Unit 1 Introduction

CHAPTER - 1
Introduction
Contents
1. CONCEPT OF MANAGEMENT AND BUSINESS MANAGEMENT.................................................... 2
2. CHARACTERISTICS OF MANAGEMENT .......................................................................................... 2
3. PROCESS OF MANAGEMENT ............................................................................................................ 3
4. TYPES OF MANAGERS ON THE BASIS OF NATURE OF JOB ......................................................... 8
5. BASIC MANAGERIAL ROLE .............................................................................................................. 9
6. MANAGERIAL SKILLS ...................................................................................................................... 11
Kiran Sah, Faculty Member, Faculty of Management, R.R.M. Campus, Janakpurdham. // kiran.sahnep@gmail.com
Page 1.2 Foundation Of Business Management
CONCEPT OF MANAGEMENT AND BUSINESS MANAGEMENT
Management is the activity of directing and leading to achieve the predetermined goals of an organization. It is a
set of activities directed at organizations resources with the aim of achieving organizational goals in an efficient
and effective manner. By efficient, it means using resources wisely and, in a cost-effective way and by effective, it
means making the right decisions and successfully implementing them. Management brings together all six M's i.e.,
Men, Money, Machine, Materials, Method and Markets. Management uses these resources for achievin g the
objectives of the organization.
Business Management is the system to manage the business enterprises. So, it is concern with managing business
activities (related to human resource, strategic, operations, technology and innovation, marketing, and finance)
efficiently as well as effectively so that the organization can achieve the certain goal such as high sales, maximum
profit, business expansion, etc.
Harold Koontz- "Management is an art of getting things done through and with the people in formally organized
groups. It is an art of creating an environment in which people can perform and individuals and can co -operate
towards attainment of group goals."
F.W Taylor- "Management is an art of knowing what to do, when to do and see that it is done in the best and
cheapest way."
CHARACTERISTICS OF MANAGEMENT
We can list many characteristics of management. Some of them are described as below:
1. Goal Oriented
Every organization has certain goals. Management is an instrument to achieve the predetermined goals.
Management helps in or contributes greatly for the efficient and effective use of different resources to achieve the
goal. The main objective of management is to maximize the productivity through minimum sources.
2. Universal Activity
Management is universal in nature. It is necessary and practiced in almost all types of organization. It is used in
small organization, medium and large: national and multinational: profit oriented and service oriented; technical
and non-technical; Private and government agencies etc. It is essential all level of organization. Management is
required or essential where there is human activity. It means, wherever there is a human activity, there is a
management. The principles of management are universally applicable.
3. Group Activity
Management is a group activity as different people are involved in carrying out different functions of management.
It is less concerned with individual effort and more concerned with group effort. A single effort may worthless to
achieve the organizational goal. So, it always refers to group efforts. Management represents team, class or section
of people working together for the common goal.
4. Dynamic Activity
Introduction Page 1.3
Management is a continuous and dynamic activity. The principles of management are not rigid. The principles are
flexible as per the need and requirement of time and organization. The system of management of today may not be
suitable or applicable tomorrow. They may be applied in different environment in different situation. Management
need to modify its style and system as per the time, situation and need of the organization. This helps the
organization to adjust itself in the changing environment of the business.
5. Multidisciplinary in Nature
Management is multi-disciplinary in nature. The principles of management draw the knowledge and concepts of
different disciplines like economics, sociology, psychology, statistics etc. Management integrates the knowledge
and concepts from different disciplines in managing organization and for the decision making.
6. Both Art and Science
We can get the features of both art and science in management. A manager has to play the role of both scientist and
an artist. It is science in the sense that the principles of management have universal application, based on scientific
process and procedure. It is an art in the sense that it requires skill, experience and ability to perform managerial
functions.
7. Distinct Process
Management is a distinct process in the sense that it uses different resources like physical, capital, and informational
through human resources. These resources have different functions and are inter -related with each other. It clearly
defines the specific process and does not consider the hit and trial or rule of thumb to make the work done to achieve
the predetermined goals.
8. Social Process
Management is a social process as the activities of management are performed by the use of human. It utilizes and
