MANAGEMENT

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According to H Koontz –
“ Management is the art of
getting things done through others in formally
organized groups.”

Thus management is the process of Planning,

Organizing, Staffing, Directing and Controlling to
accomplish organizational objectives.

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In other words, Management is the attainment of
organizational goals in an effective and efficient
manner through planning, organizing, staffing,
directing and controlling organizational resources*.

* Organizational resources include men(human

beings), machines, materials & money.

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 Features/ Nature of Management

1. It is a systematic process of doing things with the help

of planning, organising, staffing, directing &
controlling.
2. It is applied to all types of org.
3. It is applied to managers at all the levels.
4. It is an organized activity.
5. It aims at the accomplishment of predetermined
objectives.
6. It is both science & art.
7. Its principles are universal in nature.
8. It integrates human and other resources.

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Importance/ Significance of Management

1. It plays important role in economic growth of the

country.
2. The competent managers can coordinate & combine
the resources of the country & turn them into
productive units.
3. It helps to coordinate the current organizational
activities & also plan for the future.
4. With proper mgmt & leadership, conflicts can be
avoided which acts as hindrance in the success of
the org.
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5. It helps in achievement of organizational goals.
6. If the mgmt. of the org. is good, it can provide
competitive edge over its rivals/ competitors.
7. It leads to optimum utilization of resources.
8. It encourages innovation.
9. Improves life of employees through better working
environment, monetary, non-monetary rewards etc.
10. It improves efficiency by controlling wastage.
11. Improves relations among individuals resulting in
team work which leads to success of org.
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 Functions of Management
1. Planning
2. Organising
3. Staffing
4. Directing
5. Controlling
6. Leadership
7. Motivation
8. Communication
9. Supervision
10. Coordination
11. Decision-making
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 Levels of Management

1. Top level Mgmt.

2. Middle level Mgmt.
3. Lower / First-line Mgmt.

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 Managerial Skills

These are the essential skills which helps manager to

perform their roles & functions in better way.
They are –
1. Conceptual skills & Design skills
2. Human Relations skills
3. Technical skills.

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Managerial Skills

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 Managerial Skills

1. Conceptual skills & Design skills – it is mostly

required by the top-level management because they
spend more time in planning, organizing & problem
solving. It helps them to identify the causes of the
problems & solve them for the benefit of the entire
organization.
2. Human Relations skills / Interpersonal skills – it
is required by managers at all levels of mgmt as they
have to interact & work with people. It helps
managers to motivate employees & develop team
spirit among them.

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3. Technical skills – it is required more at lower-level
because employees at lower level are in-charge of the
actual operations.
Eg- supervisors must have knowledge & ability to teach
mechanics regarding the usage of tools.

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Roles of Manager
(As per Mintzberg)

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Mintzberg's Set of Ten Roles

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 Challenges of an Indian manager

1. Globalization - cope with changes, R&D.

2. Corporate restructuring - merger, acquisition of core
business
3. Changing job profile – Machines replaced men.
Effective recruitment & selection.
4. Emphasis on knowledge management – Employees
are a great source of rich knowledge. Treating them
as assets and managing the in house talent is a
challenge for todays manager.
5. Increasing role of women employees.
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 Management – Science / Art ?
Management as Science

Characteristics of Science –
1. Universally acceptable principles
2. Experimentation & Observation
3. Cause & Effect relationship
4. Test for Validity & Predictability

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 Management as Science (Inexact
Science)
1. Management involves getting things done through
other people. Since the behavior of people cannot be
predicted accurately thus standard solutions cannot
be given as in case of Exact Science.
2. Management is more concerned with future which is
unpredictable & complex.
4. Every org. is influenced by surrounding
environment (eg- technological, economic, socio-
cultural and political factors.) Thus the process
becomes so complex that though the plans are
effective but still it can be taken over by the
unexpected changes in the environment. 20
 Management as Art

Characteristics of Art -
1. Practical knowledge
2. Personal skill
3. Creativity
4. Perfection through practice

