1 Management: The Conceptual Framework

Niti Goyal

Learning Outcome:

After completing this module the students will be able to:

• Understand the meaning of management.

• Understand the nature & features of management

• Define the process & functions of the business management

• Importance of management

• Levels of management

Introduction to Management:

According to Theo Heimann, Management has three different meanings, viz.,

Management as a Noun: refers to a Group of Managers.
Management as a Process: refers to the Functions of Management i.e. Planning, Organising, Directing, Controlling, etc.
Management as a Discipline: refers to the Subject of Management.

Management is indispensable wherever human efforts are to be undertaken collectively to achieve certain objective. Management is a vital aspect in any organized group activity, be it business activity or any other activity Management integrates the human and the physical resources for efficient achievement of objectives. Without the leadership provided by management, the resources of production remain resources only.

It is required not only in business enterprises but to all kinds of organizations where wherever resources are deployed to achieve some objectives. It is the specific organ of all kinds of organizations since every organisation need to utilize their limited resources most efficiently and effectively for the achievement of their goals .

Without management there will be chaos, wastage of time, effort and resources. Although management is pervasive, our discussion is confined to managing a business enterprise. The quality of management has a major implication on the growth and prosperity of the enterprise. Management is the dynamic and gives life to every organization. The aim of management is to accomplish desired goals. To achieve goals, one need to deploy resources. Management aims at judicious use of these resources. In today’s competitive world, the quality management lays the foundation of the enterprise.

Figure 1: CONCEPTUAL FRAMEWORK OF MANAGEMENT

The above figure gives a conceptual framework of management. Management is about making decisions regarding various resources such as human, capital and physical resources for the accomplishment of desired objectives. It aims at judicious use of these resources to achieve the desired result.

Management Definitions :-

It is very difficult to give a precise definition of the term ‘management’. There is no universally accepted definition of management. Different scholars from different disciplines have their own interpretation of word management. Some of the leading definitions of Management given by various experts are:

• Henri Fayol, who is known as the father of modern management defined management as, “Management is to forecast, to plan, to organize, to command, to coordinate and control activities of others.”

• F.W. Taylor, father of scientific management, “Management is an art of knowing what is to be done and seeing that it is done in the best possible manner.”

Scientific management is defined as the use of the scientific method to determine the “one best way” for a job to be done.
“Management is the process by which co-operative group directs actions towards common goals.” by Joseph Massie
Henry Sisk defines “Management is the coordination of all resources through the process of planning, organizing, directing and controlling in order to attain stated goals.”
Tho Harmann & William Scott defines management as , “Social and technical process that utilises resources, influences human action and facilitates changes in order to accomplish an organization’s goals.”
According to Rovert Kreitner “Management is a process of working with and through others to achieve organizational objectives in a changing environment, central to this purpose is the effective and efficient use of limited resources.”
According to Harold Koontz,”Management is the art of getting things done through and with people in formally organised groups.”
According to Peter Drucker,”Management is a multi-purpose organ that manages business and manages managers and manages workers and work.”
Mary Parker Follett defines management as the “art of getting things done through people”. A manager is one who contributes to the organization’s goals indirectly by directing the efforts of others – not by performing the task himself. On the other hand, a person who is not a manager makes his contribution to the organization’s goals directly by performing the task himself.

Various definitions of management cited above are different but still have something in common. Management is carried out in order to achieve some objective by putting together the physical and human resources.

Management functions or Process

Different experts have given definitions of the various functions of management differently. Henri Fayol has given POSDCORB as the functions of management: POSDCORD stands for Planning, Organizing, Staffing, Directing, Coordinating, Reporting & Budgeting. According to Luther Gulick, Decision Making, Organizing, Staffing, Planning, Controlling, Communicating & Directing are the functions of Management. Warren Haynes & Joseph Massie classify management functions into Planning, Organizing, Staffing, Directing & Controlling. Koontz and O’Donnell divide these functions into planning organizing, staffing, directing and controlling.

The basic functions or process of management have been elaborated below:

Figure 2: Management Functions or The Process Of Management

1. Planning

Planning is the most fundamental of all management functions. first of all the objective of the business are determined after that the plans are made to achieve those objectives. Planning is deciding in advance, what is to be done, how is to be done, and where it is to be done, who will do it and how result are to be evaluated.

2. Organising

Organising provides structure to the organisation. Organizing refers to the identifying the activities to be carried out, grouping similar activities and establishing relationship among the activities in terms of superior subordinate relationships. It also establishes the authority and responsibility relationship among the activities.

3. Staffing

Staffing refers to putting the right person at right place, It provides competent people to fill various positions created out of the organisational structure. Staffing should be done very carefully. If the right person is not employed at right place, all the efforts go haywire.

