Concept, nature and

signifcance of management
1) Nature, concept and
signifcance of
management
2) Functions and principles of
management
3) Development of
management thought
By !hu"ham #ush$aha
%&'N(N) 'ND D&F(N(*(+N +F
%'N')&%&N*
%anagement is the process "y $hich a co
operative group directs action to$ards a
common goal,
By -oseph %essie
*o manage is to forecast and plan, to
organi.e, to command, to coordinate and to
control,
By /enri Fayol
%anagement is the art of 0no$ing $hat you
$ant men to do in the cheapest $ay,
By F,1, *aylor
Features 2or characteristics) of
management
%anagement is an activity concerned $ith
guiding human and physical resources such
that organi.ational goals can "e achieved,
Nature of management can "e highlighted as

1) %anagement is )oal+riented3 *he

success of any management activity is
accessed "y its achievement of the
predetermined goals or o"4ective,
%anagement is a purposeful activity, (t is
a tool $hich helps use of human 5
physical resources to fulfll the pre
determined goals, For e6ample, the goal
of an enterprise is ma6imum consumer
satisfaction "y producing 7uality goods
and at reasona"le prices, *his can "e
achieved "y employing e8cient persons
and ma0ing "etter use of scarce
resources,
2) %anagement integrates /uman,
9hysical and Financial :esources3 (n an
organi.ation, human "eings $or0 $ith
nonhuman resources li0e machines,
%aterials, fnancial assets, "uildings etc,
%anagement integrates human e;orts to
those resources, (t "rings harmony
among the human, physical and fnancial
resources,
3) %anagement is
Continuous3 %anagement is an ongoing
process, (t involves continuous handling
of pro"lems and issues, (t is concerned
$ith identifying the pro"lem and ta0ing
appropriate steps to solve it, &,g, the
target of a company is ma6imum
production, For achieving this target
various policies have to "e framed "ut
this is not the end, %ar0eting and
'dvertising is also to "e done, For this
policies have to "e again framed, /ence
this is an ongoing process,
<) %anagement is all
9ervasive3 %anagement is re7uired in all
types of organi.ations $hether it is
political, social, cultural or "usiness
"ecause it helps and directs various
e;orts to$ards a defnite purpose, *hus
clu"s, hospitals, political parties,
colleges, hospitals, "usiness frms all
re7uire management, 1hen ever more
than one person is engaged in $or0ing
for a common goal, management is
necessary, 1hether it is a small "usiness
frm $hich may "e engaged in trading or
a large frm li0e *ata (ron 5 !teel,
management is re7uired every$here
irrespective of si.e or type of activity,
=) %anagement is a )roup
'ctivity3 %anagement is very much less
concerned $ith individual>s e;orts, (t is
more concerned $ith groups, (t involves
the use of group e;ort to achieve
predetermined goal of management of
'BC 5 Co, is good refers to a group of
persons managing the enterprise,
+"4ectives of "usiness
*he main o"4ectives of management are3
1) )etting %a6imum :esults $ith
%inimum &;orts *he main o"4ective of
management is to secure ma6imum outputs
$ith minimum e;orts 5 resources,
%anagement is "asically concerned $ith
thin0ing 5 utili.ing human, material 5
fnancial resources in such a manner that
$ould result in "est com"ination, *his
com"ination results in reduction of various
costs,
2)(ncreasing the &8ciency of factors of
9roduction *hrough proper utili.ation of
various factors of production, their e8ciency
can "e increased to a great e6tent $hich can
"e o"tained "y reducing spoilage, $astages
and "rea0age of all 0inds, this in turn leads
to saving of time, e;ort and money $hich is
essential for the gro$th 5 prosperity of the
enterprise,
3) %a6imum 9rosperity for &mployer 5
&mployees %anagement ensures smooth
and coordinated functioning of the
enterprise, *his in turn helps in providing
ma6imum "enefts to the employee in the
shape of good $or0ing condition, suita"le
$age system, incentive plans on the one
hand and higher profts to the employer on
the other hand,
<) /uman "etterment 5 !ocial -ustice
%anagement serves as a tool for the
upliftment as $ell as "etterment of the
society, *hrough increased productivity 5
employment, management ensures "etter
standards of living for the society, (t provides
4ustice through its uniform policies,
%anagement concepts
%anagement?a process 's a process,
management refers to a series of inter
related functions, (t is the process "y $hich
management creates, operates and directs
purposive organi.ation through systematic,
coordinated and cooperated human e;orts,
according to )eorge :, *erry, @%anagement
is a distinct process consisting of planning,
organi.ing, actuating and controlling,
performed to determine and accomplish
stated o"4ective "y the use of human "eings
and other resourcesA, 's a process,
management consists of three aspects3
!ince human factor is most important
among the other factors, therefore
management is concerned $ith
developing relationship among people, (t
is the duty of management to ma0e
interaction "et$een people productive
and useful for o"taining organi.ational
goals,
%anagement underta0es the 4o" of
"ringing together human physical and
fnancial resources so as to achieve
organi.ational purpose, *herefore, is an
important function to "ring harmony
"et$een various factors,
(t is a never ending process, (t is
concerned $ith constantly identifying the
pro"lem and solving them "y ta0ing
ade7uate steps, (t is an ongoing process,
%anagement?an activity Bi0e
various other activities performed "y human
"eings such as $riting, playing, eating,
coo0ing etc, management is also an activity
"ecause a manager is one $ho accomplishes
the o"4ectives "y directing the e;orts of
others, 'ccording to #oont., @%anagement is
