Meaning of Management

Management is understood in different ways by different people. Economists regard it as a

factor of production. Sociologists see it as a class or group of persons while practitioners of
management treat it as a process. For our understanding, management may be viewed as what
a manager does in a formal organization to achieve the objectives. In the words of Mary Parker
Follet management is “the art of getting things done through people”. This definition throws
light on the fact that managers achieve organizational goals by enabling others to perform
rather than performing the tasks themselves. Management encompasses a wide variety of
activities that no one single definition can capture all the facets of management. That is why,
it is often said that there are as many definitions of management as there are authors in the
field. However, the definition given by James A.F. Stoner covers all the important facets of
management. According to him: “Management is the process of planning, organizing, leading
and controlling the efforts of organization members and of using all other organizational
resources to achieve stated organizational goals”.

The definition suggests:

“Management is a continuous process;

“Several interrelated activities have to be performed by managers irrespective of their levels

to achieve the desired goals.”

“Managers use the resources of the organization, both physical as well as human, to achieve
the goals.”

“Management aims at achieving the organisation’s goals by ensuring effective use of resources
in the best interests of the society.”
Management Practices from Past to Present
The evolution and growth of change management as a discipline has seen a meteoric rise over
the three main eras of the definitive past, evolving present and the formalized and expanding
future. The foundational years before the 1990’s saw academics beginning to define and
understand the very basics of change management and systems experiencing, reacting and
learning to adapt to change.

1910s-1940s: Management as Science

Management as Science was developed in the early 20th century and focused on increasing
productivity and efficiency through standardization, division of labour, centralization and hierarchy.

1950s-1960s: Functional Organisations Due to growing and more complex organisations, the
1950’s and 1960’s saw the emergence of functional organisations and the Human Resource
(HR) movement.

1970s: Strategic Planning

In the 1970’s we changed our focus from measuring function to resource allocation and tools
like Strategic Planning (GE), Growth Share Matrix (BCG) and SWOT were used to formalise
strategic planning processes.

1980s: Competitive Advantage

As the business environment grew increasingly competitive and connected, and with a
blooming management consultancy industry, Competitive Advantage became a priority for
organisations in the 1980’s.

1990s: Process Optimisation

Benchmarking and business process reengineering became popular in the 1990’s, and by the
middle of the decade, 60% of Fortune 500 companies claimed to have plans for or have already
initiated such projects.

2000s: Big Data

Largely driven by the consulting industry under the banner of Big Data, organisations in the
2000’s started to focus on using technology for growth and value creation.

Management practices from past to present-

 Classical approaches to management include:

– Scientific management

– Administrative principles

– Bureaucratic organization

(A classical approach means people are rational.)

The scientific management theory focused on improving the efficiency of each individual in
the organization. The major emphasis is on increasing the production through the use of
intensive technology, and the human beings are just considered as adjuncts to machines in
the performance of routine tasks.
The scientific management theory basically encompasses the work performed on the
production floor as these tasks are quite different from the other tasks performed within
the organization.

7 Techniques of Scientific Management

1. Work Study

Work-Study includes the following techniques

(а) Method Study

(b) Motion Study

(c) Time Study or Work Measurement

(d) Fatigue Study

2. Standardization of Tools and Equipments

3. Scientific Task Setting

4. Scientific Setting of Wage Rates

5. Scientific Selection and Training

6. Functional Foremanship

7. Differential Piece-Rate Plan

 Bureaucratic organization (Max Weber)

– Bureaucracy

• An ideal, intentionally rational, and very efficient form of

organization.

• Based on principles of logic, order, and legitimate authority.

Characteristics of bureaucratic organizations:

– Clear division of labor

– Clear hierarchy of authority

– Formal rules and procedures

– Impersonality

 Possible disadvantages of bureaucracy:

– Excessive paperwork or “red tape”

– Slowness in handling problems

 – Rigidity in the face of shifting needs

– Resistance to change

 Human resource approaches include:

– Hawthorne studies

– Maslow’s theory of human needs

– McGregor’s Theory X and Theory Y

– Argyris’s theory of adult personality

Hawthorne studies

– Initial study examined how economic incentives and physical conditions

affected worker output.