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 Management as Art
Art is concerned with how the work can be done. Thus
because of its application, mgmt. is also considered as
an art because only theoretical knowledge of mgmt
theories & principles cannot lead to accomplishment
of work. The mangers must know how to apply these
principles in order to solve the problems.
E.g.- Executives who attempt to manage without the
conceptual understanding of the management
principles and techniques have to depend on luck
and intuition. With a sound knowledge and the
necessary skills to use such knowledge, they stand a
better chance to succeed.
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 Management as Profession

According to McFarland, profession must include

following characteristics –
1. Existence of an organized & systematic body of
knowledge.
2. Formal methods of acquiring training.
3. Existence of an ethical code to regulate the behavior
of the members of the profession.
4. Charging fees for the service rendered but also focus
on social responsibilities.

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 Qualities / Characteristics of a Manager
1. Analytical approach
2. Communication skill
3. Committed to org.
4. Be aware of global trends in org. & market.
5. Fulfil social responsibilities.
6. Technical knowledge
7. Interpersonal relations.
8. Optimist
9. Confident
10. Foresight
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Evolution of Management
Thought
 Scientific Management- Frederick
Winslow Taylor (1856-1915)
He made the study under following elements –
1. Time & Motion study
2. Differential payment
3. Division of work & responsibility
4. Scientific recruitment & training
5. Co-operation between mgmt. & workers
1. Time & Motion study – Under this, the time taken
for each motion of the job was recorded with stop-
watch. And thus the objective was to develop shorter
& less motions for each job.
2. Differential payment – In this, Taylor fixed
standard for production / piece. If the workers
produced as per the standard, they received the
payment fixed / piece & if they produced above
standard, they got high piece rate. Thus this motivate
workers to increase production & earn incentives.
3. Division of work & responsibility – Work should be
assigned to individuals according to their speciality &
they must be held responsible for the work they
perform.
4. Scientific recruitment & training – Employees
should be scientifically selected & trained so that
their efficiency can be increased & they do profitable
work.
5. Co-operation between mgmt. & workers – So as to
avoid conflicts & focus on cooperation, mutual
confidence, sense of goodwill among both managers
& workers.
 Administrative Management - Henry
Fayol (1841–1925)
He gave 14 principles of management –

1. Division of labour
2. Authority & Responsibility
3. Discipline
4. Unity of command
5. Unity of direction
6. Subordination of individual interests to general
interest
7. Remuneration of personnel
8. Centralization
9. Scalar chain
10. Order
11. Equity
12. Stability of tenure
13. Initiative
14. Esprit de corps (union of strength).

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1. Division of work: According to this principle, each
job and work should be divided into small task and
should be assigned to specialist of it .This will help
individuals in acquiring speed & accuracy in their
performance.
2. Authority and Responsibility: They are co-existing.
If authority is given to a person, he should also be made
responsible. In the same way, if anyone is made
responsible for any job, he should also have
concerned authority.
3. Discipline: Discipline should be maintained by
having good superiors at all levels, clear and fair
agreement and fair application of penalties.
4. Unity of command: According to this principle,
employee should receive orders from one superior
only.
5. Unity of direction: Under this, each group of
activities having the same objective must have one
head and one plan.

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6. Subordination of individual interest to general
interest: In any group the interest of the group should
be given priority rather than the individual interest.
When there is a clash between individual & group
interest, it should be resolved as working cannot be
conducted smoothly with clashes.
7. Remuneration of personnel/ employees: Salary and
methods of payment should be fair and give highest
satisfaction to worker and boss.
8. Centralization: It refers to the extent to which
authority is concentrated or dispersed in an enterprise.
Circumstances will determine the degree of
centralization or decentralization.
9. Order: This principle is based on arrangement of
things and persons. According to him there should be
“a place for everything (everyone), and everything
(everyone) should be in its (his) place”.

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10. Scalar chain: This is a line of authority, from the highest to
the lowest ranks. It refers to the chain of superiors ranging
from top management to the lowest rank linking all managers
at all levels.
Every orders, instructions, messages, requests, explanation etc.
has to pass through Scalar chain. But in case of urgency, this
path can be cut short cut, which is known as Gang Plank.

