Principles of management like the
principles of medicine are used by the practitioner not as rules of thumb but
as guides in solving practical problems.
Management
as a Profession: By
a professional manager, we generally mean a manager who undertakes management
as a career and is not interested in acquiring ownership share in the
enterprise which he manages. But, is management a profession in the true sense
of the word? or, is it like the professions of law and medicine?
According to McFarland, a
profession possesses the following characteristics:
(i)
A body of principles, techniques,
skills, and specialized knowledge;
(ii)
Formalized methods of acquiring
training and experience;
(iii)
The establishment of a representative
organization with professionalization as its goal;
(iv)
The formation of ethical codes
for the guidance of conduct; and
(v)
The charging of fees based on the
nature of services.
Management is a profession to the
extent it fulfills the above conditions. It is a profession in the sense that
there is a systematized body of management, and it is distinct, identifiable
discipline. It has also developed a vast number of tools and techniques. But
unlike medicine or law, a management degree is not a prerequisite to become a
manager. In fact, most managers in India as elsewhere do not have a formal
management education. It seems reasonable to assume that at no time in the near
future, the possession of a management degree will be a requirement for
employment as a career manager.
Management partially fulfils the
third characteristic of profession. There are a number of representative
organizations of management practitioners almost in all countries such as the All
India Management Association in India. Management does not fulfill the last two
requirements of a profession. There is no ethical code of conduct for managers
as for doctors and lawyers. Some individual business organizations, however,
try to develop a code of conduct for their own managers but there is no general
and uniform code of conduct for all managers.
It may be concluded from the
above discussion that management is a science, an art as well as a profession.
1.3:
Functions of Management/ Process of Management (POSDCC)
There
is enough disagreement among management writers on the classification of
managerial functions. Newman and Summer recognize only four functions, namely,
organizing, planning, leading and controlling. Henri Fayol identifies five
functions of management, viz. planning, organizing, commanding, coordinating
and controlling. Warren Haynes and Joseph Massie classify management functions
into decision-making, organizing, staffing, planning, controlling,
communicating and directing. Koontz and O'Donnell divide these functions into
planning organizing, staffing, directing and controlling. For our purpose, we
shall designate the following six as the functions of a manager: planning,
organizing, staffing, directing, coordinating and controlling.
1. Planning: Planning is
the most fundamental and the most pervasive of all management functions. If
people working in groups have to perform effectively, they should know in
advance what is to be done, what activities they have to perform in order to do
what is to be done, and when it is to be done. Planning is concerned with
'what', 'how, and 'when' of performance. It is deciding in the present about
the future objectives and the courses of action for their achievement. It thus
involves:
(a) Determination
of long and short-range objectives;
(b) Development of strategies and courses of
actions to be followed for the achievement of these objectives; and
(c) Formulation
of policies, procedures, and rules, etc., for the implementation of strategies,
and plans.
The
organizational objectives are set by top management in the context of its basic
purpose and mission, environmental factors, business forecasts, and available
and potential resources. These objectives are both long-range as well as
short-range. They are divided into divisional, departmental, sectional and
individual objectives or goals. This is followed by the development of
strategies and courses of action to be followed at various levels of management
and in various segments of the organization. Policies, procedures and rules
provide the framework of decision making, and the method and order for the
making and implementation of these decisions.
Every
manager performs all these planning functions, or contributes to their performance.
Planning is thus the most basic function of management. It is performed in all
kinds of organizations by all managers at all levels of hierarchy.
2. Organizing:
Organizing involves identification of activities required for the achievement
of enterprise objectives and implementation of plans; grouping of activities
into jobs; assignment of these jobs and activities to departments and
individuals; delegation of responsibility and authority for performance, and provision
for vertical and horizontal coordination of activities. Every manager has to
decide what activities have to be undertaken in his department or section for
the achievement of the goals entrusted to him. Organizing thus involves the
following sub-functions:
(a) Identification of activities required for
the achievement of objectives and implementation of plans.
(b) Grouping the activities so as to create
self-contained jobs.
(c) Assignment of jobs to employees.
(d) Delegation of authority so as to enable them to perform their jobs
and to command the resources needed for
their performance.
(e) Establishment
of a network of coordinating relationships.
