Nature of management

Grade-XII Business Organization & Office Management

01-NATURE OF MANAGEMENTConcept of Management:

Management is a universal talk of every work of life. In whatever form, may be a business activity or any other activity, management will be there. In modern time as the size of business increases, new products and production techniques are developed, new business policies are made, government interference become essential. It is a process of getting results by doing things others.

The word management can be explained as "Manage+Men+T", which means, manage the men tactfully to do something in good and proper way to achieve the pre-determined goals of the organization. With the help of good force of managerial person, ratio of development will increase. With the help of efficient management selection of employees for specific job, proper management of tools, machines and other equipments, institutional work can be done. It is the most important function to control & co-ordinate the efforts of different individual or group of person. It is an art of handling people. It consists of planning, organizing and controlling. It is a continuous process and art of getting things done through other people. Definition:

According to Koontaz and O' Donnell, "Management is an art of getting things done through and with the people in formally organized group."

According to Henry Fayol, "To manage is to forecast and to plan, to organize, to command, to co-ordinate and to control."

The definitions above show that it is a continuous process of getting things done by proper use of manpower and other resources. It also helps to control, organize and co-ordinate the function of an organization.

Characteristics of Management: As blood, soul & mind are important for the life, same as management is for business.

Someone has written, "Management is the soul of Industrial development." The progress and prosperity of business organization is based on management. It is the brain of an organization, without management nothing can be done in the business. So, it has some characteristics which are as follows.

1. Management is universal2. Management, social process3. Goal oriented4. Science & Art5. Group Effort6. Intangible7. Required at all level8. Separate from ownership9. Purposeful activity

1. Management is universal:Management is taken as universal activity whether an organization is big or small,

government, hospitals, schools, colleges, etc. management is needed. Wherever there is a human activity there is management. Every step of life requires management because with the help of management each & every task can be handled easily, properly & effectively.

2. Management, social process:Management involves dealing with the people, the effort of human beings are

controlled & directed by the management. It has social obligation to make efficient use of scare material for the benefit of the society.

3. Goal oriented:Effective management is always management by objectives and also it has no

justification to exist without goals. An efficient and good management tries to achieve the

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predetermined goals by the minimum resources. Management is established only to achieve the goal. Hence, it is goal oriented.

4. Science & Art:Management is both science and art. It is based on some skills; knowledge is also

required to achieve the goals effectively. So, it is concerned with art tough it is not exactly like music or dance.

5. Group Effort:It deals with group of activities because no individual can do all the activities at the

same time. So, it is based on group efforts. It is also used to achieve the common goals with group efforts. A group also can achieve the predetermined goals easily and effectively.

6. Intangible:It is important but unseen process of the organization. We can only feel it. It cannot

be seen functioning with eyes but can feel by observing the result.7. Required at all level:

It is one of such process which requires all level, top level, middle level & low level of an organization. According to levels the process of management is different.

8. Separate from ownership:Management & ownership are two different things in a company. In a company,

shareholders are the owner and managerial work is in the hand of 'Board of Directors'.9. Purposeful activity:

The activity of management is connected with planning, direction, controlling, staffing, etc. and also there is some purpose behind it. Its main aim is to achieve the economic and social objective. Without any purpose management cannot be formed.

Functions of Management:In competitive days management become a typical job, a manager have to perform different

types of managerial job to achieve the goals of the organization. It is said that, "management is what manager does," Management is that type of process which requires different level of the requirement of the organization. The functions are defined differently by experts. The main branches of function of management are as follows.

1. Planning2. Organizing3. Directing4. Staffing5. Controlling

1. Planning:It involves the fore-casting of future problem and selecting the proper course of

action to solve the problem. It may be either for a short period or longer or both type. The main element of planning are what should be done? How shall be done? Who will be responsible for doing? How shall be done? Who will be responsible for doing?, etc. Planning is essential for every level of the management. With the help of planning function, a manager can perform organizational activities properly and clearly.

