BS CHAPTER 4 me Concept, Nature and Process of Management Meaning of Management Management as a Process Management as a Discipline Management as a Group Nature and Characteristics of Management Management and Administration Importance of Management Management as a Science Management as an Art or Practice Management ex @ Professes 7 Emerging Challenges of Management Introduction An organisation is commonly viewed as a group of people contributing theit efforts The process by which organisational objectives management is an essential element of any school, college, club, charitable trust or ‘on. Managing requires planning of activities, organising of tion system, motivation of people and controlling of resources, cre various activities to attain the organisational objectives. This chapter isa modest attempt d nature of management and highlight the basic to explain the meaning, importance an functions of management. towards certain common objectives. are achieved is called ‘management . Thus, on which may be a business firm, organ even a religious organisati ating communicatLs - i soi 4 CONCEPT, NATURE AND PROCESS OF MANAGE 1.1 MEANING tama EANING OF MANAGEMENT ‘Traditional View of Management Traditionally, management is defined as an art of geting things done throug, others. The person who directs the efforts of others is known as Manager. He ory f rough and with the help of opera accomplishes the goals of the organisation through employees. tive Traditional Concept : Art of ett Done ple. ‘ ‘things done through peor ‘Management is the art of getting things fi a _/Bacagerart consists of getting things done through others... A managers one wig ‘accomplishes organisational objectives by directing the efforts of others ives by al obj traditional viewpoint about management is considered inappropriate in the peey coma ‘where workers are educated and have higher level of aspiration. It has been criticized on the following grounds: () Iedoes nor give the functions which a manager has to perform to get results from others. (ii) It gives the impression of the manipulative character of the practice of ‘management. (ii) The employees are merely treated as means for getting results. In ohet words, their position is like a cog in the wheel. (i) The needs of the workers have been ignored. The workers are supposed work like machines Modern Definition of Management The modern concept of management considers management as the proves of utilisation of human resources and physical resources (i.e., capital, machines material, et.) in such a tianner that organizational objectives are achieved eft and dffciently. In other words, management involves planning, organising, staffing» directing and controlling the activities of the enterprise for the efficient utilisation resources to achieve organisational goals. Definitions of Management “Management is the process of working with and through others to effectively achiev? organisational objectives by eficiontly utilising theimibod sosources we the can environment.” ee “Management entails the utiisation of human efforts and material resources toward® the achievement of organisational objectives.” —B.M. Richman “Management is a distinct process consisting of planning, organising, actual | (directing) and controlling, performed to determine and re ht objectives with the use of human beings and other resources.” —George R. Te“CONCE T. NATURE AND PROCESS GF MANAGEMENT 15 Accor ding to Koontz and Weihrich, “Management is the process of designing and maintaining ae environment in which individuals, working together in groups, efficiently accomplish selected aims or goals,” We talk of management in the context of an organisation wherein individuals and groups work together for the attainment of certain common goals. It is the management which provides proper environment for the effective and efficient functioning of the organisation. The modern concept of management has the following features : (@ Management is Seal oriented, Tes purpose is to accomplish the objectives of the organisation. — Gi) It involves effective and efficient utilisation of human and other resour: like capital, machines, materials, etc. (iii) It performs the functions of planning, organising, staffing, directing and controlling. Thus, management could be yiewed.as a process consisting of these functions. : (v) Itis an integral part of any group activity and is concerned with enhancing its effectiveness and efficiency. Effectiveness vs. Efficiency. These two terms are different, but they are interrelated. For management, it is important to be both effective and efficient. Effectiveness and efficiency are two sides of the same coin. But these two aspects need to be balance and management at times, has to compromise with efficiency. For example, it is easier to be effective and ignore efficiency, i.e., complete the given task but at a high cost. Suppose, acompany has two units to produce colour TVs and each has a target of 4,000 units per month. If the first unit achieves this target at the cost Rs. 6,000 per unit as compared to the second unit which achieves the target at the cost of Rs. 6,500 per unit, the first unit would be considered more efficient. However, both the units are effective as they are able to achieve the given targets. For the long-term survival and growth ofa business, its management must try to achieve goals (i.e., effectiveness) with the use of minimum resources (i.e., efficiency) and thus maintain a balance between effectiveness and efficiency. Table 1.1 : Effectiveness vs. Efficiency Effectiveness nae ; Efficiency ak : i It refers to accomplishment of| 1. | It refers to efficient utilisation organisaiional goals. of resources to accomplish organisational goals. 2. | lis focus is on end results. 2. | Its focus is on getting maximum =r a . output using minimum of resources. Int is a multi-dimensional concept. | 3. | It is uni-dimensional in nature. It is It is concerned with satisfaction “of concerned with the efficient use of customers, employees, investors and resources only. other stakeholders of the business.r CONCEPT, NATURE AND PROCESS LC MANAGEMENT AS A PROCESS Management refers to a series of inter-related functions or elements 10 achieve stated objectives through the effective utilisation of human and other resources, | involves five functions, namely, (a) planning, (6) organising, (c) staffing, (a) directing or leading and (¢) controlling. As shown in Fig. 1.1, itis through the performance of these functions that management is able to effectively utilise manpower and physica} Tesources such as_money or capital, machines, materials, methods, etc. to produce goods and services required by the society. |ANAGEMENT Management as a Process “To manage is to forecast and plan, to organise, to command, to coordinate and to control.” —Henri Fay “Management is the handling of all resources through the process of planning, organising, directing and controlling to attain the stated objectives. —Gary Dessler [ Resources eal Managerial Functions |» Objectives Planning Directing Men and Women Goods and Services Desired by the Customers Staffing Organising Controlling Fig. 1.1. An Overview of Management Process A brief overview of the functions of management is as follows : ()) Planning. It means detemining the objectives of the enterprise and its various units. (4) Organising. Its refers to identification of activities to be carried out, grouing of similar activities and cration-of departments. Organisation also leads to cration of authority and responsibility relationships among superiors a subordinates throughout the enterprise. (iii) Staffing. It involves manpower planning employment of personnel and their training, performance appraisal, remuneration, etc. (iv) Directing. It isa very broad function concerned with interpersonal realations- It includes communication with the subordinates, providing them leadership, and also motivating them.