Organizing
is thus the basic process of combining and integrating human, physical and
financial resources in productive interrelationships for the achievement of
enterprise objectives. It aims at combining employees and interrelated tasks in
an orderly manner so that organizational work is performed in a coordinated manner,
and all efforts and activities pull together in the direction of organizational
goals.
3. Staffing: Staffing is a
continuous and vital function of management. After the objectives have been
determined, strategies, policies, programmes, procedures and rules formulated,
identified and grouped into jobs etc., the next logical step in the management
process is to procure suitable personnel for manning the jobs. Since the
efficiency and effectiveness of an organization significantly depends on the
quality of its personnel and since it is one of the primary functions of
management to achieve qualified and trained people to fill various positions,
staffing has been recognized as a distinct function of management. It comprises
several sub-functions:
(a) Manpower planning involving determination
of the number and the kind of personnel required.
(b) Recruitment for attracting adequate
number of potential employees to seek jobs in the enterprise.
(c) Selection of the most suitable
persons for the jobs under consideration.
(d) Placement, induction and orientation.
(e) Transfers,
promotions, termination and layoff.
(f) Training
and development of employees.
As
the importance of human factor in organizational effectiveness is being
increasingly recognized, staffing is gaining acceptance as a distinct function
of management. It need hardly any emphasize that no organization can ever be
better than its people, and managers must perform the staffing function with as
much concern as any other function.
4. Directing: Directing
is the function of leading the employees to perform efficiently, and contribute
their optimum to the achievement of organizational objectives. Jobs assigned to
subordinates have to be explained and clarified, they have to be provided
guidance in job performance and they are to be motivated to contribute their optimum
performance with zeal and enthusiasm. The function of directing thus involves
the following sub-functions:
(a)
Communication
(b)
Motivation
(c)
Leadership
5. Coordination and Controlling:
Coordinating is the function of establishing such relationships among various
parts of the organization that they all together pull in the direction of
organizational objectives. It is thus the process of tying together all the
organizational decisions, operations, activities and efforts so as to achieve
unity of action for the accomplishment of organizational objectives. Coordination,
as a management function, involves the following sub-functions:
(a)
Clear definition of
authority-responsibility relationships
(b)
Unity of direction
(c)
Unity of command
(d)
Effective communication
(e)
Effective leadership
Controlling is the function of ensuring that the divisional, departmental,
sectional and individual performances are consistent with the predetermined
objectives and goals. Deviations from plans and objectives provide feedback to
managers, and all other management processes including planning, organizing,
staffing, directing and coordinating are continuously reviewed and modified,
where necessary. Controlling implies a flexible and dynamic organization which
will permit changes in objectives, plans, programmes, strategies, policies, organizational
design, staffing policies and practices, leadership style, communication
system, etc., for it is not uncommon that employees failure to achieve
predetermined standards is due to defects or shortcomings in any one or more of
the above dimensions of management. Thus, controlling involves the following process:
(a)
Measurement of performance against
predetermined goals.
(b)
Identification of deviations from
these goals.
(c)
Corrective action to rectify
deviations.
It
may be pointed out that although management functions have been discussed in a
particular sequence-planning, organizing, staffing, directing, coordinating and
controlling – they are not performed in a sequential order. Management is an
integral process and it is difficult to put its functions to separate one from
the other. For example, when a production manager is discussing work problems
with one of his subordinates, it is difficult to say whether he is guiding,
developing or communicating, or doing all these things simultaneously.
Moreover, managers often perform more than one function simultaneously.
1.4: Significance of Management
Management is concerned with
acquiring maximum prosperity with a minimum effort. Management is essential
wherever group efforts are required to be directed towards achievement of
common goals. In this management conscious age, the significance of management
can hardly be over emphasized.. Koontz and O'Donnel have rightly observed
"there is no more important area of human activity than management since
its task is that of getting things done through others."
The inputs of labour, capital and
raw material never become productive without the catalyst of management. It is
now widely recognized that management is an important factor of growth of any
country. The following points further highlight the significance of management:
1. Achievements
of group goals: Management makes group efforts
more effective. The group as a whole cannot realise its objectives unless and
until there is mutual co-operation and co-ordination among the members of the
group. Management creates team work and team spirit in an organization by
developing a sound organization structure. It brings the human and material
resources together and motivates the people for the achievement of the goals of
the organization.
