Unit – I:INTRODUCTION TO MANAGEMENT AND ORGANIZATION

The term ‘Management’ is derived form Latin i.e., Manum agere – means ‘lead by the hands’ and from Old French literally means that “the art of conducting and directing.” Management can be defined as a process consisting of all those factions required in ‘getting work done through others’ without confusion, overlap and without wasting resources.Professor Theo Haimaun in his popular book is ‘Professional Management Theory and Practice’ the term management is used in three different senses i.e. Management is as a Noun, a Discipline and a Process.

Management is as a Noun: - It refers all those persons who manage in an organized group those are Board of Directors, Managing Directors, Chief Executives, Functional Managers, and Supervisors etc.

Management is as a Discipline: - Management is a body of knowledge and its practice. ‘Art of getting things done through others’ based on scientific principles of management science. Management is Art and Science of decision-making and leadership.

Management is as a Process: - management is what Manager does in an organized group. That functions are Forecasting, Planning, Organizing, Staffing, Directing, Coordinating, Budgeting and Controlling. That can be summaries through the following diagram.

Note: - Psychological and physical resources considered as a input elements in establishing an organization.

The following is Management thinkers and practitioners; Experts and Psychologists offered the few Definitions in different views:

I. Human relations concept:• Management is the art of getting things done through others. - Harold Koontz.

II. Functional as a process:• Management is a social process; the process consists of planning, control, co-

ordination and motivation. – E F L Brech, 1957.• Management is what manager does. – Louis Allen.

III. Leadership and Decision making concept:• Management is an art and science of decision-making and leadership. - Donald

Clough.IV. Productivity concept:

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• Management is concerned with systematic organization of economic resources and its task is to make these resources productive. – Peter F Drucker, 1955.

• Management is an art of securing maximum productivity. – John F Mee.V. Integration concept:

• Management is the force that integrates men and physical resources into on effective operation unit. – Keith & Gubellini.

• Management is the art of directing and inspiriting people.- Mooney and Riely.

• Management is the coordination of all resources through the process of planning, organizing, detecting and controlling in order to attain stated goals.

-Henry L. Sisk• Management means decision-making. – Rose Moore.• Management is the process of designing and maintaining an environment in

which individuals, working together in-group, efficiently accomplish selected aims. – Weinrih

• Management is effective utilization of human and material resources to achieve the enterprise objectives. – W F Glueck, 1977.

• Management is the art of knowing what you want to do in the best and cheapest way. – F W Taylor.

• Management is to forecast and plan, to organize, to command, to coordinate and to control. – Henry Fayol, 1916.

All these above definitions are not giving a complete meaning, so management can be finally regarded as:o Formulation of plans, policies and objectiveso Securing the human and physical resources for their achievement o Putting all of them into operation effectivelyo Directing and motivating men at worko Supervising and controlling their performance ando Providing maximum satisfaction and services to the concerned and public at large.

Nature and Characteristics of Management:• Management is omnipresent in character applicable in all types of organization.

(Business, Social, Religious, Cultural, Sports, Educational, Political, Military etc.)• Management is an intangible and its activities are creative • Management is group activity and it is goal oriented. • Management is a factor of production.• Management is needed at all level of organization, it call as organized knowledge.• Management is distinct process and social process• Management process evolves skills (social and technical) which are similar to

music, painting etc.• Management is authority and dynamic function in enterprise.• Management is viewed in terms of its goal, structure and methodology.• Management is interdisciplinary.• Management maintains rationality of total scientific system.• Management is scientific principles and provides body of laws and regulations.• Management provides guidance in finding out the solution of its problems,

decision-making and objective evaluation.• Management is an art as well as science.• Management is a profession.• Management is personalized since the manager has his own approach problems.

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Management Science is generally referred as ‘social science’ or ‘inexact science’. The entire management environment is a laboratory and the whole process is an experiment backed by experience.Is Management is an Art, or Science?

• An art implies practical knowledge, how the application knowing by practice.

• Science is systematized body of knowledge acquired by mankind through observation, study, and experimentation, and which is capable of verifying and providing all.

• As science improves, so should art, while science teaches one to know, where as art teaches one to do.

A

R

T

Characteristics SCIENCE

Characteristics

Practical knowledge Systemized body of knowledge Personal skill Continues observationRegular practice Cause and effect relationCreativity and Validity and predictabilityValue additions in practice Universal application

Limitations:• Management does not consist fundamental truths• Management lacks certainty about results• Behaviour of human science management cannot predict.

Thus, management is not pure science; it is inexact science or social science. Most of the eminent management thinkers and practitioners are opinioned that management is ‘an art as well as science’.