“CONCEPT, NATURE AND PROGESS OF MANAGEMENT 1.7 (2) Controlling. It refers to comparing the actual performance with the plans or standards. Corrective steps are taken when the actual performance is not upto the mark, Why is Management called a Process. Management is called @ process because it comprises a series of functions that lead to the achievement of certain objectives. As shown in Fig. 1.1, management process involves planning, organising, staffing, directing and controlling. These ate the basic functiogs which every manager performs for the achievement of certain goals. The manager diws-plans.to-translate these goals into reality. He organises, directs and controls the activities of the people working under him. He continues to perform these functions, as long as the business unit is in operation. In fact, management is a continuous process as depicted in Fig, 1.2. Planning g MANAGEMENT 8 PROCESS & a gas S Fig. 1.2, Sequence of Management Functions Management may be labelled as a social process because it deals with various social groups such as sharcholdess, suppliers, workers; customers, in particular and the society in general. Management is also called a social proces because of its major task of motivating and leading the human resources for the effective use of physical and financial resources. 1.2.1 Management as a Dis. Management has acquired the status of a discipline or field of study. Itis taught as «pce branch oft in educational, management and technical institutions. AST Feld of study, the subject includes management concepts, principles, techniques and skills. Management is a multidisciplinary discipline. It is drawn heavily from anthropology, sociology, psychology, etc. By obtaining a diploma or degree in Business ‘Administration or Management, a person becomes qualified for the job of a manager,18 CONCEPT, NATURE AND PROCESS OF MANAGEMENT knowledge, skills, techniques oadly referred to as the field of Management is both a science and an art. The and principles which managers use in managing are br : ‘ management science. It is regarded as an art because the performance 2 managerial functions requires certain skills which are a personal came of a manager. Management is recognized as a science because it has develope io es and techniques which have more or less universal application. - i. WAY, It is taught in various institutions as a subject or discipline. In other s, i (tiny of specific concepts, principles, theories and practices which are taught to the students of management. 1.2.2 Management as a Group : Management has become a very common term. People use this : ) a team or group of managers who run an organisation. Management of an enterprise is tepresentéd by the group of people which performs managerial functions for the accomplishment of its goals. These people are individually known. as Managers. In other words, a manager is 4 person who performs the managerial functions of planning, organising, staffing, directing and controlling and is a member of the management team of the organisation. Used in this sense, management of a company includes all the managers from’the chief executive to the first line supervisor. term to denote However, in practice, the term ‘management is used to imply the top management of a company. When we say that ‘management of INFOSYSIS or WIPRO is very efficient, we imply the efficiency-of the company’s top executives. 1.3 NATURE AND CHARACTERISTICS OF MANAGEMENT ota iti To understand the nature of management, it is essential to know the features or characteristics of management. The basic features or characteristics of management are as follows : 1. Management is Goal-Oriented. The purpose of management is to achieve the goals of the organisation. For in: ance, management of a ° business aims at Satisfaction of customers, earning-of profits and increasing the goodwill and image"of the ’business. Thete is no need of management if there are no pre-determined goals or objectives. The success of management is judged by the extent to which organisational goals are achieved, The basic purpose of management is to achieve maximum efficiency of the organisation. 2. Management isa Continuous Process, its functions are repeated tim: It is an ongoing process of plani organising, staffing, shown in Fig, 1.2. Management is a continuous process, ies nd again. Management does not stop anywhere. s of planning the activities and execution of plans through directing and controlling. This cycles continues as already \. 3. Management is a Coordinative Force. The essence of management is the coordination or integration of human and other resources for effectiveen ANSE NC NEE ES CONCEPT, NATURE AND PROCESS OF MANAGEMENT 1.9 performance. It brings together physical and financial resources and leads the human resources for thé efficient use of non-human resources. s. All these resources are properly organised and divided into various work-units uULpose of achieving greater é6ordination. Management acts as a maximum productivity. cae ic agent in getting eRUNTERNTTERT RRC 4, Management is an Intangible Force. Management has been called | the unseen force. Its presence is evident by the results of its efforts—orderliness, s, informed “employees, buoyant spirit and higher output. Thus, feeling of management is results are apparently known. People often comment on the effectiveness (or ineffectiveness)-of management on the basis of the end results although they cannot observe it during operation. 5. Management is a part of Group Effort. Management is an integral part of any group activity. It is essential to undertake any organised activity. It involves the use of group efforts in the pursuit of well defined goals or objectives. It cannot exist independent of the group or organisation it r manages. 6. Management accomplishes Results t through the Cooperation of Others. The managers cannot do everything themselves. They must have the necessary ability and skills to get work accomplished through the efforts of others. They must Motivate the subordinates for the accomplishment of the tasks assigned to them. It is through motivation that managers can 1 influence b the behaviour of their subordinates. 7 7 Management balances Effectiveness and Efficiency. Sound management requires that all organisational activities are performed effectively and efficiently. An organisation is said to be effective if it is able to accomplish its objectives. It will be termed as efficient if it is able to accompli ives by making optimum use of resour 55" For example, each ‘of th Managers ‘of ~a company is given the target to produce 2000 refrigerators per month. Both attain their targets and so are effective. But the cost of production per refrigerator of the first Production Manager is Rs. 9,000 per set and that of the second is® 9,800 per set. The first Production Manager will be termed both effective and efficient. 8. Management is a Dynamic Discipline. Management is a field of study which is taught in universities and management institutes. In fact, management is multidisciplinary in“ nature. It contains principles drawn from many social sciences like anthropology, psychology, Sociology, etc. Much of management literature is the result of the association of these disciplines. 9, Management is a Science as well as an Art. Management has an organised body of knowledge consisting of distinct concepts, principles and techniques which have wide application. So it is treated as a science. The application ofEAN AGE NATURE AND PROCESS OF MANAGEVEyT these concepts, principles and cechniquesrequtes specialised knowledge ng ills on wrt of the m: _ Since the skills acquired by a manager are skills on the part of the manager. Since Se eet 1.10 CONCE! personal possession, management is viewed as through training and experience. 