Rinehart argued that
Taylor's methods of transferring control over production from workers to management, and
the division of labor into simple tasks intensified the alienation of workers that had begun
with the factory system of production around the period 1870 to 1890.

Management Theory:

Taylor thought that by analyzing work, the "one best way" to do it would be found. He is
most remembered for developing the stopwatch time study, which combined with Frank
Gilbreth's motion study methods, later became the field of time and motion study. He broke a
job into its component parts and measured each to the hundredth of a minute. One of his most
famous studies involved shovels. He noticed that workers used the same shovel for all
materials. He determined that the most effective load was 21½ lb, and found or designed
shovels that for each material would scoop up that amount. He was generally unsuccessful in
getting his concepts applied, and was dismissed from Bethlehem Iron Company/Bethlehem
Steel Company. Nevertheless, Taylor was able to convince workers who used shovels and
whose compensation was tied to how much they produced to adopt his advice about the
optimum way to shovel by breaking the movements down into their component elements and
recommending better ways to perform these movements. It was largely through the efforts of
his disciples (most notably H.L. Gantt) that industry came to implement his ideas. 
Taylor had very precise ideas about how to introduce his system:
It is only through enforced standardization of methods, enforced adoption of the best
implements and working conditions, and enforced cooperation that this faster work can be
assured. And the duty of enforcing the adoption of standards and enforcing this cooperation
rests with management alone.
Taylor believed in transferring control from workers to management. He set out to increase
the distinction between mental (planning work) and manual labor (executing work). Detailed
plans, specifying the job and how it was to be done, were to be formulated by management
and communicated to the workers

 Henri Fayol:

Henri Fayol (Istanbul, 29 July 1841 – Paris, 19 November 1925) was a French mining
engineer, mining executive, author and director of mines who developed general theory of
business administration that is often called Fayolism. He and his colleagues developed this
theory independently of scientific management but roughly contemporaneously. Like his
contemporary, Frederick Winslow Taylor, he is widely acknowledged as a founder of modern
management methods.

Fayol's work became more generally known with the 1949 publication of General and
industrial administration, the English translation of the 1916 article "Administration
industrielle et générale". In this work Fayol presented his theory of management, known
as Fayolism. Before that Fayol had written several articles on mining engineering, starting in
the 1870s, and some preliminary papers on administration.

Starting in the 1870s, Fayol wrote a series of articles on mining subjects, such as on the
spontaneous heating of coal (1879), the formation of coal beds (1887), the sedimentation of
the Commentry, and on plant fossils (1890),

Fayol's work was one of the first comprehensive statements of a general theory of
management. He proposed that there were five primary functions of management and
fourteen principles of management.

Functions of Management

1. Planning
2. Organizing
3. Staffing
4. Controlling
5. Directing
The control function, from the French controller, is used in the sense that a manager must
receive feedback about a process in order to make necessary adjustments and must analyse
the deviations. Lately scholars of management combined the commanding and coordinating
function into one leading function.
Principles of Management

1. Division of work - The division of work is the course of tasks assigned to, and
completed by, a group of workers in order to increase efficiency. Division of work,
which is also known as division of labour, is the breaking down of a job so as to have
a number of different tasks that make up the whole. This means that for every one
job, there can be any number of processes that must occur for the job to be complete.
When an individual does the same job repeatedly he acquires speed and accuracy in
performance. In words of Fayol," The worker always on the same post, the manager
always concerned with the same matters, acquires an ability, sureness and accuracy
which increased their output".
2. Authority and Responsibility - Authority is the right to give orders and obtain
obedience, and responsibility is the corollary of authority.
3. Discipline - Employees must obey and respect the rules that govern the organization.
Good discipline is the result of effective leadership.
4. Unity of command - Every employee should receive orders from only one superior or
behalf of the superior.
5. Unity of direction - Each group of organizational activities that have the same
objective should be directed by one manager using one plan for achievement of one
common goal.
6. Subordination - The interests of any one employee or group of employees should not
take precedence over the interests of the organization as a whole.
7. Remuneration - All Workers must be paid a fair wage for their services.
8. Centralization - Centralization refers to the degree to which subordinates are involved
in decision making.
 9. Scalar chain - The line of authority from top management to the lowest ranks
represents the scalar chain. Communications should follow this chain.
10.Order - this principle is concerned with systematic arrangement of men, machine,
material etc. There should be a specific place for every employee in an organization
11.Equity - Managers should be kind and fair to their subordinates.
12.Stability of tenure of personnel - High employee turnover is inefficient. Management
should provide orderly personnel planning and ensure that replacements are available
to fill vacancies.
13.Initiative - Employees who are allowed to originate and carry out plans will exert high
levels of effort.
14.Esprit de corps - Promoting team spirit will build harmony and unity within the
organization.