$hat a manager doesA, %anagement as an
activity includes
(n the functioning of "usiness
enterprise, the manager constantly has to
receive and give information orally or in
$ritten, ' communication lin0 has to "e
maintained $ith su"ordinates as $ell as
superiors for e;ective functioning of an
enterprise,
9ractically all types of managerial
activities are "ased on one or the other types
of decisions, *herefore, managers are
continuously involved in decisions of
di;erent 0inds since the decision made "y
one manager "ecomes the "asis of action to
"e ta0en "y other managers, 2&,g, !ales
%anager is deciding the media 5 content of
advertising),
%anagement involves achieving goals
through people, *herefore, managers have to
interact $ith superiors as $ell as the su"
ordinates, *hey must maintain good relations
$ith them, *he interpersonal activities
include $ith the su"ordinates and ta0ing
care of the pro"lem, 2&,g, Bonuses to "e
given to the su"ordinates),
%anagement?a group %anagement
as a group may "e loo0ed upon in 2 di;erent
$ays3
'll managers ta0en together,
+nly the top management
*he interpretation depends upon the conte6t
in $hich these terms are used, Broadly
spea0ing, there are 3 types of managers
9atrimonial C Family %anager3 *hose $ho
have "ecome managers "y virtue of their
"eing o$ners or relatives of the o$ners of
company,
9rofessional %anagers3 *hose $ho have
"een appointed on account of their
speciali.ed 0no$ledge and degree,
9olitical %anagers C Civil !ervants3 *hose
$ho manage pu"lic sector underta0ings,
%anagers have "ecome a part of elite group
of society as they en4oy higher standard of
living in the society,
%anagement?a discipline
%anagement as a discipline refers to that
"ranch of 0no$ledge $hich is connected to
study of principles 5 practices of "asic
administration, (t specifes certain code of
conduct to "e follo$ed "y the manager 5
also various methods for managing resources
e8ciently,
%anagement as a discipline specifes certain
code of conduct for managers 5 indicates
various methods of managing an enterprise,
%anagement is a course of study $hich is
no$ formally "eing taught in the institutes
and universities after completing a
prescri"ed course or "y o"taining degree or
diploma in management, a person can get
employment as a manager,
'ny "ranch of 0no$ledge that fulfls
follo$ing t$o re7uirements is 0no$n as
discipline3
*here must "e scholars 5 thin0ers $ho
communicate relevant 0no$ledge through
research and pu"lications,
*he 0no$ledge should "e formally
imparted "y education and training
programmes,
!ince management satisfes "oth these
pro"lems, therefore it 7ualifes to "e a
discipline, *hough it is comparatively a ne$
discipline "ut it is gro$ing at a faster pace,
%anagement?a science !cience is a
systematic "ody of 0no$ledge pertaining to a
specifc feld of study that contains general
facts $hich e6plains a phenomenon, (t
esta"lishes cause and e;ect relationship
"et$een t$o or more varia"les and
underlines the principles governing their
relationship, *hese principles are developed
through scientifc method of o"servation and
verifcation through testing,
!cience is characteri.ed "y follo$ing main
features3
Dniversally acceptance principles
!cientifc principles represents "asic truth
a"out a particular feld of en7uiry, *hese
principles may "e applied in all situations, at
all time 5 at all places, &,g, la$ of
gravitation $hich can "e applied in all
countries irrespective of the time,
%anagement also contains some
fundamental principles $hich can "e applied
universally li0e the 9rinciple of Dnity of
Command i,e, one man, one "oss, *his
principle is applica"le to all type of
organi.ation "usiness or non "usiness,
&6perimentation 5 +"servation
!cientifc principles are derived through
scientifc investigation 5 researching i,e,
they are "ased on logic, &,g, the principle
that earth goes round the sun has "een
scientifcally proved,
%anagement principles are also "ased on
scientifc en7uiry 5 o"servation and not only
on the opinion of /enry Fayol, *hey have
"een developed through e6periments 5
practical e6periences of large no, of
managers, &,g, it is o"served that fair
remuneration to personal helps in creating a
satisfed $or0 force,
Cause 5 &;ect :elationship
9rinciples of science lay do$n cause and
e;ect relationship "et$een various varia"les,
&,g, $hen metals are heated, they are
e6panded, *he cause is heating 5 result is
e6pansion,
*he same is true for management, therefore
it also esta"lishes cause and e;ect
relationship, &,g, lac0 of parity 2"alance)
"et$een authority 5 responsi"ility $ill lead
to ine;ectiveness, (f you 0no$ the cause i,e,
lac0 of "alance, the e;ect can "e ascertained
easily i,e, in e;ectiveness, !imilarly if
$or0ers are given "onuses, fair $ages they
$ill $or0 hard "ut $hen not treated in fair
and 4ust manner, reduces productivity of
organi.ation,
*est of Ealidity 5 9redicta"ility
Ealidity of scientifc principles can "e tested
at any time or any num"er of times i,e, they
stand the test of time, &ach time these tests
$ill give same result, %oreover future events
can "e predicted $ith reasona"le accuracy "y
using scientifc principles, &,g, /
2
5 +
2
$ill
al$ays give /
2
+,
9rinciples of management can also "e tested
for validity, &,g, principle of unity of
command can "e tested "y comparing t$o
persons one having single "oss and one
having 2 "osses, *he performance of 1st
person $ill "e "etter than 2nd,
(t cannot "e denied that management has a
systematic "ody of 0no$ledge "ut it is not as
e6act as that of other physical sciences li0e
"iology, physics, and chemistry etc, *he main
reason for the ine6actness of science of
management is that it deals $ith human
