CHAPTER -1 BUSINESS STUDIES

NATURE AND SIGNIFICANCE OF MANAGEMENT

Management is the process of working with and through others to effectively achieve organizational
objectives by efficiently utilizing the limited resources in the light of changing environment. > Kreitner

It is thus a mean to establish an effective environment for the people working in a formal organizational
group where the things are done with and through others.

*Management is the set of functions directed towards the efficient and effective utilization of resources in
the pursuit of organizational goals.

>To manage is --- To Forecast---To plan ---To organize ---To Coordinate ---To command and ---To Control
the activities of a group working for a common objective in an organization.

EFFECTIVENESS vs. EFFICIENCY

Although both terms are related to each other, but effectiveness is a precondition for an efficient
management.
 Efficiency means “DOING THINGS RIGHT” and Effectiveness means “DOING THE RIGHT”
Thus efficiency is the ability to do things right and is an input output concept. IT ESTIMATES THE
ABILITY OF A MANGER in justifying the input (resources) with the amount of output (Results)
Hence in an organization an efficient effort would lead to maximization of output and benefits and
minimization of input (or without any wastage) resulting in achievement of objectives in accost effective
manner.
 Effectiveness in contrast involves choosing the right goals. And taking right decisions as far as
attainment of goals is concerned. A wrong decision in a situation may lead to lack of effectiveness which
would further lead to wastage of resources (inefficiency).
Even if the activities are done with utmost competence, the output produced will not be of desired
expectation due to wrong decisions at the beginning. Therefore no amount of efficiency can make up for
lack of effectiveness.* We can say that Effectiveness is the prerequisite to efficiency.

 The management is concerned not only with getting job completed effectively but also with doing so as
efficiently as possible.

FEATURES OF MANAGEMENT
1) Management is a Goal oriented Process.

Every organization (business or non-business, small or large) strive to achieve certain objectives. The
concept of management enables an organization to achieve its basic goals which is the essential reason
of its existence .Management with its certain functions (Planning, Organizing, Staffing, Directing,
Controlling) unites the efforts of different individuals, departments towards achieving these goals.
For example :an business organization decides to expand its business in coming 5 years .The managers
will plan a course of action and organize the activities to achieve these goals.
2) Management is all pervasive.

 Management is said to be an all Pervasive function i.e. it is present everywhere.

 The very existence of some goals and objectives will essentially requires the management of
resources that are to be used to achieve them.

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 Thus the force of management is virtually applied to every type of organization, WHATEVER SIZE,
OR PURPOSE (business or non-business).
>An Auto Plant, A city government, A Cricket Team, A Hospital or a School: ALL REQUIRE
management irrespective of the place of operations. (i.e. countries). What mangers do in India, USA,
Germany or Japan is the same THOUGH their application of functions may be quire different.
3) Management is a Continuous Process:

The Process of Management is a series of CONTINUOUS, COMPOSITE

(complex/combine), but SEPARATE FUNCTIONS (Planning, Organising, Staffing, Directing &
Controlling).
 These functions are inter-related and inter-dependent to each other and are simultaneously performed
by all the managers all the time i.e. continuously.
With every new project in hand a manager needs to perform all the functions as per the requirements
of the environment and project’s specifications.
 Each function forms the basis of the functions next to it and the cycle of these functions makes the
management as an ongoing process.

4) Management is a Dynamic Function.

 Management is a dynamic (ever-changing) function which needs to adapt to the changing business
environment. This makes the task of a manager more dynamic in nature.
>in order to be successful an organization must change itself and its goals according to the changing
requirements of the business environment which consist of various social economic and political factors.
>For eg: Pizza Hut ,Dominos ,all fast food chain centers are adding wheat based ingredients in their food
stuff as customers are becoming more cautious for their diets to be more healthy.

5) Management is a group Activity:

 Management is regarded as Group Activity, where a manager has to manage a group of individuals and
their activities, series of functions, and different departments.
 Thus it can be said that wherever there is group, MANAGEMENT is required to develop Team spirit
and combine all Individual efforts to deliver the common objectives through the process of coordination.
 Thus the process of Management is essentially required to coordinate the diverse individual efforts
towards the achievement of organizational objectives
 However it is equally important for a manager to consider the individual objectives of personnel also.
*Management is a group activity .but at the same time it is equally applicable to Individuals’ efforts.
.