10. Management is Pervasive or Universal. Management is essential for effecting performance of any organised activity. Thus itis universal in natite, Thy principles "and techniques ‘of management have ule eee They an be applied to all types of organsations—business, social eduction ang religious, However, the principles and techniques should nor be applied bina ts they are not ig laws. They should be modified to suit the given statin and the type of organisation. 1.3.1 Objectives of Management Objectives are the goals or ends owards which the activisis ofa business are directed They Serve as standards or ben: ‘ks against which the performance is measiured and assessed. From the pointof view of management, objectives may be grouped under gs, namely, () organaisational(i) social; (#) individual. three heac 1, Organistonal Objectives (Go) Survival. The basic objective of any buishess is survival. Mangement mus. strive to ensure de srvival of the business. In order to survive, a busines ‘must eatn enough revenues to cover costs of operations. (6) Profit. Mere survival'is Hot enoligh for the business. Management has to ensure that the business makes reasonable profits. Profits provide a vita incentive for the continued successful operation of the enterprise. The management must earn sufficient profits to meet the various costs of business expansion. To remain in the market, management must exploit fally the growth potential of the organisation. Growth ofa business may be measured in terms of increase in annual production, sales turnover, number of employees, capital investment, etc. 2. Social Objectives ‘Management is an organ of the society and so it must have social objet’ Such objectives are intended to do socially useful things in the areas of hes safety, environment, et, In particular, social objectives include the followin (2) Supply of quality goods at reasonable prices. (8) Generation of employment opportunities. () Providing fincacial support to community projects. (d) Protection of environment by using environmental fiendly mabod production. (6) Providing employment to physically challenged people._ NATURE AND PROCESS OF MANAGEMENT tds Reputed companies like Tata Steel, ITC, Asian Paints, etc, have been working for rural devel levelopm. i , ini pment by financing schemes for the health, eductaion and training of rural masses. 3. Personal Objectives These objectives pertain to individual employees and managers, as for example: (a) Good salary and other benefits. (6) Opportunities for training , promotion, (0. Recognition of meritorious work. (@) Good and healthy working conditions. Management must facilitate the accomplishment of the personal objectives of the employees. It must also integrate the personal goals of the individuals with those of the enterprise. etc, 1.4 __IMPORTANC F MANAGEMENT Peter E Drucker refers to management as the dynamic life-giving element of every business enterprise. Management is the shinking organ that provides vision to the business. Iris also the intergrating force for the accomplishment of business objectives. The importance of management to a modern business is discussed below : 1. Accomplishment of Goals. It is the management which determines the goals of the organisation and of various departments and functional groups. The goals are communicated to the employees to seek their cooperation. All organisational activities are directed towards the organisational objectives. Clear-cut definition of goals is essential for the success of any organisation. 2. ‘Effective Utilisation of Resources. Management ensues oprimum utilisation. of resources. Through planning and organisation, managment eliminates all types of wastages and achieves efficiency in all business operations. Management motivates workers to put in their best performance. This would lead to the effective working of the business. 3. Sound Organisation. Management establishes sound organisation for the accomplishment of the desited objectives. Ie clavifies authority responsibility relationships among various positions in the enterprise. Ir fills various positions with persons having the right qualifications and training. Management also provides the workers with proper environment and encourages the spirit of co-operation. 4, Providing Vision and Foresight. Management keeps itself in touch with the external environment and supplies vision and foresight to the enterprise, Te helps in predicting what is going to happen in fucure which will influence theOO AND PROCESS OF MANAGE QE ir CONCEPT, NATURE 0 ensure that the enterprise jg by able It also takes steps € environment, 5. He = eemony in Work. In an organisation employees come from diff, ackgrounds they have diferent aides and different styles of working ifevery one start following his itcan lead to chaos and confys the organisation. By giving directions managers bring uniformity and ha, 112 ee work rel “orking of the enterpr to C' f i meet the demands of changin} own style, i on i in TMony in the action of employees. 6. Help the Employees in manager motivates and leads his team in such a manner that indiyig: trerafbsrs ne able to achieve personal goals while contributing to the gol organisational objective. Through motivation and leadership man, overall helps individuals to develop team spitit, cooperation and comoiiimentee i Btoup Achieving Personal Objectives, p, * Ever iat 7. Development of Society and Nation. Management plays a pj Derelopnicnt cc fibei’ and) Sahl Vedelomen oa counts development of a country lies on the quality of management wad ee resources. Management can increase che national-icome and valle living ofthe people by producing maximum cost. Thus manageme sandand of at national level and is regarded as a key for the economic pon ote ‘ te aahTable 1.2 : Management vs. Admit tration Basis Management Administration 1.] Definition Management means getting the | Administration is concerned with worke done through and with | the formulation of objectives, others by leading and motivating | plans and policies of the them. organisation. 2. | Nature of ‘Management refers to execution | Administration relates to Functions of decisions. It is 2 doing | decision-making, Itisa thinking function. function. 3. | Stage of It is concerned with implemen- | It is concerned with deter- Performance _| tation of policies laid down by | mination of major objectives administration. and policies. Dading oF It is actively concerned with | Iris not directly concerned with Human Efforts | direction of human efforts at the | direction of operative personnel, operative level.iy nd poli itis on’ ig snes \TURE AND PROCESS oF | CONCEPT, NAV OF MANAGE ‘Type of Management has operational | Administration has gua, Authority authority to execute| to take strategic ang ©” administrative decisions. decisions. 6. | Level in the Management is relevant at lower | Administration refers gj Organisation _| levels of management. levels of management, 7.| Decision- Management decides who shall | Administration determing. making implement the administrative | is to be done and whe decisions. be done. 8. | Usage The term management iswidely | The term ‘administragi used in business organisations in | associated with non-by the private sector. organisations such as govern, ; departments, public enerpigs military organi-sations, oe, cultural organisations, etc 9, | Designations in | General Manager, Managing | Minister, Secretary, Comms, Organisations | Director, Plant Superin-rendent, sioner, Director, Vice, Chancel, Branch Manager, Controller, etc. | Registrar, etc. To. |Influencing | Managerial decisions are | Administrative decisions Factors influenced mainly by organisa- | are influenced by economic tional mission, objectives, | environment, social forces, policies values and beliefs of | government policies, et managers. ‘Administrative management is primarily concerned with laying down policies and determining goals whereas operative management is concerned with the implementation of the policies for the achievement of the goals. But in a business organisation, both these functions, i.e. framing of policies and executing them, are performed by the same set of individuals known as ‘managers’. Thus, there is practically no difference between management and administrative management functions and operative management functions as shown in Fig. 1. hierarchy devote more time to admi However, the managers who are higher up in the istrative functions. They are known a5 ‘top management’. Managers at the lower levels devote comparatively less time t© administrative functions. They are concerned more with directing the workers ad controlling their activities. 