While Fayol came up with his theories almost a century ago, many of his principles
are still represented in contemporary management theories.

 George Elton Mayo:

George Elton Mayo (26 December 1880 – 7 September 1949) was

an Australian born psychologist, industrial researcher, and organizational theorist. Mayo was
formally trained at the University of Adelaide, acquiring a Bachelor of Arts Degree
graduating with First Class Honours, majoring in philosophy and psychology, and was later
awarded an honorary Master of Arts Degree from the University Of Queensland (UQ).
Mayo's work helped to lay the foundation for the human relations movement. He emphasized
that alongside the formal organization of an industrial workplace there exists an informal
organizational structure as well. Mayo recognized the "inadequacies of existing scientific
management approaches" to industrial organizations, and underlined the importance of
relationships among people who work for such organizations. His ideas on group relations
were advanced in his 1933 book The Human Problems of an Industrialized Civilization,
which was based partly on his Hawthorne research. Mayo has been credited with making
significant contributions to a number of disciplines, including business
management, industrial sociology, philosophy, and social psychology. His field research in
industry had a significant impact on industrial and organizational psychology. According to
Trahair, Mayo "is known for having established the scientific study of what today is
called organizational behavior when he gave close attention to the human, social, and
political problems of industrial civilization."

Mayo’s contributions:

One of Mayo's (1924) earliest research efforts involved workers at a Philadelphia

textile mill.The mill had been experiencing a high rate of turnover. Mayo believed that the
repetitive work in the spinning department gave rise to mental abnormalities in the workers.
He found that the introduction of rest periods helped reduce turnover. The research helped
make Mayo more widely known in the U.S.
Mayo helped to lay the foundation for the human relations movement, and was known for his
industrial research including the Hawthorne Studies and his book The Human Problems of an
Industrialized Civilization (1933). The research he conducted under the rubric of the
Hawthorne Studies in the late 1920s and early 1930s, underlining the importance of groups in
affecting the behaviour of individuals at work.
Elton Mayo laid the ground rules for interviewing, the principles of which have been
subsequently repeated in numerous 'how to' books on leadership, coaching and mentoring
over the last half century.
Although biographers agree about Mayo's contributions, there is no consensus about
his credentials. The Encyclopædia Britannica, biographical dictionaries, and some published
texts indicate that Mayo was a psychologist. Some authors and critics have discussed Mayo's
credentials and his various other job titles during his career in the United States. Cullen does
not mention that Mayo was a psychologist although Cullen noted that Mayo let interlocutors
call him "Dr. Mayo," letting himself be cast as a Ph.D. in one of the social sciences, without
correcting the mistake. Mayo's biographer Trahair wrote, "Mayo was not a psychologist,
sociologist, or anthropologist, although sometimes he was cast as such" (p. 357). Trahair also
wrote that "after the great war Mayo's reputation grew as a successful academic, clinical
psychologist and public speaker" (p. 89). Of course having a reputation as a clinical
psychologist does not necessarily make one a clinical psychologist (the public often thinks of
psychotherapists, regardless of training, as clinical psychologists or even psychiatrists).

Criticisms:
Mayo's contributions to management theory were criticised by intellectual Daniel Bell.
Writing in 1947, Bell criticised Mayo and other social scientists for "adjusting men to
machines," rather than enlarging human capacity or human freedom. Many,
including Reinhard Bendix and Lloyd H. Fisher, criticized Mayo for generalizing his results
of the Hawthorne studies. The two state that Mayo's research concerned small, isolated
groups, and it was not clear that the conditions and supervision he achieved could have been
replicated in large groups and factory settings. His theories are also based upon the
assumption that humans, by nature, want to cooperate and form groups, and he never allows
for the possibility of José Ortega y Gasset's idea of "the stranger," built upon the proposition
that humans, by nature, are suspicious of others. More recently, in 2003, James Hoopes
criticised Mayo for "substituting therapy for democracy." Re-analyses of the original
Hawthorne data indicate that the quality of the research was poor.