4. Directing

Directing aims at guiding the activities towards achieving a common goal. Directing leads to action. Managers get the work done by providing the right and a uniform direction to work. The above mentioned functions of management create preconditions, while directing makes use of these preconditions to achieve the desired result. A manager directs the employees through communication (the exchange of ideas , understanding and information from one person to other person.), leadership (guiding & influencing the work) and motivation (encouraging the employees to give their best to the organization)

5. Controlling

Controlling is the process of ensuring that the actual outcome is consistent with the planned objectives. It involves measuring and comparing the actual outcome with the plans and finding the deviations and if deviations are found, taking corrective measures.

Figure 3: Control Process

FEATURES OF MANAGEMENT.

1. Continuous Process:

Management is a circular process which never ends. It is concerned with constantly identifying the problem and solving them by taking adequate steps. The process of management starts with planning and ends with controlling. New plans need to de designed as per the needs. If the result are not achieved as per the plans, plans are revised again. This way, management becomes a continuous and never ending process. It lasts till the organisation lasts.

2. Pervasive

Management is required everywhere. Management is a vital aspect in any organized group activity. Management is required not only for running a business but for any organised group activity be it a educational, charitable and religious institutions etc.

3. Result oriented

The goal of management is to achieve the desired objectives. Management makes group efforts more effective. The group as a whole cannot realize its objectives unless and until there is mutual co-operation and co-ordination among the members of the group. Management creates team work and team spirit in an organization by developing a sound organization structure. It brings the human and material resources together and motivates the people for the achievement of the goals of the organization.

5. Integrative Force

Management aims at integrating the human resources with physical resources. Human efforts are directed towards the effective use of these resources so that the desired result can be achieved in the best possible way. Managers also seek to harmonize the individuals’ goals with the organizational goals for the smooth working of the organization.

6. Multidisciplinary

Management deals with both human and physical resources. To manage people is a much difficult task than managing physical resources. A manager needs to be good at understanding the emotions, feelings, aspirations, etc. So, management is a very complex job. Therefore, management uses knowledge from many different subjects such Psychology, Sociology, as Economics, Information Technology, etc. Therefore, it is multidisciplinary in nature.

7. Flexible

Management aims at achieving the objectives in the future. Various plans are made to achieve those objectives. However, future is uncertain. So, a manager needs to be flexible in his approach and enough scope should be there to incorporate the necessary changes.

7. Owners and Managers may be different

In small organisations, generally the owner manages the business himself. But the need of management arises when there are so many people to do the work. In large organisations, generally, management is separate from ownership. The managers are highly qualified professionals who are hired from outside.

8. Both an art and science

An Effective Management is blend of both science & art. Science provides the principles and the art is the application of these principles. As science, there is a specialised field of knowledge that exists. Over the year the principles of management have been identified. Fredrick W. Taylor made significant contribution to the development of management science. He propounded the fundamental principles of scientific management . Even though management is a science as it possess a systematized body of knowledge which has evolved through observation and repeated experimentation, it is not an exact science like natural sciences since management deals with the behaviour of people in organization. Behaviour of people is much more complex and variable and it is difficult to do the controlled experiments. As a result, management principles cannot be applied directly as a rule of thumb but serve as a guide in decision making & problem solving. The application of these principles depends on the ability and the creativity of the manager. There is no hard and fast rule for the application of these principles. Different situations arise which require the application of the specialised field of knowledge, but the way these principles are applied distinguishes a successful manager from an unsuccessful one. Thus management is both a science and an art.

Developments in the field of the knowledge of management help in the improvement of its practice; and improvements in the practice of management spur further research resulting in further development of management principles.

9. Management is Intangible

Management is intangible, i.e. it cannot be seen and touched, but it can be felt and realised by its results. Good management leads to the successful enterprise but an unsuccessful management leads to its failure.

10. Dynamic

Management is dynamic in nature. That is, management is creative and innovative. An organisation will survive and succeed only if it is dynamic. It must continuously bring in new and creative ideas, new products, new product features, new ads, new marketing techniques, etc.

Importance of Management

Management is concerned with acquiring maximum prosperity with a minimum effort. Management is essential wherever group efforts are required to be directed towards achievement of common goals. It is said that, anything minus management amounts to nothing. The following points further highlight the significance of management:

1. Achieving the objectives: The ultimate goal of management is to achieve the objectives of the enterprise. It adds effectiveness to the efforts of the group of persons involved in achieving those objectives.

2. Optimum utilization of resources: Management aims at optimum utilisation of the physical and human resources. The available resources of production are put to use in such a way that all sort of wastage and inefficiencies are reduced to a minimum. Workers are motivated to put in their best performance by the inspiring leadership. Through the optimum use of available resources, management accelerates the process of economic growth.