"eings and it is very di8cult to predict their
"ehavior accurately, !ince it is a social
process, therefore it falls in the area of social
sciences, (t is a Fe6i"le science 5 that is $hy
its theories and principles may produce
di;erent results at di;erent times and
therefore it is a "ehavior science, &rnest Dale
has called it as a !oft !cience,
%anagement?an art 'rt implies
application of 0no$ledge 5 s0ill to trying
a"out desired results, 'n art may "e defned
as personali.ed application of general
theoretical principles for achieving "est
possi"le results, 'rt has the follo$ing
characters
9ractical #no$ledge &very art
re7uires practical 0no$ledge therefore
learning of theory is not su8cient, (t is very
important to 0no$ practical application of
theoretical principles, &,g, to "ecome a good
painter, the person may not only "e 0no$ing
di;erent color and "rushes "ut di;erent
designs, dimensions, situations etc to use
them appropriately, ' manager can never "e
successful 4ust "y o"taining degree or
diploma in managementG he must have also
0no$ ho$ to apply various principles in real
situations "y functioning in capacity of
manager,
9ersonal !0ill 'lthough theoretical
"ase may "e same for every artist, "ut each
one has his o$n style and approach to$ards
his 4o", *hat is $hy the level of success and
7uality of performance di;ers from one
person to another, &,g, there are several
7ualifed painters "ut %,F, /ussain is
recogni.ed for his style, !imilarly
management as an art is also personali.ed,
&very manager has his o$n $ay of managing
things "ased on his 0no$ledge, e6perience
and personality, that is $hy some managers
are 0no$n as good managers 2li0e 'ditya
Birla, :ahul Ba4a4) $hereas others as "ad,
Creativity &very artist has an element of
creativity in line, *hat is $hy he aims at
producing something that has never e6isted
"efore $hich re7uires com"ination of
intelligence 5 imagination, %anagement is
also creative in nature li0e any other art, (t
com"ines human and nonhuman resources
in useful $ay so as to achieve desired
results, (t tries to produce s$eet music "y
com"ining chords in an e8cient manner,
9erfection through practice 9ractice
ma0es a man perfect, &very artist "ecomes
more and more profcient through constant
practice, !imilarly managers learn through
an art of trial and error initially "ut
application of management principles over
the years ma0es them perfect in the 4o" of
managing,
)oal+riented &very art is result
oriented as it see0s to achieve concrete
results, (n the same manner, management is
also directed to$ards accomplishment of pre
determined goals, %anagers use various
resources li0e men, money, material,
machinery 5 methods to promote gro$th of
an organi.ation,
*hus, $e can say that management is an art
therefore it re7uires application of certain
principles rather it is an art of highest order
"ecause it deals $ith moulding the attitude
and "ehavior of people at $or0 to$ards
desired goals,
%anagement?a profession +ver a
large fe$ decades, factors such as gro$ing
si.e of "usiness unit, separation of
o$nership from management, gro$ing
competition etc have led to an increased
demand for professionally 7ualifed
managers, *he tas0 of manager has "een
7uite speciali.ed, 's a result of these
developments the management has reached
a stage $here everything is to "e managed
professionally,
' profession may "e defned as an occupation
that re7uires speciali.ed 0no$ledge and
intensive academic preparations to $hich
entry is regulated "y a representative "ody,
*he essentials of a profession are3
!peciali.ed #no$ledge ' profession
must have a systematic "ody of 0no$ledge
that can "e used for development of
professionals, &very professional must ma0e
deli"erate e;orts to ac7uire e6pertise in the
principles and techni7ues, !imilarly a
manager must have devotion and
involvement to ac7uire e6pertise in the
science of management,
Formal &ducation 5 *raining *here
are no, of institutes and universities to
impart education 5 training for a profession,
No one can practice a profession $ithout
going through a prescri"ed course, %any
institutes of management have "een set up
for imparting education and training, For
e6ample, a C' cannot audit the 'CC>s unless
he has ac7uired a degree or diploma for the
same "ut no minimum 7ualifcations and a
course of study has "een prescri"ed for
managers "y la$, For e6ample, %B' may "e
preferred "ut not necessary,
!ocial +"ligations 9rofession is a
source of livelihood "ut professionals are
primarily motivated "y the desire to serve
the society, *heir actions are inFuenced "y
social norms and values, !imilarly a manager
is responsi"le not only to its o$ners "ut also
to the society and therefore he is e6pected to
provide 7uality goods at reasona"le prices to
the society,
Code of Conduct %em"ers of a
profession have to a"ide "y a code of
conduct $hich contains certain rules and
regulations, norms of honesty, integrity and
special ethics, ' code of conduct is enforced
"y a representative association to ensure self
discipline among its mem"ers, 'ny mem"er
violating the code of conduct can "e
punished and his mem"ership can "e
$ithdra$n, *he '(%' has prescri"ed a code
of conduct for managers "ut it has no right to
ta0e legal action against any manager $ho
violates it,
:epresentative 'ssociation For the
regulation of profession, e6istance of a
representative "ody is a must, For e6ample,
an institute of Charted 'ccountants of (ndia
esta"lishes and administers standards of
competence for the auditors "ut the '(%'
ho$ever does not have any statuary po$ers
to regulate the activities of managers,
From a"ove discussion, it is 7uite clear that
management fulflls several essentials of a