6) Management is Multidimensional

 Management, in the contemporary environment has become a complex activity.

 It may be presumed as a multi-tasking activity that makes it Multi dimensional.
The 3 MAIN DIMENSIONS are –

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DIMENSIONS OF MANAGEMENT
Management of Work Management of People Management of Operations

All the Organizations exist to
achieve some objectives. For
achieving these objectives they
perform various tasks e.g. In a
manufacturing unit a product is
manufactured, in a restaurant a
customers need is satisfied, in a
hospital patients are treated.
>Management of these respective
units translates (convert) their
task into objectives and then
assigns all the possible and
required means to achieve them.
>THIS IS REFERRED TO AS
MANANGEMENT OF WORK.
Human Resource is considered as
the important and most required
amongst the OTHER
RESOURCES. The very notion,
Management is an ART to GET
THE THINGS DONE WITH &
THROUGH OTHERS
INDICATE THIS.
>Thus apart from managing all
other Resources it becomes very
essential to MANAGE HUMAN
RESOURCE AT ITS FIRT
PLACE. It has to dimensions:
(i) Dealing with diverse need &
behavior,
ii) Dealing with employees AS A
GROUP.
> The Task of a Manager is to
work towards the achievement of
goals through Human Resource.
Operations can be defined as the
process of converting input into
output. The production process
(Operations) results in the final
output (either goods or services)
that an organization dealing into -
--
*A manager MANAGES all the
operations i.e. from arranging the
required resources till the final
outcome in their respective fields.
>This dimension is interlinked
with both the management of
work and management of people.

>Thus Management can be seen as a Multi-dimensional Activity.

7) Management is an intangible force

 The process of management cannot be seen but just can be felt or is reflected in the way
organization is functioning.
 The difference between a managed and mismanaged activity can just be felt by noticing that the
targets are not met on time according to plans, employees are happy, quality in output, smooth
operations i.e. there is order instead of chaos.
 Thus the force of management gets the things done in its orderly ways through the managers and
non managerial employees. Management is seen in actions, it is not action in itself.

OBJECTIVES OF MANAGEMENT
 Objectives are those end points for the attainment of which all activities are undertaken. An
organization strives to attain certain predetermined objectives in many areas.
 Further in contemporary business environment, a business unit survives not only to earn profit as
its only objective, but it is essentially important on its part to contribute for social development
(by defining social objectives) and fulfill expectation of every employee from the company. (by
defining individual objectives)
Objectives of management can be broadly divided into the following three categories:
1. Organisational Objectives
2. Personal Objectives
3. Social Objectives

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ORGANISATIONAL / FORMAL OBJECTIVES
It refers to ascertain the objectives for the whole organization during managerial activities. These objectives
forms the very basis or reasons for the existence of an organization. While fixing these objectives,
management keeps into consideration benefits of all the stakeholders (like owners , employees, customers,
government, etc. ). With a view to this an organization strives to attain its following 3 economic objectives
that invariably are its formal/ Organizational objectives also:
 SURVIVAL
 PROFIT
 GROWTH
Explanation for these points from NCERT (pg9)

SOCIAL OBJECTIVES OF MANAGEMENT

Social objectives of management involve the creation of benefits and economic value for the society.
Since each business or non business unit is a part of society, the compliance of social responsibilities
through pursuing social objectives becomes inevitable.
 Following responsibilities are listed which a manger has to follow to satisfy the society’s norms:
 To contribute in improving living standards and supply the quality products at reasonable prices.
 Working towards the improvement of community by providing financial support for the development
of an area, facilities like schools, charitable health facilities, parks, etc.
 Generation of employment opportunities for all the sections of society (including the challenged and
disadvantaged sections of society)
 Helping in rehabilitation process during any crisis.(natural or man- made)
 Using environmental methods of production, packaging and other functioning of business.
 Not to get involved in malpractices like manipulation of accounts against the interest of its
stakeholders, adulteration of goods, etc.