– No consistent relationship found.

“Psychological factors” influenced results

Maslow’s theory of human needs

Implications of Theory X and Theory Y:

– Managers create self-fulfilling prophecies.

– Theory X managers create situations where workers become dependent and

reluctant.

– Theory Y managers create situations where workers respond with initiative

and high performance.

DEFINITION:
• F.W. Taylor - “Art of knowing what you want to do and then seeing that it is done the best
and cheapest way”.
• Henry Fayol – “To Manage is to forecast, to plan, to organize, to command, to co-ordinate
and to control”.
• Peter F.Drucker –”Management is work and as such it has its own skills, its own tools and
its own techniques”.
• “Management is the art of getting things done through and with people”.

Management is an Art or Science or both

To become an effective manager, a individual needs the understanding of management

principles and the skills of how to utilize the knowledge. Lack of either will lead to inefficiency.
A comparison between science and art is presented below.
Art Science
 Advances by practice Advances by knowledge
 Feels Proves
 Guesses Predicts
 Describes Defines
 Opines Measures
 Expresses Impresses

Levels of Management

The term “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 / Administrative level

2. Middle level / Executory
3. Low level / Supervisory / Operative / First-line managers-

Managers at all these levels perform different functions. The role of managers at all the
three levels is discussed below:
Managerial Roles & Functions-

Mintzberg published his Ten Management Roles in his book, "Mintzberg on Management:
Inside our Strange World of Organizations," in 1990.

The ten roles are:

1. Figurehead

2. Leader

3. Liaison

4. Monitor

5. Disseminator

6. Spokesperson

7. Entrepreneur

8. Disturbance Handler

9. Resource Allocator

10. Negotiator

The 10 roles are then divided up into three categories, as follows:

 Category Roles

Figurehead
Leader
Interpersonal Liaison

Monitor
Disseminator
Informational Spokesperson

Entrepreneur
Disturbance
Handler
Resource
Allocator
Decisional Negotiator

Management Skills
What are management skills? Management skills mean having the capacity to run a
business. It's being able to make the right choices while managing the overall performance
of the company. It means being able to communicate and deliver results by providing
employees with a strong business plan to meet the aim for the company. Management skills
are required to manage the business and include overseeing workplace issues, employees,
teamwork and team development and communication. It also means giving employees their
duties and monitoring their performance, while at the same time reaching the business
objective.
Functions of Management
Planning

The planning function of management controls all the planning that allows the organization
to run smoothly. Planning involves defining a goal and determining the most effective
course of action needed to reach that goal.
Organizing

The organizing function of leadership controls the overall structure of the company. The
organizational structure is the foundation of a company; without this structure, the day-to-
day operation of the business becomes difficult and unsuccessful.
Staffing

The staffing function of management controls all recruitment and personnel needs of the
organization. The main purpose of staffing is to hire the right people for the right jobs to
achieve the objectives of the organization.
Coordinating

The coordinating function of leadership controls all the organizing, planning and staffing
activities of the company and ensures all activities function together for the good of the
organization.
Controlling

The controlling function of management is useful for ensuring all other functions of the
organization are in place and are operating successfully. Controlling involves establishing
performance standards and monitoring the output of employees to ensure each employee’s
performance meets those standards.

Meaning and Concept of Planning

In simple words, planning is deciding in advance what is to be done, when where, how and by
whom it is to be done. Planning bridges the gap from where we are to where we want to go.
It includes the selection of objectives, policies, procedures and programmes from among
alternatives. A plan is a predetermined course of action to achieve a specified goal. It is an
intellectual process characterized by thinking before doing. It is an attempt on the part of
manager to anticipate the future in order to achieve better performance. Planning is the
primary function of management.

According to Koontz and O’ Donnell, “Planning is an intellectual process, conscious

determination of course of action, the basing of decision on purpose, facts and considered
estimates.”
Nature of planning

• Intellectual process: A mental process involving imagination, foresight and sound

adjustment but not guesswork.

• Continuous process: An on-going/dynamic exercise as old assumptions change, old

plans are revised or new ones are prepared.

