UNIT 1
Introduction to Basic Management Concepts
In the modern times one of the most important human activities is managing group of people. Ever since people began forming groups to accomplish aims they could not achieve as individuals, managing has been essential to ensure the coordination of individual efforts. As society has come to rely increasingly on group effort and as many organized groups have become large the task of managers has been rising in importance.
Management is the process of designing and maintaining an environment in which individuals working together in groups efficiently accomplish selected aims.
The basic definition of Management explain that
- As managers, people carry out the managerial functions of planning organizing, staffing, leading and controlling.
- Management applies to any kind of organization.
- It applies to managers at all organizational levels.
- The aim at all managers is the same to create a surplus.
- Managing is concerned with productivity, which implies effectiveness and efficiency.
Thus it may be concluded that management plays a key role in improving standard of living of the people in the society through developing an ideal organizational structure and making economic use of available resources.
The knowledge of management theory and practice enables managers to take more realistic view about organizational and social problems and to find out their effective solution.
Meaning:
Management is an important factor for the success of any organized activity. Today management basically concern with changes and challenges, and it is difficult to manage. Management is an art of getting things done through others. Management is to plan, organize, direct and control the resources of the organization for obtaining common objectives or goals. It is related with resources like material, money, machinery, methods, manufacturing and marketing.
Management principles are universal in nature. Management is necessary for all types of organization, such as public sector, private sector, govt. department, hotel, hospital, hostels, educational institutes, require management for several growth and expansion.
Definitions:
1) According to Taylor- “Management is the art of knowing what you want to do and then seeing that it is done in the best and cheapest way.”
2) According to Lawrence- “Management is the accomplishment of results through the efforts of other people.”
3) According to Henry Fayol- “To manage is to forecast and to plan, to organize, to co-ordinate and to control.”
Importance of management-
- Management is goal oriented- Management is concern with achievement of specific goals. It is always directed towards achievement of objectives. The success of management is measured by the extent to which objectives are achieved.
- Management is associated with group efforts- The business comes into existence with certain objectives which are to be achieved by a group and not by one person alone. Management gets things done by, with and through the efforts of group members. It co-ordinates the activities and actions of its members towards a common goal.
- Management is intangible- It is an unseen force, its presence can be evidence by the result of its efforts up to date order but they generally remain unnoticed, whereas mismanagement is quickly noticed.
- Management is an activity and not a person or group of person- Management is not people or not a certain class but it is the activity, it is the process of planning, organizing, directing and controlling to achieve the objectives of the organization.
Key Takeaways
1) According to Taylor- “Management is the art of knowing what you want to do and then seeing that it is done in the best and cheapest way.”
2) Management is intangible- It is an unseen force, its presence can be evidence by the result of its efforts up to date order but they generally remain unnoticed, whereas mismanagement is quickly noticed.
Universal Process: Wherever there exists human pursuit, there exists management. Without effective management, the intentions of the organisation cannot be accomplished.
The factor of Production: Equipped and experienced managers are necessary for the utilisation of funds and labour.
Goal-Oriented: The most significant aim of all management pursuit is to achieve the purposes of a firm. The aims must be practical and reachable.
Supreme in Thought and Action: Managers set achievable goals and then direct execution on all aspects to achieve them. For this, they need complete assistance from middle and lower degrees of management.
The system of authority: Well-defined principles of regulation, the regulation of proper power and efficiency at all degrees of decision-making. This is important so that each self must perform what is required from him or her and to whom he must report.
Profession: Managers require to control managerial expertise and education, and have to adhere to a verified law of demeanour and stay informed of their human and social responsibilities.
Process: The management method incorporates a range of activities or services directed towards an object.
Key Takeaways
1. Management is an activity
2. Management is a purposeful activity.
3. Management is concerned with the efforts of a group Nature of Management.
4. Management applies economic principles.
1. Optimum utilisation of resources-
The most important objectives of the management are to use various resources of the enterprise in a most economic way.
The proper use of men, materials, machines, and money will help a business to earn sufficient profits to satisfy various interests i.e. proprietor, customers, employees and others. All these interests will be served well only when physical resources of the business are properly utilised.
2. Growth and development of business-
By proper planning, organisation and direction etc., management leads a business to growth and development on sound footing. It helps in profitable expansion of the business. It provides a sense of security among the employers and employees.
3. Better quality goods-
The aim of the sound management has always been to produce the better quality products at minimum cost. Thus, it tries to remove all types of wastages in the business.
4. Ensuring regular supply of goods-
Another objective of management is to ensure the regular supply of goods to the people. It checks the artificial scarcity of goods in the market. Hence, it keeps the prices of goods within permissible limits.
5. Promotion of research and development-
Management undertakes the research and development to take lead over its competitors and meet the uncertainties of the future. Thus, it provides the benefits of latest research and technology to the society.
6. Minimise the element of risk-
Management involves the function of forecasting. Though the exact future can never be predicted yet on the basis of previous experience and existing circumstances, management can minimise the element of risk. Management always keeps its ears and eyes to the changing circumstances.
Most organizations have three management levels:
- Low-level managers;
- Middle-level managers; and
- Top-level managers.
These managers are classified in a hierarchy of authority, and perform different tasks. In many organizations, the number of managers in every level resembles a pyramid.
Top-level managers
The board of directors, president, vice-president, and CEO are all examples of top-level managers.
These managers are responsible for controlling and overseeing the entire organization. They develop goals, strategic plans, company policies, and make decisions on the direction of the business.
In addition, top-level managers play a significant role in the mobilization of outside resources.
The roles and responsibilities of the top level of management can be summarized as follows:
- Laying down the objectives and broad policies of the business enterprise.
- Issuing necessary instructions for the preparation of department-specific budgets, schedules, procedures, etc.
