CHAPTER ONE

FUNDAMENTALS OF MANAGEMENT
Introduction
Management is one of the oldest practices of human being. It was started first when
human being started forming and live in groups and organized in communities to wage
wars, build pyramids, build Axum Obelisk, etc. There is a management practice even in
our own family as well. Through generations, there happened that the resources
available to human being is progressively becoming inadequate and needed a means to
use it efficiently and effectively as there is a rapid population growth with increased
demand for this scarce resource as the population size progressively increase.
Managing is one of the most important human activities. From the time human beings
began forming social organizations to accomplish aims and objectives they could not
accomplish as individuals, managing has been essential to ensure the coordination of
individual efforts. As society continuously relied on group effort, and as many
organized groups have become large, the task of managers has been increasing in
importance and complexity. Henceforth, managerial theory has become crucial in the
way managers manage complex organizations. Therefore, managers of contemporary
organizations ought to appreciate the important role they play in their respective
organizations if they are to achieve set goals. Secondly, there is need to promote
excellence among all persons in organizations, especially among managers themselves.
To address these concerns, the course will proceed along the following spectrum:
management will be defined for purposes of conceptual clarity; management objectives,
functions, goals, and essentiality, will be highlighted; the importance of managerial
skills and the organizational hierarchy will be sketched; the importance of women in
the organizational hierarchy will be emphasized; reasons for studying management
theory will be enumerated; the different management theories, the core of the paper,
will be discussed at length; the significance of management as a practice will be
contextualized; and ‘the way forward’ in form of a conclusion will be offered.
1.1. Definition of Management
It is very difficult to give a precise definition of the term ‘management’. Different
scholars from different disciplines view and interpret management from their own
angles. The economists consider management as a resource like land, labor, capital and
organization. The definitions by some of the leading management thinkers and
practitioners are given below:
Management is the coordination of all resources through the process of planning,
organizing, directing and controlling in order to attain stated objectives. —Henry L.
Sisk.
Management is a distinct process consisting of planning, organizing, actuating and
controlling performed to determine and accomplish the objectives by the use of people
and resources. —George R. Terry
Management is guiding human and physical resources into dynamic, hard-hitting
organisation unit that attains its objectives to the satisfaction of those served and with a
high degree of morale and sense of attainment on the part of those rendering the
service. —Lawrence A. Appley
Management is the art and science of organizing and directing human efforts applied to
control the forces and utilize the materials of nature for the benefit of man. —American
Society of Mechanical Engineers
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 attainment of group goals. —Harold Koontz and Cyrill O’Donnell
Management is the process of achieving goals and objectives effectively and efficiently
through and with the people.
More broadly, management is the process of designing and maintaining an
environment in which individuals, working together in groups, efficiently accomplish
selected aims (Koontz and Weihrich 1990, p. 4). In its expanded form, this basic
definition means several things. First, as managers, people carry out the managerial
functions of planning, organizing, staffing, leading, and controlling. Second,
management applies to any kind of organization. Third, management applies to
managers at all organizational levels. Fourth, the aim of all managers is the same – to
create surplus. Finally, managing is concerned with productivity – this implies
effectiveness and efficiency.
1.2. Nature and Characteristics of Management
The term management has been interpreted in several ways; some of which are given
below
Management as a process has the following implications:
(i) Social Process: Management involves interactions among people. Goals can be
achieved only when relations between people are productive. Human factor is the most
important part of the management.
(ii) Integrated Process: Management brings human, physical and financial resources
together to put into effort. Management also integrates human efforts so as to maintain
harmony among them.
(iii) Continuous Process: Management involves continuous identifying and solving
problems. It is repeated every now and then till the goal is achieved.
(iv) Interactive process: Managerial functions are contained within each other. For
example, when a manager prepares plans, he is also laying down standards for control.
(iiv) Management as a Process
Management is considered a process because it involves a series of interrelated
functions. It consists of getting the objectives of an organization and taking steps to
achieve of getting the objectives of an organization and taking steps to achieve
objectives. The management process includes planning, organizing, staffing, and taking
steps to achieve objectives
Management as an Activity
Management is an activity just like playing, studying, teaching etc. As an activity
management has been defined as the art of getting things done through the efforts of
other people. Management is a group activity wherein managers do to achieve the
objectives of the group.
The activities of management are:
 Interpersonal activities
  Decisional activities
 Informative activities
Management as a Team
As a group of persons, management consists of all those who have the responsibility of
guiding and coordinating the efforts of other persons. These persons are called as
managers who operate at different levels of authority (top, middle, operating). Some of
these managers have ownership stake in their firms while others have become
managers by virtue of their training and experience. Civil servants and defense
personnel who manage public sector undertakings are also part of the management
team. As a group managers have become an elite class in society occupying positions
with enormous power and prestige.
Management as an academic discipline
Management has an emerged as a specialized branch of knowledge. It comprises
principle and practice for effective management organization. Management becomes as
very popular field of study as is evident from the great rush for admission into
institutes of management. Management offers a very rewarding and challenging career.
