Notes on Management in an Organisation

Here is a compilation of notes on management. After reading these notes you will learn
about:- 1. Meaning of Management 2. Features of Management 3. Objectives 4. Nature 5.
Importance 6. Functions 7. Tasks 8. Aspects 9. Levels.
Contents:
1. Notes on the Meaning of Management
2. Notes on the Features of Management
3. Notes on the Objectives of Management
4. Notes on the Nature of Management
5. Notes on the Importance of Management
6. Notes on the Functions of Management
7. Notes on the Tasks of Management
8. Notes on the Aspects of Management
9. Notes on the Levels of Management

1. Notes on the Meaning of Management:

In today’s world of complex and fast internationalization of business, most companies are going
global. Unless they are effectively managed, they cannot survive in the fast changing
international business environment. Management helps in doing and getting things done through
others. It is the process that optimizes human, material and financial resources of the
organisation for effective achievement of its goals.
The process involves a series of actions (functions) by managers, optimisation refers to getting
maximum output (goods and services) out of minimum inputs (men, materials, money, machine
etc.) and goals are the results or ends that managers and other stakeholders (shareholders,
consumers, suppliers, workers etc.) wish to achieve.
Terry and Franklin:
“Management is a distinct process consisting of activities of planning, organising, actuating and
controlling, performed to determine and accomplish stated objectives with the use of human
beings and other resources.”
Koontz and Weihrich:
“Management is the process of designing and maintaining an environment in which individuals,
working together in groups, efficiently accomplish selected aims.”
F. W. Taylor:
“Management is an art of knowing what is to be done and seeing that it is done in the best
possible manner.”
Henri Fayol:
Management is to forecast, to plan, to organise, to command, to co-ordinate and control activities
of others. Every organisation, at every level, needs management, be it an organisation as small as
a family, temple or church or big organisations such as Schools, Colleges, Universities, business
houses or even the Government. It is important for both profit and non-profit organisations and
also for manufacturing and service organisations.
Labour unions and research organisations, hospitals and armed services are also guided by
management principles. All these institutions (whether profit or service) consider management as
the effective organ which plans the activities, makes people responsible to carry out those
activities, co-ordinates and controls their activities through an effective system of feedback.
Management is the art of getting things done through others. It is an activity which co-ordinates
the human and non-human resources (men, material, machines etc.) for achieving the desired
results. Although different views are given on the functions of management, the most commonly
accepted functions are planning; organising; staffing; leading and controlling.

Though management is essential for both business and non-business organisations, it is primarily
linked with business management. The arguments in support are given by Peter F. Drucker.
1. Of all institutions in the modern society, business institutions were the first to be set up and
management was meant to be part of these institutions on a continuous basis.
2. Though management is important for non-profit organisations also, the main criterion for
testing the efficiency of management is economic surplus (though not accurate) and this criterion
is generally satisfied by business organisations.
3. With economic reforms initiated in 1991, business has become’ open in international
boundaries and the economy has become free and liberalised. The performance of business
houses is bringing the nations together and the focus on business management is, thus, evident.
“Without institution there is no management. But without management there is no institution.
Management is the specific organ of the modern institution. It is the organ on the performance of
which the performance and the survival of the institution depends.” — Peter F. Drucker