INDIVIDUAL / PERSONAL OBJECTIVES:

It refers to consideration of the interest of employees during the managerial activities. An organization can
be viewed as a group of individuals of diverse need ----working together for the attainment of
Organizational objectives.
 Thus to secure the willingness of people to work with full spirits and high morale it become essential
for the managers to satisfy the needs of the employees working with them .
 MAIN OBJECTIVES OF MANAGEMNT IN THIS REGARD CAN BE LISTED IN THE
CATEGOARY OF FINANCIAL AND NON FINANCIAL INCENTIVES .They are:
 To give deserving and competitive remuneration packages.
 To provide good working conditions and healthy environment
 To provide a possible and fair share in profit as per the requirements and contribution of
employees.
 To provide job security
 To enable the employees to have a say in management through allowing them to participate in
decision making process by giving suggestions.
 To facilitate the skill development of employees by imparting training opportunities
 To provide career development through providing opportunities for promotions.

MANAGERIAL LEVELS AND HIERARCHY

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All the employees working in an organization can be divided into two categories:

 Managerial Members
 Non-Managerial Members

 Managers are the persons who manages some or the other persons/activity by implementing the functions
of management (planning, organizing, staffing ,directing and controlling) in order to get the work done
with and through others for the achievement of organizational objectives.
 Except Workers, all others are called as Managers irrespective of their designation.
 So workers constitutes the Non Managerial category
 These two categories can be shown in hierarchy of jobs leading to creation of Levels of Management. This
is shown in following diagram:

1. SENIOR MANAGEMENT (OR “TOP LEVEL MANAGEMENT” OR “UPPER

MANAGEMENT”)
Personnel working at this level are considered as at the crucial positions who are responsible for
leading and directing the efforts of other people working at levels subordinate to them.
 They have maximum authority. The job (designations )at this level are :
BOARD OF DIRECTORS,CHIEF EXECUTIVE OFFICERS,CHAIRMAN ,MANAGING
DIRECTOR,GENERAL MANAGER, CHIEF OPERTING OFFICER,ETC.
 This level of management is accountable to the stakeholders, specially shareholders, governmnet, etc.
 Following are the functions performed at this level:
(a) Determining the objectives of the enterprise. The top level managers formulate the main
objectives of the organisation. They form long term as well as short term objectives.
(b) Framing of plans and policies. The top level managers also frame the plans and policies to
achieve the set objectives.
(c) Organising activities to be performed by persons working at middle level. The top level
management appoints and assigns jobs to different individuals working at middle level. They also
approve the budgets prepared by different departmental heads (managers)
(d) Assembling all the resources such as finance, fixed assets etc. The top level management arranges
all the finance required to carry on day to day activities. They buy fixed assets to carry on activities in
the organisation.
(e) Responsible for welfare and survival of the organisation—Top level is responsible for the
survival and growth of the organisation. They make plan to run the organisation smoothly and
successfully.
(f) Liaison with outside world, for example, meeting Government officials etc. The top level
management remains in contact with government, competitors, suppliers, media etc. Jobs of top level
are complex and stressful demanding long hours of commitment towards organisation.
(g)Coordinating and controlling the overall activities of the business enterprise.

 They have to be very aware of external factors such as markets.

 Their decisions are generally of a long-term nature
 Their decisions are made using analytic, directive, conceptual and/or
behavioral/participative processes
 They are responsible for strategic decisions.
 They have to chalk out the plan and see that plan may be effective in the future.
 They are executive in nature.
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2. MIDDLE MANAGEMENT
The personnel working at this level are departmental heads or managers that includes production
manager, purchase managers, etc. This level lies between the top level and the lower level of
management. They are responsible for executing the plans and policies that are made by top level
management
 Their authority level is decided by the Top level management and as per the degree of
decentralization. Followings are the designations at this level:
Divisional heads; Departmental Heads; Deputy departmental Heads
 This level of management is accountable to the Top level management for the responsibility
(duties) dispersed and authority delegated.
 Main functions are:
(a) Interpretation of policies framed by top management to lower level. Middle level management
act as linking pin between top level and lower level management. They only explain the main
plans and policies framed by top level management to lower level.