Management as a Group
Management means the group of persons occupying managerial positions. It refers to
all those individuals who perform managerial functions. All the managers, e.g., chief
executive (managing director), departmental heads, supervisors and so on are
collectively known as management.
Nature and Characteristics of Management
Management is goal-oriented: Management is not an end in itself, It is a means to achieve
certain goals. Management goals are called group goals or organizational goals. The
basic goal of management is to ensure efficiency and economy in the utilization of
human, physical and financial resources.
Management is universal: Management is an essential element of every organized activity
irrespective of the size or type of activity.
Management is an Integrative Force: The essence of management lies in the coordination
of individual efforts in to a team
Management is multidisciplinary: Management has to deal with human behaviour under
dynamic conditions. Therefore, it depends upon wide knowledge derived from several
disciplines like engineering, sociology, psychology, economics, anthropology, etc.
Management is a continuous Process: Management is a dynamic and an on-going process.
The cycle of management continues to operate so long as there is organized action for
the achievement of group goals.
1.3. Significance of Management
Management is concerned with acquiring maximum prosperity with a minimum effort.
Management is essential wherever group efforts are required to be directed towards
achievement of common goals. In this management conscious age, the significance of
management can hardly be over emphasized. It is said that, anything minus
management amounts to nothing.
The significance of management in business activities is relatively greater. The inputs of
labour, capital and raw material never become productive without the catalyst of
management. It is now widely recognized that management is an important factor of
growth of any country. The following points further highlight the significance of
management:
1. Achievements of group goals: Management makes group efforts more effective. The
group as a whole cannot realize its objectives unless and until there is mutual co
operation and co-ordination among the members of the group. Management creates
team work and team spirit in an organization by developing a sound organization
structure. It brings the human and material resources together and motivates the people
for the achievement of the goals of the organization.
2. Optimum utilization of resources: Management always concentrates on achieving
the objectives of the enterprise. The available resources of production are put to use in
such a way that all sort of wastage and inefficiencies are reduced to a minimum.
Workers are motivated to put in their best performance by the inspiring leadership.
Managers create and maintain an environment conducive to highest efficiency and
performance. Through the optimum use of available resources, management accelerates
the process of economic growth.
3. Minimization of cost: In the modern era of intense competition, every business
enterprise must minimize the cost of production and distribution. Only those concerns
can survive in the market, which can produce goods of better quality at the minimum
cost. A study of the principles of management helps in knowing certain techniques used
for reducing costs. These techniques are production control, budgetary control, cost
control, financial control, material control, etc.
4. Change and growth: A business enterprise operates in a constantly changing
environment. Changes in business environment create uncertainties and risk and also
produce opportunities for growth. An enterprise has to change and adjust itself in the
ever-changing environment. Sound management moulds not only the enterprise but
also alters the environment itself to ensure the success of the business. Many of the
giant business corporations of today had a humble beginning and grew continuously
through effective management.
5. Efficient and smooth running of business: Management ensures efficient and
smooth running of business, through better planning, sound organization and effective
control of the various factors of production.
6. Higher profits: Profits can be enhanced in any enterprise either by increasing the
sales revenue or reducing costs. To increase the sales revenue is beyond the control of
an enterprise. Management by decreasing costs increases its profits and thus provides
opportunities for future growth and development.
7. Provide innovation: Management gives new ideas, imagination and visions to an
enterprise.
8. Social benefits: Management is useful not only to the business firms but to the
society as a whole. It improves the standard of living of the people through higher
production and more efficient use of scarce resources. By establishing cordial relations
between different social groups, management promotes peace and prosperity in society.
9. Useful for developing countries: Management has to play a more important role in
developing countries, like India. In such countries, the productivity is low and the
resources are limited. It has been rightly observed, "There are no under-developed
countries. They are only under-managed ones".
10. Sound organization structure: Management establishes proper organization
structure and avoids conflict between the superiors and subordinates. This helps in the
development of spirit of cooperation and mutual understanding, and a congenial
environment is provided in the organization.
1.4. Objectives of Management
There are basically three management objectives. One objective is ensuring
organizational goals and targets are met – with least cost and minimum waste.
The second objective is looking after health and welfare, and safety of staff. The third
objective is protecting the machinery and resources of the organization, including the
human resources.
The objectives of management are narrated as under.
(i) Organizational objectives: Management is expected to work for the achievement of
the objectives of the particular organization in which it exists. Organizational objectives
include:
(a) Reasonable profits so as to give a fair return on the capital invested in business
(b) Survival and solvency of the business, i.e., continuity.
(c) Growth and expansion of the enterprise
(d) Improving the goodwill or reputation of the enterprise.
(ii) Personal objectives: An organization consists of several persons who have their
own objectives. These objectives are as follows:
(a) Fair remuneration for work performed
(b) Reasonable working conditions
(c) Opportunities for training and development
(d) Participation in management and prosperity of the enterprise
(e) Reasonable security of service.