- Preparing strategic plans and policies for the organization.
- Appointing the executives for middle-level management, i.e. departmental managers.
- Establishing controls of all organizational departments.
Middle-level managers
The branch and departmental managers form this middle management level. These people are directly accountable to top management for the functioning of their respective departments, devoting more time to organizational and directional functions. For smaller organizations, there is often only one layer of middle management, but larger enterprises can see senior and junior levels within this middle section.
The roles and responsibilities of the middle level of management can be summarized as follows:
- Executing the plans of the organization in accordance with the policies and directives laid out by the top management level.
- Forming plans for the sub-units of the organization that they supervise.
- Participating in the hiring and training processes of lower-level management.
- Interpreting and explaining the policies from top-level management to lower-level management.
- Sending reports and data to top management in a timely and efficient manner.
- Evaluating the performance of junior managers.
- Inspiring lower level managers towards improving their performance.
Low-level managers
This level of management consists of supervisors, foremen, section officers, superintendents, and all other executives whose work must do largely with HR oversight and the direction of operative employees. Simply put, managers at the lower level are primarily concerned with the execution and coordination of day-to-day workflow that ensure completion of projects and that deliverables are met.
The roles and responsibilities of the lower level of management can be summarized as follows:
- Assigning jobs and tasks to various workers.
- Guiding and instructing workers in day-to-day activities.
- Overseeing both the quality and quantity of production.
- Maintaining good relations within lower levels of the organization.
- Acting as mediators by communicating the problems, suggestions, and recommendatory appeals, etc. of workers to the higher level of management, and in turn elucidating higher-level goals and objectives to workers.
- Helping to address and resolve the grievances of workers.
- Supervising and guiding their subordinates.
- Taking part in the hiring and training processes of their workers.
- Arranging the necessary materials, machines, tools, and resources, etc. necessary for accomplishing organizational tasks.
- Preparing periodical reports regarding the performance of the workers.
- Upholding discipline, decorum, and harmony within the workplace.
- Improving the enterprise’s image as a whole, due to their direct contact with the workers.
Key Takeaways
Most organizations have three management levels:
- Low-level managers;
- Middle-level managers; and
- Top-level managers.
- Division of Work - According to this principle the whole work is divided into small tasks. The specialization of the workforce according to the skills of a person, creating specific personal and professional development within the labour force and therefore increasing productivity; leads to specialization which increases the efficiency of labour.
- Authority and Responsibility - This is the issue of commands followed by responsibility for their consequences. Authority means the right of a superior to give enhance order to his subordinates; responsibility means obligation for performance.
- Discipline - It is obedience, proper conduct in relation to others, respect of authority, etc. It is essential for the smooth functioning of all organizations.
- Unity of Command - This principle states that each subordinate should receive orders and be accountable to one and only one superior. If an employee receives orders from more than one superior, it is likely to create confusion and conflict.
- Unity of Direction - All related activities should be put under one group, there should be one plan of action for them, and they should be under the control of one manager.
- Subordination of Individual Interest to Mutual Interest - The management must put aside personal considerations and put company objectives firstly. Therefore the interests of goals of the organization must prevail over the personal interests of individuals.
- Remuneration - Workers must be paid sufficiently as this is a chief motivation of employees and therefore greatly influences productivity. The quantum and methods of remuneration payable should be fair, reasonable and rewarding of effort.
- The Degree of Centralization - The amount of power wielded with the central management depends on company size. Centralization implies the concentration of decision making authority at the top management.
- Line of Authority/Scalar Chain - This refers to the chain of superiors ranging from top management to the lowest rank. The principle suggests that there should be a clear line of authority from top to bottom linking all managers at all levels.
- Order - Social order ensures the fluid operation of a company through authoritative procedure. Material order ensures safety and efficiency in the workplace. Order should be acceptable and under the rules of the company.
- Equity - Employees must be treated kindly, and justice must be enacted to ensure a just workplace. Managers should be fair and impartial when dealing with employees, giving equal attention towards all employees.
- Stability of Tenure of Personnel - Stability of tenure of personnel is a principle stating that in order for an organization to run smoothly, personnel (especially managerial personnel) must not frequently enter and exit the organization.
- Initiative - Using the initiative of employees can add strength and new ideas to an organization. Initiative on the part of employees is a source of strength for organization because it provides new and better ideas. Employees are likely to take greater interest in the functioning of the organization.
- Esprit de Corps/Team Spirit - This refers to the need of managers to ensure and develop morale in the workplace; individually and communally. Team spirit helps develop an atmosphere of mutual trust and understanding. Team spirit helps to finish the task on time.
The major differences between management and administration are given below:
1. Management is a systematic way of managing people and things within the organization. The administration is defined as an act of administering the whole organization by a group of people.
2. Management is an activity of business and functional level, whereas Administration is a high-level activity.
3. While management focuses on policy implementation, policy formulation is performed by the administration.
4. Functions of administration include legislation and determination. Conversely, functions of management are executive and governing.
5. Administration takes all the important decisions of the organization while management makes decisions under the boundaries set by the administration.
6. A group of persons, who are employees of the organization, is collectively known as management. On the other hand, administration represents the owners of the organization.
7. Management can be seen in the profit making organization like business enterprises. Conversely, the Administration is found in government and military offices, clubs, hospitals, religious organizations and all the non-profit making enterprises.
8. Management is all about plans and actions, but the administration is concerned with framing policies and setting objectives.
Key Takeaways
1. Management is a systematic way of managing people and things within the organization. The administration is defined as an act of administering the whole organization by a group of people.
2. Management is an activity of business and functional level, whereas Administration is a high-level activity.
References-
- Principles & Practices of Management: L. M. Prasad
- Principles of Management: P. C. Tripathy & P.N. Readdy