2.
Optimum utilization of
resources: Management always concentrates on achieving the objectives of
the enterprise. The available resources of production are put to use in such a
way that all sort of wastage and inefficiencies are reduced to a minimum.
Workers are motivated to put in their best performance by the inspiring leadership.
Managers create and maintain an environment conducive to highest efficiency and
performance. Through the optimum use of available resources, management
accelerates the process of economic growth.
3. Minimisation of cost: In
the modern era of intense competition, every business enterprise must minimise
the cost of production and distribution. Only those concerns can survive in the
market, which can produce goods of better quality at the minimum cost.
4.
Change and growth: A
business enterprise operates in a constantly changing environment. Changes in
business environment create uncertainties and risk and also produce
opportunities for growth. An enterprise has to change and adjust itself in the
ever changing environment. Sound management moulds not only the enterprise but
also alters the environment itself to ensure the success of the business.
5.
Efficient and smooth running of
business: Management ensures efficient and smooth running of business,
through better planning, sound organization and effective control of the
various factors of production.
6.
Higher profits: Profits can
be enhanced in any enterprise either by increasing the sales revenue or
reducing costs. To increase the sales revenue is beyond the control of an
enterprise. Management by decreasing costs increases its profits and thus
provides opportunities for future growth and development.
7.
Provide innovation: Management
gives new ideas, imagination and visions to an enterprise.
8.
Social benefits: Management
is useful not only to the business firms but to the society as a whole. It
improves the standard of living of the people through higher production and
more efficient use of scarce resources. By establishing cordial relations
between different social groups, management promotes peace and prosperity in
society.
9.
Useful for developing countries:
Management has to play a more important role in developing countries, like
India. In such countries, the productivity is low and the resources are
limited. It has been rightly observed, "There are no under-developed
countries. They are only under-managed ones".
1.5: Managerial Levels
Levels of management refer to a
line of demarcation between various managerial positions in an enterprise. The
levels of management depend upon its size, technical facilities, and the range
of production. We generally come across two broad levels of management, viz.
(i) administrative management (i.e., the upper level of management) and (ii)
operating management (i.e., the lower level of management). Administrative
management is concerned with "thinking" functions such as laying down
policy, planning and setting up of standards. Operative management is concerned
with the "doing" function such as implementation of policies, and
directing the operations to attain the objectives of the enterprise.
But in actual practice, it is
difficult to draw any clear cut demarcation between thinking function and doing
function. Because of the basic/fundamental managerial functions are performed
by all managers irrespective of their levels or ranks. For instance, wage and
salary director of a company may assist in fixing wages and salary structure as
a member of the Board of Directors, but as head of wages and salary department,
his job is to see that the decisions are implemented.
The real significance of levels
is that they explain authority relationships in an organization. Considering
the hierarchy of authority and responsibility, one can identify three levels of
management namely:
1.
Top Level Management:
Top level management of a
company consists of owners/shareholders, Board of Directors, its Chairman,
Managing Director, or the Chief Executive, or the General Manager or Executive
Committee having key officers. The important functions of top management
include:
(a) To establish the objectives or goals of the enterprise.
(b) To make policies and frame plans to attain the objectives
laid.
(c) To set up an organizational frame work to conduct the
operations as per plans.
(d)
To assemble the resources of money,
men, materials, machines and methods to put the plans into action.
(e) To exercise effective control of the operations.
(f) To provide overall leadership to the enterprise.
2.
Middle Level Management: Middle management of a
company consists of heads of functional departments viz. Purchase Manager,
Production Manager, Marketing Manager, Financial controller, etc. and
Divisional and Sectional Officers working under these Functional Heads. The job
of middle management is to implement the policies and plans framed by the top
management. It serves as an essential link between the top management and the
lower level or operative management. The following are main functions of middle
management:
(a) To interpret the policies chalked out by top management.
(b)
To prepare the organizational set
up in their own departments for fulfilling the objectives implied in various
business policies.
(c)
To
recruit and select suitable operative and supervisory staff.
(d)
To
assign activities, duties and responsibilities for timely implementation of the
plans.
(e)
To
compile all the instructions and issue them to supervisor under their control.