3. Reduces cost: In the modern era of intense competition, only those concerns can survive in the market, which can produce goods of better quality at the minimum cost. A study of the principles of management helps in knowing certain techniques used for reducing costs. Management by decreasing costs increases its profits and thus provides opportunities for future growth and development

4. Establishes a sound organisation: Efficient management creates a sound organisation. It not only establishes a sound organisational structure but also employs the right type of people at right place to carry further the operations of the enterprise.

5. Change and growth: A business enterprise operates in a constantly changing environment. Changes in business environment create uncertainties and risk and also produce opportunities for growth. Sound management makes effective SWOT analysis to ensure the success of the business.

6. Provide innovation: Management gives new ideas, imagination and visions to an enterprise.

7. Social benefits: Management is useful not only to the business firms but to the society as a whole. It improves the standard of living of the people through higher production and more efficient use of scarce resources. By establishing cordial relations between different social groups, management promotes peace and prosperity in society.

LEVELS OF MANAGEMENT

There may be different levels or layers of management in an organization depending upon its size, technical facilities, and the range of production. Broadly there are three levels of management: Top level, Middle level & Lower level management.

Figure 4: Levels of Management

1. Top management: Top management lays down goals, policies and plans for the enterprise . It consists of Company Presidents, Executives, Vice Presidents , Chairman and other Key Officers. Top management is the ultimate source of authority. It is accountable to the owners of the business for the overall management. The important functions of top management include:

(a) Establishment of the goals, objectives & overall policies for the enterprise.

(b) To assemble the resources: money, men, materials & machines.

(d) To provide overall leadership to the enterprise.

2. Middle management: The job of middle management is to implement the policies and plans framed by the top management. Most importantly, they serve as a link between the top and the lower level. They consist of sales managers, personnel managers & other departmental head. They are responsible to the top management for the functioning of their departments. The following are the main functions of middle management :

(a) To implement the policies of the top management.

(b) To recruit and select suitable operative and supervisory staff.

(d) To motivate personnel to attain higher productivity and to reward them properly.

(e) To ensure cooperation among the various departments for smooth functioning of the entire organization.

(f) To report to the top management

(g) To communicate the problems of the lower level management.

3. Lower or operative management: Lower management performs the executory function. It consists of foreman, supervisors, sales officers, accounts officers and so on. They are in direct touch with the rank and file or workers. Their authority and responsibility is limited. They pass on the instructions of the middle management to workers. They prepare the short term or operating plans. They are also involved in day to day decisions-making . They have to get the work done through the workers. They allot various jobs to the workers, evaluate their performance and report to the middle level management. They are more concerned with direction and control functions of management. They devote more time in the supervision of the workers.

MANAGEMENT vs. ADMINISTRATION

The use of two terms management and administration are generally used interchangeably but the two terms are different. The difference between Management and Administration can be summarized as under:

Basis	Management	Administration
Meaning	Management is an art of getting things done through others by directing their efforts towards achievement of pre-determine goals.	It is concerned with formulation of broad objectives, plans & policies.
Status	Management constitutes the employees of the organization who are paid remuneration (in the form of salaries & wages).	Administration represents owners of the enterprise who earn return on their capital invested & profits in the form of dividend.
Level	Management is a doing function because managers get work done under their supervision.	Administration is a thinking function because plans & policies are determined under it.
Function	Management is a doing function because managers get work done under their supervision.	Administration is a thinking function because plans & policies are determined under it.
Applicability	It is applicable to business concerns i.e. profit-making organization.	It is applicable to non-business concerns i.e. clubs, schools, hospitals etc.
Process	Management decides how to do.	Administration decides what is to be done & when it is to be done.
Influence	The management decisions are influenced by the values, opinions, beliefs & decisions of the managers	The administration is influenced by public opinion, govt. policies, religious organizations, customs etc.

In actual practice, there is no difference between management & administration. Every manager has to perform both administrative management functions and operative management functions. However, higher the hierarchical level of the manager, he denotes more time on administrative function & the lower level denote more time on directing and controlling worker’s performance i.e. management.

Summary:

Management is the binding force that binds various resources. It brings all resources together and efficiently utilize them to help accomplish organization’s goals. Koontz and O’ Donnel have rightly observed “there is no more important area of human activity than management since its task is that of getting things done through others.” The assumes greater significance in business activities. The various factors of production could never become productive without the catalyst of management. It is now widely recognized that management is an important factor of growth of any country.

References

Kootnz & O’Donnell, Principles of Management.
J.S. Chandan, Management Concepts and Strategies.
Arun Kumar and R. Sharma, Principles of Business Management.
Sherlerkar and Sherlerkar, Principles of Management
B.P. Singh, Business Management and Organizations
http://www.whatishumanresource.com/management-definitions-by-greatmanagement-scholars
http://www.managementstudyguide.com/management-basics-articles.htm
https://en.wikibooks.org/wiki/Management_Concepts_and_Applications/Management