(iii) Social objectives: Management is not only a representative of the owners and
workers, but is also responsible to the various groups outside the organization. It is
expected to fulfill the objectives of the society which are given below:
(a) Quality of goods and services at fair price to consumers.
(b) Honest and prompt payment of taxes to the Government.
(c) Conservation of environment and natural resources.
(d) Fair dealings with suppliers, dealers and competitors.
(e) Preservation of ethical values of the society.
1.5. Managerial Functions an Overview
There is enough disagreement among management writers on the classification of
managerial functions. Newman and summer recognize only four functions, namely,
organizing, planning, leading and controlling.
Henri Fayol identifies five functions of management, viz. planning, organizing,
commanding, coordinating and controlling. Luther Gulick states seven such functions
under the catch word "POSDCORB' which stands for planning, organizing, staffing,
directing, coordinating, reporting and budgeting. Warren Haynes and Joseph Massie
classify management functions into decision-making, organizing, staffing, planning,
controlling, communicating and directing. Koontz and O'Donnell divide these functions
into planning organizing, staffing, directing and controlling.
For our purpose, we shall designate the following six as the functions of a manager:
planning, organizing, staffing, directing, coordinating and controlling.
1. Planning: Planning is the most fundamental and the most pervasive of all
management functions. If people working in groups have to perform effectively, they
should know in advance what is to be done, what activities they have to perform in
order to do what is to be done, and when it is to be done. Planning is concerned with
'what', 'how, and 'when' of performance. It is deciding in the present about the future
objectives and the courses of action for their achievement.
It thus involves:
(a) Determination of long and short-range objectives;
(b) Development of strategies and courses of actions to be followed for the achievement
of these objectives; and
(c) Formulation of policies, procedures, and rules, etc., for the implementation of
strategies, and plans.
The organizational objectives are set by top management in the context of its basic
purpose and mission, environmental factors, business forecasts, and available and
potential resources. These objectives are both long-range as well as short-range. They
are: divided into divisional, departmental, sectional and individual objectives or goals.
This is followed by the development of strategies and courses of action to be followed at
various levels of management and in various segments of the organization. Policies,
procedures and rules provide the framework of decision making, and the method and
order for the making and implementation of these decisions. Planning is thus the most
basic function of management. It is performed in all kinds of organizations by all
managers at all levels of hierarchy.
2. Organizing: Organizing involves identification of activities required for the
achievement of enterprise objectives and implementation of plans; grouping of
activities into jobs; assignment of these jobs and activities to departments and
individuals; delegation of responsibility and authority for performance, and provision
for vertical and horizontal coordination of activities. Every manager has to decide what
activities have to be undertaken in his department or section for the achievement of the
goals entrusted to him. Having identified the activities, he has to group identical or
similar activities in order to make jobs, assign these jobs or groups of activities to his
subordinates, delegate authority to them so as to enable them to make decisions and
initiate action for undertaking these activities, and provide for coordination between
himself and his subordinates, and among his subordinates. Organizing thus involves
the following sub-functions:
(a) Identification of activities required for the achievement of objectives and
implementation of plans.
(b) Grouping the activities so as to create self-contained jobs.
(c) Assignment of jobs to employees.
(d) Delegation of authority so as to enable them to perform their jobs and to command
the resources needed for their performance.
(e) Establishment of a network of coordinating relationships. Organizing process results
in a structure of the organization. It comprises organizational positions, accompanying
tasks and responsibilities, and a network of roles and authority-responsibility
relationships. Organizing 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 organizational work is performed in a coordinated manner, and
all efforts and activities pull together in the direction of organizational goals.
3. Staffing: Staffing is a continuous and vital function of management. After the
objectives have been determined, strategies, policies, programmes, procedures and
rules formulated for their achievement, activities for the implementation of strategies,
policies, programmes, etc. identified and grouped into jobs, the next logical step in the
jobs. Since the efficiency and effectiveness of an organization significantly depends on
the quality of its personnel and since it is one of the primary functions of management
to achieve qualified and trained people to fill various positions, staffing has been
recognized as a distinct function of management. It comprises several sub- functions:
(a) Manpower planning involving determination of the number and the kind of
personnel required.
(b) Recruitment for attracting adequate number of potential employees to seek jobs in
the enterprise.
(c) Selection of the most suitable persons for the jobs under consideration.
(d) Placement, induction and orientation.
(e) Transfers, promotions, termination and layoff.
(f) Training and development of employees.
As the importance of human factor in organizational effectiveness is being increasingly
recognized, staffing is gaining acceptance as a distinct function of management. It need
hardly any emphasize that no organization can ever be better than its people, and
managers must perform the staffing function with as much concern as any other
function.