1,6__ MANAGEMENT AS A SCIENCE Science is a systematized body of knowledge pertaining to a particular field of enquiry. It contains concepts, hypotheses, theories, and principles to explain caus" and effect relationship between two or mote factors. Any subject which is scientificallyCONCEPT, NATURE AND PROCESS OF MANAGEMENT developed and consists of universally accepted principles is a science. In order to be organized as a science, a discipline should have the following characteristics: (i) Systematized Body of Knowledge. It should have a systematic body of knowledge including concepts, principles and theories. (é) Scientific Observation. It should have scientific methods of observation and enquiry. There should be no scope of personal likes and dislikes of the scientist. (iii) Experimentation. Scientific principles are evolved through observation and tested by repeated experimentation to check their validity. They should produce the same cause and effect relationship every time. (ix) Verifiable Principles. Once an observation is confirmed by repeated experimentation and testing, it takes the form of a scientific principle. Anybody can verify the principle by repeating the experiment. The results are the same every time. Thus, it can be said that application of a principle ensures predictable results. (v) Universal Application. The scientific principles have universal validity and application. They give the same results everywhere if the prescribed conditions are satisfied. It is a well-known fact that the management has systematised body of knowledge pertaining to its field. The researchers in management use scientific techniques to collect and analyse data about human cause and effect relationship. These have been developed which also establish cause and effect relationship. These principles have also been verified by many researchers. More or less, these principles have universal application in different type of organisations in different countries. That is why, management is called a science. " However, management is not a perfect science like other physical sciences such as astronomy, physics, chemistry, biology, etc. The main reasons for the inexactness of science of management are as follows : (@ Many of the principles of management are not supported by‘research. (i) In management, it is difficult to establish cause and effect relationship as in chemistry or biology. (iii) Application of management principles depends upon situations and factors. (iv) Management deals with people at work and it is very difficult to predict their behaviour accurately. Since it is a social process, it is also called a Social Science. Management is a universal phenomenon, but its theories and principles may produce different results in different situations. Management principles and theories are situation bound because of which applicability does not necessarily lead to the same result every time. That is why, Ernest Dale called management a Soft Science.1.16 — sa siti ‘CONCEPT, NATURE AND PROCES: 1.7 MANAGEMENT AS AN ART OR PRACTICE qe and personal skis bring about desired Art signifies the application of knowl Is 0 bri results, It is based on scientific knowledge and Pri nciples. Ifa science is learnt, an artis practised. Stared differently, so me peedge and art isto apply know, An art has the following features: (0 Body of Knowledge. principles and applica ete. (ia Personalised Application of Knowledge and Skills: ywledge and sills about @ Parc ‘oner develops his person coretical knowledge of concep, sed on th Tar field such as music, painting, Are is bas tions aboura particu ‘Artimplies personalise, Jar field, say, music or al skills and style application of kni ing, Every artist ot practi paint ce results. of producing concret learnt and refined chrough continuo practice. throug ses his skills and style to (iii) Practice. Are is wre. An artist u: (ia) Creativity, Artis creative im nat create bereer results. idered an art because of the following reasons : Management is consi (a The practice of e use of knowledge of management concepts; f management does involve th principles and techniques. personal skill to deal with various problens (Every manager has to apply his hhe may have to use personal judgement ofthe unit he is managing, At times, to take managerial decisions. ning thereby that there is no bes (iii) Management is situational, mea apply his knowledge and skills ro del management. Every manager has to with various situations. (io) The are of management can be learnt and mastered through consis practice. (v) The process of management is directed towards the accomplishment of concizte results, Like any other art, management is creaive in the sm that managing creates new situation needed for further improvemen® + concepts, principle the desired Jhievemen™ Every manager applies his knowledge of ge of the management and techniques and also his sills while dealing with people to achieve elke, Moulding the attcudes and behaviour of people at work rowards ac of certain goals is an art of the highest order. As an art, management calls for a co ‘management theories # work done ‘a manage of abilities and judgement and a continuous practice of principles. Management has been termed.as an age-old art and hus getting through employees in fine arts like music and painting, The effectiveness ofCONCEPT, NATURE AND PROCESS OF MANAGEMENT 1.17 7 dependent upon his personal skills, types of people to be managed and the types of situation faced. A musician can repeat his composition time and again, but a manager may not be able to repeat the same ne principles and techniques because of changes in the situation. Dual Role of Management as a Science and an Art Management is both a science and an art. It is considered a science because it hea an mgnganiced boa of »f knowledge which contains certain universal truths. It is called possession of the manager. Science provides aaa about certain things and art deals with the application of “knowledge and skills. A manager to be successful must acquire the knowledgé of science of management an and | learnt to apply this knowledge. A manager should"be'an applied | scientist. He should p possess n0 only. specialised knowledge of management, but also the skills to put his Knowledge ‘into practice. Just as a doctor uses his knowledge to treat his patients, a “a manager should use his knowledge to solve the ofganisational problem.” lem. Management is as old as the civilisation. But its emergence as a scientific field of enquiry is comparatively new. It has been aptly remarked that management is the oldest ee) of arts and the youngest of sciences. 