Management is a Profession:One who have specialized knowledge in a particular filed for instructing, guiding

and advising etc. is known as professional. Hence, management is also called as professions because

• Body of specialized knowledge and techniques• Formulated methods of acquiring training and experience• Cone of conduct – rules and regulation, norms of hones and morality• Priority of service over economic considerations

Introduction to Organization:Modern society man called as an organizational society. We are born and brought

up in an organization (family), we receive our education in organizations (Schools and Colleges) and we buy most of our daily requirements form organizations (Retail stores). Each one or use belongs to several groups which may called as organizations e.g. family sports club, business firm, Government, hospitals etc.

What one cannot do two can do together. What one can do two can do it better. Hence, human beings realized that cooperative activity of living together and working together was better than isolated individual existence and effort. Such a realization led to the formation of any organization. Generally organization refers to a social group (manmade) involves creating a structure of relationships among them working for the desired results or certain goals.

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What is an organization?A. “…social units (or human groupings) deliberately constructed an

reconstructed to seek specific goals.” Etzioni, in Scott, 1998B. “…systems of interdependent activities linking shifting coalitions of

participants; the systems are embedded in – dependent on continuing exchanges with and constituted by – the environments in which they operate.” Scott, 1998

The following definitions give more insight into the concept of organization:• ‘Organization is a system of consciously coordinated activities or forces of two or

more persons’. - Chester Barnard.• ‘An organization is a structured process in which persons interact for objectives’.

- Hicks and Gullett.• ‘An organization is a collection of interacting and interdependent individuals who

work towards common goals whose relationships are determined according to a certain structure’. - W. J. Duncan

• ‘Organizations are social units (human groupings) deliberately constructed and reconstructed to seek specific goals’. - Amitai Etizioni

• Organizations are intricate human strategies designed to achieve certain objectives.’ - Argyris, 1960.

• Organization is the framework of the management process’. - Brech, 1965.• ‘Organizations are systems of behaviour crated for better results. So organization

form must be joint function human characteristics and the nature of the task environment’. - Simon, 1976.

• ‘Organizations are systems of interdependent human beings.’ -Pugh, 1990.• ‘Organizations facilitate cohesive performance directed towards achievement of

goals. Organizations are more known for their complexity’. -Stewart, 1994.• According to James D. Moony ‘organization is the form of every human

association for the attainment of common purpose.’ Thus, an organization structure is ‘the skeleton or framework of business. The lines of authority that hold this framework together at the same time communication channels through which flow the elements of authority and responsibilities.

• According to Koontz O’ Donnel “the establishment of authority relationships among people, with provision for coordination between them both vertically and horizontally in the enterprise.”

These above definitions bring out essential features common of all organizations:o An organization is always composed of people who have their own needs,

goals sentiments and values. It is man made, and people form the backbone of the organization.

o These are all interacting with one another and deliberately work togethero These interactions can always be ordered or specified by some sort of

structure, according to that organization structure interactions are describedo People interact to achieve some common objectiveso An organization is an open system and its success depends on how well it

interacts with its environment. It obtains inputs (Men, Money, Materiel, Machinery etc.) and exports outputs to the environment.

o The interactions or relationship and activities need to be managed by a specific group of people (managers) within the organization.

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To sum up an organization is a social goal directed, open and relatively permanent and managed structure of people. It is a group of people whose activities are deliberately coordinated to achieve common objectives. Thus organization can be regarded as “Structured group of people working together consciously to attain the ultimate objectives of and organization”.Organization and its Environment:

Levels of Management and Organization:Peter F Drucker rightly said that - What ever a manager does, he does it through

decision-making. In brief, decision-making is the essence of management.

ROBERT B. ANTHONY described three levels of business activities i.e.

• Top-level management: – Policies, Plans, Budgets, Objectives / Goals

• Middle level management: – Revenue, Costs, Profits, Schedules, and Measurements

• Lower level management: - Goods, Services, performance.

Distinction between Management, Administration: - The term Management and Administration are often used interchangeably by some authors and independently by others. There is much confusion in the first two terms namely management and administration, and various authors made the actual meaning into confusion. It is like a hat that has worn out by so many persons that it has lost its shape.

There are three Business Schools of thought to explain what Administration means in relation to Management:

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The First School of Thought is pioneered by Oliver Sheldon, Florence and Tead, Spreigel and Lansnurgh opinioned that “Administration and Management are two different functions”. According to this School of thought administration is concerned a broader function and management is a subset of organization.• Formulation of corporate policy• Execution of a policy with in the limits setup by the administration• Placing the organization under the ultimate control of the Chief Executive and

other hand management is concerned with execution of a policy within the limits set up by the administration.

• The coordination of function areas such as personnel, finance, production marketing etc

• Ensure in an organization to attain the given objectiveThus, administration is here viewed as a broader function and management is

subset of administration.