4. Directing: Directing is the function of leading the employees to perform efficiently,
and contribute their optimum to the achievement of organizational objectives. Jobs
assigned to subordinates have to be explained and clarified, they have to be provided
guidance in job performance and they are to be motivated to contribute their optimum
performance with zeal and enthusiasm. The function of directing thus involves the
following sub-functions:
(a) Communication
(b) Motivation
(c) Leadership
5. Coordination: Coordinating is the function of establishing such relationships among
various parts of the organization that they all together pull in the direction of
organizational objectives. It is thus the process of tying together all the organizational
decisions, operations, activities and efforts so as to achieve unity of action for the
accomplishment of organizational objectives.
The significance of the coordinating process has been aptly highlighted by Mary Parker
Follet. The manager, in her view, should ensure that he has an organization "with all its
parts coordinated, so moving together in their closely knit and adjusting activities, so
linking, interlocking and interrelation, that they make a working unit, which is not a
congeries of separate pieces, but what I have called a functional whole or integrative
unity". Coordination, as a management function, involves the following sub-functions:
(a) Clear definition of authority-responsibility relationships
(b) Unity of direction
(c) Unity of command
(d) Effective communication
(e) Effective leadership
6. Controlling: Controlling is the function of ensuring that the divisional, departmental,
sectional and individual performances are consistent with the predetermined objectives
and goals. Deviations from objectives and plans have to be identified and investigated,
and correction action taken. Deviations from plans and objectives provide feedback to
managers, and all other management processes including planning, organizing,
staffing, directing and coordinating are continuously reviewed and modified, where
necessary.
Controlling implies that objectives, goals and standards of performance exist and are
known to employees and their superiors. It also implies a flexible and dynamic
organization which will permit changes in objectives, plans, programmes, strategies,
policies, organizational design, staffing policies and practices, leadership style,
communication system, etc., for it is not uncommon that employees failure to achieve
predetermined standards is due to defects or shortcomings in any one or more of the
above dimensions of management.
Thus, controlling involves the following process:
(a) Measurement of performance against predetermined goals.
(b) Identification of deviations from these goals.
(c) Corrective action to rectify deviations.
It may be pointed out that although management functions have been discussed in a
particular sequence-planning, organizing, staffing, directing, coordinating and
controlling – they are not performed in a sequential order. Management is an integral
process and it is difficult to put its functions neatly in separate boxes. Management
functions tend to coalesce, and it sometimes becomes difficult to separate one from the
other. For example, when a production manager is discussing work problems with one
of his subordinates, it is difficult to say whether he is guiding, developing or
communicating, or doing all these things simultaneously. Moreover, managers often
perform more than one function simultaneously.
1.6. Levels of Management and Types of Managers
Every business organization, irrespective of its size, has many managerial positions in
its structure. Levels of management refer to a line of demarcation between various
managerial positions in an enterprise. The levels of management depend upon its size,
technical facilities, and the range of production. These positions are created through the
process of delegation of authority from the top to the lower level. Each position marked
by authority, responsibility, function, roles and relationships.
The contents and nature vary, depending in the level at which the position lies. As one
moves upward in the organization, the managerial position plays an important role,
larger the contribution, greater the authority and higher the responsibility. These
managerial positions lying in the chain of command may be classified into various
groups or levels of management. Broadly speaking, an organization has two important
levels of management, namely functional and operative. The functional level is
concerned with the process of determining primary objectives, formulating basic
policies, making vital decisions and controlling and coordinating activities of personnel.
The operative level of management is related to implementation of plans and decisions,
and pursuit of basic policies for achieving the objectives of the organization.
Generally, the levels of management consisting of various managerial positions in the
structure of an organization differ from one organization to another, depending on the
size of business activity, philosophy of management, span of control and other related
factors. But, in a joint stock company, for conducting its business efficiently, managerial
personnel may be placed in three levels, that is, top, middle and lower or supervisory
level.
Types of Managers
First line managers - Responsible for day-to-day operations. Supervise people
performing activities required to make the good or service
Middle managers - Supervise first-line managers. Are responsible to find the best way
to use departmental resources to achieve goals
Top managers - Responsible for the performance of all departments and have cross-
departmental responsibility. Establish organizational goals and monitor middle
managers
Top Level Management
Top management of a company consists of owners/shareholders, Board of Directors,
its Chairman, Managing Director, or the Chief Executive, or the General Manager or
Executive Committee having key officers. Thus, they elect their representatives as
directors; form a board, known as board of directors, which constitutes the top level of
management. It is the highest level in the managerial hierarchy and the ultimate source
of authority in the organization. The top level managers are accountable to the owners
and responsible for overall management of the organization.
Top management: Top management is the ultimate source of authority and it lays
down goals, policies and plans for the enterprise. It devotes more time on planning and
coordinating functions. It is accountable to the owners of the business of the overall
management. It is also described as the policy making group responsible for the overall
direction and success of all company activities. The important functions of top
management include:
(a) To establish the corporate objectives or goals of the enterprise.