1.8 MANAGEMENT AS A PROFESS! RNR A GRR AN eR SRR The term ‘profession’ may be defined as an occupation backed by te dge and raining and to which entry is re, e body. The essential requirements of a profession are as specialised body bya repres ta follows: , @ Specialised field of knowledge. f _ ar Restricted entry based on education and training. ini) ‘Representative or professional association. Liv) Ethical code of conduct for self-regulation. @ “Social recognition. “wy “Professional fee. “The application of the above tests or criteria to management is examined below: (@ Specialised Knowledge. There exists a specialised body of knowledge underlying the field of management. It has well Idefined p principles, concepts, he managers. theories and techniques which can be put into practice by ¢ Further, management is widely taught in the universities and management a Seeman) institutes as a iscipline.iD PROCESS OF MANAG 7 Entry © a profession shou 118 CONCEI (4) Restricted Entry Based on Formal Trainin be based on formal education and training. But entry to managem profession is not restricted as there is no prescribed qualification (as Mijpg in case of medical profession) to becomea managet: MBAS are prefers, managerial jobs, But MBA degree is not necessary condition 0 entry, profession. Persons with degiees in commerce psychology, engineering can also take up managetial jobs- (iii) Representative Association. For the seston — regulation of any profession, the existence of a representative Dody is 2 mus F, ihe Instirute of Chartered Accountants of India lays down standard of education and training for those who want to enter iy accounting profession. Only the persons holding C.A. degree ang membership of the Institute of Chartered Accountants of India can wor sional chartered accountants in India. But it is not so in case of example, as profes management. Some organisations such as All India have been set up for the professionalisation of management. But none of these has any authority to prescribe minimum qualifications for taking up managerial posts or to regulate the functioning of managers. Further, it is not compulsory fora manager to be a member of any recognised management association. (i) Ethical Code. Every profession must have a code of conduct which prescribes norms and professional ethics for its members. But there is no universally aécepted code of conduct for the practising managers. The ll India Management Association has prescribed a code for manages, buti has no right to take action against any manager who does not follow ths code. () Social Responsibilities. Managers of today recognise their so‘! responsibilities towards customers, workers and other groups. Theiraction Management Association (AIMA) are influenced by social norms and values. They are guided by the mot of service to others rather than making money. That is why, managetse a respectable status in the society as is the case with doctors, chat accountants, etc, ) Chasing of Fee. The managers who act as consultants charge posi Se forthe services provided to their clients as in case of doco. Ho" ‘ast majority of managers are salaried people a they are engaged!" employees in various organisations,Bi CHAPTER 2 | Managerial Functions, ao ae sis | The Process of Management ‘Managerial Functions Coordination—The Essence of Managing Roles of Managers Levels of Management Managerial Skils a Introduction Management is the process of effective utilisation of human and other resources for the accomplishment of organisational objectives. G.R, Temy has defined mariagement as “@ distinct process consisting of planning, organising, actuating, and controlling performed to determine and accomplish objectives by the use of iuman beings and othie? resources.” Management is regarded as a process because it involves a series of functions. As shown in Fig. 2.1, management starts with planning and ends with controlling. But it does not mean that managerial functions are followed in a specific sequence. In practice, a manager performs all the managerial functions simultaneously to utilise labour, capital, materials, machines and methods effectively for producing goods and services required by the society. 2.1 THE PROCESS OF MANAGEMENT Managements called a process because it comprises a series of functions that lead to the achievement of certain objectives. The manager stars with formulating plans to2.2. MANAGERIAL FUNCTIONS Since various management scholars studied different organisations at different times, they identified the functions of management in their own ways. For insta Henri Fayol, the father of functional or administrative managements remarked : 8 manage is to forecast and plan, to organise, to command, to coordinate and to contro! This, Fayol classified management functions into (Ato forecast and plan, : (@ to organise, (ito command or to give orders, : to co-ordinate, and wg Cbyrgock on) (») to control. Luther Gullick offered a list of administrative functions under the catchword “PODSCoRB”. Each alphabet of this keyword “PODSCoRB” stands forthe following activities : P for Planning, O for Organisation, D for L Directing, S for Staffing, Co for Co-ordinatin, R : ‘aetna ing, and B for Budgeting. five categories as follows : ll, “The most useful method of classifying managerial activities is to group them around the functions of (planning, organising, staffing directing and controlling. ’They think that co-ordination is not a separate function but is the essence of management. Thus, for the sake of analysis of the management process, we can classify the management functions into the following categories : (1) Planning / (2) Organising / (3) Staffing ji (4) Directing (5) Controlling. Planning Planning lays down the objectives to be achieved an id the step to be followed to achieve them. It is a mental Process requirin, a ig the use of intellect culties, foresight ~ and sound judgement, It involves selecting and relating of facts aking and using of assiimptions regarding the future in the visualisation and formation of Proposed activities believed necessary to achieve the desired results, It involves deciding in advance what to do, when to do, where to do, how to do and who is to do and how the results are to be evaluated. Thus, g about the ways and ¢ evaluate Planning is the systematic thinking about the ways and the means for the accomplishment of predetermined objectives, Planning involves the following steps : Ai Determination of objectives; (ii) Forecasting; (iii) Formulation of policies and Programmes;(io) Preparation of schedules and procedures an (v) Budgeting. Planning includes detern Programmes, strategies, budgets and PF is to minimise the risk and to make a the available opportunities. Itbridges the gaP i a 0. Good planning is flexiblein nature ase an at) Te covers both short-term and long-term Pet pisces agement by which management Orang moon must be performed hes m together the human and, ‘material resour ivity invol persons. res determining the activites activity involves (Wo. ore cigning the grouped activities to individuals, ang to be done, et dios assigning the grouped activities ae i ee nd responsibility among the people tO achieve he objectives of the enterprise. ‘Unwick defined orga i the purpose and arranging them in groups "Be tae ae sae SE involves the deter i responsibility relations in the organisation. [tis an important function of every manager ) to determine the nature of the activities required to attain the group goals, the grouping of these activities and the assignment of the activities to the individuals with necessary delegation of authority. The process of organisation involves the following steps : of che objectives, policies, rule, atone rs ‘The purpose of planni, Sete same time Full advantage of vm where we are and where we want jy ‘changes in business conditiony- isingas determining what activities are necessary to achioe alr may Be Tiécessary tO assign to the nation of authority and (a) Determination of objectives; (8) Identification and grouping of activities; (0 Assignment of duties to individuals: and (d)-Development of relationships. Staffing or Human Resource Management __After organising the various dctivities to be performed, management is in # Position to know the manpower requirements of the enterprise at different levels in the organisation structure, After determining the number and ype of personnel be selected to fil different jobs, management proceeds with recruiting, selecting and the people to Fill the requirements ofthe enterprise. Ina cole centerprist staffing is & continuous process because new jobs ate created in the entesprise and existing employees leave the enterprise. Staffing comprises of those activities which are essential to keep manned tH positions creaosd by the organisation structure, It includes the task of determiningt® requirements with regard to number and types of people for the jobs to be done, layits————— pe eae ea TP MANAGERIAL FUNCTIONS, ROLES AND SKILLS down qualifications for various jobs and recruiting, selecting and training people to perform those jobs efficiently. Staffing is concerned with both managers and non-managers. It is a function performed by managers at all levels. Earlier, staffing was considered a part of organising. But with thé ¥ecognition of the importance of the human factor in industry and business, it began to be considered as a separate function. Staffing usually includes the following activities: i) Human resource planning. (ii)» Deciding sources of recruitment. “ it)” Receiving applications. (iv) Testing and interviewing. (v)*Final selection and issue of appointment letter. (vi) Orientation and placement. 