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ABFM MODULE - A INTRODUCTION:

Chapter 1: Basics of Management (PART-I) Management is necessary for making our life or any task or
venture we undertake successful, including any industrial,
What we will study? business or service activity.
*What is Management? All of us are aware that the modern-day Banking has become
*What is Management Process? a significant component of the Indian Financial System
because of the increasingly important role played by banks in
the economic development of the country.
In fact, the role of the entire financial sector for optimum
allocation and utilisation of financial resources has been
continuously growing.
It is therefore, very important for bankers to understand the
process of management and the functions performed by
managers along with their importance.
This understanding shall help the bankers face the short-term,
as well as the long-term, challenges being faced by them and
shall also help the banking system become stronger and more
and more resilient, which is highly important for growth with
financial stability and for protecting the interests of the
investors and customers.

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DEFINITION OF MANAGEMENT: His contemporary, Frederick Winslow Taylor, introduced
methods to improve the industrial efficiency.
The term ‘Management’ could be defined in a variety of ways.
Taylor’s book ‘The Principles of Scientific Management’,
It could be referring to the persons running an organisation
published in the year 1911, was voted as the most influential
collectively, who are responsible for decision making.
management book of the twentieth century.
The Cambridge Dictionary refers to Management as ‘the
Scientific management, also known as ‘Taylorism’, is a
activity or job of being incharge of a company, organization,
management theory which was used for analysing and
department, or team of employees.
synthesizing workflows with the main objective of
We could even say that the three components of management improvement of economic efficiency and labour productivity.
refer to their organising skills, their skills as an entrepreneur
Several parts of the theory, relating to industrial engineering
and getting the best out of their team members.
and management, are still relevant.
The skills for organising would obviously include the
To quote Henri Fayol,
traditional skills, principles and the techniques of
management which have evolved over a period of time and “To manage is to forecast and plan, to organize, to command,
are continuously evolving. to coordinate and to control.
Henri Fayol, widely acknowledged as the founder of modern To foresee and plan means examining the future and drawing
management methods, was an early management writer who up the plan of action.
was instrumental in contributing immensely to ‘formal
To organize means building up the dual structure, material
organisation theory’.
and human, of the undertaking.
The theory propounded by Henri Fayol included the six types
To command means binding together, unifying and
of organisational activities, which also included management.
harmonizing all activity and effort.
It also explained the various functions and principles of
To control means seeing that everything occurs in conformity
management.
with established rule and expressed demand”.
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Peter Drucker, the famous Management Guru, in his book And this process is a continuous process as developments on
"Management: tasks, responsibilities, practices" has written various fronts, viz. economic, social, political, regulatory etc.
that "Frederick W. Taylor' was the first man in recorded are taking place all the time.
history who deemed work deserving of systematic
You solve a problem and a new problem crops up.
observation and study.
A manager is supposed to deal with multiple problems at the
Management is not common sense alone but a discipline, a
same time, each of which could be at a different resolution
culture and an art and science at the same time.
stage.
It represents people, and their achievements or failures
The complexity of management has laid down the foundation
denote the effectiveness of management or mismanagement
of breaking down each activity into various parts or sub-
of the organisation’s affairs.
activities so that we can understand the complete significance
of each activity.
THE MANAGEMENT PROCESS: This is the reason for division of management tasks into
different elements: planning, organizing, staffing, directing
Productivity is very important in any business organisation,
and controlling.
and there is a continuous demand on the people at the helm
of affairs to increase productivity for increasing profits to Although all these elements are inter-connected, each of
meet the expectations of the stakeholders and the society. these can be analysed as a sub-process and each element
contributes to the success of an organisation, irrespective of
The process of management involves multiple actions
its size-big or small; type of ownership-public or private;
performed in a series to achieve the objectives of the business
constitution-sole proprietor, partnership, company; or type of
enterprise.
organisation-industrial, business, service, non-profit.
The process of management can be classified as a social
process as it involves relationships and co-operation between
people and their team effort.