(b) To make policies and frame plans to attain the objectives laid.
(c) To set up an organizational frame work to conduct the operations as per plans.
(d) To assemble the resources of money, men, materials, machines and methods to put
the plans into action.
(e) To exercise effective control of the operations.
(f) To provide overall leadership to the enterprise
(g)To decide upon the matters which are vital for the survival, profitability and growth
of the organization such as introduction of new product, shifting to new technology and
opening new plant etc.
(h) To decide structure of organization, creating various positions there in.
2. Middle management: The job of middle management is to implement the policies
and plans framed by the top management. It serves as an essential link between the top
management and the lower level or operative management. They are responsible to the
top management for the functioning of their departments. They devote more time on
the organization and motivation functions of management. They provide the guidance
and the structure for a purposeful enterprise. Without them the top management's
plans and ambitious expectations will not be fruitfully realized. The following are the
main functions of middle management:
(a) To interpret the policies chalked out by top management.
(b) To prepare the organizational set up in their own departments for fulfilling the
objectives implied in various business policies.
(c) To recruit and select suitable operative and supervisory staff.
(d) To assign activities, duties and responsibilities for timely implementation of the
plans.
(e) To compile all the instructions and issue them to supervisor under their control.
(f) To motivate personnel to attain higher productivity and to reward them properly.
(g) To cooperate with the other departments for ensuring a smooth functioning of the
entire organization.
(h) To collect reports and information on performance in their departments.
(i) To report to top management
(j) To make suitable recommendations to the top management for the better execution
of plans and policies.
3. Lower or Supervisory management
Lower level management is known as Supervisory management because it is
concerned mainly with personal oversight and direction of operative employees. It
consists of factory supervisors, superintendents, foremen, sales supervisors, accounts
officers etc. They directly guide and control the performance of rank and file workers.
They issue orders and instructions and guide day to-day activities.
It is placed at the bottom of the hierarchy of management, and actual operations are the
responsibility of this level of management. It consists of foreman, supervisors, sales
officers, accounts officers and so on. They are in direct touch with the rank and file or
workers. Their authority and responsibility is limited. They pass on the instructions of
the middle management to workers.
They interpret and divide the plans of the management into short-range operating
plans. They are also involved in the process of decisions-making. They have to get the
work done through the workers. They allot various jobs to the workers, evaluate their
performance and report to the middle level management. They are more concerned
with direction and control functions of management. They devote more time in the
supervision of the workers.
Supervisory management performs the following functions:
(i) Planning of day to day work
(ii) Assignment of jobs and issuing orders and instructions
(iii) Supervising and guiding workers
(iv)Maintaining close personal contacts with workers to ensure discipline and team-
work
(v) Evaluating operating performance
(vi)Sending reports and statements to higher authorities
(vii) Communicating the grievances and suggestions of workers to higher authorities.
1.8. Managerial Roles and Skills
In the modern business the job management has become very difficult. Several skills are
required to manage successfully a large organization in a dynamic environment. These
skills of managers have been classified into four categories, namely technical, human,
diagnostic and conceptual skills.
Managers is the people responsible for supervising the use of an organization’s
resources to meet its goals Resources include people, skills, knowledge, machinery,
computers and IT, and financial capital
A manager is someone who participates in the management process by planning,
organizing, leading, and/or controlling the organization’s resources.
A skill is an individual's ability to translate knowledge into action. Hence, it is
manifested in an individual's performance. Skill is not necessarily inborn. It can be
developed through practice and through relating learning to one's own personal
experience and background. In order to be able to successfully discharge his roles, a
manager should possess three major skills. These are conceptual skill, human relations
skill and technical skill.
Conceptual skill deals with ideas, technical skill with things and human skill with
people. While both conceptual and technical skills are needed for good decision-
making, human skill in necessary for a good leader.
(i) Conceptual Skills
Conceptual skills comprise the ability to see the whole organization and the
interrelationships between its parts. These skills refer to the ability to visualize the
entire picture or to consider a situation in its totality. Such skills help the manager to
conceptualize the environment, to analyze the forces working in a situation and take a
broad and farsighted view of the organization. Conceptual skills also include the
competence to understand a problem in all its aspects and to use original thinking in
solving the problem. Such competence is necessary for rational decision-making.
The conceptual skill refers to the ability of a manager to take a broad and far sighted
view of the organization and its future, his ability to think in abstract, his ability to
analyze the forces working in a situation, his creative and innovative ability and his
ability to assess the environment and the changes taking place in it. It short, it is his
ability to conceptualize the environment, the organization, and his own job, so that he
can set appropriate goals for his organization, for himself and for his team. This skill
seems to increase in importance as manager moves up to higher positions of
responsibility in the organization.