2. Organizing:Organized efforts are essential for the success of any enterprise. It involves the

division and subdivision of activities into the department, section and job as well as the integration of activities of an organization. It is a collection of various factors like man, machinery, material, money, etc.

3. Directing:It is concerned with guiding the people at work for securing their cooperation in the

execution of work. It helps in influencing, motivating human resources towards the achievement of organizational goals. The directing function actually starts the work. It



guide the human resources how the work be done? With the help of good directing, people can easily obtain their goals.

4. Staffing:Men are the biggest asset of an organization. This function of management is also related with human resources. Human resources are very important for proper and regular functioning of an organization. No organization can run without human factor. No enterprise can succeed unless right men are put on the right job. The staffing process concerned with appointment of personnel for individual job. It involves the following steps.

i. Determine the effective man power.ii. Set their qualification according to work and remuneration.iii. Training & recruitment of the employees.

5. Controlling:It is the important function in all types of enterprises. It is concerned with measuring

and comparing the operating results with plan and take corrective action if any deviation occur. So that similar problem may not occur in future. It involves the following steps.

i. Laying down norms and standard of desired performance.ii. Measuring the actual performance.iii. Interpreting and comparing the actual performance.iv. Taking Corrective action.

Level of Management:The organization may have various levels of management. The simple meaning of the term

'level' is the arrangement of managerial position. So, the level of management means dividing the authority and responsibility among the managerial person. The level of management will depend upon the size, technology process, quantity of production, nature of organization, etc. Generally, levels of management are categorized in three types.

1. Top Level Managementi. Share Holders

ii. Board of Directorsiii. Chief Executiveiv. Managing Director

2. Middle Level Managementi. Department Head

ii. Production Manageriii. Finance Manageriv. Branch Manager

3. Lower Level Managementi. Supervision

ii. Foremaniii. Sales Officeriv. Accountantv. Laborer

1. Top Level Management:It is the highest level in managerial process. It is responsible for all over success or failure of organization. It consists of share holders, Board of Directors, Chief Executive, Managing Director, etc. It establishes overall organizational goals & strategies for their achievements. These persons are also responsible for deciding objectives, policies and take final decision. It includes.

i. Determination of objective of the organization.ii. Formulate plans & policiesiii. Setup organizational structure.



iv. To attain resources 4M-Men, Material, Machine & money.v. It provides overall direction and control the operation.

2. Middle Level ManagementIt consist middle order rank of management, such as branch manager, production

manager, finance manager, departmental head, superintendent or other persons of some rank. It is also known as functional management. The personnel of middle level management are answerable to top level management and control & order the low level management. They assist the planning, coordinating, motivating, controlling the activities of various department. The functions of middle level management are as follows.

i. Select required no. of employees.ii. To provide training the new employees.iii. To report and make suitable recommendation to the top level management.iv. To motivate the personnel for attaining the goals.v. To maintain co-operation and coordination.vi. To issue instructions for the staff.

3. Lower Level Management:It is also known as first line management, First level management and supervisory

management. It includes personnel like fore-man, supervisor, sales officer, finance officer, etc. Their main job is to get work done from other workers and employees who are working directly under them. They receive instructions from middle level management and act in accordance with policies & program laid down by top level management.

The main functions of Low Level Management are as follows;i. To issue the instruction to the workers and supervise and control the work.ii. Classify and assign the worker's job.iii. To solve the problem of workers.iv. To arrange necessary tools machinery & equipment.v. To maintain good relation & discipline among the workers.

Administration & Management: It is a higher level activity which is concerned with determination of goals and policy

farming of an enterprise. It decides the objective, policies, rules and regulation through which various activities of any enterprise are regulated and controlled.

Management is a continuous process which helps in predicting, "what is going on to happen on near future," that will influence the working of an enterprise. It is the brain of an organization.

But in management study, management and administration are confusing term and has become the controversial issue. Some writers express their view that both are same whether some regard the term management & administration is differ from each other. After analyzing the different views of various authors, the controversial issue can be explained in the following manner.