The second School of thought – let by E F L Brech opinioned that management is broader and it includes administration. According to Brech, management constitutes the entire executive control.

“Administration is that part of Management” which deals with• Formulation of policies and procedures• Carrying out these procedures and • Measurement of performance as against the plansThus, management is here viewed as a broader function to include administration

as its subsystem.

The third school of thought – led by Henry Fayol explains that the terms “Management and Administration are both one and the same”. Hence, both are interchangeable. When Fayol’s work was translated, the French word administration is translated into English as management.

It is common to find that the term administration is used to refer to higher executive function in Government sectors where as the term management is used for the same function the business world (private). For the last five decades, the term management is understood as encompassing much more than administration. Administration was identified with the narrower process of performance of carrying out the assigned duties. Developing and maintaining procedures is as incidental activity that supplements the management process. Administration is similar to organizing in management functions.

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Comparisons between Administration and Management:

Basis of Difference

Administration Management

1) Nature of workIt is thinking function. Formulating polices, plans, and determining the objectives

It is doing functions, involves the implementation of plans and policies.

2) ScopeIt takes major decisions and is a wider term than management

It takes the decisions within frame of administrations

3) Level of authority

It is top management function It is lower level management function

4) Stratus It consists of the owners of enterprise

It consists of managerial personnel with specialize knowledge who may be the employees.

5) nature of origination

Generally it is used in Government, military and educational organization

It is used mainly in business firms which have economic motives

6) influence

Its decisions are influenced by external factors such as political, economical, social, technological etc.

Its decisions are influenced by internal factors such as values, beliefs, opinions etc.

Comparisons between Management and Organization:

No MANAGEMENT ORGANIZATION

1 It is an executive function concerned primarily with getting things done.

It is organic function of putting together the different part of an enterprise into working order

2. It consists of planning, organizing, staffing, direction and controlling. The scope of management wider than organization

Organization is an important part of the management.

3. Management functions are executed by bringing into being and organization

Organization is the frame work of management

4. It is like the entire body of human being It is like the nervous system of human body

5 There are different levels of management

There are no such levels – it exists at all levels of authority.

6. Management uses organization determined by administration

Organization is the mission of the management is achieving the goal determined by administration.

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7. It is carried out through an organization structure

It is the framework or edifice of management.

Functions of Management:There is no consensus on the list of the management functions but broadly these

functions cab be divided into two categories. They are ‘Managerial’ and ‘Operative’ functions.

I. Managerial functions: - The dynamic process of management encompassed certain functions to perform in a logical sequence by each manager. The different management theorists were viewed and suggested different managerial functions more or less the same with slight changes.

Koontz O’ Donnel Henry Fayol Lindall Urwick Luther Gulick

Planning Planning Planning Planning

Organizing Organizing Organizing Organizing

Staffing Commanding Commanding Staffing

Directing and Leading

Coordinating Coordinating Directing

Controlling Controlling Communicating Coordinating

Forecasting Reporting

Investigating Budgeting

Other behavioural scientists such as Elton Mayo, Douglas McGregor and Chester I Barnard considered motivation, leadership, and communication respectively as indispensable functions of the manager. The above all different viewpoints by different theorists can be generalized that functions of manager are:Function

Sub-functions

Planning Forecasting, Decision-making, Strategy formulation, Policymaking, Programming, Budgeting, Problem solving, Innovation and Research.

Organizing Fictionalisation, Divisionalisation, Departmentalisation, Delegation or Decentralisation, Activity analysis, Task allocation

Staffing Manpower Planning, Recruitment, Selection, Orientation, Induction, Compensation, appraisal, Promotion etc.

Directing Leading, Supervision, Advising or Guiding, Communication, Motivation, and coordination

Coordination Maintain human relations, Developing mutual trust, Interpersonal communication and Parity between Authority and Responsibility.

Controlling Fixation of standards, Recording, Measurement, Reporting, Corrective

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action

Planning:The word plan is derived from Latin word ‘Paradox’ means against or opposite action for uncertain conditions. Planning and a Plan both is similar in usage but the difference is a ‘Plan’ is a commitment to particular course of action where as ‘Planning’ is a activity consisting of a process. Planning is essential in preset economic, technological, political social setups etc.

Planning is deciding in advance, what is to be done in future or thinking before doing. It is the bridge form preset to the nearest future. Planning is the ‘process of determining the best course of action for a particular period to achieve desired results’. Planning gives answers for What to do? When to do? Where to do? How to do? By Whom to do?

According to Koontz O’ Donnel: - The selection among the alternatives for future course of action for the enterprise as a whole and each department with it.