(ii) The technical skill is the manager's understanding of the nature of job that people
under him have to perform. It refers to a person's knowledge and proficiency in any
type of process or technique. In a production department this would mean an
understanding of the technicalities of the process of production. Whereas this type of
skill and competence seems to be more important at the lower levels of management, its
relative importance as a part of the managerial role diminishes as the manager moves to
higher positions. In higher functional positions, such as the position of a marketing
manager or production manager, the conceptual component, related to these functional
areas becomes more important and the technical component becomes less important.
The technical skills refer to ability and knowledge in using the equipment, technique
and procedures involved in performing specific tasks. These skills require specialized
knowledge and proficiency in the mechanics of particular job. Ability in programming
and operating computers is, for instance, a technical skill. There are two things a
manager should understand about technical skills. In the first place, he must know
which skills should be employed in his particular enterprise and be familiar enough
with their potentiality to ask discerning questions of his technical advisors. Secondly a
manager must understand both the role of each skill employed and interrelations
between the skills.
(iii) Human Skills
A human skill consists of the ability to work effectively with other people both as
individual and as members of a group. These are required to win cooperation of others
and to build effective work teams. Such skills require a sense of feeling for others and
capacity to look at things from others point of view. Human skills are reflected in the
way a manager perceives his superiors, subordinates and peers. An awareness of the
importance of human skills should be part of a manager’s orientation and such skills
should be developed throughout the career.
Human relations skill is the ability to interact effectively with people at all levels. This
skill develops in the manager sufficient ability (a) to recognize the feelings and
sentiments of others; (b) to judge the possible actions to, and outcomes of various
courses of action he may undertake; and (c) to examine his own concepts and values
which may enable him to develop more useful attitudes about himself. This type of skill
remains consistently important for managers at all levels.
Table-2 gives an idea about the required change in the skill-mix of a manager with the
change in his level. At the top level, technical skill becomes least important. That is
why, people at the top shift with great ease from one industry to another without an
apparent fall in their efficiency. Their human and conceptual skills seem to make up for
their unfamiliarity with the new job's technical aspects.
Tables-2 : Skill-mix of different management levels
MANAGERIAL ROLES
1. Interpersonal Roles
Figurehead: In this role, every manager has to perform some duties of a ceremonial
nature, such as greeting the touring dignitaries, attending the wedding of an employee,
taking an important customer to lunch and so on.
Leader: As a leader, every manager must motivate and encourage his employees. He
must also try to reconcile their individual needs with the goals of the organization.
Liaison: In this role of liaison, every manager must cultivate contacts outside his
vertical chain of command to collect information useful for his organization.

Figurehead Ceremonial and symbolic duties

Leader Hire, train, motivate, and coordinate others

Liaison Develop relationship with others outside work unit

2. Informational Roles
Monitor: As monitor, the manager has to perpetually scan his environment for
information, interrogate his liaison contacts and his subordinates, and receive
unsolicited information, much of it as result of the network of personal contacts he has
developed.
Disseminator: In the role of a disseminator, the manager passes some of his privileged
information directly to his subordinates who would otherwise have no access to it.
Spokesman: In this role, the manager informs and satisfies various groups and people
who influence his organization. Thus, he advises shareholders about financial
performance, assures consumer groups that the organization is fulfilling its social
responsibilities and satisfies government that the origination is abiding by the law.

Monitor Gather information from various sources

Disseminator Transmit information to other managers
Spokesperson Transmit information to people outside the organization

3. Decisional Roles
Entrepreneur: In this role, the manager constantly looks out for new ideas and seeks to
improve his unit by adapting it to changing conditions in the environment.
Disturbance Handler: In this role, the manager has to work like a fire fighter. He must
seek solutions of various unanticipated problems – a strike may loom large a major
customer may go bankrupt; a supplier may renege on his contract, and so on.
Resource Allocator: In this role, the manager must divide work and delegate authority
among his subordinates. He must decide who will get what.
Negotiator: The manager has to spend considerable time in negotiations. Thus, the
chairman of a company may negotiate with the union leaders a new strike issue, the
foreman may negotiate with the workers a grievance problem, and so on.
In addition, managers in any organization work with each other to establish the
organization’s long-range goals and to plan how to achieve them. They also work
together to provide one another with the accurate information needed to perform tasks.
Thus, managers act as channels of communication with the organization.
Entrepreneur Initiate change to improve units or find opportunities
Disturbance handler Make changes to resolve unanticipated problems
Resource allocator Decide which managers and projects will receive resources
and in which proportion
Negotiator Bargain with people outside the unit to support goals

1.9. Universality of Management

This concept is sometimes called the universality of management in which managers
perform the same functions regardless of their place in the organizational structure or
the type of enterprise in which they are managing.
The statement from Weihrich means that management performs the same functions
regardless of its position in the organization or the enterprise managed, and
management functions and fundamental activities are characteristic duties of managers;
management practices, methods, detailed activities, and tasks are particular to the
enterprise or job managed.