(f)
To
motivate personnel to attain higher productivity and to reward them properly.
(g) To cooperate with the other
departments for ensuring a smooth functioning of the entire organization.
(h) To collect reports and information on performance in their departments.
(i) To
report to top management
(j)
To make suitable recommendations
to the top management for the better execution of plans and policies.
3. Lower or Operation level Management: These are placed at the
bottom of the hierarchy of management, and actual operations are the
responsibility of this level of management. It consists of foreman,
supervisors, sales officers, accounts officers and so on. Their authority and
responsibility is limited. The following are main functions of lower
management:
- They pass on the instructions of
the middle management to workers.
- They interpret and divide the
plans of the management into short-range operating plans.
- They are also involved in the
process of decisions-making.
- They have to get the work done
through the workers.
- They allot jobs to the workers,
evaluate their performance and report to the middle level management.
- They are more concerned with
direction and control functions of management.
- They devote more time in the
supervision of the workers.
1.6: Managerial Skills
A skill is an individual's
ability to translate knowledge into action. Hence, it is manifested in an
individual's performance. Skill is not necessarily inborn. It can be developed
through practice and through relating learning to one's own personal experience
and background. In order to be able to successfully discharge his roles, a
manager should possess three major skills. These are conceptual skill, human
relations skill and technical skill. Conceptual skill deals with ideas,
technical skill with things and human skill with people. While both conceptual
and technical skills are needed for good decision-making, human skill in
necessary for a good leader.
The conceptual skill refers to the ability of a manager
to take a broad and 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 the changes taking place in it. It short, it is his ability to
conceptualize the environment, the organization, and his own job, so that he
can set appropriate goals for his organization, for himself and for his team.
This skill seems to increase in importance as manager moves up to higher
positions of responsibility in the organization.
The technical skill is the manager's understanding of the
nature of job that people under him have to perform. It refers to a person's
knowledge and proficiency in any type of process or technique. In a production
department this would mean an understanding of the technicalities of the process
of production. Whereas this type of skill and competence seems to be more
important at the lower levels of management, its relative importance as a part
of the managerial role diminishes as the manager moves to higher positions. In
higher functional positions, such as the position of a marketing manager or
production manager, the conceptual component, related to these functional areas
becomes more important and the technical component becomes less important.
Human
relations skill is
the ability to interact effectively with people at all levels. This skill
develops in the manager sufficient ability
(a)
To recognize the feelings and
sentiments of others;
(b)
To judge the possible actions to,
and outcomes of various courses of action he may undertake; and
(c)
To examine his own concepts and
values which may enables him to develop more useful attitudes about himself.
This type of skill remains
consistently important for managers at all levels.
Table-1 gives an idea about the
required change in the skill-mix of a manager with the change in his level. At
the top level, technical skill becomes least important. That is why, people at
the top shift with great ease from one industry to another without an apparent
fall in their efficiency. Their human and conceptual skills seem to make up for
their unfamiliarity with the new job's technical aspects.
Table-1:
Skill-mix of different management levels
1.7: Roles of Manager
1.
Interpersonal Roles
Figurehead: In
this role, every manager has to perform some duties of a ceremonial nature,
such as greeting the touring dignitaries, attending the wedding of an employee,
taking an important customer to lunch and so on.
Leader: As
a leader, every manager must motivate and encourage his employees. He must also
try to reconcile their individual needs with the goals of the organization.
Liaison: In
this role of liaison, every manager must cultivate contacts outside his
vertical chain of command to collect information useful for his organization.
2.
Informational Roles
Monitor: As
monitor, the manager has to perpetually scan his environment for information,
interrogate his liaison contacts and his subordinates, and receive unsolicited
information, much of it as result of the network of personal contacts he has
developed.
Disseminator: In
the role of a disseminator, the manager passes some of his privileged
information directly to his subordinates who would otherwise have no access to
it.
Spokesman: In
this role, the manager informs and satisfies various groups and people who
influence his organization. Thus, he advises shareholders about financial
performance, assures consumer groups that the organization is fulfilling its
social responsibilities and satisfies government that the origination is
abiding by the law.
3.
Decisional Roles
Entrepreneurship: In
this role, the manager constantly looks out for new ideas and seeks to improve
his unit by adapting it to changing conditions in the environment.