According to Alfred and Beauty: - Planning is the thinking process, the organized forecast, the vision based on fact and experience is require for intelligent action.

Every manager has to work against uncertain circumstance in order to perform his/her regular duties and need to achieve the ultimate goal of the organization. Thus, all management function starts with planning. Hence planning is premise to do any activity in an organization. Manager should anticipate future problem and needs to prepare a plan to over come the problems and no chance to guess work. Planning is required in determining the organizational objectives and developing the policies, procedures, programs, budgets, strategies etc.

Planning involves essentially four stages in an organization:• Identifying the goal to be achieved • Exploring the courses of action available to reach this goals• Evaluating each course of action on merits and • Selecting the best course of action of the implementation

If organizational activities are not properly planned, it is quiet unlikely that the given goals would be achieve. The complexity of business environments adds fuel to the fire. The feature is so uncertain that no plan at times may really come to the rescues of the manager! To protect the organization from such an uncertainty, the primary function of planning make vital and it should be more flexible to consider the continuously. The planning function is performed all through the organization at all levels, and hence, it is said to be all pervasive (all encompassing).

Nature of the planning:• Primacy of planning – means pre dominance or begins with all managerial

functions• Intellectual process• Focus on objectives• Leads to efficiency and economy• Realistic and flexibility• Continuous

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Characteristics of planning:• It should be simple and will defined • It should be lay down objectives in unambiguous terms• It has to set forth standards• It has to provide action schedules • It should be flexible to accommodate change in future.

Six P’s for Planning:• Purpose• Philosophy• Promise• Policies• Plans• Priorities

Reasons for planning:• Essential for modern business• Focus on objectives • Proper allocations of resources• Helpful in decision making• Related to performance• Facilitates control• Avoiding business failures

Elements of Planning:

Forecasts Estimates or prediction of future based on the past and present data

Objectives These are open-ended attributes denoting to achieve future state or out come that an organization or an individual. These are set for every individual and department in the organization.

Policies Specify what can be done or what cannot be done to achieve the given objectives.

Strategies Refers to the course of action and decisions to follow and how the resources are being developed to achieve the given objectives.

Programmes Specify what is to be done. Complex of goals, policies, procedures, rules , tasks, steps, resources to be employed and others necessary to carry out a given actions

Procedures Out line how a task is to be carried out.

Schedules Indicate what is to be done at a given point of time

Budgets The plan statement for a given period of time expressed in quantifiable details such as sales budget, expenses budget and so on.

Planning Process:1. Identify uncertain condition and gather information2. Laying down objectives3. Developing premises4. Examining alternative course of actions5. Evaluating of action pattern

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6. Reviewing limitation and selection best course of action 7. Implementation of plan8. Controlling

Organizing:Organizing is the process of designing the structure of organizational activities,

authority and responsibility relationship among the members. It consists of the following activities:

• Determining and defining the activities required to achieve the established objectives

• Grouping these activities into logical and convenient units• Assigning the activities and duties to specific positions• Delegating adequate authority to the concerned persons• Fixing responsibility for proper performance • Coordinating horizontal and vertical relationships throughout the structure

Organizing refers the process of identifying and grouping the related activities as a unit or division and assigning them to a manager with authority to supervise it. Delegating the authority responsibility through established relationship for the purpose of enabling people to work most effectively together in accomplishing objectives.

Organizing is an essential function that makes the plans operational be identifying and classifying necessary activities. Fayol explains organization as a structure of relationships. It explains superior subordinate relation ships. Organizing is how the task can be achieved with given resources. Organizing is paves way for formal communication.

Organizing makes the organizational environment more convenient for group effectiveness. The well-defined authority and responsibility are used as tools to evaluate one’s performance at work. The function of organizing provides the manger enough flexibility in the origination to create higher managerial positions that the employees would cherish to reach.

Staffing:Staffing is the process of determining the work force requirements of the

organization and o filling the various managerial and non-managerial positions with competent people. It involves fitting the right person to the right job on a sustained basis and strengthening the human resources of the organization.

The process of Staffing includes Manpower planning, recruitment, selections, job orientations, etc. Ascertain how many positions are required in the light of organization and fill up these positions with the right men at right time and in the right number. In small organization, all these staffing activities are taken care by the manager alone. However, in large scale organizations have a separate department known as Personnel that will looks after these functions and a qualified professional manager headed as Personnel Manager.

Directing:After filling the positions in the organization with the right kind of people, the

next task is to guide and enable them to achieve the common goals. Directing is a process of activating the efforts of employees by issuing the orders and instructions to guide and

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advise the proper methods of work towards the achievement of organizational objectives. In the process of directing, the manager has to perform the following sub-factions while directing the members of his group. These are leading, communicating, guiding and advising, motivating etc.

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