profession, even then it is not a fully Fedged
profession "ecause3
(t does not restrict the entry in
managerial 4o"s for account of one
standard or other,
No minimum 7ualifcations have "een
prescri"ed for managers,
No management association has the
authority to grant a certifcate of practice
to various managers,
'll managers are supposed to a"ide "y
the code formulated "y '(%',
Competent education and training
facilities do not e6ist,
%anagers are responsi"le to many groups
such as shareholders, employees and
society, ' regulatory code may curtail
their freedom,
%anagers are 0no$n "y their
performance and not mere degrees,
*he ultimate goal of "usiness is to
ma6imi.e proft and not social $elfare,
*hat is $hy /aymes has rightly remar0ed,
@*he slogan for management is "ecoming
>/e $ho serves "est, also profts most>,A
Bevels of management
*he term @Bevels of %anagement> refers to a
line of demarcation "et$een various
managerial positions in an organi.ation, *he
num"er of levels in management increases
$hen the si.e of the "usiness and $or0 force
increases and vice versa, *he level of
management determines a chain of
command, the amount of authority 5 status
en4oyed "y any managerial position, *he
levels of management can "e classifed in
three "road categories3
*op level C 'dministrative level
%iddle level C &6ecutory
Bo$ level C !upervisory C +perative C First
line managers
%anagers at all these levels perform
di;erent functions, *he role of managers at
all the three levels is discussed "elo$3
*op Bevel of %anagement
(t consists of "oard of directors, chief
e6ecutive or managing director, *he top
management is the ultimate source of
authority and it manages goals and policies
for an enterprise, (t devotes more time on
planning and coordinating functions,
*he role of the top management can "e
summari.ed as follo$s
*op management lays do$n the
o"4ectives and "road policies of the
enterprise,
(t issues necessary instructions for
preparation of department "udgets,
procedures, schedules etc,
(t prepares strategic plans 5 policies for
the enterprise,
(t appoints the e6ecutive for middle level
i,e, departmental managers,
(t controls 5 coordinates the activities of
all the departments,
(t is also responsi"le for maintaining a
contact $ith the outside $orld,
(t provides guidance and direction,
*he top management is also responsi"le
to$ards the shareholders for the
performance of the enterprise,
%iddle Bevel of %anagement
*he "ranch managers and departmental
managers constitute middle level, *hey are
responsi"le to the top management for the
functioning of their department, *hey devote
more time to organi.ational and directional
functions, (n small organi.ation, there is only
one layer of middle level of management "ut
in "ig enterprises, there may "e senior and
4unior middle level management, *heir role
can "e emphasi.ed as
*hey e6ecute the plans of the
organi.ation in accordance $ith the
policies and directives of the top
management,
*hey ma0e plans for the su"units of the
organi.ation,
*hey participate in employment 5
training of lo$er level management,
*hey interpret and e6plain policies from
top level management to lo$er level,
*hey are responsi"le for coordinating the
activities $ithin the division or
department,
(t also sends important reports and other
important data to top level management,
*hey evaluate performance of 4unior
managers,
*hey are also responsi"le for inspiring
lo$er level managers to$ards "etter
performance,
Bo$er Bevel of %anagement
Bo$er level is also 0no$n as supervisory C
operative level of management, (t consists of
supervisors, foreman, section o8cers,
superintendent etc, 'ccording to :,C, Davis,
@!upervisory management refers to those
e6ecutives $hose $or0 has to "e largely $ith
personal oversight and direction of operative
employeesA, (n other $ords, they are
concerned $ith direction and controlling
function of management, *heir activities
include
'ssigning of 4o"s and tas0s to various
$or0ers,
*hey guide and instruct $or0ers for day
to day activities,
*hey are responsi"le for the 7uality as
$ell as 7uantity of production,
*hey are also entrusted $ith the
responsi"ility of maintaining good
relation in the organi.ation,
*hey communicate $or0ers pro"lems,
suggestions, and recommendatory
appeals etc to the higher level and higher
level goals and o"4ectives to the $or0ers,
*hey help to solve the grievances of the
$or0ers,
*hey supervise 5 guide the su"
ordinates,
*hey are responsi"le for providing
training to the $or0ers,
*hey arrange necessary materials,
machines, tools etc for getting the things
done,
*hey prepare periodical reports a"out the
performance of the $or0ers,
*hey ensure discipline in the enterprise,
*hey motivate $or0ers,
*hey are the image "uilders of the
enterprise "ecause they are in direct
contact $ith the $or0ers,
(mportance of management
(t helps in 'chieving )roup )oals
(t arranges the factors of production,
assem"les and organi.es the resources,
integrates the resources in e;ective
manner to achieve goals, (t directs group
e;orts to$ards achievement of pre
determined goals, By defning o"4ective of
organi.ation clearly there $ould "e no
$astage of time, money and e;ort,
%anagement converts disorgani.ed
resources of men, machines, money etc,
into useful enterprise, *hese resources
are coordinated, directed and controlled
in such a manner that enterprise $or0
to$ards attainment of goals,
+ptimum Dtili.ation of :esources
%anagement utili.es all the physical 5
human resources productively, *his leads
to e8cacy in management, %anagement
provides ma6imum utili.ation of scarce
resources "y selecting its "est possi"le
alternate use in industry from out of
various uses, (t ma0es use of e6perts,
professional and these services leads to