Therefore, the functions and general activities of management can be universally
applied to managing any organization or activity. Recognition of this concept is crucial
to the improvement of software engineering project management, for it allows us to
apply the wealth of research in management sciences to improving the management of
software engineering projects. Additional discussion on the universality of management
can be found in.
This chapter and introduction is important to the readers of this tutorial. The basic
assumption of this tutorial on software engineering project management is based on a
scientific management approach as follows:
1. Management consists of planning, organizing, staffing, directing, and controlling.
2. The concepts and activities of management apply to all levels of management, as well
as to all types of organizations and activities managed.
Based on these two assumptions, this tutorial is divided into chapters, based on
planning, organizing, staffing, directing, and controlling, and includes articles from
other disciplines that illustrate the concepts of management that can be applied to
software engineering project management.
1.10. Is Management an art, Science, or profession?
Management is Combination of Art and Science
Management knowledge exhibits characteristics of art and science, the two not
mutually exclusive but supplementary. Every discipline of art is always backed by
science which is basic knowledge of that art. Similarly, every discipline of science is
complete only when it is used in practice for solving various kinds of problems faced by
human beings in an organization or in other fields of social life which is more related to
an art. Art basically deals with an application of knowledge personal skill and know-
how in a specific situation for efficiently achieving a given objective. It is concerned
with the best way of doing things and is consequently, personalized in nature.
During the primitive stages of development of management knowledge, it was
considered as an art. There was a jungle of managerial knowledge. It was not codified
and systemized. People used it to get things done by others, in their own way giving an
impression that whosoever uses it, knows the art of using it. This kind of loose and
inadequate understanding of management supported the view that it was an art.
Management as a Science
Science means a systematic body of knowledge pertaining to a specific field of study. It
contains between two or more factors. These principles and theories help to explain past
events and may be used to predict the outcome of actions. Scientific methods of
observations and experiments are used to develop principles of science. The principles
of science have universal application and validity.
Thus, the essential features of science are as follows:
(i) Basic facts or general principles capable of universal application
(ii) Developed through scientific enquiry or experiments
(iii) Establish cause and effect relationships between various factors.
(iv) Their Validity can be verified and they serve as reliable guide for predicting future
events.
Let us now examine as to what extent management satisfies the above conditions:
(i) Systematic body of knowledge: Management has a systematic body of knowledge
consisting of general principles and techniques.
These help to explain events and serve as guidelines for managers
in different types of organizations.
(ii) Universal principles: Scientific principles represent basic facts about a particular
field enquiry. These are objective and represent best thinking on the subject. These
principles may be applied in all situations and at all times. Exceptions, if any, can be
logical explained. Management contains sound fundamental principles which can be
universally applied. For instance, the principle of unity of command states that at a time
one employee should be answerable to only one boss. This principle can be applied in
all types of organization business or non business. However, principles of management
are not exactly like those of physics or chemistry. They are flexible and need to be
modified in different situations.
(iii) Scientific enquiry and experiments: Scientific principles are derived through
scientific investigation and reasoning. It means that there is an objective or unbiased
assessment of the problem situation and the action chosen to solve it can be explained
logically. Scientific principles do not reflect the opinion of an individual or of a religious
guru. Rather these can be scientifically proved at any time. They are critically tested. For
example, the principle that the earth revolves around the sun
Management principles are also based on scientific enquiry and investigation. These
have been developed through experiments and practical experience of a large number
of managers.
(iv) Cause and effect relationship: Principles of science lay down a cause and effect
relationship between related factors. For example, when water is heated up to 100ºC, it
starts boiling and turns into vapour. Similarly, the principles of management establish
cause and effect relationship between different variables.
For instance lack of balance between authority and responsibility will cause
management to become ineffective.
(v) Tests of validity and predictability: Validity of scientific principles can be tested at
any time and any number of times. Every time the test will give the same result.
Moreover, the future events can be predicted with reasonable accuracy by using
scientific principles. For example, the Law of Gravitation can be tested by throwing
various things in the air and every time the object will fall on the ground. Principles of
management can also be tested for their validity. For example, the principle of unity of
command can be tested by comparing two persons, one having a single boss and other
having two bosses. The performance of the first person will be higher than that of the
second.
Thus, management is undoubtedly a science. It contains a systematic body of
knowledge in the form of general principles which enjoy universal applicability.
However, management is not as exact a science—Physics, Chemistry, Biology and other
Physical sciences. This is because management deals with people and it is very difficult
to predict accurately the behaviour of living human beings. Management principles are
universal but they cannot be expected to give exactly the same results in every situation.
That is why management is known as a soft science. Management is a social science. It
is still growing, with the growing needs of human organisations.
Management as an Art
Art implies the application of knowledge and skills to bring about the desired results.