(b) Organising the activities of their department for executing the plans and policies. Generally
middle level managers are the head of some department. So they organise all the resources and
activities of their department.

(c) Finding out or recruiting/selecting and appointing the required employees for their department.
The middle level management selects and appoints employees of their department.

(d) Motivating the persons to perform to their best ability. The middle level managers offer various
incentives to employees so that they get motivated and perform to their best ability.

(e) Controlling and instructing the employees, preparing their performance reports etc. The middle
level managers keep a watch on the activities of low level managers. They prepare their
performance appraisal reports.

(f) Cooperate with other departments for smooth functioning.

(g) Implementing the plans framed by top level.

 Mid-level managers have a specialized understanding of certain managerial tasks.

 They are responsible for carrying out the decisions made by top-level management.
 Certain organisations divide middle level management into 2 parts---like the upper
level middle management (departmental heads)---and lower level middle
management(deputy departmental heads)
 The job at this level is considerd to be the toughest one.

3. LOW-LEVEL MANAGEMENT, SUCH AS SUPERVISORS OR TEAM-LEADERS

Managers at this level are assigned with minimum authority and are placed at the lowest level of
management. They are in direct link with the workers .This level is also known as Supervisory
Management. The MANAGERS are also called as FIRST LINE MANAGERS.
 The authority level at this level of management is least and they have to work within the framework of
the duties assigned to them by middle level managers.
 Followings are the designations at this level:

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 Foreman and supervisors(production department), sales officers(sales dept)
Accounts officers (accounts department), office superintendent
(office/administration department).
 Main functions are:
(a) Representing the problems or grievances of workers before the middle level management. The
supervisory level managers are directly linked with subordinates so they are the right persons to
understand the problems and grievances of subordinates. They pass these problems to middle level
management.
(b) Maintaining good working conditions and developing healthy relations between superior and
subordinate. The supervisory managers provide good working conditions and create supportive
work environment which improve relations between supervisors and subordinates.
(c) Looking to safety of workers. Supervisory level managers provide safe and secure work
environment for workers.
(d) Helping the middle level management in recruiting, selecting and appointing the workers. The
supervisory level managers guide and help the middle level managers when they select and appoint
employees.
(e) Communicating with workers and welcoming of their suggestions. The supervisory level
managers encourage the workers to take initiative. They welcome their suggestions and reward
them for good suggestions.
(f) They try to maintain precise standard of quality and ensure steady flow of output. The
supervisory level managers make sure that quality standards are maintained by the workers.
(g) They are responsible for boosting the morale of the workers and developing the team spirit in
them. They motivate ‘the employees and boost their morale.
(h) Minimising the wastage of materials.

 This level of management ensures that the decisions and plans taken by the other two
are carried out.
 Lower-level managers’ decisions are generally short-term ones.

IMPORTANCE OF MANAGEMENT
Management is an integral activity to any organization. It is universally necessary in all organizations. It is
the force that holds everything together and that sets everything in motion.
---Management is the life giving element in every business. Without it, the resources of production remain
resources and shall never become production.

“Anything minus management is nothing”

It is observed that most of the failures of the business is due to poor management.
So it becomes essential to understand the relevance of management for the business scenario.

This can be highlighted as follows:

1) Management helps in achieving Group Goals

 The very essence of management is to achieve the organizational goals in short and long run.
 The process of management helps in achieving the group goals by giving the common directions to
the individual efforts.
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  Each function of management (Planning, Organising, staffing, directing and controlling) is designed
with a view to achieve the predetermined goal by ensuring effectiveness and unity in group efforts.
 THUS with process of management and coordination an organization is able to achieve its objectives
(formal, individual and social).

2) Management helps in achieving personal objectives.

