Fundamentals of Management

Introduction
 Concept of Management
• Management is a universal phenomenon. Every
individual or entity requires setting objectives,
making plans, handling people, coordinating and
controlling activities, achieving goals and evaluating
performance directed towards organizational goals.
These activities relate to the utilization of variables or
resources from the environment − human, monetary,
physical, and informational.
• Human resources refer to managerial talent, labor
(managerial talent, labor, and services provided by them),
monetary resources (the monetary investment the
organization uses to finance its current and long-term
operations), physical resources (raw materials, physical and
production facilities and equipment) and information
resources (data and other kinds of information).

• Management is essentially the bringing together these

resources within an organization towards reaching
objectives of an organization.
 Definition
• Management is the process of planning,
organizing, leading, and controlling an
organization’s human, financial, physical, and
information resources to achieve
organizational goals in an efficient and
effective manner.
 What Is Management?
•The process of getting things done effectively and
efficiently, with and through people.

•Effectiveness: Doing the right things

•Efficiency: Doing things right
 Elements of definition
• Process - represents ongoing functions or primary activities engaged-in by
managers

• Efficiency - getting the more output from the less

inputs
– “doing things right/ correctly”
– Achieving the objectives in time
– Relationship between inputs and outputs
– seeks to minimize resource costs

• Effectiveness - completing activities so that organizational goals are attained

– “doing the right things”
– concerned with ends
– goal attainment
• Management is an art of getting things done with and through
others. Management can be defined as, the process of getting
things done with the aim of achieving organizational goals
effectively and efficiently.
• Efficiency and Effectiveness
• Efficiency (completing the work at low cost) means doing the
task correctly at minimum cost through optimum utilization of
resources while effectiveness (Completing the work on time) is
concerned with end result means completing the task correctly
within stipulated time. Although efficiency and effectiveness are
different yet they are inter related. It is important for
management to maintain a balance between the two.
 Who Are Managers?
Where Do They Work?
• Organization
– A systematic arrangement of people brought
together to accomplish some specific purpose;
applies to all organizations—for-profit as well as
not-for-profit organizations.
• Common characteristics
– Goals
– Structure
– People
1-8
Common Characteristics of Organizations
 Organizational Hierarchy

• Hierarchy is a way to structure an organization using

different levels of authority and a vertical link, or
chain of command, between superior and
subordinate levels of the organization. Higher levels
control lower levels of the hierarchy. You can think of
an organizational hierarchy as a pyramid. The highest
level of authority is at the top of the pyramid, and
orders flow from this top level down to the next level
where it continues to move on down until it reaches
the level where the order is supposed to be carried
out.
• Information and directions flow vertically in a
hierarchical structure. Information flows up through
each level until it reaches the top. After all the
information has been received and assessed, a
decision will be made at the top and will flow down
through the levels of the hierarchy until it reaches
the level where the decision will be implemented.
Also, note that the top level of the hierarchy often
coordinates all the activities and communication of
the various parts of the organization.
Organizational Levels
 Classifying Managers
• Operatives
– People who work directly on a job or task and have no
responsibility for overseeing the work of others.
• First-line Managers
– Individuals who manage the work of operatives.
• Middle Managers
– Individuals who manage the work of first-line managers.
• Top Managers
– Individuals who are responsible for making organization-wide
decisions and establishing plans and goals that affect the entire
organization.
 Characteristics of Management

• 1. Goal oriented Process It is a goal oriented process, which is to

achieve already specified and desired objectives by proper utilization of
available resources.
• 2. Pervasive: Management is universal in nature. It is used in all types
of organizations whether economic, social or political irrespective of its
size, nature and location and at each and every level.
• 3. Multidimensional: It is multidimensional as it involves management
of work, people and operations.
• 4. Continuous: It consists of a series of function and its functions are
being performed by all managers simultaneously. The process of
management continues till an organization exists for attaining its
objectives.