3 (vii) Training and development. Directing and Leading Direction is the process of guidi subordinates to work in a way that is b 0 work way The manager not only shows the right path but also leads nates to achieve the objectives of the enterprise. He creates a sense of belongingness, faith and loyalty among the subordinates. The direction function involves the following four elements : (i Leadership. Leadership is the process by which a manager guides and influences the work of others in choosing and attaining specified goals. According to Chester Barnard, leadership is the quality of the behaviour of the individuals whereby they guide people towards the accomplishment of some common goal.” , (i) Communication. A manager has to tell the workers what they are required to do, how to do and when to do ir. It has to create an understanding in the minds of the subordinates of ‘to be done. This is datie-by the process of communication. : (ii) Motivation. It is the function of a manager to motivate the people working under him to perform the work assigned. A successful manager motivate the people to Work harmoniously for the attainment of desired objectives. (iv) Supervision. Supervision is the process by which conformity between planned and actual results is maintained. Effective supervision ensures greater output of high ‘quality. It teaches the subordinates th their tasks are to be performed. Controlling ‘According to Fayol, “In an_ undertaking, control consists of verifying whether everything occurs in conformity 1 the plan adopted, i rructions issued and the principles ¢ pablishe "Controlling is that management activity whereby the managers7 2.6 MANAGERIAL FUNCTIONS, ROLES AND Skii7g compare actual performance against the planned one, find out the deviations, te corrective action to teniove the deviations, incorporate positive deviations in the Plang and help ensure the realisation of the specific goals. In a running concern, planning and control go together because planning Seeks , Set consistent, integrated and articulated goals or programmes, while control se compel events conform to plans, The most notable feature of the process of g is that it is forward-looking. A manager cannot control the past but can ay, problems in future by taking actions in the light of past experiences. The Process consists of the following steps : es tg Otro] Oid the Control Setting up of standards. (i)”Measuring performance. id” Comparing performance with standards. “(oy Taking corrective action. 2.3 _COORDINATION—THE ESSENCE OF MANAGING Coordination has been viewed by different management ex; perts in different ways. Henri Fayol con: iders coordi ation asa function of manager. Louis A. All, : - = s aia en also tegards coordination as one of the separate miaflagerial functions. James D, Mooney considers coofdination as the first principle of organisation. Ral di the J ph C. Davis looks Upon coordination primarily as a viral phase of controlling. Meaning of Coordination In the words of Mooney and Railey, “Coordination is the orderly arrangement of group efforts to provide unity of action in the pursuit of a.common Purpose.” It is the effort fo ensure a smooth interplay of the functions and forces of the different componentMANAGERIAL FUNCTIONS, ROLES AND SKILLS 2.7 such a manner that it brings about harmonious relations and unified action to achieve the given objectives. In a business enterprise, coordination will lead to the following advantages: (2) Better Results. Through coordination, duplication of efforts is avoided. The time and energy thus saved are better utilised in creative tasks. This results in total accomplishment which will be far in excess of the sum of the individual parts. (7) Economy and Efficiency, Coordination leads to economy and efficiency in the organisation by avoiding wastage of resources and duplication of efforts. Due to coordination, there will be no delays and breakdowns which will further increase efficiency. (i) Better Utilisation of Human Resources. Modern organisations employ specialists in diverse fields for better results. Their efforts need to be integrated if the services of such experts are to be utilised fully. Coordination can help in integration 0 the activities of the experts or specialists. : Excellence through Coordination The Dabbawallas of Mumbai is the story of excellence through coordination. The success of the business lies in the complex yet well coordinated exercise that is carried out on the streets of Mumbai day after day. What is the secret behind the efficiency with which their business is conducted ? The story of the dabbawallas begins in the kitchens of Mumbai. After a person step out of his door for work, someone begins the time-consuming process of preparing for him or her a fresh, home-cooked lunch. What happens next demonstrates the coordination of the dabbawallas system. The first dabbawalla picks up the tiffins from the specified homes and takes them to the nearest railway station. The second dabbawalla sorts out the dabbas at the railway station according to them destination and puts them in the luggage carriage. The third one travels with the dabbas to the railway stations nearest to the destinations. The fourth one picks up dabbas from the railway station and drops them off at the respective offices. i By mid-morning, thousands of dabbawallas are bicycling through the streets of Mumbai, ensuring a hot home cooked lunch for their customers. The whole tiffin distribution requires negligible technology. The dabbawallas tely on low capital and use cycles, wooden carriages and local trains to achieve their target. There are several groups that work independently and network with each other to achieve their common ¢ goal. is divided into several small distribution sectors and each sector is handled by i nanieckl soreor This person understands the addresses in that locality very well. Also, this perfection comes with practice. Many new employees work for months under the guidance of their seniors. ole ee ity and time management are on top of the agenda for dabbawallas. Whatever BU ee eslaices, the dabbawallas never get delayed even by a few minutes. (iv) Meeting Environment Challenges. The technological, economic, social, and political environments of modern business are very complex. Proper coordination o| the operations of different departments can help in meeting these challenges effectively.Table 2.1 : Coordination vs. Cooperation S.No. ‘Coordination Cooperation 1. | Coordination isa deliberateeffort by | Cooperation is voluntary attitude of amanager to ensure synchronisation | organisational members to contribute of various organisational activities. * | ro organisational objectives. 