mobilizes the human resources for the achievement of organizational goals. It has to fulfill the needs, wants and
demands of employees along with fulfilling the organizational objectives.
9. Profession
A profession involves the application of expert knowledge for the solution of specific problems. Management
acquires the features of profession like specific knowledge, formal education, service motive, ethical codes etc.
With the development of industries and companies, management has been entrusted in the hands of professional
managers, having specific skills and knowledge. So, Management can be taken as a profession.
10. Intangible
Management cannot be seen but it can be felt. It has no physical appearance. The functions of managers cannot be
seen with our naked eyes but the consequence or result of management can be felt. How effectively and efficiently
the functions of management have been carried out can be felt by the people. The effectiveness of management is
judged on the basis of the end result though operations cannot be seen. So, management is intangible in nature.
PROCESS OF MANAGEMENT
Management process is the systematic way of getting things done through and with others for accomplishing
organizations objectives. Every business organization has certain pre-determined goals and objectives. no business
organization can achieve its objectives until and unless all the members of the unit make an integrated and planned
effort under the directions of a manager or management. The methodology of getting things done is known as
‘Management Process’. The process is defined as a series of actions or operations conducting to an end.
The Management Process are as follows:
1. Planning
Planning is the primary function of management without which no other functions of management can go ahead. It
involves selecting and determination of objectives, policies, procedures and programs to realize the pre -determined
goals of an organization. It is the activity of deciding in advance about the future course of action. Planning is very
much essential to save time, effort and cost. Besides, it also helps in minimizing the future uncertainties and risk.
It acts as a milestone to work in the future and provides a big picture of desire result for the organization and its
people.
In the simple words, planning is concerned with determination of objectives or goals and ways and means
for achieving them. More specially, planning is the process of seeking answers of the following particular questions:
- What is to be done?
- Why it is to be done?
- How the work will be done?
- Who will do the work?
- When the work will be done?
- Where the work will be done?
Planning is an intellectual process consisting of the following steps:
a. Evaluating environmental factors and organizational resources.
b. Establishing objectives and goals of the organization.
c. Establishing planning drafts.
d. Developing alternative strategies and course of action (plans) for achieving the stated goals and objectives.
e. Evaluating alternatives.
f. Selection of a course of action i.e., plan.
g. Formulating policies, programmes, procedures, methods, rules etc. for implementing the plan.
2. Organizing
Organizing is the process of identifying the major activities and grouping them into jobs and assigning the
jobs to different departments and individuals to implement plans successfully. It is concerned with collecting and
gathering various resources to achieve the planned goals. The resources include human, financial, physical and
information. It also includes delegating necessary authority to fulfill the given responsibility so that people can
perform their activities in the best and cheapest way to achieve the organizational goal.
In the simple words, organizing is the process of developing a structure of relationships among human and
physical factors and activities in the organization. The process of organizing consists of the following steps:
a. Identifying and defining the activities to perform for accomplishing the organizational goals.
b. Grouping of the activities.
c. Assigning the activities to the departments individuals or to the groups.
d. Delegating necessary authority to the departments, individuals or to the groups.
e. Fixing responsibilities for the performance of these activities.
f. Establishing horizontal and vertical relationships among the departments, individuals, or to the groups.
3. Staffing
Staffing is the activity related with recruitment, selection, appointment and placement of right person at
right time for the right job. It is concerned with human resources. Human resources are the life blood and pillar
behind the success of an organization. Therefore, staffing is one of the most important functions in an organization.
It determines total manpower requirement in an organization. It is also related with organizing seminar, workshops,
trainings etc. for the growth and development of employee's skills and competencies. It also includes the activities
like performance evaluation, promotion, transfer of employees, planning proper remuneration, reward management,
and maintenance etc.
Staffing process are planning, recruiting, selecting, training, developing, compensating, prompting, and
maintaining human resources in the organizations. Staffing function aims at placing the right person to the right
job on a systematic way.
4. Directing
Directing is an important managerial function performed by the managers to encourage subordinates for
effective & efficient output. It is concerned with instructing, supervising, guiding and inspiring the subordinates to
achieve the desired organizational goal. Direction is very much necessary to make the work done as it stimulates