 Peter F. Drucker:

Peter Ferdinand Drucker (November 19, 1909 – November 11, 2005) was an

Austrian-born American management consultant, educator, and author, whose writings
contributed to the philosophical and practical foundations of the modern
business corporation. He was also a leader in the development of management education, he
invented the concept known as management by objectives and self-control, and he has been
described as "the founder of modern management". Drucker's books and scholarly and
popular articles explored how humans are organized across the business, government,
and non-profit sectors of society. He is one of the best-known and most widely influential
thinkers and writers on the subject of management theory and practice. His writings have
predicted many of the major developments of the late twentieth century, including
privatization and decentralization; the rise of Japan to economic world power; the decisive
importance of marketing; and the emergence of the information society with its necessity of
lifelong learning. In 1959, Drucker coined the term “knowledge worker," and later in his life
considered knowledge-worker productivity to be the next frontier of management. Peter
Drucker gave his name to three institutions: the Drucker Institute and the Peter F. Drucker
and Masatoshi Ito Graduate School of Management, both at Claremont Graduate University,
and the Peter F. Drucker Academy. The annual Global Peter Drucker Forum in his hometown
of Vienna honors his legacy. Drucker's career as a business thinker took off in 1942, when his
initial writings on politics and society won him access to the internal workings of General
Motors (GM), one of the largest companies in the world at that time.

Drucker’s key ideas:

Drucker is considered the single most important thought leader in the world of
management, and several ideas run through most of his writings:

 Decentralization and simplification. Drucker discounted the command and

control model and asserted that companies work best when they are decentralized.
According to Drucker, corporations tend to produce too many products, hire employees
they don't need (when a better solution would be outsourcing), and expand into economic
sectors that they should avoid.
 The concept of "knowledge worker" in his 1959 book The Landmarks of
Tomorrow. Since then, knowledge-based work has become increasingly important in
businesses worldwide.
 The prediction of the death of the "Blue Collar" worker. The changing face of the US
Auto Industry is a testimony to this prediction.
 The concept of what eventually came to be known as "outsourcing.” He used the
example of "front room" and "back room" of each business: A company should be
engaged in only the front room activities that are critical to supporting its core business.
Back room activities should be handed over to other companies, for whom these tasks are
the front room activities.
 The importance of the non-profit sector, which he calls the third sector (private sector
and the Government sector being the first two). Non-Government Organizations (NGOs)
play crucial roles in the economies of countries around the world.
 A profound skepticism of macroeconomic theory. Drucker contended that economists
of all schools fail to explain significant aspects of modern economies.
 A lament that the sole focus of microeconomics is price, citing its lack of showing
what products actually do for us, thereby stimulating commercial interest in discovering
how to calculate what products actually do for us; from their price.
 Respect for the worker. Drucker believed that employees are assets not liabilities. He
taught that knowledgeable workers are the essential ingredients of the modern economy,
and that a hybrid management model is the sole method of demonstrating an employee's
value to the organization. Central to this philosophy is the view that people are an
organization's most valuable resource, and that a manager's job is both to prepare people
to perform and give them freedom to do so.
 A belief in what he called "the sickness of government." Drucker made nonpartisan
claims that government is often unable or unwilling to provide new services that people
need and/or want, though he believed that this condition is not intrinsic to the form of
government. The chapter "The Sickness of Government" in his book The Age of
Discontinuity formed the basis of New Public Management, a theory of public
administration that dominated the discipline in the 1980s and 1990s.
 The need for "planned abandonment." Businesses and governments have a natural
human tendency to cling to "yesterday's successes" rather than seeing when they are no
longer useful.
 A belief that taking action without thinking is the cause of every failure.
 The need for community. Early in his career, Drucker predicted the "end of economic
man" and advocated the creation of a "plant community" where an individual's social
needs could be met. He later acknowledged that the plant community never materialized,
and by the 1980s, suggested that volunteering in the nonprofit sector was the key to
fostering a healthy society where people found a sense of belonging and civic pride.[44]
 The need to manage business by balancing a variety of needs and goals, rather than
subordinating an institution to a single value. This concept of management by
objectives and self-control forms the keynote of his 1954 landmark The Practice of
Management.
 A company's primary responsibility is to serve its customers. Profit is not the primary
goal, but rather an essential condition for the company's continued existence
and sustainability.
 A belief in the notion that great companies could stand among humankind's noblest
inventions.
 “Do what you do best and outsource the rest” is a business tagline first “coined and
developed” in the 1990s by Drucker. The slogan was primarily used to advocate
outsourcing as a viable business strategy. Drucker began explaining the concept of
outsourcing as early as 1989 in his Wall Street Journal (WSJ) article entitled “Sell the
Mailroom.” In 2009 by way of recognition, Drucker was posthumously inducted into the
Outsourcing Hall of Fame for his outstanding work in the field.