2. | Coordination is an orderly | Cooperation denotes collective efforts arrangement of group efforts to | of the group members who contributed provide unity of action in the pursuit” | yoluntarily to accomplish a particular of common objectives. ieee 3. | Coordination is essential where a. | Cooperation is voluntary in nature. It group of people work together fora | arises out of the desire of the people to common purpose. work together. - 4. | Coordination is based on both formal | Cooperation arises out of informal and informal relations. relations. 5. | Coordination seeks whole- | Cooperation without coordination is hearted support of employees and departments which will definitely improve the results of the business. fruitless. Cooperation alone may lead to imbalanced operations.2.4 _ROLES OF MANAGERS Who is a Manager ? ‘A manager is a person wh performs the function of planning ergaising ivecting, and controlling forthe accomplishmen ofthe objecivesf an underatng ‘Tmanetstpetfooms che managerial functions, he is a member of the manages the organisation. Used inthis sense, management includes all those who ms" ffs of an organization. Every manager is concemed with taking ceain and their implementation forthe achievement of organisational objectives He ‘the human resources in the effective use of materials, machines and cechnol! " "YgSome of the characteristics that are common to most of the managers are as follows: J¢ Managers spend a major portion of their time in achieving coordination between human and non-human resources. 2. Managers do much work at an unrelenting pace. 3 Managerial tasks are characterised by brevity, variety, and fragmentation. 4% Managers prefer live action—brief, specific, well-defined activities that are Y current, non-routine, and non-reflective, , 5° Managers prefer oral to written communication. G¢ Managers maintain a vast number of contacts, spending most time with subordinates, linking them with superiors and others in a complex network. Types of Roles It has already been observed that managing involves certain functions. While performing these functions, a manager has to play multiple roles. A role consists of the behaviour patterns displayed by a manager within an organisation or a functional unit. Henry Mintzberg conducted a comprehensive survey on the subject of managerial roles and integrated his findings with the results of a study of five practising chief executives. He identified ten basic roles performed by managers at all levels from foremen to chief executives and classified them under three heads : (1) interpersonal, (2) informational, and (3) decisional as shown in Table 2.2. These roles describe what managers actually do, whereas functions of managers had historically described what managers should do. A brief description of the managerial roles is given below. Table 2.2 : Roles of Managers INTERPERSONAL ROLES Figurehead Leader “Liaison Performs symbolic duties Motivates, inspires, sets an Maintains relationship with ‘bestows honours, makes example, legitimizes the pow- | other organizations, gov- speeches, serves on ers of subordinates. ern-ments, industry groups. com-mittees. etc. INFORMATIONAL ROLES Disseminator Spokesperson Observes, collects and Transmits information and ‘Speaks for the organization. teviews data on the meeting | judgements about internal Lobbies and defends. En- of standards. Notes compli- | and external environments. gages in public relations. ance. DECISIONAL ROLES Entrepreneur Disturbance Handler | Resource Allocator Initiates changes. Handles conflicts and | Approves budgets, Works out agree- Authorizes action. complaints. Counters | schedules and ment with cus- Sets goals. Formu- actions of competitors. | promotions. Sets to-mers, suppliers lates plans. priorities. and agencies. Source : Adapted from Mintzberg, H., "The Managers’ Job : Folklore and Fact, Harvard Business Review (July/Aug. 1975), pp. 50-a Figuchead. I Excontive smanagers petiorm 2 = seebs of cement cs such (Zi) Lizison. paamaeerlnenenag en En groups and sndivduals wich are pare of oF Sm te contact wach, am rganiseton. The Haion Foe © innocent for excablishing contacts with suppliers, coordinating activities among work groups and encouraging harmony necded mo assure effective Informational Roles As the term implies, informarional roles are concerned with communication zmong individuals and groups bur managers must also be skilled in gathering and’ ving information m help make effecive decisions. More important, they should be 2ble communicators who can transmit information and articulare decisions. Minubergs three informational roles are 2s follows : 0 Men ade gale (di) Disseminator. Here communications are reversed. Rather than receive information, managers transmit information. Obviously, ‘this is a crucial aspect of management. c Subordinates, superiors and managers of ‘similar work groups rely on timely information disseminated with darity aati (dif) Spokesperson. Top executives find themselves more involved 3 spokespersons than lower-level el_ managers. A firm's policy on competition its philosophy of of customer care, and its commitment to safety | are topics may be lle pn fo pest det gps Fo For example, when department heat meet 0 dis uss operating budgets, they must be prepared co present int information 24 support budget requests oF their respective departments. re Decisional | Roles Mintzberg identified four roles within the list of his behavioural sets. These as follows:3 2.13 (2) Entrepreneur. In recent years, entreprencurs have been. id tified with a ee MANAGERIAL FUNCTIONS, ROLES AND S commitment tc to ) innovation. Managers i in complex organisations act act in in 1 entrepreneurial way, by “constantly tr trying to improve their operations. They seek new ways of using vs ncaa resources, new w technologies] for enhanced pe (performance, and new systems of organi ing, human resources. ey Disturbance Handler. Historically, this may be the best understood role of of managers because they have always had the primary respon ibility for resolving problen Jems. lfmay also be the most stressful role as managers seem to find themselves constantly faced with disturbances that threaten the harmony | and effectiveness of their - organisations. (iid) Resource Allocator. The third role links planning and organising functions. ee Managers must plan to meet their objectives and ibute resources, accordingly. There will never be" all that is expected, ‘ resources. (iv), Negotiator. The allo scarce seme ces must be share | among many operating Tas a “managers with superior negotiating , skills lls will have advantages over others. However, negotiating extends to many managerial activities both inside and outside the firm. Purchase manager, for example, neg prices s and terms. Personnel manager negotiates union contracts. Negotiation, of course, does not mean conflict but it does imply face to face bargaining between ‘managers and employees t to resolve problems or formulate performance expectations. “The above description of the managerial roles shows that managers must change hats’ frequently and must be alert to the particular role needed at a given’ time. The ability to fécognize the appropriate role to be played and to change roles readily i is a mark of an effective manager. However, it may be concluded that at the lower level, some of the decisional roles and informational roles are more important whereas at the top level interpersonal roles and decisional roles are of greater significance. At the middle level of management, informational roles are found to be more common. Reconciliation of Managerial Roles and Functions Mintzberg’s roles approach describes ‘what managers do and provides important insights into the problems and issues involved in managing. The functional approach, on the other hand, providés the general framework for analysing the job ofa manager. It prescribes what managers should do. The roles and functional approaches | are two sides of the same coin. They are two different but related ways of of analysing the job oF a manager. The relationship | between’ thee two approaches f es has ‘been shown in Fig. 23. ~NT 2.5__LEVELS OF MANAGEMENT gars ie Management levels signify the hierarchy of management In a Bi i . shown in Fig 2.4, the managers can be divided into a number of levels depending a their activities. The number of levels will depend upon the size of business, number of workers and effective span of control. Top Management of Directors Chief Executive General Managers Departmental Heads Regional Managers Plant Managers Middle Management ‘Supervisors, Foremen Section Officers Supervisory or Lower Management Fig. 2.4. Hierarchy of Management.