the action of subordinates. Until and unless there is a good direction, no other activities of management like decision
making, planning, organizing and staffing are effectively implemented. Direction is also regarded as heart of
administration. The direction function includes supervision, motivation, leadership, communication and
coordination.
In the simple words, directing means influencing and mobilizing individuals and groups in an organization
to do desired tasks through leadership, motivation, communication and supervision for accomplishing objective of
the organization.
Directing function involves following sub-functions:
a. Leadership: Leadership is the process of guiding and influencing the behavior of subordinates or employees
to work willingly for attaining goals and objectives of an organization. The quality of leadership usually determines
success or failure of an organization. The leaders, they like to enjoy and capture the mind of the followers
developing their own philosophy Therefore, every manager must develop and adopt the different leadership styles
those can best inspire individuals and groups for higher, effective and rewording performance.
b. Motivation: As it says ‘happy workers or employees are the production workers or employees’. Effective
ideas of motivation satisfies need and meets the expectations of the employees. It creates willingness among the
employees or workers to contribute more to their jobs. Motivation leads to higher performance Moreover, motivated
workers or employees can readily adopt the organizational changes. These all helps in achieving organizational
goals effectively and efficiently.
It is the task of every manager to motivate his subordinates or employees. He/she must use financial as well
as non-financial incentives to motivate the employees evaluating the actions positive, negative and short term and
long-term impacts. He/she must make every effort to satisfy intrinsic and extrinsic needs of the workers or
employees in order to motivate them.
c. Communication: Communication is the process of transmitting ideas and information from one person or
group to another person or group effectively and efficiently. It is the systematic process of conveying or exchanging
information, facts, ideas, emotions, understandings etc of the message communication is fundamental and vital to
all managers. It is the basic of actions and co-operations. Therefore, every manager must develop sound two way
communication system. Sound communication system gets ideas and instruction understood properly, results in
increased performance and morale.
d. Supervision: The supervision is the process of ensuring performance of subordinates or employees in
accordance with the plans, policies, programs, procedures, methods, rules etc. Though, supervision is very
important at every level of management because of controlling and directing the activities of the subordinates or
employees. Therefore, every manager should have ideas of effective supervision to supervise subordinates or
employees to work as per plans and standards
5. Controlling
Controlling is the process of measuring and comparing the actual performance with that of planned
performance and taking corrective actions. It checks whether the activities are performed as per the plan or not and
brings uniformity in action. The main objective of controlling is to take corrective action rightly by using right
techniques to avoid the deviation during the course of action to ensure the attainment of desired results. Therefore,
controlling is related with identifying, comparing and measuring the actual performance with that of planned
performance and taking corrective action to achieve the predetermined goals.
In the simple words, controlling is the process of measuring, comparing, and correcting the performance in
order to ensure that things or actions are performed in accordance with the plans. Actual outcomes or performance
of the employees are compared with budgeted or planned outcomes or performance. The controlling function
involves the following steps:
a. Establishing standards of performance of every activity.
b. Measuring actual performance.
c. Comparing actual performance with the standards of performance.
d. Finding at variations or gaps between actual and standard performance and reasons thereof.
e. Taking corrective steps to remove significant variations for ensuring performance as per plans.
Managerial Hierarchy/Levels of Management
Levels of management refer to the division of authority and responsibility among the various managerial positions.
There are three levels of management classified on the basis of size, nature of the organization, range of production.
They are described as below:
1. Top Level Management
The top level management is the first and foremost level of management for the welfare, growth and development
of the organization. Its main responsibility is to make plan, policies etc. to obtain the organizational goal and for
the betterment and survival of the organization. The top level management is the final or the ultimate source of
authority. This means it concentrates total authority. It comprises (consists of) Chief Executive Officer (CEO),
Managing Director, Board of Directors, General Manager (GM). It devotes more time on planning and coordinating
functions. They also represent the organization to the external environment like government officials, executives
of other organizations, and so forth officially.
a. Determines the goal of an organization
b. Preparing plans, policies and strategies to achieve the goals.