The essential elements of arts are:
(i) Practical knowledge
(ii) Personal skill
(iii) Result oriented approach
(iv) Creativity
(v) Improvement through continuous practice
Let us judge how far management fulfils these requirements:
(i) Practical knowledge: Every art signifies practical knowledge. An artist not only
learns the theory but also its application in practice. Similarly, a person cannot become a
successful manager simply by reading the theory and getting a degree or diploma in
management. He must also learn to apply his knowledge in solving managerial
problems in practical life. A manager is judged not just by his technical knowledge but
by his efficiency in applying this knowledge.
(ii) Personal skill: Every artist has his own style and approach to his job. The success of
different artists differs even when all of them possess the same technical knowledge or
qualifications. This is due to the level of their personal skills.
(iii) Result-oriented approach: Arts seeks to achieve concrete results.
The process of management is also directed towards the accomplishment of desirable
goals. Every manager applies certain knowledge and skills to achieve the desired
results. He uses men, money, materials and machinery to promote the growth of the
Organization.
(iv) Creativity: Art is basically creative and an artist aims at producing something that
had not existed before. Therefore, every piece of art requires imagination and
intelligence to create. Like any other art, management is creative. A manager effectively
combines and coordinates the factors of production to create goods and services.
Moulding the attitudes and behaviour of people at work, towards the achievement of
the desired goals is an art of the highest order.
(v) Improvement through people: Practice makes one perfect.
Every artist become more and more efficient through constant practice. A dancer, for
example, learns to perform better by continuously practicing a dance. Similarly,
manager gains experience through regular practice
Thus, “management is both a science as well as an art”. It is a science because it has an
organised body of knowledge consisting of certain universal facts. It is known as an art
because it involves creating results through practical application of knowledge and
skills. However, art and science are complementary to each other. They are not
mutually exclusive. Science teaches one to know and art to do. Art without science has
no guide and science without art is knowledge wasted.
For example, a person cannot be a good surgeon unless he has scientific knowledge of
human anatomy and the practical skill of applying that knowledge in conducting an
operation.
Similarly, a successful manager must know the principles of management and also
acquire the skill of applying those principles for solving managerial problems in
different situations. Knowledge of principles and theory is essential, but practical
application is required to make this knowledge fruitful. One cannot become an effective
manager simply by learning management principles by heart. Science (theory) and art
(practice) are both essential for the success of management.
Management as a Profession
A profession is calling that requires specialized knowledge and often, long intensive
academic preparation. The essential features of profession are as follows:
(i) Well defined body of knowledge
(ii) Restricted entry
(iii) Service motive
(iv) Code of Conduct
(v) Representative professional association
Let us examine to what extent management fulfils the above requirements:
(i) Specialized body of knowledge: Every profession has a well defined body of
knowledge relevant to the area of specialization. In order to practice a profession, a
person requires specialized knowledge of its principles and techniques. Moreover, he
must make deliberate efforts to gain proficiency unit. There exists a substantial and
rapidly expanding body of knowledge in management. A manager must have intensive
devotion and involvement to acquire expertise in the science of management.
(ii) Restricted entry: There exist institutions and universities to impart education and
training for a profession. No one can enter a profession without going through the
prescribed course of learning. For example one must pass the Chartered Accountancy
examination to practice accountancy profession. Several management consultancy firms
have also come into existence to offer advice for solving managerial problems.
(iii) Service motive: A profession is a source of livelihood but professionals are
primarily motivated by the desire to serve the community.
For example, a doctor earns his living from his medical practice. But he does not treat
his patients only for the sake of money. He has a concern for the suffering of others and
a desire to help the community. Therefore, a profession enjoys high community
sanction or respect. Similar is the case with managers. A manager of a factory is
responsible not only to its owners, but he is also expected to produce quality goods at a
reasonable cost and to contribute to the well-being of the community.
(iv) Representative association: In every profession there is a statutory association or
institution which regulates that profession.
(v) Code of conduct: Members of one profession have to abide by a code of conduct
which contains rules and regulations providing the norms of honesty, integrity and
professional ethics. For example a chartered accountant is not expected to commercially
advertise his firm. The code of conduct is by the representative association to ensure
self-discipline among its members. Any member violating the code can be punished
and his membership can be cancelled. The code requires the managers to fulfill their
social of the association are expected not to disclose the trade secrets of their employers
and to make personal gain from the knowledge of internal working of the organisation.
But this code does not have legal sanctions. However, observing business ethics is
always helpful in becoming a more effective manager.
SELF ASSESSMENT QUESTIONS
1. "There is no important area of human activity than management since its task is that
of getting things done through people". Discuss.
2. "Management is both a science and an art". Discuss this statement, giving suitable
examples.
3. Define Management. How does it differ from Administration?
4. What do you understand by the term "Levels of Management"? Explain with
reference to an organization with which you are familiar.
5. Briefly discuss the nature and scope of Management.
6. What are the functions of a Manager? Is mere knowledge of Management enough to
become successful manager?
7. Discuss basic principles of Management along with their significance.
8. Discuss and illustrate the meaning, definition and characteristics of management in
modern organizations.
9. What is Management? Explain the principles of management with suitable
illustrations.