2. Notes on the Features of Management:

Management is characterised by the following features:
(i) An activity:
It is an activity of getting things done through others. It involves coordinated efforts of a group
of people towards a common end in highly structured organisations like Reliance or Infosys or
social organisations like a club or an NGO. Working with and through people establishes
superior-subordinate relationships where work is assigned to individuals and authority-
responsibility relationships are established amongst them.
(ii) A process:
Management gets things done through others by the management process. It helps to achieve
organisational goals through functions of management.
(iii) Required for all organisations:
Both business and non-business organisations (such as Government or service organisations,
irrespective of their size; large or small) need effective management to achieve their objectives.
(iv) Required at all organisational levels:
Management is required at all the levels — top, middle and lower levels of the organisation,
though degree of management is different at different levels.
(v) Goal-oriented:
Success of an organisation is measured by achievement of its goals and management plays
significant role in goal achievement. Since organisations are deliberately created structures, they
exist for a purpose or goal. Objectives are the desired state of results that all organisational
members agree to achieve through coordinated efforts.
(vi) Intangible:
Management cannot be seen or felt. The result of management can be observed by comparing a
well-managed organisation with a poorly managed organisation. The difference in results can be
attributed to management concepts.
(vii) Dynamic:
Management is an ever-changing discipline of knowledge. It was not very important during the
early years of 1900s even in highly institutionalized countries. The main decision-making
authority used to be the Government.
The changing business scenario requires innovations, research and development in the business
sector and, thus, highlights the changing role that management plays in this environment.
Effective management is situational i.e., managers assess the facts and circumstances of each
situation and use a managerial approach that best applies in the situation to attain the individual
and organisational goals.
(viii) A discipline:
Though management seeks ideas and concepts from other fields of study, such as psychology,
behavioural sciences, sociology etc., yet it is a complete discipline in itself. Managers acquire
specific managerial skills, knowledge and fundamentals to practice management.
(ix) Management and society:
Though management is a separate discipline which aims to accomplish pre-determined
organisational goals, yet its impact on society cannot be overlooked. Management is governed by
social values, culture and beliefs. It is a function that transforms the society. It preserves the
society and promotes its interests.
(x) Group effort:
Management as a function, activity or a process is not undertaken by a single person. It is the co-
ordinated effort of a group of people that envisions future of the organisation, sets its goals,
makes plans and policies, implements them and controls its working through an effective
feedback mechanism. Management does not exist to achieve personal goals of people. Though,
however, personal objectives are important, they should contribute to objectives of the group and
the organisation.
(xi) Global function:
Management is not confined to a specific society, culture or country. It is a global phenomenon.
In the contemporary business environment, the concept of national boundaries, as far as business
is concerned, is fading away. With the kind of reforms coming in, the world has become a single
economy, a single market. The multinational character of management is, thus, evident and in
fact, inescapable.

3. Notes on the Objectives of Management:

How effectively an organisation achieves its objectives (profit or service) depends upon how
effectively it is managed.
Management serves the following objectives to help organisations meet their goals:
(i) Helps organisation achieve its objectives:
Management helps in managing the organisations to achieve their objectives at minimum cost. It
enables managers to work efficiently, that is, achieve maximum output at minimum cost. It also
aims to coordinate the organisational resources (physical, financial and human) so that human
knowledge and expertise can be geared towards optimum utilisation of non-human resources.
(ii) Promotes effectiveness:
Efficiency means ‘doing things right’ and effectiveness means ‘doing the right things’. It means
choosing the most appropriate organisational objectives out of multiple objectives. Lack of
effectiveness or choosing wrong objectives will result in inefficiency, howsoever hard managers
may work. Management, thus, helps to find out the right things to do and to concentrate on those
things efficiently.
(iii) Develops the ability of managers:
Managers should not only be skilled in problem-solving, they should be equally skilled in
problem-finding. They should anticipate problems before they arise. They should take advantage
of opportunities to make their organisations competitive. Management develops analytical
abilities of managers (problem solving) and the ability to find problems and exploit gainful
business opportunities.
(iv) Human welfare:
Management helps in knowing the needs of employees and satisfies them through suitable
motivators.
(v) Social welfare:
Organisations operate in the larger social system. The performance of business organisations
largely affects the welfare of society and through it, the welfare of the nation. Management
develops business organisations as socially acceptable institutions which give gainful
employment to people.
(vi) Interaction with environment:
Business operates in the larger environment that consists of economic and non-economic
variables. Firms secure inputs from the environment, transform them into outputs and give them
back to the environment. They survive if they adapt their plans to the environmental
requirements and change their operations according to changes in the environment. Management
helps firms to successfully frame and alter their policies to profitably interact with the larger
environment.