c. Setting performance appraisal system.
d. Setting compensation system.
e. Performing direction, controlling, motivation, communication etc.
f. Assemble the resources of money, men, materials and other necessary resources.
2. Middle Level Management
Middle level management is the level which consists of department, division, and section head. The main function
of middle level management is to implement and control the plans and policies formulated by the top level
management. This level also formulates the objectives of department. The middle level manager may be personnel
manager, sales manager, sales manager, division heads, section heads, etc. This level also concentrates on the
following activities:
a. To interpret the plans and policies developed by the top level management.
b. To set departmental goals and objectives.
c. To guide, instruct and apply controlling to the departments and lower level.
d. To communicate lower level about the plans, policies and guidelines set by top level management.
e. To recruit and select the suitable staff.
f. To assign duties and responsibilities for first line officer.
3. Lower Level Management
Lower level management is the first line management. This is formed by supervisors, foreman, and different officers
like sales officer, account officer, finance officer, etc. These officers are mainly responsible for carrying out the
assigned duties for the achievement of organizational goal. They are directed and controlled by the middle level
managers. In contrast to top and middle level managers, the first line managers spend a large proportion of their
time supervising the work of subordinates. Their main jobs consist of the following activities:
a. To arrange the necessary tools, equipments etc. for the workers.
b. To solve the problems of workers.
c. To maintain the good human relations and discipline among the workers.
d. To classify and assign the duties.
e. To guide the workers about the procedure of working.
f. To build a high group morale among the workers.
g. To provide training to the workers.
h. To communicate about the success or failure of the operation with middle level management.
i. To communicate the plan and policies guided by middle level management.
TYPES OF MANAGERS ON THE BASIS OF NATURE OF JOB
General Manager:
Definition: A General Manager (GM) is a top-level executive who is responsible for the overall management and
performance of an entire organization or a significant business unit. The GM reports to the board of directors or the
CEO.
Responsibilities:
Strategic Leadership: Develop and implement the organization's mission, vision, and overall strategic direction.
Decision-Making: Make high-level decisions that impact the entire organization.
Coordination: Oversee and coordinate the activities of various departments to ensure alignment with organizational
goals.
Risk Management: Identify and mitigate risks that could affect the organization's success.
Performance Evaluation: Assess and monitor the overall performance of the organization.
External Relations: Represent the organization to external stakeholders, such as clients, investors, and the public.
Functional Manager:
Definition: A Functional Manager is responsible for managing a specific business function or department within an
organization. Unlike general managers, functional managers focus on a particular aspect of the business.
Examples:
Finance Manager: Manages the financial activities of the organization, including budgeting, financial reporting,
and investment decisions.
Marketing Manager: Oversees the development and implementation of marketing strategies to promote products
or services.
Human Resources Manager: Manages HR functions such as recruitment, training, employee relations, and
compliance with labor laws.
Operations Manager: Focuses on the day-to-day operations of the business, ensuring efficiency and smooth
workflow.
Line Manager:
Definition: A Line Manager, also known as a Front-Line Manager, is responsible for managing the employees
directly involved in the production or delivery of goods and services. They are at the forefront of the organizational
hierarchy and have a direct impact on operational success.
Responsibilities:
Supervision: Directly oversees the work of employees in a specific department or team.
Daily Operations: Ensures that daily tasks and operations are carried out effectively and efficiently.
Communication: Acts as a link between upper management and front-line employees, conveying goals and
expectations.
Problem-Solving: Addresses day-to-day challenges and resolves issues within the team.
Performance Management: Provides feedback, evaluates performance, and may be involved in decisions related to
promotions or disciplinary actions.
In summary, a General Manager is responsible for the overall management of the entire organization, a Functional
Manager focuses on a specific business function, and a Line Manager directly oversees the work of front -line
employees in a particular department or team. Each of these roles plays a crucial part in the organizational hierarchy,
contributing to the overall success and effectiveness of the business.
BASIC MANAGERIAL ROLE
A role is an organized set of behaviors. A manager, in order to be effective, has to assume different roles at different
point of the time as demanded by the call of duty. Henry Mintsberg has identified ten roles common to the work of
all managers. The ten roles are divided into three groups as interpersonal, informational and decisional. Ten
different roles of managers are described as below:
1. Interpersonal Role