• Forward process: No plan can be prepared without knowledge of future.

• Involves choice : Decision making is core of planning

Objective Of Planning

• To focus attention on objective & results.

• To reduce uncertainty and change.

 • To provide sense of direction.

• To encourage innovation and creativity.

• To help in coordination.

• To guide decision making.

• To provide a basis for decentralization.

• To provide economy in operation.

• To facilitate control

Planning Process

Effective planning requires gathering data about the projected growth of the industry and
information about competitors -- their strengths, weaknesses and the strategies they are
devloping. The small business owner also must identify the best opportunities for his
company to pursue. He starts by analyzing customer needs and determines how to create
products and services to meet these needs. He then sets goals for the company, which may
include revenue targets and productivity goals such as the gross margin percentage he
intends to achieve. The next step is designing strategies and action plans -- the specific steps
the owner and his team will take to reach company goals.

Types of Planning

1. Financial Planning: It goes without saying that you must have a tangible financial
plan for your business, but with the infinite number of ways you can develop yours,
what do you do? When it comes to our financial planning, we’ve found the strongest
results after following this handful of “musts”:
o The plan must have buy-in from employees at all levels of the organization.
o The plan must be clearly communicated.
o The plan must be rooted in reality.
o The plan must be forward-looking.
o The plan must be reviewed formally; progress must be tracked on an ongoing
basis.

2. Strategic Planning: In addition to having a strong financial outlook, your company also
needs a clear strategic vision. (Again, you probably already know this—it isn’t rocket
science!) We suggest doing a quick online search—you’ll find several great templates that
will guide you in establishing your strategic vision

3. Contingency Planning: A sturdy contingency plan is essential to growth and business

success. After all, you need a “Plan-B” or a backup plan to launch when the
unexpected happens, right? Contingency planning makes you proactive and serves
as a source of innovation and business growth in and of itself (double win!). In short,
a good contingency represents a researched and vetted realistic opportunity. If
disaster strikes, activate contingencies in order to fill a void.
4. Succession Planning: What if your manager or an executive left suddenly? Is your
organization prepared to replace a major player on your team? While “missing”
them is one thing, making sure your organization continues to grow beyond their
departure is crucial to your overall success (obviously!). To make sure you don’t skip
more than a beat, you need to beef up your succession.

Types of Plans
Plans commit individuals, departments, organizations, and the resources of each to specific
actions for the future. Effectively designed organizational goals fit into a hierarchy so that
the achievement of goals at low levels permits the attainment of high‐level goals. This
process is called a means‐ends chain because low‐level goals lead to accomplishment of
high‐level goals.

Three major types of plans can help managers achieve their organization's goals: strategic,
tactical, and operational. Operational plans lead to the achievement of tactical plans, which
in turn lead to the attainment of strategic plans. In addition to these three types of plans,
managers should also develop a contingency plan in case their original plans fail.

1. Operational plans

The specific results expected from departments, work groups, and individuals are
the operational goals. These goals are precise and measurable. “Process 150 sales
applications each week” or “Publish 20 books this quarter” are examples of operational
goals.
Single‐use plans apply to activities that do not recur or repeat.

Continuing or ongoing plans are usually made once and retain their value over a period of
years while undergoing periodic revisions and updates
2. Tactical plan is concerned with what the lower level units within each division must do,
how they must do it, and who is in charge at each level. Tactics are the means needed to
activate a strategy and make it work.
3. Contingency planning involves identifying alternative courses of action that can be
implemented if and when the original plan proves inadequate because of changing
circumstances.

Corporate planning is a process used by businesses to map out a course of action that will
result in revenue growth and increased profits. Although large corporations may have staff
members -- or entire departments -- devoted to performing the planning function, small
business owners can become proficient through learning basic concepts and putting forth
the effort necessary to create a comprehensive plan.
What is 'Management by Objectives - MBO'
Management by objectives (MBO) is a management model that aims to improve
performance of an organization by clearly defining objectives that are agreed to by both
management and employees. According to the theory, having a say in goal setting and
action plans should ensure better participation and commitment among employees, as well
as alignment of objectives across the organization. The term was first outlined by
management guru Peter Drucker in 1954 in his book "The Practice of Management."