 The process of management assists the managers to help their team members to achieve
individual/personal objectives.
 Since there are many individuals with diverse needs working in an organization, the role of a manager
thus lies in enabling them to achieve the objectives of his team members by providing them incentives,
motivating them under the process of directing. Through motivation and leadership, the management
helps the individuals to develop team spirit, cooperation and commitment to group success.
 HENCE management through its proper means ensures the satisfaction of individual objectives while
mainly working for the achievement of Organizational Objectives.

3) Management helps in the development of Society

 Proper management of resources ensures judicious and maximization utilization of limited resources.
 Further management by pursuing its social objectives ensures
 the provision of good quality products at the reasonable prices to satisfy the customers
 Good compensation to satisfy their employees
 Use of Environment friendly ways
 To create the employment opportunities for the underprivileged section of society.
 To adopt new adopt new technology for the greater good of the society.
 Thus the overall effect of properly managed organization results in growth and development of
society and nation as well (from economic as well as from society’s point of view)

4) Management increases efficiency

 Efficiency means using resources at the competitive cost. Management of resources facilitates
maximum utilization of resources with minimum wastage. The aim of the managers is to reduce the
cost and increase the productivity through better planning, organizing, staffing, directing and
controlling the activities of the organization.
 THIS also reduces wastage and overlapping of tasks hence leading to efficiency in operations at a
competitive cost.

5) Management creates a Dynamic Environment

 It is the most required feature on the part of management to create a dynamic environment in the
organization.
 This is due to the fact that all the organizations (business/non business) have to function in an
environment which is ever-changing. The organization needs to adapt change as and when required
otherwise it can lag behind.
 The job of the manager is to facilitate change .It is generally seen that an individual in an
organization resist change. ----A manager through proper motivational techniques helps his team
members welcoming and adapting change so as to maintain competitive edge for the organisations.

NATURE OF MANAGEMNET :some important issues

 Management has different principles which are derived on certain basis .These basis leads to the need
of understanding the nature of management. In the light of this need ,different authors have regarded
MANAGEMENT AS: AN ART, PROFESSION AND SCIENCE.
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
 The principles of management are evaluated against the principles of respective concept.
 And then a conclusion is drawn to comment the nature of management in that capacity.
 On a general note,
 Management is getting more close to being science as the managers are becoming more
logical in their approach.
 It is regarded as a Perfect/Fine Art
 And it is moving towards being called as profession as a trend.

 MANGEMENT AS SCIENCE
 Science can be defined as a systematic and organized body of knowledge based on
logically observed findings, facts and findings.
It is comprised of exact principles which can be verified and it can establish cause and effect
relationship
 To be called as science , A SUBJECT MUST QUALIFY FOLLOWING
CHARACTERISTICS(features of Science)
i. Systematic body of Knowledge: Science is a systematic body of knowledge. Its
principles are based on a cause and effect relationship.
ii. Principles are based on experimentation: The scientific principles are derived after
repeated experiments under different conditions and places. They are based on the
logical and scientific observations which do not have any subjectivity
iii. Universal application of the principles with no deviation in results irrespective of
place, situation, etc.
iv. There is cause and effect relationship in scientific principles.

 A close analysis of the above features in respect to management reveals that although
Management qualifies for the following principles
i) It also has systematic body of knowledge which is supported by organized study material. It has
its own theories and principles which have been developed over a period of time. All the
management related courses are based on specialized studies like human resource management,
finance management, etc.
ii) The results or the principles of management studies are also based on repeated
experiments and observations by the managers under different conditions in different
organizations. All the decisions made by managers are ought to be logically inclined.
However, the implications of the decisions taken may bring discretion of the managers
involved.
iii) We can very well establish the cause and effect relationship in the application of
managerial principles.

 The above features verify the management as to be a science concept but due to
involvement of human element management principles are practiced with great
amount of subjectivity. And even though it has universal application ,the results tends to
give variations based on different situations, time and organization
 Since the principles of management are not as exact as the principles of science, the
application and use is not universal they have to be modified according to the given
situation. Thus Management cannot be considered as a perfect science but it is very well
known as A social science or soft science or behavioral science.