Managers need to interact, lead, and represent their subordinates. Such roles are called as interpersonal roles. The
three interpersonal roles are primarily concerned with interpersonal relationships. The interpersonal roles insure
that information is provided. There are three different types of interpersonal roles of managers as below:
a. Figurehead Role: In figure head role, the manager represents the company legally and socially to those
outsiders of the organization. Every manager has to perform some ceremonial duties such as attending the wedding
of employees, entertaining dignitaries, attain seminar and meeting conducted by different parts of the business
society and so on. These roles may or may not have any real substance.
b. Liaison Role: In the liaison role, the manager interacts with peers and people outside the organization. The
top level manager uses the liaison role to gain favors and information, while the supervisor uses it to maintain the
routine flow of work.
c. Leader Role: The leader role defines the relationship between the manager and employees. The
interpersonal roles keep the manager in a unique position to get and disperse information. It creates the direct
relationship with the people in working in the organization. Managers must motivate and direct the activities of
subordinates towards accomplishment of organizational objectives.
2. Informational Roles
Managers need to get and provide different information regarding business as well as work in progress. The
information roles link all managerial work together. This means informational roles are primarily concerned with
the information aspects of managerial work. There are three different types of informational roles as below:
a. Monitor Role: In the role of monitor, the manager receives and collects information. The information
collected, by scanning internal and external environment, facilities managerial decision -making function.
b. Disseminator Role: In the role of a disseminator, the manager transmits special information into the
organization. The top level manager receives and transmits more information from people outside the organization
to the department level managers and department level managers to lower level managers and vice versa.
c. Spokesperson Role: In the role of spokesperson, the manager disseminates the organization's information
into its external environment to whom it is required. Top level manager is seen as an industry expert, while the
supervisor is seen as a unit or department expert. They inform and satisfy various people who influence
organization's goals. They provide the financial information regarding financial performance to the shareholders.
They also assure consumer groups that the organization is meeting the social obligations.
3. Decision Role
Managers need to involve in decision making process frequently. Different types of managers hold such authority
for the benefit of organization. The unique access to information keeps the manager at the centre of organizational
decision making. The decisional roles make significant use of the information, the requirements of these managerial
roles can be fulfilled, or these roles can be played, at different times by the same manager and different degrees
depending on the level and function of management. There are four decisional roles as below:
a Entrepreneur Role: In the entrepreneur Role, the manager initiates change. The manager seeks and identifies
opportunities to promote the needed change. He is also involved in the department and implement of change
strategy.
b. Disturbance Handler Role: In the disturbance handler Role, the manager deals with threats to the
organization. The role equips the manager to take corrective actions needed to resolve problems or unexpected
disturbances. He must seek solutions to various unanticipated problems like strike, accidents and so on.
c. Resource Allocator Role: In the resource allocator role, the managers need to choose the area or sector as
to where the organization will expand its efforts. These roles deal with allocation of scarce resource in the most
efficient and effective way. Such roles guide specific activities include developing and monitoring budgets,
forecasting future resource needs and handling problems in acquiring them.
d. Negotiator Role: In the negotiator role, the manager negotiates with outsiders like suppliers, capital
provider, and other elements of society on behalf of the organization. The top-level manager makes the decisions
about the organization as a whole, while the supervisor makes decisions about his or her particular work unit. For
example, a manager might represent the corporation to negotiate a trade union contract, a joint venture and so on.
MANAGERIAL SKILLS
Skill refers to the ability of an individual to perform a given task effectively & efficiently. Robert Katz has identified
three basic kinds of skills (Technical, Human, and Conceptual) for the managers. Still another important element
of managerial work is the set of skills necessary to carry out basic functions and fill fundamental roles. In general,
most successful managers have a strong combination of technical, interpersonal, conceptual, and diagnostic skills.
A manger needs these skills to carryout various management functions.
1. Technical Skills
It refers to the ability of managers in using the equipments, techniques, and knowledge of a specified field.
Technical skills are those skills necessary to accomplish specific tasks within the organization. Assembling a
computer, developing a new formula for a frozen food additive, and writing a press release each require technical