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11. Equity: It implies that managers should be fair while
dealing with the subordinates. They should create and
maintain cordial relations between the managers and sub-
ordinate. They should give similar treatment to people of
similar position. They should not discriminate on the
basis of age, caste, sex, religion, relation etc.
12. Stability of tenure of personnel: According to this
principle, employees should not be frequently moved
from one position to another. Stability of job creates team
spirit and a sense of belongingness among workers which
ultimately increases the quality as well as quantity of
work.
13. Initiative: According to this principle, workers
should be encouraged to take initiative in the work
assigned to them. Management should provide
opportunity to its employees to suggest ideas,
experiences & new method of work. This will
encourage employees to work with zeal and energy.
14. Esprit de corps: It refers to team spirit i.e. there
should be harmony and mutual understanding among
the members. With proper co-ordination of work at
all levels, team work can be achieved.
Business Environment

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 Business Environment

Business is an entity that is involved in the provision of

goods & services to the consumers.
Whereas Business environment
refers to all the factors that affect business decisions,
performance & org.
Arthur M Weimer - “BE encompasses the climate or set
of conditions in which business operations are
conducted.”
The change in BE can both be
positive or negative for the org., so it is very important
to monitor the environment specially external
environment as it is uncontrollable.

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 Characteristics/ Features of BE
1. Complex: Environment consists of a number of factors,
events, conditions arising from different sources which
influences business thus making it complex.
2. Interdependence : Factors affecting business environment
like social, economic, legal, cultural etc are inter dependent.
E.g. A rich country can make sufficient expenditure on the
research and development.
3. Dynamic: It is dynamic as it keeps on changing in terms of
tech., changes in consumer preferences, entry of new
competitors etc.
4. Uncertainty: Thus it is difficult to predict future happenings.
5. Forecasting is not possible everywhere. Eg.- fluctuation in
interest rate , rate of inflation etc are difficult to predict on
long term basis. 40
 Objectives of BE

1. Knowledge of Information: Every businessman

should be aware about the current environment of
the business to change accordingly.
2. Basis of Decision: It contains all the information
which is needed for taking good decision. e.g. If a
business knows about its competitors, suppliers and
customers they take decision about price, purchase,
salary etc.
3. Helpful in making policies: For making good
business policies one needs to know and scan
business through business environment. 41
4. Technological Planning: In today's environment it is
really important for the business houses to keep
themselves changing according to the technological
changes in the market.
5. Survive in the business: Sometimes industry may
face recession. In such condition only those business
will survive who estimate this entire situation in
advance through business environment study.

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 Importance of BE

1. Identifying Firm’s Strength and Weakness: BE

helps to identify the firm’s strength & weakness in
view of the technological and global developments.
2. Determining Opportunities and Threats: The
interaction between the business and its environment
would identify opportunities & threats, which
will help the business enterprises for meeting the
challenges successfully.
3. Giving Direction for Growth: The interaction with
the environment enables the business to identify
the areas for growth and expansion of their activities.43
4. Continuous Learning: The managers are motivated
to continuously update their knowledge,
understanding and skills to meet with business
challenges.
5. Image Building: Environmental understanding
helps the business in improving their image by
showing their sensitivity to the environment within
which they are working.
6. Meeting Competition: It helps the firms to analyse
competitor’s strategies and formulate their own
strategies accordingly. 44
 Types of BE
Business Environment

Internal External
Environment Environment
Micro Macro
Environment Environmnet
1. Economic
1. Man 1. Suppliers 2. Non-Economic –
2. Material 2. Customers a. Political
3. Money 3. Market b. Socio-Cultural
4. Machinery Intermediaries c. Technological
5. Management 4. Competitors d. Natural
5. Public e. Demographic
f. International

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 Types of BE

1. Internal Environment
2. External Environment

1. Internal Environment: It includes 5 Ms, usually within the

control of business. Business can make changes in these factors
according to the change in the functioning of enterprise.
They are –
1. Man
2. Material
3. Money
4. Machinery
5. Management

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2. External Environment: Those factors which are
beyond the control of business enterprise are included
in external environment. eg.- Government and Legal
factors, Geo-Physical Factors, Political Factors,
Socio-Cultural Factors, Demo-Graphical factors etc.

