Unit I

Management
Management in business and human organization activity, in simple terms means the act of getting people together to accomplish desired goals. Management comprises planning, organizing, resourcing, leading or directing, and controlling an organization (a group of one or more people or entities) or effort for the purpose of accomplishing a goal. Resourcing encompasses the deployment and manipulation of human resources, financial resources, technological resources, and natural resources. Management can also refer to the person or people who perform the act(s) of management. The verb manage comes from the Italian maneggiare (to handle especially a horse), which in turn derives from the Latin manus (hand). The French word mesnagement (later mnagement) influenced the development in meaning of the English word management in the 17th and 18th centuries.[1]

Theoretical scope
Mary Parker Follett (18681933), who wrote on the topic in the early twentieth century, defined management as "the art of getting things done through people". [2] Two weaknesses of this definition are: 1. The word art is used in defining management. To say that management is merely an art is to state a half truth. Art deals with application of knowledge where as management involves acquisition of knowledge along with its application. 2. This function does not deal with the various functions of a manager. A manager is one who contributes the organizations goals indirectly by directing the effort of others not by performing the task himself. Sometimes however he may play both the roles and and perform a few tasks. George R.Terry defines management as a process consisting of planning, organizing, actuating and controlling, performed to determine and accomplish the objectives by the use of people and resources. One can also think of management functionally, as the action of measuring a quantity on a regular basis and of adjusting some initial plan; or as the actions taken to reach one's intended goal. This applies even in situations where planning does not take place. From this perspective, Frenchman Henri Fayol[3] considers management to consist of five functions: 1. planning 2. organizing

3. leading 4. co-ordinating 5. controlling Management is a critical element in the economic growth of a country. By bringing together the four factors of production men, money, material and machines , management enables a country to experience a level of economic development. Peter Drucker observes that without management, a countrys resources of production remain resources and never become production. Management is an essential in all organized effort, be it a business activity or any other activity. Management is the dynamic, life giving element in every organization. It is this element that coordinates current organizational activities and plans future ones. It arbitrates disputes and provides leadership. It adapts the organization to its environment and often shapes the environment to make it more suitable to the organization. Good management can definitely become an organizations monopoly and give it a competitive edge over its rivals.

Management Functions
Disagreement among management writers have been observed on the classification of managerial functions. Some classify them into four, some five, some others six or seven. Terminologies are also not always alike. 1. Newman and Summer recognizes 4 functions organizing planning leading and controlling. 2. Henry Fayol identifies 5 functions organizing planning commanding coordinating and controlling. 3. Koontz and ODonnell divide these functions into 5 planning organizing staffing directing and controlling. 4. Warren Haynes and Joseph Massie classify management into 7 functions decision-making organizing staffing planning controlling communicating and directing. 5. Luther Gulick states 7 functions planning organizing staffing directing coordinating reporting and budgeting.(POSDCORB) Ernest Dale includes 2 additional managerial functions innovation and representation. Planning: Planning in organizations and public policy is both the organizational process of creating and maintaining a plan; and the psychological process of thinking about the activities required to create a desired future on some scale.It is a fundamental property of intelligent behavior. In simple words planning is a process of deciding the business objectives and charting out methods to attain those objectives. It is the determination of

1. 2. 3. 4. 5.

what is to be done how it is to be done where it is to be done who does it how the results are to be evaluated

It is not only done for the whole organization but also for its every subunit. It is performed by managers at all levels and different time periods. Planning helps in forecasting the future, makes the future visible to some extent. It bridges between where we are and where we want to go. Planning is looking ahead. Organizing: To organize a business is to provide it with everything useful to its function: personnel, raw materials, tools, capital. It may be divided into 2 sections: human organization and material organization. Organizing comes right after planning. The human organization helps to carry out those plans successfully. Allen defines organization as the structure which results from identifying and grouping work, defining and delegating responsibility and authority, and establishing relationships. Staffing is an important function in building human organization. Here the manger attempts to find the right person for every job. It is the managers responsibility to make certain that there is enough man power availableto fill various positions needed in the organization. It is not done once and for all as people continually keep leaving, getting fired, retiring and dying and changes in the organization create new positions. A suitable system of compensation is carried out by training and selection of future managers. It should also be noted that different objectives require different kinds of organizations to achieve them. An organization for scientific research requires teams of scientists and experts in various disciplines while an organization for manufacturing bicycles requires assembly line techniques. Directing: After planning and organizing the next step is to move towards its defined objectives. This function is called Directing. Terms like Leading Motivating Actuating are also used in place of Directing. Directing is basically that function of a manager where he explains to his subordinates about what their jobs are and helps them to do it to their best ability. Thus it involves 3 sub functions:

1. Communication: Its the process of passing information and understanding from one person to another. 2. Leadership: its the process by which the manager guides and influences the work of subordinates. 3. Motivation: It is the act of stimulating or inspiring the workers to pull their weight effectively, give heir loyalty to the enterprise and to carry out their task effectively. There are two categories of motivation : Financial Motivation: It takes the form of salary, bonus, profit sharing etc. Non financial Motivation: It takes the form of job security, opportunity of advancement, recognition, praise etc. Controlling: Controlling by the manager ensures that every thing occurs in conformity of the plans adopted, the instructions issued and the principles established. The controlling function involves three elements: 1. Establishing standards of performance. 2. Measuring current performance and comparing it against established standards. 3. Taking action to correct any performance that does not meet those standards. In the absence of sound control, there is no guarantee that the objectives which have been set will be realized. The management may go on committing mistakes without realizing them. Control compels events to conform to plans. Innovation It is not as necessary for an organization to grow bigger as it is necessary for it to grow better. This makes Innovation an important function for a manager. Innovation means creating new ideas which may either result in the development of new products or finding new uses for the old ones. Thus, a salesmen who can persuade Eskimos to buy a refrigerator to prevent food from freezing is as much an innovator as the one who invents a new product. One may however consider innovation not a separate function but a part of planning. Representation: A manager is also required to spend a part of his time in representing his organization before various outside groups which have some stake in the organization. These stake holders may be government officials, labour unions, financial institutions, suppliers, customers etc. they weild influence over the organization. The manager must win their support by effectively managing the social impact of his organization.

Management process: The model of the management process has bee given here. A model is a simplification of the real world, used to convey complex relationships in understandable terms. The four functions do not necessarily in the sequence represented in the model. In fact various combinations of these activities usually go on simultaneously in an organization. Thus, for example, when a manager controls employees actions he establishes standards of performance which is also a part of the planning function. Professor Haimann has rightly observed that it is helpful to think of these managerial functions as a circular, continuous movement. They blend into each other and at times there is no clear line of demarcation when one ends and the other begins. In fact, they have no separate entities.

controlling

planning

directing

organising

Roles of a Manager After an intensive observation of what five top executives did during the course of a few days at work, Henry Mintzberg concluded that these labels do not adequately capture the reality of what managers do. He suggested instead that the manager should be regarded as playin some ten different roles in no particular order. Interpersonal Roles 1. Figurehead: In this role, every manager has to perform some duties of ceremonial nature, such as greeting touring dignitaries, attending the wedding of an employee, taking a important customer to lunch and so on

2. Leader: As a leader, every manager must motivate and encourage his employees and also try to reconcile their individual needs with the goals of the organization 3. Liaison: In his role of liaison every manager must cultivate contacts outside his vertical chain of command to collect information for his organization. Informational Roles: 1. Monitor: As a monitor, the manager has to perpetually scan his environment for information, interrogate his liaison contacts and his subordinates, and receive unsolicited information, much of it as a result of the network of personal contacts he has developed. 2. Disseminator: In the role of a disseminator, the manager passes some of give privileged information directly to his subordinates who would otherwise have no access to it. 3. Spokesman: In this role the manager informs and satisfies various groups of people who influence his organization. Thus he advises shareholders about financial performance, assures consumer groups that the organisation is fulfilling its social responsibilities and satisfies government that h organization is abiding by the law. Decisional Roles: 1. Entrepreneur: In this role the manager constantly looks out for new ideas and seeks to improve his unit by adapting it to changing conditions in the environment. 2. Disturbance Handler: In this role the manger has to work like a fire fighter. He must seek solutions of various unanticipated problems - a strike may loom large, a major customer may go bankrupt, a supplier may renege on his contract etc. 3. Resource Allocator: In this role, the manager must divide work and delegate authority among his subordinates. 4. Negotiator: The manager has to spend considerable time in negotiations. Thus the resident of a company may negotiate with the union leaders a new strike issue, the foreman may negotiate with the workers a grievance problem etc.