skills. These skills are generally associated with the operations employed by the organization in its production
process. Technical skills are more important to first line managers. These skills are required by the professionals
like engineers, doctors, supervisors, production managers etc. It helps to solve the technical problems rather than
human related problems. Normally, operation level managers need technical skills in lar ge extent.
In other words, technical skill is the ability to use principles, tools, techniques, procedures, resources etc.
in a specialized manner in performing task or job. For e.g. ability to use accounting principles, rules, procedures,
etc. is the accounting manager’s technical skill.
Though, technical skills are needed by all the managers but lower level managers require a high degree of
technical skills for the following reasons:
- To provide technical and instructions to the subordinates.
- To monitor and correct daily activities of the subordinates
Higher the level of management, lower the need for technical skills. It is because the managers at higher levels do
not directly supervise and control the day to day activities.
1. Human Skills
It refers to the ability of managers to understand, motivate and work with the people. Managers need to be
empathetic to solve the human related problems. It is also known as interpersonal skills. So, interpersonal skills
comprise the manager's ability to communicate with, understand, and motivate individuals and groups. As we have
already noted, managers spend a large portion of their time interacting with others. Thus, it is clearly important that
they should be able to relate to, and get along with other people.
In other words, human skill refers to the ability to understand, motivate, lead and work with other people.
Human skills are required for managers for following reasons:
- To interact and communicate with subordinates and outsides.
- To understand people and their problems, needs and feelings.
- To develop abilities of the subordinates.
- To maintain discipline and resolve conflicts among subordinates.
- To inculcate team spirit among the subordinates.
- To provide counseling to the subordinates.
2. Conceptual Skills
Conceptual skills refer to the manager's ability to think in the abstract. A manager with strong conceptual skills is
able to see the "big picture". That is, she or he can see potential or opportunity where others see road -blocks or
problems. Managers with strong conceptual skills can see opportunities that others miss.
In order words, conceptual skill refers to the ability to understand relationships between the organization and its
external environment and to co-ordinate the organizational activities. More specifically, conceptual skills refer to
the ability.
- To think and visualize total system of the organization.
- To identify and understand relationships among its sub-systems.
- To deal with these sub-systems in co-ordinated way.
Conceptual skills are most crucial for managers at top level, the reason is that they can visualize the total system
of the entire organization and develop a vision to deal with the environment surrounding it.
3. Other Skills
- Diagnostic Skills: The skill that enables the managers to visualize and analyze the most appropriate
response to a situation that helps to solve the managerial problems is a diagnostic skill. Most successful managers
also bring diagnostic skills to the organization. Diagnostic skills allow the manager to better understand cause-and-
effect relationships and to recognize the optimal solution to problems.
- Design Skills: Design skill refers to the ability to design a workable solution to a problem. It is a necessary
skill for upper level managers because they cannot merely be the passive ‘problem watchers’.
- Administrative Skills: Administrative skills refer to the ability to get things done through others by
implementing the plans in accordance with the policies, procedures, rules etc. of the organization. Such skills can
make the managers professionally sound and pragmatic.
Of course, neither every manager has an equal allotment of these four basic skills nor are equal allotments critical.
For example, the optimal skills mix tends to vary with the manager's level in the organization. First -line managers
generally need to depend more on their technical and interpersonal skills and less on their conceptual and diagnostic
skills. Top managers tend to exhibit the reverse combination i.e a greater emphasis on conceptual and diagnostic
skills and somewhat lesser dependence on technical and interpersonal skills. Middle managers require a more even
distribution of skills.
If Any Notes:

Unit 1 Introduction

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Unit 1 Introduction

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CHAPTER - 1

2. CHARACTERISTICS OF MANAGEMENT .......................................................................................... 2

3. PROCESS OF MANAGEMENT ............................................................................................................ 3

4. TYPES OF MANAGERS ON THE BASIS OF NATURE OF JOB ......................................................... 8

5. BASIC MANAGERIAL ROLE .............................................................................................................. 9

6. MANAGERIAL SKILLS ...................................................................................................................... 11

Managerial Hierarchy/Levels of Management

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