.
• 5. Group Activity: It is a group activity since it involves managing
and coordinating activities of different people as a team to attain
the desired objectives of the organization.
• 6. Dynamic function : It is a dynamic function since it has to
adapt according to need, time and situation of the changing
business environment. For example, McDonalds made major
changes in its ‘Menu’ to survive in the Indian market.
• 7. Intangible Force: It is intangible force as it can’t be seen but
its effects can be felt in the form of results like whether the
objectives are met and whether people are motivated or not
and there is orderliness and coordination in the work
environment
 Objectives of Management

• (1) Organizational objectives:

• Organizational Objectives  can be divided into Survival (Earning
enough revenues to cover cost); Profit (To cover cost and risk);
and Growth (To improve its future prospects).
• (A) Survival – Management by taking positive decisions with
regard to different business activities ensures survival of
business for long term.
• (B) Profit – It plays an important role in facing business risks
and successful running of business activities.
• (C) Growth – Management must ensure growth which can be
measured by increase in sales, number of employees, number
of products, additional investment, etc.
• (2) Social Objectives:
• Social objectives is to provide some benefits to society
like applying environmental friendly practices in the
production process and giving employment to
disadvantaged sections of society, etc. Example:
TISCO, ITC, and Asian Paints.
• (3) Personal Objectives:
• Personal Objectives is to focus on diverse personal
objectives of people working in the organization which
need to be reconciled with organizational objectives.
 Management as an Art

• Art refers to skillful and personal application of existing

knowledge to achieve desired results. It can be acquired through
study, observation and experience. The features of art as follows:
• (1) Existence of theoretical knowledge: In every art, Systematic
and organized study material should be available compulsorily to
acquire theoretical knowledge.
• (2) Personalized application: The use of basic knowledge differs
from person to person and thus, art is a very personalized
concept.
• (3) Based on practice and creativity: Art involves in consistent
and creative practice of existing theoretical knowledge.
• In management also a huge volume of
literature and books are available on different
aspects of management. Every manager has
his own unique style of managing things and
people. He uses his creativity in applying
management techniques and his skills improve
with regular application. Since all the features
of art are present in management. so it can
called an art.
 Management as a Science

• Science is a systematized body of knowledge that is based

on general truths which can be tested anywhere, anytime.
The features of Science are as follows:
• (1) Systematized body of knowledge: Science has a
systematized body of knowledge based on principles and
experiments.
• (2) Principles based on experiments and
observation: Scientific principles are developed through
experiments and observation.
• (3) Universal validity: Scientific principles have universal
validity and application.
• Management has systematic body of knowledge and
its principles are developed over a period of time
based on repeated experiments & observations
which are universally applicable but they have to be
modified according to given situation.
• As the principles of management are not as exact as
the principles of pure science, so it may be called-an
inexact science. The prominence of human factor in
the management makes it a Social Science.
 Nature of management

• Various contributions to the field of

management have changed its nature.
The nature of management can be described
as follows:
• Multidisciplinary: Management is multidisciplinary because it includes
knowledge/information from various disciplines- economics, statistics,
maths, psychology, sociology, ecology, operations research, history, etc.
Management integrates the ideas and concepts taken from these
disciplines and presents newer concepts which can be put into practice for
managing the organizations.
• Management is dynamic: Management has framed certain principles,
which are flexible in nature and change with the changes in the
environment in which an organization exits.
• Relative, Not Absolute Principles: Management principles are relative, not
absolute, and they should be applied according to the need of the
organization. A particular management principle has different strengths in
different conditions. Therefore, principles should be applied according to
the prevailing conditions.
• Management as Profession: Management has been regarded
as a profession by many while many have suggested that it
has not achieved the status of a profession. Schein concluded
that by some criteria management is indeed a profession, but
by other criteria it is not. Today we can see many signs that
management is working towards increased professionalism.
• Management is Universal: Management is a universal
phenomenon. However, management principles are not
universally applicable but are to be modified according to the
needs of the situation.
Universal Need for Management
 IMPORTANCE OF MANAGEMENT