Managerial levels and hierarchy

The management of a large organization may have three levels: 1. 2. 3. 4. 5. Senior management (or "top management" or "upper management") Middle management Low-level management, such as supervisors or team-leaders Foreman Rank and File

Top-level management

Require an extensive knowledge of management roles and skills. They have to be very aware of external factors such as markets. Their decisions are generally of a long-term nature Their decisions are made using analytic, directive, conceptual and/or behavioral/participative processes They are responsible for strategic decisions. They have to chalk out the plan and see that plan may be effective in the future. They are executive in nature.

Middle management

Mid-level managers have a specialized understanding of certain managerial tasks. They are responsible for carrying out the decisions made by top-level management.

Lower management

This level of management ensures that the decisions and plans taken by the other two are carried out. Lower-level managers' decisions are generally short-term ones

Foreman / lead hand

They are people who have direct supervision over the working force in office factory, sales field or other workgroup or areas of activity.

Rank and File

The responsibilities of the persons belonging to this group are even more restricted and more specific than those of the foreman.

Managerial skills: A skill is an individuals ability to translate knowledge into action. Hence it is manifested in an individuals performance. It is not necessarily inborn but can be developed through practice and through relating learning to ones own personal experience and background. A manager should possess 3 main skills to be abe to successfully discharge his roles. 1. Conceptual skills: this refers to the ability of a manager to take a broad and a farsighted view of the organization and its future, his ability to think in abstract, his ability to analyze the forces working in a situation, his creative and innovative ability and his ability to assess the environment and changes taking place in it. In short it his ability to conceptualize the

environment, the organization, and his own job so that he can set appropriate goals for the organization, for himself and for his team. The importance of this skill increases as the manager moves up to higher positions of responsibility. 2. Technical Skills: It is the managers understanding of the nature of the job that his subordinates have to perform. It refers to a persons knowledge or proficiency as in any type of process or technique. Whereas this type of skill and competence is important at the lower levels of management, its relative importance as a part of a managerial role diminishes as the manager moves to higher positions. In higher functional positions, the conceptual component, related to these functional areas becomes more important and the technical component becomes less important. 3. Human Relations skills: It is the ability to interact with people at all levels. This skill develops in a manager sufficient ability to Recognize the feelings and sentiments of others Judge the possible reactions to and outcomes of various courses of action he may undertake. Examine his own concepts and values which may enable him to develop more useful attributes of himself. This type of skill remains consistently important for managers at all levels. Top management

Conceptual skills

Human relations Middle management skills Technical skills

Supervisory level

Management and Administration:

There is a lack of unanimity among writers over the maning and the use of the words management and administration. 1. According to Sheldon, Spriegal and Milward administration involves thinking. It is a top level function which centers around the determination of plans, policies and objectives of a business enterprise. On the other hand management involves doing. It is a lower level function which is concerned with the execution and directions of policies and operations. 2. According to the second view expressed by E.F.L. Brech and the others management is a comprehensive generic term which includes administration. Brech regards management as a generic function embracing the entire

process of planning, organizing, directing and controlling. Administration is only a branch of management which encompasses planning and controlling. According to this view functions of management can be divided into two categories: 1) Administration management: upper level management 2) Operative management: lower level management. 3. According to another view expresses by Peter Drucker the basic difference between management and administration lies in the use of these words in different fields. The governance of non business institutions (govt, army, church etc) is generally called administration. The economic consequence for an administrator is only secondary for an administrator. The governance of business enterprises is called management and here the economic performance becomes chief dimension of management. This is one of the reasons why some successful administrators are not successful managers and vice versa.