use of their s0ills, 0no$ledge, and proper
utili.ation and avoids $astage, (f
employees and machines are producing
its ma6imum there is no under
employment of any resources,
:educes Costs (t gets ma6imum
results through minimum input "y proper
planning and "y using minimum input 5
getting ma6imum output, %anagement
uses physical, human and fnancial
resources in such a manner $hich results
in "est com"ination, *his helps in cost
reduction,
&sta"lishes !ound +rgani.ation
No overlapping of e;orts 2smooth and
coordinated functions), *o esta"lish
sound organi.ational structure is one of
the o"4ective of management $hich is in
tune $ith o"4ective of organi.ation and
for fulfllment of this, it esta"lishes
e;ective authority 5 responsi"ility
relationship i,e, $ho is accounta"le to
$hom, $ho can give instructions to
$hom, $ho are superiors 5 $ho are
su"ordinates, %anagement flls up
various positions $ith right persons,
having right s0ills, training and
7ualifcation, 'll 4o"s should "e cleared to
everyone,
&sta"lishes &7uili"rium (t ena"les
the organi.ation to survive in changing
environment, (t 0eeps in touch $ith the
changing environment, 1ith the change
is e6ternal environment, the initial co
ordination of organi.ation must "e
changed, !o it adapts organi.ation to
changing demand of mar0et C changing
needs of societies, (t is responsi"le for
gro$th and survival of organi.ation,
&ssentials for 9rosperity of
!ociety &8cient management leads to
"etter economical production $hich helps
in turn to increase the $elfare of people,
)ood management ma0es a di8cult tas0
easier "y avoiding $astage of scarce
resource, (t improves standard of living, (t
increases the proft $hich is "enefcial to
"usiness and society $ill get ma6imum
output at minimum cost "y creating
employment opportunities $hich
generate income in hands, +rgani.ation
comes $ith ne$ products and researches
"enefcial for society,
Functions 2scope) of management
%anagement has "een descri"ed as a social
process involving responsi"ility for
economical and e;ective planning 5
regulation of operation of an enterprise in
the fulfllment of given purposes, (t is a
dynamic process consisting of various
elements and activities, *hese activities are
di;erent from operative functions li0e
mar0eting, fnance, purchase etc, :ather
these activities are common to each and
every manger irrespective of his level or
status,
Di;erent e6perts have classifed functions of
management, 'ccording to )eorge 5 -erry,
@*here are four fundamental functions of
management i,e, planning, organi.ing,
actuating and controllingA, 'ccording to
/enry Fayol, @*o manage is to forecast and
plan, to organi.e, to command, 5 to controlA,
1hereas Buther )ullic0 has given a 0ey$ord
>9+!DC+:B> $here 9 stands for 9lanning, +
for +rgani.ing, ! for !ta8ng, D for Directing,
Co for Coordination, : for reporting 5 B for
Budgeting, But the most $idely accepted are
functions of management given "y #++N*H
and +>D+NN&B i,e, 9lanning, +rgani.ing,
!ta8ng, Directing and Controlling,
For theoretical purposes, it may "e
convenient to separate the function of
management "ut practically these functions
are overlapping in nature i,e, they are highly
insepara"le, &ach function "lends into the
other 5 each a;ects the performance of
others,
9lanning
(t is the "asic function of management, (t
deals $ith chal0ing out a future course of
action 5 deciding in advance the most
appropriate course of actions for
achievement of predetermined goals,
'ccording to #++N*H, @9lanning is deciding
in advance $hat to do, $hen to do 5 ho$ to
do, (t "ridges the gap from $here $e are 5
$here $e $ant to "eA, ' plan is a future
course of actions, (t is an e6ercise in pro"lem
solving 5 decision ma0ing, 9lanning is
determination of courses of action to achieve
desired goals, *hus, planning is a systematic
thin0ing a"out $ays 5 means for
accomplishment of predetermined goals,
9lanning is necessary to ensure proper
utili.ation of human 5 nonhuman resources,
(t is all pervasive, it is an intellectual activity
and it also helps in avoiding confusion,
uncertainties, ris0s, $astages etc,
+rgani.ing
(t is the process of "ringing together
physical, fnancial and human resources and
developing productive relationship amongst
them for achievement of organi.ational
goals, 'ccording to /enry Fayol, @*o organi.e
a "usiness is to provide it $ith everything
useful or its functioning i,e, ra$ material,
tools, capital and personnel>sA, *o organi.e a
"usiness involves determining 5 providing
human and nonhuman resources to the
organi.ational structure, +rgani.ing as a
process involves3
(dentifcation of activities,
Classifcation of grouping of activities,
'ssignment of duties,
Delegation of authority and creation of
responsi"ility,
Coordinating authority and responsi"ility
relationships,
!ta8ng
(t is the function of manning the organi.ation
structure and 0eeping it manned, !ta8ng
has assumed greater importance in the
recent years due to advancement of
technology, increase in si.e of "usiness,
comple6ity of human "ehavior etc, *he main
purpose o sta8ng is to put right man on
right 4o" i,e, s7uare pegs in s7uare holes and
round pegs in round holes, 'ccording to
#oont. 5 +>Donnell, @%anagerial function of
sta8ng involves manning the organi.ation
structure through proper and e;ective
selection, appraisal 5 development of
personnel to fll the roles designed un the
structureA, !ta8ng involves3
%anpo$er 9lanning 2estimating man
po$er in terms of searching, choose the
person and giving the right place),
:ecruitment, selection 5 placement,
*raining 5 development,
:emuneration,
9erformance appraisal,
9romotions 5 transfer,
Directing
(t is that part of managerial function $hich