• 1] Management is goal oriented:-

• Management is concern with achievement of specific goals. It is always directed
• towards achievement of objectives. The success of management is measured by
• the extent to which objectives are achieved.
• 2] Management is associated with group efforts:-
• The business comes into existence with certain objectives which are to be
• achieved by a group and not by one person alone. Management gets things
• done by, with and through the efforts of group members. It co-ordinates the
• activities and actions of its members towards a common goal.
• 3] Management is intangible:-
• It is an unseen force, its presence can be evidence by the result of its efforts up
• to date order but they generally remain unnoticed, Where as mismanagement is
• quickly noticed.
• 4] Management is an activity and not a person or group of person:-
• Management is not people or not a certain class but it is the activity, it is the
• process of planning, organizing, directing and controlling to achieve the
• objectives of the organization.
• 5] Management is situational:-
• Management does not advice best way of doing things. Effective management is
• always situational. A manager has to apply principles, approaches and
• techniques of management after taking into consideration the existing situations.
• 6] Management is universal:-
• Most of the principles and techniques of management are universal in nature.
• They can be applied to government organization, military, educational institutes,
• religious institutes etc. They provide working guidelines which can be adopted
• according to situations.
• 7] Management is concern with people:-
• Since management involves getting things done through
others only human being performed this activity with the
help of planning and control. The element man can not be
separated from the management.
• 8] Management is the combination of art, science and
profession:-
• Management makes use of science as well as art. It is science because it collects
knowledge with the methods and data, analyzes and measures it and decision is taken
with the help of experiment. It is a systematic body of knowledge. Art means application of
knowledge for solving various problems. In
modern times there is separation of ownership and management, so professional experts
are appointed.
 Managerial Skills

• Managerial Skills
• Three basic managerial skills - technical skill, human skill and
conceptual skill.
• Technical Skill
• Knowledge and skills used to perform specific tasks. Accountants,
engineers, surgeons all have their specialized technical skills
necessary for their respective professions. Managers, especially at
the lower and middle levels, need technical skills for effective task
performance.
• Technical skills are important especially for first line managers,
who spend much of their time training subordinates and
supervising their work-related problems.
• Human Skill
• Ability to work with, understand, and motivate other people as individuals or in groups.
According to Management theorist Mintzberg, the top (and middle) managers spend
their time: 59 percent in meetings, 6 percent on the phone, and 3 percent on tours.
• Ability to work with others and get co-operation from people in the work group. For
example, knowing what to do and being able to communicate ideas and beliefs to
others and understanding what thoughts others are trying to convey to the manager.
• Conceptual Skill
• Ability to visualize the enterprise as a whole, to envision all the functions involved in a
given situation or circumstance, to understand how its parts depend on one another,
and anticipate how a change in any of its parts will affect the whole.
• Creativity, broad knowledge and ability to conceive abstract ideas. For example, the
managing director of a telecom company visualizes the importance of better service for
its clients which ultimately helps attract a vast number of clients and an unexpected
increase in its subscriber base and profits.
 1. Technical Skills
• Refer to the ability of a person to carry out a specific
activity.
• In order to do so, you need to have knowledge of
methods, processes and procedures.
• Engineers, computer specialists, accountants and
employees in manufacturing departments all have the
necessary technical skills for their specialized fields.
• Technical skills are essential for first-level managers.
• For example, employees at the operational level work
with tools, and their supervisors must be able to teach
them how to perform the tasks assigned to them using
these tools. First-level managers spend much of their time
in training subordinates and clarifying doubts in work-
related problems.
 2. Human Skills
• Human skills or interpersonal skills refer to the ability
of a person to work well with other people in a group.
• It is the ability to lead, motivate, and communicate
with people to accomplish certain objectives; Human
skills are of paramount importance in the creation of
an environment, in which people feel comfortable
and are free to voice their opinions.
• These skills aid employees during interaction with
their supervisors, peers and people outside the work
unit such as suppliers, customers and the general
public. These skills are important for all levels in the
organization.
 3. Conceptual Skills
• Refer to the ability of a person to think and
conceptualize abstract situations.
• It is the ability where you understand and
coordinate the full range of corporate objectives and
activities.
• These skills are most important at the top
management level, as top-level managers have the
greatest need to see the “big picture,” to understand
how the various parts of the organization relate to
one another and associate the organization with the
external environment.
 4. Design Skills
• Refer to the ability of a person to find solutions to
problems in ways that would benefit the organization.
• As a top manager, you should not only recognize a
problem but also suggest ways to overcome them. If
you only see the problem, you would become mere
“problem watcher,” and would prove ineffective.
• Managers at upper organizational levels should be able
to design a rational and feasible solution to the problem
by considering the various internal and external factors.
 Summary of skills at different organizational
hierarchy
• As a first-level manager, you require more technical skills in order
to supervise operational employees. You need to have good
human skills as you need to interact with your subordinates on a
regular basis. However, conceptual skills are usually not very
essential for the managers at the supervisory level.

• The need for technical skills is lesser at the middle-management

level. Here, human skills and conceptual skills are more significant.

• At the top-management level, conceptual, design and

interpersonal skills are of greatest importance; there is little need
for technical skills.