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 MANAGEMNT AS AN ART
 Art can be defined as a skill to put in action a systematic body of knowledge for the
achievement of the given task.
Therefore it can be asserted that art consist in doing a job efficiently and achieving an objective effectively
by using:
----Practical knowledge (know –how)
----Personal skills
 To be called as an art ,A SUBJECT MUST POSSES THE FOLLOWING FEATURES:
i) Personal skills
ii) Situational
iii) Personal judgment
iv) Development through constant practice
v) Practical knowledge
 Let us see that whether the management’s features satisfy the features of
Art or not:
i) Like in Art ,the management practices also involve theories based on studies,
observation ,experience. all this supported by proper study material presenting all
the fields like marketing finance ,etc. THERE IS EXISTENCE OF
THEORITICAL KNOWLEDGE IN MAANGEMENT PACTICES ALSO.
ii) An artist needs to be situational and creative in his application. Similarly a
manager applies his scientific knowledge to solve the problems related to a
particular situation as per the requirement and in his personalized unique
manner.
The success of a manger depends upon how well he handles the situation using his experience, creativity,
imagination and innovation.
Further a manger attains his growth level through continuous practice in long run which is again very similar
to the growth process of an artist.
iii) An artist uses his personalized and skillful approach to present his ideas.
Similarly a manager needs to apply his acquired knowledge depending upon
different situations in a personalized manner. This leads to different styles of
management.
 All the management practices are based on same set of principles, as compare to the features of
Art. Alike in the field of art , wht distinguishes a successful manger from a less successful
manager is the ability to put the principles into practice.
 Thus considering the above discussion, we can conclude that management fulfills all the
features of An art subject exactly. Therefore we ca say that management can be regarded as a
subject of Art completely or it can be termed as Fine or Exact Art.
Management as a blend of ART and SCIENCE
It is said that Management is oldest of Art and Youngest of Science.
It is said that "management is the oldest of arts and the youngest of sciences". This explains the
changing nature of management but does not exactly answer what management is? To have an
exact answer to the question it is necessary to know the meanings of the terms "Science" and "Art".
What is "SCIENCE" and ‘’ ART?
 Science can be defined as a systematic and organized body of knowledge based on logically
observed findings , facts and findings. It comprised of exact principles which can be verified and it
can establish cause and effect relationship
 Art' refers to "the way of doing specific things; it indicates how an objective is to be achieved."
Management like any other operational activity has to be an art. Most of the managerial acts have to be
cultivated as arts of attaining mastery to secure action and results.

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 Management is both a Science as well as an Art
Management is both a science as well as an art. The science of management provides certain general principles
which can guide the managers in their professional effort. The art of management consists in tackling every
situation in an effective manner. As a matter of fact, neither science should be over-emphasised nor art should
be discounted; the science and the art of management go together and are both mutually interdependent and
complimentary.
Management is thus a science as well as an art. It can be said that-"the art of management is as old as human
history, but the science of management is an event of the recent past."

 MANAGEMENT AS PROFESSION
Profession can be defined as an occupation which has a well defined body of knowledge, is learned
intellectually and organizationally. In a profession, examination or education restricts entry. It is
primarily concerned with services to others.
 To be called as a profession any occupation needs to satisfy the following traits:
i) Well defined body of knowledge.
ii) Restricted entry through examination
iii) Professional association.
iv) Existence of ethical code of conduct
v) Existence of service motive
 BY COMAPRING THE ABOVE FEATURES with the field of management we can analyse that
whether management can be regarded as a professional occupation or not :

i) WELL DEFINED BODY OF KNOWLEDGE:

All professions are based on a well-defined body of knowledge that can be acquired through instruction.
Similarly, all over the world management is being taught in the universities and management institutes.
There are abundance of management theories and study material available that makes management also a
body of knowledge like any other profession.

ii) RESTRICTED ENTRY:

The entry to a profession is restricted through an examination or through acquiring an educational degree.
For example, to become a chartered accountant in India a candidate has to clear a specified examination
conducted by the Institute of Chartered Accountants of India
In the same way, there are many formal training institutions like IIMs which are programs. These institutes
restrict the entry for the admissions through examinations. Therefore entrance in management studies is also
restricted to certain examinations. However, even in today’s time organisations may prefer experience than
qualification. Thus this feature is not fully present in the case of management.