It is of two Types:
a. Micro Environment
b. Macro Environment

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 a. Micro Environment

a) Micro Environment: The environment which is close to

business and affects its capacity to work is known as Micro
or Operating Environment.
It consists of -
(1) Suppliers: – They are the persons who supply raw material
and required components to the company. They must be
reliable and business must have multiple suppliers i.e. they
should not depend upon only one supplier.
(2) Competitors: - Every move of the competitors affects the
business. Business has to adjust itself according to the
strategies of the Competitors.

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(3) Customers: - Customers are regarded as the king of
the market. Success of every business depends upon
the level of their customer’s satisfaction.
Types of Customers:
(i) Wholesalers
(ii) Retailers
(iii) Industries
(iv) Government and Other Institutions
(v) Foreigners

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(4) Market Intermediaries: - They work as a link
between business and final consumers. Types:-
(i) Middleman
(ii) Marketing Agencies
(iii) Financial Intermediaries
(iv) Physical Intermediaries
(5) Public: - Any group who has actual interest in
business enterprise is termed as public e.g. media and
local public. They may be the users or non-users of
the product.
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 b) Macro Environment
b) Macro Environment: – It includes factors that create
opportunities and threats to business units. Following are the
elements of Macro Environment:
(1) Economic Environment: - It consists of economic forces
that affect business activities.
Eg.- Industrial production, agriculture, infrastructure, national
income, per capita income, money supply, price level,
monetary and fiscal policies, population, business cycles,
economic policies, infrastructural facilities, financial
facilities etc.
It includes Decisions regarding allocation of resources which
respect to what to produce, how to produce and for whom to
produce; nature of technology and the techniques of
production, timing of production etc. 51
(2) Non-Economic Environment: -
It includes-
i) Political Environment: - It affects different business
units extensively. Components:
(a) Political Belief of Government
(b) Relation with other countries
(c) Defense and Military Policies
(d) Centre State Relationship in the Country
(e) Thinking of Opposition Parties towards Business
Unit
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(ii) Socio-Cultural Environment: - Influence exercised by
social and cultural factors is known as Socio-Cultural
Environment.
These factors include:
(a) Attitude of people to work
(b) Family system
(c) Caste system
(d) Religion
(e) Education,
(f) Marriage etc.
(g) Lifestyle of the society
(h) Level of resistance/acceptance to change

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(iii) Technological Environment: - A systematic application of
scientific knowledge to practical task is known as technology.
Everyday there has been vast changes in products, services,
lifestyles and living conditions. These changes must be
analysed by every business unit and they should adapt these
changes if essential.
These factors include:
(a) Level of technological development of the country
(b) Pace of technological changes and obsolescence
(c) Sources of acquiring technology
(d) Restrictions on acquisition/transfer/absorption of technology
(e) Cost factors involved 54
(iv) Natural Environment: - It includes. Every
business unit must look for these factors before
choosing the location for their business.
These factors include:
(a) Natural resources
(b) Weather,
(c) Climatic conditions
(d)Port facilities,
(e) Topographical factors such as soil, sea, rivers,
rainfall etc
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(v) Demographic Environment :- It is a study of perspective of
population. Every business unit must see these features of
population and recognise their various needs and produce
accordingly.
These factors include:
(a) Population size
(b) Standard of living
(c) Growth rate
(d) Age-sex composition
(e) Family size
(f) Income level (upper level, middle level and lower level)
(g) Education level etc.

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(vi) International Environment: - It is particularly
important for industries that directly depends on
import or exports.
The factors that affect the business are:
(a) Globalisation
(b) Liberalisation
(c) Foreign business policies
(d) Cultural exchange.

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