actuates the organi.ational methods to $or0
e8ciently for achievement of organi.ational
purposes, (t is considered lifespar0 of the
enterprise $hich sets it in motion the action
of people "ecause planning, organi.ing and
sta8ng are the mere preparations for doing
the $or0, Direction is that inertpersonnel
aspect of management $hich deals directly
$ith inFuencing, guiding, supervising,
motivating su"ordinate for the achievement
of organi.ational goals, Direction has
follo$ing elements3
!upervision
%otivation
Beadership
Communication
!upervision implies overseeing the
$or0 of su"ordinates "y their superiors, (t
is the act of $atching 5 directing $or0 5
$or0ers,
%otivation means inspiring,
stimulating or encouraging the su"
ordinates $ith .eal to $or0, 9ositive,
negative, monetary, nonmonetary
incentives may "e used for this purpose,
Beadership may "e defned as a
process "y $hich manager guides and
inFuences the $or0 of su"ordinates in
desired direction,
Communications is the process of
passing information, e6perience, opinion
etc from one person to another, (t is a
"ridge of understanding,
Controlling
(t implies measurement of accomplishment
against the standards and correction of
deviation if any to ensure achievement of
organi.ational goals, *he purpose of
controlling is to ensure that everything
occurs in conformities $ith the standards, 'n
e8cient system of control helps to predict
deviations "efore they actually occur,
'ccording to *heo /aimann, @Controlling is
the process of chec0ing $hether or not
proper progress is "eing made to$ards the
o"4ectives and goals and acting if necessary,
to correct any deviationA, 'ccording to
#oont. 5 +>Donnell @Controlling is the
measurement 5 correction of performance
activities of su"ordinates in order to ma0e
sure that the enterprise o"4ectives and plans
desired to o"tain them as "eing
accomplishedA, *herefore controlling has
follo$ing steps3
&sta"lishment of standard performance,
%easurement of actual performance,
Comparison of actual performance $ith
the standards and fnding out deviation if
any,
Corrective action,
9rinciples of management
2management thoughts)
' principle refers to a fundamental truth, (t
esta"lishes cause and e;ect relationship
"et$een t$o or more varia"les under given
situation, *hey serve as a guide to thought 5
actions, *herefore, management principles
are the statements of fundamental truth
"ased on logic $hich provides guidelines for
managerial decision ma0ing and actions,
*hese principles are derived3
+n the "asis of o"servation and analysis
i,e, practical e6perience of managers,
By conducting e6perimental studies,
Fayol>s principles of management
Division of Ba"or
/enry Fayol has stressed on the
speciali.ation of 4o"s,
/e recommended that $or0 of all 0inds
must "e divided 5 su"divided and
allotted to various persons according to
their e6pertise in a particular area,
!u"division of $or0 ma0es it simpler and
results in e8ciency,
(t also helps the individual in ac7uiring
speed, accuracy in his performance,
!peciali.ation leads to e8ciency 5
economy in spheres of "usiness,
9arty of 'uthority 5 :esponsi"ility
'uthority 5 responsi"ility are coe6isting,
(f authority is given to a person, he
should also "e made responsi"le,
(n a same $ay, if anyone is made
responsi"le for any 4o", he should also
have concerned authority,
'uthority refers to the right of superiors
to get e6actness from their su"ordinates
$hereas responsi"ility means o"ligation
for the performance of the 4o" assigned,
*here should "e a "alance "et$een the
t$o i,e, they must go hand in hand,
'uthority $ithout responsi"ility leads to
irresponsi"le "ehavior $hereas
responsi"ility $ithout authority ma0es
the person ine;ective,
9rinciple of +ne Boss
' su"ordinate should receive orders and
"e accounta"le to one and only one "oss
at a time,
(n other $ords, a su"ordinate should not
receive instructions from more than one
person "ecause
(t undermines authority
1ea0ens discipline
Divides loyalty
Creates confusion
Delays and chaos
&scaping responsi"ilities
Duplication of $or0
+verlapping of e;orts
*herefore, dual su"ordination should "e
avoided unless and until it is a"solutely
essential,
Dnity of command provides the enterprise
a disciplined, sta"le 5 orderly e6istence,
(t creates harmonious relationship
"et$een superiors and su"ordinates,
Dnity of Direction
Fayol advocates one head one plan $hich
means that there should "e one plan for a
group of activities having similar
o"4ectives,
:elated activities should "e grouped
together, *here should "e one plan of
action for them and they should "e under
the charge of a particular manager,
'ccording to this principle, e;orts of all
the mem"ers of the organi.ation should
"e directed to$ards common goal,
1ithout unity of direction, unity of action
cannot "e achieved,
(n fact, unity of command is not possi"le
$ithout unity of direction,
&7uity
&7uity means com"ination of fairness,
0indness 5 4ustice,
*he employees should "e treated $ith
0indness 5 e7uity if devotion is
e6pected of them,
(t implies that managers should "e fair
and impartial $hile dealing $ith the
su"ordinates,
*hey should give similar treatment to
people of similar position,
*hey should not discriminate $ith
respect to age, caste, se6, religion,
relation etc,
&7uity is essential to create and
maintain cordial relations "et$een the
managers and su"ordinate,
But e7uity does not mean total a"sence
of harshness,
Fayol $as of opinion that, @at times
force and harshness might "ecome
necessary for the sa0e of e7uityA,
+rder
*his principle is concerned $ith proper 5
systematic arrangement of things and
people,
'rrangement of things is called material
order and placement of people is called
social order,