Decision-making is regarded as the cognitive process resulting in the selection of a belief or

a course of action among several alternative possibilities. Every decision-making process
produces a final choice, which may or may not prompt action. Decision-making is the
process of identifying and choosing alternatives based on the values, preferences and
beliefs of the decision-maker.
TYPES OF DECISIONS:

PROGRAMMED DECISIONS:

Programmed decisions are routine and repetitive, and the organization typically develops
specific ways to handle them. A programmed decision might involve determining how
products will be arranged on the shelves of a supermarket. For this kind of routine,
repetitive problem, standard arrangement decisions are typically made according to
established management guidelines.

NON-PROGRAMMED DECISIONS:

Non programmed decisions are typically one-shot decisions that are usually less structured
than programmed decision.

5 ELEMENTS OF THE DECISION SITUATION:

1. The Decision Makers

2. Goals to be served
3. Relevant Alternatives
4. Ordering of Alternatives
5. Choice of Alternatives

Steps of Decision-Making Process

Following are the important steps of the decision-making process. Each step may be
supported by different tools and techniques.
Decision Making Techniques

5 techniques that can assist managers in their efforts toward

1. Brainstorming: It is a combination of group problem-solving and discussions. It works on

the belief that the more the number of ideas, greater the possibility of arriving at a solution
to the problem that is acceptable to all. It starts with the group generating ideas which are
then analyzed, with action points based on the discussions.

2. Nominal group technique: In a nominal group technique, the team divides itself into
smaller groups and generates ideas. Possible options are noted down in writing and the
team members further discuss these to narrow down the possible choices they would like to
accept. Team members then discuss and vote on the best possible choice. The choice that
receives the maximum votes is accepted as the group decision.
Continuing the above example, this group of instructional designers can be further divided
into smaller teams. Every member of the team gives their idea and at the end, each member
votes for the best one. At the end, the idea that gains the highest votes would be finalized.

3. Multi-voting: It starts with a round of voting where an individual casts his vote for the
shortlisted options. Each individual can cast one vote at a time. The options with the
maximum number of votes are carried to the next round. This process is repeated until a
clear winning option is obtained.
For instance, from the above discussed example, each team would propose their strategy in
front of the other teams. And the other teams would vote for the one they prefer best. The
strategy that receives the maximum number of votes is considered final.

4. Delphi method: In this method of decision-making, the facilitator allows team members
to individually brainstorm and submit their ideas “anonymously”. Other team members do
not know the owner of the ideas. The facilitator then collects all the inputs and circulates
them among others for modifying or improving them. This process continues until a final
decision is made. In the above example, you can have a facilitator who collects strategies
and passes them on to the others without revealing to whom the strategy belongs. Later,
the facilitator collects the improvised strategies and chooses the best one.
5. Electronic meeting: Here, the decision-making process takes place virtually with the help
of technology. For instance, we can have a Skype call with the client. Create two or three
strategies and discuss them with the client clearly in the Skype call; let the client choose the
strategy close to his expectations.
Team decision-making is a time-consuming process and before the team leader ensures the
participation of the full team, he/she must make sure he has enough time and resources for
the decision-making process and choose a technique that is most appropriate in a given
situation, keeping the profile of team members in mind.

Making decision effective-

1. Classifying the problem. Is it generic? Is it exceptional and unique? Or is it the first

manifestation of a new genus for which a rule has yet to be developed?
2. Defining the problem. What are we dealing with?

3. Specifying the answer to the problem. What are the “boundary conditions”?

4. Deciding what is “right,” rather than what is acceptable, in order to meet the boundary
conditions.. What will fully satisfy the specifications before attention is given to the
compromises, adaptations, and concessions needed to make the decision acceptable?

5. Building into the decision the action to carry it out. What does the action commitment
have to be? Who has to know about it?

6. Testing the validity and effectiveness of the decision against the actual course of
events. How is the decision being carried out? Are the assumptions on which it is based
appropriate or obsolete?