iii) PROFESSIONAL ASSOCAITION

All professions are affiliated to a professional association which regulates entry, grants certificate of practice
and formulates and enforces a code of conduct. To be able to practice in India lawyers have to become
members of the Bar Council which regulates and controls their activities.
Although there are number of associations working at national and international levels like All India
Management associations (AIMA). But legally it is not compulsory for the managers to be the part these
associations. Therefore this feature of profession is not fully satisfied by management.

iv) EXISTENCE OF ETHICAL CODE OF CONDUCT

All professions are bound by a code of conduct which guides the behaviour of its members. All doctors, for
example, take the oath of ethical practice at the time they enter the profession.

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 In the same manner the mangers are also expected to follow certain code of conducts listed by their
respective associations, but they are not legally bounded to follow them.
Therefore this feature of profession is also not fully present in the field of management.

v) EXISTENCE OF SERVICE MOTIVE

The basic motive of a profession is to serve their client’s interests by rendering dedicated and
committed service. Like, the task of a lawyer is to ensure that his client gets justice.
As in today’s world the concept of social responsibility expects from manager to work for service
motive, a sound management is in a way also contributes towards the development of society but its
desired means.
But the managers’ main motive is still to earn profits for its owners due to which the service motive is
considered as just an subsidiary motive.
After comparing all the features we can say that although management is not fully satisfying the
features of profession; but a close analysis will reveal that it is certainly moving towards being a
profession.”MANGEMNT IS EMERGING AS A PROFESSION -AS A TREND”

COORDINATION
Definition and concept: Coordination is the force that binds all the other functions of management. It is the
common thread that runs through all activities such as purchase, production, sales, and finance to ensure
continuity in the working of the organisation.
Nature of coordination

1) Coordination integrates the Group efforts

 Coordination is applied to the group efforts and not to an individual. If only an individual is working
then the question of coordination does not arise.
 Coordination helps to integrate the efforts of all individuals who may have their personal goals in mind
while working. Their efforts are directed towards the common goals of the organization.

2) Coordination ensures Unity of Action

 The managers working at different levels ensure that the efforts of individuals are focused towards
achieving the organisational goals.
 It is the force that bids to synchronize the working of individuals and departments and eliminates
the overlapping of activities.

*UNRELATED AND DIVERSE ACTIVITIES

3) Coordination is a Continuous Process

 Coordination is not one time process
 It begins at planning function and continues till controlling
 Results of particular period helps in better subsequent planning and activities related to one department
are consistently coordinated with the activities of other departments.
 Thus, it is regarded as an ongoing/ continuous process.

4) Coordination is an all Pervasive function.

 Coordination is required throughout the organisation at different levels, among different divisions,
different departments, different groups and individuals.
 There may be some common and related activities amongst different divisions, departments, and levels
that affect the working of other.

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  So to eliminate the overlapping, confusions and conflicts and avoid wastage of resources coordination
is required.

5) Coordination is the function of all the managers

 Maintaining coordination is required at all levels. Top level coordinates with middle level to ensure that
all policies are implemented.
 Middle level coordinates with lower level as well as top level and operational level coordinates the
activities with the middle level and actual workforce to avoid overlapping and wastage of resources.
 Thus coordination is not the responsibility of any single level or manager; it’s the function to be
performed by all the managers.

6) Coordination is a Deliberate Function

 Every manager has to coordinate the efforts of different people working in the organization. It is to be
ensured even if all people cooperate with each other.
 Coordination MAKES SUCH COOPERATION FRUITFUL and gives proper direction for the
achievement of goals of the organization.