‘Sone epnamnareean arogEA Af ES NACE | MANAGERIAL FUNCTIONS, ROLES AND SKILLS 2.17 the fast changing environment. R.L, Katz has given three types of managerial skills as follows : (4) Technical skills (i) Human skills (iti) Conceptual skills, i Some authors have added two more skills to the above list. These are analytical shills and administrative skills, Technical Skills: Technical skill implies proficiency in a specific kind of activity particularly the one involving methods, processes, procedures or techniques. We can visualise the technical skill of the surgeon, the musician, the accountant or the engineer, when each is performing his own special function. Such functions involve specialised knowledge, analytical ability within the specialised field, facility in the use of tools and the techniques of the specific discipline. Technical skill is very important in n managing. The first line supervisor in a manu- facturing firm needs prez greater Knowledge abo about the technical aspects ¢ of the 2 job compared to his top by boss. In a small manufacturing organisation, even the top boss who owns the company needs to have alot of technical skills, However, in big organisations, technical skills are more important at the lower levels. Managers need technical skills to guide and train subordinates. They cannot handle their subordinates if they do not know how the jobs are done. There are two things a manager should understand about technical skills. In the first place, he must know what skills should be employed in his unit. Secondly, the manager must understand the'role of each skill employed and also the iner- “relationships between different skills. Human Skills: Human skill is che manager's ability to work effectively asa group member and to build cooperative effort within the team he leads. Every managerial level requires managers to interact with the subordinates working with processes and physical resources. Human relations skills are required to win cooperation of others and 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 is superiors, s, subordinates and peers. A person with human skills is sufficiently sensitive to the needs and motivations of others in the organisation. With human skills, managers can resolve intra and i inter-group conflicts, ‘An awareness of the importance of human skills should be a part of every manager's orientation. Conceptual Skills: Conceptual skill means the ability to see the organisation as a whole and it includes recognising how the various functions of the organisation depend on one another. It also makes the individual aware how changes i in one part of the organisation affect the others. It extends to visualising the relationship of the individual business to the industry, the community and the political, social and economic forcesAnalytical Skills: These refer to abilities to proceed in a logical, step-by-step a systematic manner, to examine the various aspects of specific issues and to undesang ‘complex characteristics ofa phenonemon. Is lo the abiliy ro break down probley into Ts components and to ‘clinically’ cramine its dimensions. Analytical sis needed for problem solving and decision making, to evaluate performance, andy ‘manage complex sations ‘Administrative Skill: These centre around ably to actin a pragmatic manne, get things done by implementing decisions and plans, to mobilise and organise resoue, and efforts, to co-ordinate diverse activities and to regulate organisational evens ina ‘orderly manner.ls Development of | | Management Thought — u Approaches to Management =~ — Classical Theory m _Neo-Classical or Human Relations Theory = Systems Approach = — Contingency Approach oe Introduction The history of modern management can be traced to the industrial revolution in England and other European countries during the 18th and 19th centuries. The inventions during the industrial revolution, rise of factory system, growth of trade unionism, expansion of international trade, rise of consumerism, etc. have led to the development of different schools of management thought. thoughts have caused, Harold Koontz to call the resulting array “management The divergent directions of management theory jungle”. 3.1__ APPROACHES TO MANAGEMENT 8 Starting with the oldest school of management thought, the different approaches can be listed as follows ; (i) Scientific Management approach, (ii) Management Process approach. (iii) Human Relations approach, (iv) Behavioural Science approach,ee ME We Tuture, 2:2_ CLASSICAL THEORY The classical approach is one of the oldest approaches to management and is The classical theory incorporates three viewpoints : (2) Laylor’s Scientifre Management, (i) Fayol Administrative Theory, and (ii) Weber: Bureaucracy, These writers Concentrated on structure and that is why their approach sometimes is characterized as _CLASSICAL THEORY Bureaucracy Scientific Administrative or Functional (Max Weber) Management Management (Fw, Taylor) (Henri Fayol) Fig. 3.1. Approaches in Classical Theory3.6 D UGHT Contributions of Classical Theory The main features of classical theory are as under : (i) The classical theory concentrated on the study of formal organisations, It laid emphasis on division of labour, specialization, structure, scalar chain, functional processes and span of control. (#) Management is the study of managerial experiences. If the experiences are studied and certain generalizations are derived therefrom, these will help the practising managers. (iii) The classical theorists emphasised organisation structure for coordination of various activities. They ignored the role of human element. (iv) The relationship between workers and management is established through formal communications, defined tasks and accountability and formalised procedures and practices to minimise conflict between them. (vi) The worker is essentially an ‘economic man’ who can be motivated basically by economic rewards. Money is considered the main motivator under this theory. (v) The efficiency of the organisation can be increased by making each individual efficient. (vi) The integration of the organisation is achieved through the authority and control of the central mechanism. Thus, it is based on centralisation of authority. (vii) There is no conflict between the individuals and the organisation. In case of any conflict, the interests of the organisation should prevail. (viii) The classical school is based on the study of past’ managerial experiences and cases of various organisations. It implies that formal education and training is required for developing managers. criticism of Classical Theory The classical theory has been criticized on the following grounds : () The classical approach ignored the human relations aspect and undermined the role of human factor. Its main emphasis was on formal structure, centralisation of authority, unity of command and narrow span of control. (ii) It viewed organisation as a closed system, i.e., having no interaction with the external environment (iii) Economic rewards were assumed as the main motivator of workforce. The role of non-monetary factors was ignored. (iv) The classical principles are based on managerial experiences and theit limited observations. (v) The classical approach is based on over-simplified assumptions. Its prin- ciples are ambiguous and contradictory.