%aterial order *here should "e safe,
appropriate and specifc place for every
article and every place to "e e;ectively
used for specifc activity and commodity,
!ocial order !election and appointment
of most suita"le person on the suita"le
4o", *here should "e a specifc place for
everyone and everyone should have a
specifc place so that they can easily "e
contacted $henever need arises,
Discipline
'ccording to Fayol, @Discipline means
sincerity, o"edience, respect of authority
5 o"servance of rules and regulations of
the enterpriseA,
*his principle applies that su"ordinate
should respect their superiors and o"ey
their order,
(t is an important re7uisite for smooth
running of the enterprise,
Discipline is not only re7uired on path of
su"ordinates "ut also on the part of
management,
Discipline can "e enforced if
*here are good superiors at all levels,
*here are clear 5 fair agreements $ith
$or0ers,
!anctions 2punishments) are 4udiciously
applied,
(nitiative
1or0ers should "e encouraged to ta0e
initiative in the $or0 assigned to them,
(t means eagerness to initiate actions
$ithout "eing as0ed to do so,
Fayol advised that management should
provide opportunity to its employees to
suggest ideas, e6periences5 ne$ method
of $or0,
(t helps in developing an atmosphere of
trust and understanding,
9eople then en4oy $or0ing in the
organi.ation "ecause it adds to their .eal
and energy,
*o suggest improvement in formulation 5
implementation of place,
*hey can "e encouraged $ith the help of
monetary 5 nonmonetary incentives,
Fair :emuneration
*he 7uantum and method of
remuneration to "e paid to the $or0ers
should "e fair, reasona"le, satisfactory 5
re$arding of the e;orts,
's far as possi"le it should accord
satisfaction to "oth employer and the
employees,
1ages should "e determined on the "asis
of cost of living, $or0 assigned, fnancial
position of the "usiness, $age rate
prevailing etc,
Bogical 5 appropriate $age rates and
methods of their payment reduce tension
5 di;erences "et$een $or0ers 5
management creates harmonious
relationship and pleasing atmosphere of
$or0,
Fayol also recommended provision of
other "enefts such as free education,
medical 5 residential facilities to $or0ers,
!ta"ility of *enure
Fayol emphasi.ed that employees should
not "e moved fre7uently from one 4o"
position to another i,e, the period of
service in a 4o" should "e f6ed,
*herefore employees should "e appointed
after 0eeping in vie$ principles of
recruitment 5 selection "ut once they are
appointed their services should "e
served,
'ccording to Fayol, @*ime is re7uired for
an employee to get used to a ne$ $or0 5
succeed to doing it $ell "ut if he is
removed "efore that he $ill not "e a"le to
render $orth$hile servicesA,
's a result, the time, e;ort and money
spent on training the $or0er $ill go
$aste,
!ta"ility of 4o" creates team spirit and a
sense of "elongingness among $or0ers
$hich ultimately increase the 7uality as
$ell as 7uantity of $or0,
!calar Chain
Fayol defnes scalar chain as >*he chain of
superiors ranging from the ultimate
authority to the lo$estA,
&very orders, instructions, messages,
re7uests, e6planation etc, has to pass
through !calar chain,
But, for the sa0e of convenience 5
urgency, this path can "e cut shirt and
this short cut is 0no$n as )ang 9lan0,
' )ang 9lan0 is a temporary arrangement
"et$een t$o di;erent points to facilitate
7uic0 5 easy communication as e6plained
"elo$3
(n the fgure given, if D has to communicate
$ith ) he $ill frst send the communication
up$ards $ith the help of C, B to ' and then
do$n$ards $ith the help of & and F to )
$hich $ill ta0e 7uite some time and "y that
time, it may not "e $orth therefore a gang
plan0 has "een developed "et$een the t$o,
)ang 9lan0 clarifes that management
principles are not rigid rather they are
very Fe6i"le, *hey can "e moulded and
modifed as per the re7uirements of
situations,
!u"+rdination of (ndividual
(nterest to )eneral (nterest
'n organi.ation is much "igger than the
individual it constitutes therefore interest
of the underta0ing should prevail in all
circumstances,
's far as possi"le, reconciliation should
"e achieved "et$een individual and
group interests,
But in case of conFict, individual must
sacrifce for "igger interests,
(n order to achieve this attitude, it is
essential that
&mployees should "e honest 5 sincere,
9roper 5 regular supervision of $or0,
:econciliation of mutual di;erences and
clashes "y mutual agreement, For e6ample,
for change of location of plant, for change of
proft sharing ratio, etc,
&spirit De> Corps 2can "e achieved
through unity of command)
(t refers to team spirit i,e, harmony in the
$or0 groups and mutual understanding
among the mem"ers,
&spirit De> Corps inspires $or0ers to $or0
harder,
Fayol cautioned the managers against
dividing the employees into competing
groups "ecause it might damage the
moral of the $or0ers and interest of the
underta0ing in the long run,
*o inculcate &spirit De> Corps follo$ing
steps should "e underta0en
*here should "e proper coordination of
$or0 at all levels
!u"ordinates should "e encouraged to
develop informal relations among
themselves,
&;orts should "e made to create
enthusiasm and 0eenness among
su"ordinates so that they can $or0 to the
ma6imum a"ility,
&8cient employees should "e re$arded
and those $ho are not up to the mar0
should "e given a chance to improve their
performance,
!u"ordinates should "e made conscious
of that $hatever they are doing is of
great importance to the "usiness 5
society,
/e also cautioned against the more use of
Britain communication to the
su"ordinates i,e, face to face
communication should "e developed, *he
managers should infuse team spirit 5
"elongingness, *here should "e no place