Disturbance Handler: In
this role, the manager has to work like a fire fighter. He must seek solutions
of various unanticipated problems – a strike may loom large a major customer
may go bankrupt; a supplier may renege on his contract, and so on.
Resource Allocator: In
this role, the manager must divide work and delegate authority among his
subordinates. He must decide who will get what.
Negotiator: The
manager has to spend considerable time in negotiations. Thus, the chairman of a
company may negotiate with the union leaders a new strike issue; the foreman
may negotiate with the workers a grievance problem, and so on.
In addition, managers in any
organization work with each other to establish the organization’s long-range
goals and to plan how to achieve them. They also work together to provide one
another with the accurate information needed to perform tasks. Thus, managers
act as channels of communication with the organization.
1.8: Management vs. Administration
The use of two terms management
and administration has been a controversial issue in the management literature.
Some writers do not see any difference between the two terms, while others
maintain that administration and management are two different functions. This
controversy is discussed as under in three heads/viewpoints:
(i)
Administration is a Higher Level Function:
According to Oliver Shelden, "Administration is
concerned with the determination of corporate policy, the coordination of
finance, production and distribution, the settlement of the compass of the
organization and the ultimate control of the executive. Management proper is
concerned with the execution of policy within the limits set up by
administration and the employment of the organization in the particular objects
before it... Administration determines the organization and management uses it.
Administration defines the goals; management strives towards it".
(ii)
Management is a Generic Term including Administration:
According to Brech, "Management is a social
process entailing responsibility for the effective and economical planning and
regulation of the operation of an enterprise in fulfillment of a given purpose
or task. Administration is that part of management which is concerned with the
installation and carrying out of the procedures by which the programme is laid
down and communicated and the progress of activities is regulated and checked
against plans". Thus, Brech conceives administration as a part of
managemen
(iii)
Management and Administration are Synonymous: The
third viewpoint is that there is no distinction between the terms 'management'
and 'administration', so they are often used interchangeably. The term
management is used for higher executive functions like determination of
policies, planning, organizing, directing and controlling in the business
circles, while the term administration is used for the same set of functions in
the Government circles. It seems from the above concepts of administration and
management that administration is the process of determination of objectives,
laying down plans and policies, and ensuring that achievements are in
conformity with the objectives. Management is the process of executing the
plans and policies for the achievement of the objectives determined by an
administration. This distinction seems to be too simplistic and superficial. If
we regard chairmen, managing directors and general managers as performing
administrative functions, it cannot be said that they perform only planning functions
of goal determination, planning and policy formulation, and do not perform
other functions such as staffing functions of selection and promotion, or
directing functions of leadership, communication and motivation. On the other
hand, we cannot say that managers who are responsible for the execution of
plans and formulation of plans and policies, etc. do not contribute to the
administrative functions of goal determination, and formulation of plans and
policies. In fact all manages, whether the chief executive or the first line
supervisor, are in some way or the other involved in the performance of all the
managerial functions. It is, of course, true that those who occupy the higher
echelons of organizational hierarchy are involved to a greater extent in goal
determination, plans and policy formulation and organizing than those who are
at the bottom of the ladder.
Administration is a determinative
function; on the other hand, management is an executive function which is
primarily concerned with carrying out of the broad policies laid down by the
administration as shown in Table 2.
Table 2: Administration Vs. Management
|
S. No.
|
Basic
|
Administration
|
Management
|
|
1
|
Meaning
|
Administration is concerned with
the formulation of objectives, plans and policies of the organization
|
Management means getting the
work done through and with others
|
|
2
|
Nature
of work
|
Administration relates to the decision-
making. It is a thinking function
|
Management refers to the execution
of decisions. It is a doing function
|
|
3
|
Decision
Making
|
Administration determines what
is to be done and when it is to be done
|
Management decides who shall implement
the administrative excisions
|
|
4
|
Status
|
Administration refers to higher
levels of management
|
Management is relevant at lower
levels in organization
|
1.9: Coordination as Essence of Management-
(a)
Clear definition of authority-responsibility relationships
(b)
Unity of direction
(c)
Unity of command
(d)
Effective communication
(e)
Effective leadership