4. Notes on the Nature of Management:

Management is viewed as:
1. Science,
2. Art, and
3. Profession.
1. Management as Science:
What is Science:
Science is a branch of knowledge that involves systematized observation and experiment with
phenomena. It involves “the systematic development and testing of theories based on observation
of behaviour”. It creates a general body of knowledge evolved through continuous testing and
experiments. Testing of hypothesis evolves principles which establish cause and effect
relationship amongst variables.
Features of Science:
Science is characterised by the following features:
(a) Clarity of concepts:
Science is characterised by universal concepts evolved through experiments.
(b) Scientific methods:
Scientific methods involve study of phenomena through systematic procedure of observation,
formulation of hypothesis and experiment. Repeated observation of similar facts leads to
generalisations as to what will happen in similar situations. Scientific methods, thus, help in
predictions.
(c) Clarity of theory:
Grouping of interdependent concepts and principles that evolve an area of acknowledge is
known as theory. Theory is a generalized set of principles and concepts.
(d) Causal relationship:
It explains relationship between two forces: one, the cause and other, the effect. It explains
relationship between application of principles and its end result.
(e) Systematized theory of knowledge:
Science is not just a theory of knowledge. It is a systematized theory of knowledge. Scientific
principles are applied in a systematic and scientific manner.
(f) Universal application:
Scientific principles are universally applicable. They apply in all situations, all countries and all
cultures. They do not change according to situations.
Is Management a Science?
(a) Clarity of concepts:
Concept is a “mental image of anything formed by generalization from particulars.”
Management, as a discipline, has a number of concepts (management, administration, levels of
management, functional areas of management, managerial planning, organisation charts and
manuals etc.) evolved through the experience of managers in various organisations.
Management, therefore, can aptly be called a management science. Concepts like organisation
charts, organisation manuals, managerial planning etc. have gained widespread popularity and
management can, thus, be called a science.
(b) Scientific methods:
The study of scientific problem through systematic multistep procedure of observation,
formulation of hypothesis, experiment and development of a theory is known as scientific
method. “A scientific method involves the determination of facts through observation.” Repeated
observation of similar facts and situations leads to certain generalizations which help in making
predictions about what will happen in similar situations.
While dealing with people, managers repeatedly observe human behaviour, analyze their
physiological and psychological needs and frame policies to satisfy those needs. Financial
incentives, for example, can satisfy physiological needs and non-financial incentives satisfy
psychological needs of human beings, is an aspect of motivation that has evolved through
constant observation of human behaviour. Management can, therefore, be described as a
‘Science’.
(c) Clarity of theory:
When scientific methods are tested for their accuracy, they result into principles. “Theory is a
systematic grouping of interdependent concepts and principles that gives a framework to, or ties
together, a significant area of knowledge.” Management has evolved over a period of years as a
theory with generalized set of principles and concepts that support the organisation structure.
The principles of management are a universally accepted set of knowledge which have evolved
through constant observation and experimentation (case studies on management) for dealing with
managerial resources. They can be applied to different organisations. The principles of unity of
command, unity of direction, scalar chain, esprit de corps, for example, have made management
a universally accepted science or theory. Management can, thus, be called a science.
(d) Causal relationship:
The principles of science usually explain relationship between two forces; the cause and the
effect. There is some evidence of causal relationship (as in Science) between managerial
practices and their end results. Financial management, for example, invests in assets (long-term
and short-term) for wealth maximisation.
The principle of unity of command results in loyalty towards superiors is a management
principle that holds good in almost all organisations. Though not universally true (a subordinate
may, at times, have to report to more than one boss), it is a generally accepted principle.
Management, thus, satisfies this principle of science.
(e) Systematized theory of knowledge:
Science is not just a set of principles (theory). It applies principles in a systematic and scientific
manner to attain certain goals. Management is “a field of knowledge that seeks to systematically
understand why and how men work together to accomplish objectives and to make these co-
operative systems more useful to mankind.”
Management concepts and principles have evolved over a period of time and have systematized
into well-defined management theories being practiced in all successful organisations.
Management can, therefore, be rightly called a systematized body of knowledge. “Management
science is a body of systematized knowledge accumulated and accepted with reference to the
understanding of general truths concerning management.”
(f) Universal application:
Though not always true, management principles are universally applicable. The principles of
‘Esprit de Corps’ — unity is strength is applied in almost every organisation and every situation.
On this basis also management can be called a science.
Management is not an exact science:
Though management can be described as science of applying scientific concepts and methods in