for misunderstanding, 9eople then en4oy
$or0ing in the organi.ation 5 o;er their
"est to$ards the organi.ation,
Centrali.ation 5 DeCentrali.ation
Centrali.ation means concentration of
authority at the top level, (n other $ords,
centrali.ation is a situation in $hich top
management retains most of the decision
ma0ing authority,
Decentrali.ation means disposal of
decision ma0ing authority to all the levels
of the organi.ation, (n other $ords,
sharing authority do$n$ards is
decentrali.ation,
'ccording to Fayol, @Degree of
centrali.ation or decentrali.ation
depends on no, of factors li0e si.e of
"usiness, e6perience of superiors,
dependa"ility 5 a"ility of su"ordinates
etc,
'nything $hich increases the role of
su"ordinate is decentrali.ation 5
anything $hich decreases it is
centrali.ation,
Fayol suggested that a"solute
centrali.ation or decentrali.ation is not
feasi"le, 'n organi.ation should stri0e to
achieve a lot "et$een the t$o,
!cientifc management "y *aylor
Fredric0 1inslo$ *aylor 2%arch 2I, 1J=K
%arch 21, 1L1=) commonly 0no$n as >Father
of !cientifc %anagement> started his career
as an operator and rose to the position of
chief engineer, /e conducted various
e6periments during this process $hich forms
the "asis of scientifc management, (t implies
application of scientifc principles for
studying 5 identifying management
pro"lems,
'ccording to *aylor, @!cientifc %anagement
is an art of 0no$ing e6actly $hat you $ant
your men to do and seeing that they do it in
the "est and cheapest $ayA, (n *aylors vie$,
if a $or0 is analy.ed scientifcally it $ill "e
possi"le to fnd one "est $ay to do it,
/ence scientifc management is a thoughtful,
organi.ed, dual approach to$ards the 4o" of
management against hit or miss or :ule of
*hum",
9rinciples of scientifc management
Development of !cience for each
part of men>s 4o" 2replacement of
rule of thum")
*his principle suggests that $or0
assigned to any employee should "e
o"served, analy.ed $ith respect to each
and every element and part and time
involved in it,
*his means replacement of odd rule of
thum" "y the use of method of en7uiry,
investigation, data collection, analysis
and framing of rules,
Dnder scientifc management, decisions
are made on the "asis of facts and "y the
application of scientifc decisions,
!cientifc !election, *raining 5
Development of 1or0ers
*here should "e scientifcally designed
procedure for the selection of $or0ers,
9hysical, mental 5 other re7uirement
should "e specifed for each and every
4o",
1or0ers should "e selected 5 trained to
ma0e them ft for the 4o",
*he management has to provide
opportunities for development of $or0ers
having "etter capa"ilities,
'ccording to *aylor e;orts should "e
made to develop each employee to his
greatest level and e8ciency 5 prosperity,
Cooperation "et$een %anagement
5 $or0ers or /armony not discord
*aylor "elieved in cooperation and not
individualism,
(t is only through cooperation that the
goals of the enterprise can "e achieved
e8ciently,
*here should "e no conFict "et$een
managers 5 $or0ers,
*aylor "elieved that interest of employer
5 employees should "e fully harmoni.ed
so as to secure mutually understanding
relations "et$een them,
Division of :esponsi"ility
*his principle determines the concrete
nature of roles to "e played "y di;erent
level of managers 5 $or0ers,
*he management should assume the
responsi"ility of planning the $or0
$hereas $or0ers should "e concerned
$ith e6ecution of tas0,
*hus planning is to "e separated from
e6ecution,
%ental :evolution
*he $or0ers and managers should have a
complete change of outloo0 to$ards their
mutual relation and $or0 e;ort,
(t re7uires that management should
create suita"le $or0ing condition and
solve all pro"lems scientifcally,
!imilarly $or0ers should attend their 4o"s
$ith utmost attention, devotion and
carefulness, *hey should not $aste the
resources of enterprise,
/andsome remuneration should "e
provided to $or0ers to "oost up their
moral,
(t $ill create a sense of "elongingness
among $or0er,
*hey $ill "e disciplined, loyal and sincere
in fulflling the tas0 assigned to them,
*here $ill "e more production and
economical gro$th at a faster rate,
%a6imum 9rosperity for &mployer
5 &mployees
*he aim of scientifc management is to
see ma6imum prosperity for employer
and employees,
(t is important only $hen there is
opportunity for each $or0er to attain his
highest e8ciency,
%a6imum output 5 optimum utili.ation of
resources $ill "ring higher profts for the
employer 5 "etter $ages for the $or0ers,
*here should "e ma6imum output in place
of restricted output,
Both managers 5 $or0ers should "e paid
handsomely,
Bureaucratic theory of management
"y %a6 1e"er
Bureaucratic *heory $as developed "y a
)erman !ociologist and political economist
%a6 1e"er 21JK<1L2I), 'ccording to him,
"ureaucracy is the most e8cient form of
organi.ation, *he organi.ation has a $ell
defned line of authority, (t has clear rules
and regulations $hich are strictly follo$ed,
Features of "ureaucratic
management
*he characteristics or features of
Bureaucratic +rgani.ation are as follo$s3
*here is a high degree of Division of
Ba"our and !peciali.ation,
*here is a $ell defned /ierarchy of
'uthority,
(t follo$s the principle of :ationality,
+"4ectively and Consistency,
*here are Formal and (mpersonal
relations among the mem"er of the
organi.ation,
(nterpersonal relations are "ased on
positions and not on personalities,
*here are $ell defned :ules and
:egulations, *here rules cover all the
duties and rights of the employees, *hese
rules must "e strictly follo$ed,
*here are $ell defned %ethods for all
types of $or0,
!election and 9romotion is "ased on
*echnical 7ualifcations,
+nly Bureaucratic or legal po$er is given
importance,