IMPORTANCE OF COORDINATION
1) Unity of action
Coordination brings unity of action among interdependent activities and departments of an organization
.This helps in achievement of organizational goals irrespective of the fact that all activities are performed
individually.
2. Avoids conflicts among departments.
Coordination helps in avoiding conflict amongst all department that are working with individual objectives.
Thus binding the activities of different department together helps the organization to realize the group goals
by avoiding the conflicts in individual objectives.
3. Harmonious implementation of plans.
Coordination helps in harmonious implementation of plans for the achievement of objectives by securing
cooperation in efforts. Cooperation amongst employees leads to willingness to coordinate and thus the plans
are achieved well in time.
4. Brings efficiency and economy
Coordination brings efficiency and economy by keeping together the team and by ensuring suitable
allocation of tasks to the various members and seeing that the tasks are performed with harmony among the
members themselves .The harmony and cooperation avoids the overlapping of activities thereby resulting in
efficiency leading to economy of operations.
5. High morale of employees
Coordination high morale of employees by providing a systematic work environment without chaos .The
smooth operations and achievement of results at the specified time motivates the employees at work. Further
assignment of right jobs and clear work relationships boost up the morale of employees at the work.

Need of Coordination or why coordination is required :-

i) Specialty of the personnel.
ii) functional differentiation
iii) growth in size
(i) Growth in size: As organisations grow in size, the number of people employed by the organisation also
increases. At times, it may become difficult to integrate their efforts and activities. As employees may have
their own individual goals also. Therefore, for organisational efficiency, it is important to harmonise
individual goals and organisational goals through coordination.

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 (ii) Functional differentiation: Functions of an organisation are divided into departments, divisions and
sections. In an organisation there may be separate departments of finance, production, marketing or human
resources. All these departments may have their own objectives, policies and their own style of working.

However, all departments and individuals are interdependent and they have to depend on each other for
information to perform their activities. The activity of each department needs to be focused on attainment of
common organisational goals. The process of linking the activities of various departments is accomplished
by coordination.

(iii) Specialisation: Specialisation arises out of the complexities of modern technology and the diversity of
tasks to be performed. Specialists usually think that they only are qualified to evaluate, judge and decide
according to their professional criteria. They do not take advice or suggestions from others in matters
pertaining to their area of specialisation. This often leads to conflict amongst different specialists as well as
others in the organisation. Therefore, some coordination is required by an independent person to reconcile
the differences in approach, interest or opinion of the specialists.

Why coordination is considered as the essence of management!

Coordination can be defined as “Synchronization of efforts from the stand-point of time and the sequence of
execution”. In general coordination means bringing together the activities and resources of organisation and
bringing harmony in them.
Coordination is the base or primary function of every manager because various departments of an
organisation are working independently and there is need to relate and integrate their activities.
Coordination: The Essence of Management:
Coordination brings unity of action and integrates different activities of organisation. Coordination is
considered as the essence of management because of following reasons
1. Coordination is needed to perform all the functions of management:
(i) In planning coordination is required between main plan and supportive plans of different departments.
(ii) In organising coordination is required between different resources of an organization and also between
authority responsibility and accountability.
(iii) In staffing coordination is required between skill of a person and job assigned to him, between
efficiency and compensation etc.
(iv) In directing function coordination is required between superior and subordinates, between orders,
instructions, guidelines and suggestions etc.
(v) In controlling function coordination is required between standards and actual performance.

2. Coordination is required at all the levels:

(i) Top level requires coordination to integrate all the activities of organisation and lead the efforts of all the
individuals in one common direction.
(ii) Coordination is required at middle level to balance the activities of different departments so that these
can work as a part of one organisation only.
(iii) Lower level requires coordination to integrate the activities of workers towards achievement of
organisational objectives.

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3. Coordination is the most important function of an organization:
Any company which fails to coordinate its activities cannot survive and run successfully for a long period of
time.
For example, Allwyn Company, established in 1942, was the first company to produce a double-decker bus.
It was running successfully as a leading electronic industry, especially in refrigeration industry. By the end
of 1980 the company faced the problem of coordination. There was lack of balance and integration of
different activities; as a result the company started facing huge losses and by 1993 company had an
accumulated loss of Rs. 168 crore. Company failed to balance its departmental activities and product folios.
So in short we can say without coordination no company can work efficiently and earn profit.

Management is an Art

Management is Group Activity

Coordination

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