1. No difference between management & administration:Some authors are with the view that there is no difference between management &

administration. A manager has to perform 5 functions like planning, organizing, directing, staffing & controlling. Similarly an administrator also performs these 5 functions. So, these two terms are interchangeable.

2. Administration is differ from management:The second view is that administrator consisting top level management, spend more

time on configuration of plans, policies and lesser time on their execution whereas manager consisting middle level management and lower level management, spend lesser time on planning or policy making and more time in execution of plan. This can be explained with help of following diagram.



Diagonal line in the rectangle indicates the ladder. As we move up along the ladder the importance of administration increases i.e. more time is spent on planning, organizing and such as we move down the ladder importance of management increases i.e. more time is spent on execution of plans.

Difference between management & administration:Basis Administration Management

Meaning Used to determine the objectives, plans & policies

Art of getting work done through others.

Nature Decision making function, it frames policy.

Functional activity, which execute the policy.

Aim Used for deciding plans & policies of an enterprises.

Used for achieving predetermined objectives.

Level Concerned with top level management only.

Concerned with middle & low level management.

Scope Its scope is wider than management. Its scope is limited, it is subordinate of admin.

Usage It is used with reference to non-business organization like:

Government, Institute, Schools, etc.

It is used in reference to business enterprises, which have economic

motive.Relation Only related to owners and top level

management.Only related to employees of any

enterprise.Ability It requires administrative ability

rather than technical ability.It requires technical ability rather than

administrative ability.Functions Main functions are planning &

organizing.Main functions are directing &

controlling.

Management-A science, an art or a profession:In a context of management it is a controversy that management is a science, an art or a

profession. There are different thoughts about management; some consider it is a science, while some say it is an art, still other call it as a profession. The nature is discussed as below.

1. Management, as a science:Science refers to an organized and systematic body of knowledge acquired by

mankind though observation, experimentation and also based on some universal principles, concepts, and theories. Principles of science are developed through testing & observation. With the help of concept of science it can safely be concluded that management is also a science because it is based upon certain principle and concerned as a systematized body of


Low Level Mgmt

Middle Level Mgmt

Top Level MgmtNon-business Org. (Schools, Hospitals, etc.)

Administration

Management

(Deals with business organization only)


knowledge, observation, test and experiment is a science, however it is not exact as physics, chemistry, biology, etc.

Since, it is concerned with human & human behavior; it can be called as social science.

2. Management, as an art: Art is concerned with particle knowledge and personal skill for doing out the desired

results. In management, a manager should have practical knowledge & skill. Otherwise his performance will be adversely affected.

Management is a way of doing a specific action while doing the function of an art is to achieve the success in a given action.

According to George R. Terry, "Art is bringing about of a desired result through application of skill." Thus, art has 5 essential features.

i. Practical Knowledgeii. Personal Skilliii. Concrete Resultiv. Constructive Skillv. Improvement through practice

These 5 functions of art also belong to the management. When a manager uses his management skill then he must have practical knowledge for solving managerial problem. A manager also has power to face the problem to find out the result, which is only possible when he/she has constructive skills.

To improve the managerial skill, managerial work should be done on regular basis because regularity and practice make the work effective. So, we can say that manager is an artist since he/she posses the skill of getting the work done through and with the people.

Therefore, it can be concluded that manager is an artist and management is bound to be an art.

3. Management, as a profession:Profession is an economic activity. It refers rendering services to other by getting

specialized knowledge. A professional renders his/her services to other for earning his livelihood.

Features of profession are as follows:i. Store of Knowledge

ii. Facility of Trainingsiii. Service Mottoiv. Restriction on Entry

While examining the features of profession, these are also related to management. In management process a manager must have special knowledge about management work. He can acquire knowledge from various trainings and professional provides services for the livelihood and also for earning money & provide services to the society.

When an illiterate person wants to professional trainings then there is restriction then he never become a manager but if an illiterate person having financial resources wants to establish an enterprise and become its manager then no one can stop him from doing so. So, we can say that management also deals with profession and engage in doing different kinds of work which are related to person.

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Nature of management

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