a systematized manner, with specific rules and regulations to achieve organisational goals, it is
not an exact science. It is not as exact as physical science (Physics or Chemistry). Physical
science has no direct or practical application in studying human welfare. It is studied only for
understanding the natural phenomenon.
Management is not as pure as physical science. It is applied science. It deals with problems and
finds solutions to these problems to maximise human welfare. Management is social science
(study of human beings) based on accumulation of data, past experience, tradition and reasoning.
It deals with human behaviour which changes in different situations.
It is a social science that maximises human welfare in specific situations. Management principles
change with change in situations and human behaviour. These principles are, thus, flexible and
change according to situations. Management, therefore, can be called a behavioural science,
social science or soft science.
“The field of management would truly become a science, when theory would be able to guide
managers by telling them what to do in a particular situation and enabling them to predict the
consequences of their actions”.
2. Management as an Art:
What is Art: Art is know-how. It is a branch of knowledge that gives personal expression to
feelings, thoughts and ideas. It is a means to creative growth and does not depend on scientific
experiments and testing. It applies personal aptitude and skill in assessing how best can one
utilise resources to get maximum benefit out of them.
Features of Art: Art is characterised by the following features:
(a) Vision:
An artist has clear vision of what he wants to make. He strives to achieve a definite goal.
(b) Knowledge:
Art requires practical knowledge. It applies theoretical knowledge to achieve the goal.
(c) Communication:
An artist can fulfill his objectives by communicating with his artists. He alone cannot attain his
goal.
(d) Creativity:
Art requires creativity. Since there are no defined procedures and methods to achieve goals, the
artist uses imagination, skill and creativity to do so. Creativity can be enhanced through
motivation and training.
(e) Skilled performance:
Art requires application of personal skill. It differs for each artist and for each artistic situation.
Every artist has his own way of performing the job.
(f) Practice:
Artist can improve his performance through constant practice. His work is not based on scientific
methods.
Is Management an Art?
(a) Artist’s vision:
As an artist (while he composes a painting or a musical note) has clear vision or picture of what
he strives to achieve; management theorist also has to envision the future and frame the
objectives and plans. “Management art involves envisioning an orderly whole from chaotic parts,
communicating the vision and achieving the goal. It is the ‘art of arts’ because it organises and
uses human talent.”
(b) Knowledge:
As in Art, managers must clearly know their objectives and how they wish to achieve them. This
results in optimum allocation of scarce resources over varied organisational objectives.
(c) Communication:
Similar to Art, successful managers need to effectively communicate the objectives, plans,
procedures, orders and instructions to the subordinates (top-down communication) and listen to
their grievances and complaints patiently (bottom-up communication). This helps to achieve the
objectives efficiently.
(d) Creativity:
Management is a behavioural science. It deals with people. Managers, therefore, must have the
art of knowing human needs and devise motivational plans to satisfy them. Art is always
creative. Artist’s creativity can be enhanced through training and motivation. Management is
also creative. It requires managerial skills to forecast opportunities in the environment and
exploit them gainfully. Managers need to be creative to coordinate the resources (human and
non-human) for achieving the practical results.
(e) Skilled performance:
As ‘Art’ applies personal aptitude and skills for different artistic situations, managers also
possess managerial skills to deal with different problem-solving situations. This helps to
optimally utilise the scarce organisational resources over different managerial activities.
Experience, observation and study of results, all contribute to skilled performance. “In that art
requires a personal aptitude or skill, managers who must make organisational decisions about
how best to position their resources in certain future markets are surely involved in an artistic
process.”
(f) Practice:
Managers expertise in the art of management through constant practice. The more they practice,
the more they learn and become successful business entrepreneurs. One may, thus, conclude that
management is an art of applying skill, knowledge, creativity, personal judgement and
innovativeness to understand the behaviour of subordinates and application of suitable devices to
allocate scarce resources over organisational objectives. Scientific principles and theories cannot
always solve organisational problems.
Management — Both A Science and Art:
Management is both, Science and Art. It cannot, however, be clearly defined as to when it is
science and when art. As science, it has principles and theories on the basis of which managers
act, and as Art, it deals with decision-making processes through application of practical and
personal skills.
The art of management begins where the science of management ends. Science provides
knowledge and art helps in application of knowledge. Science provides the knowledge of
management principles and art helps in skillfully applying those principles to solve managerial
problems.
While science explains ‘why’ of a situation, art explains ‘how’ of it. Art explains how the
problem can be solved once it is known why it has occurred. There is no best way to solve that
problem. Every manager has individual approach and solves it to the best of his experience,
knowledge, skill and creativity.
A successful manager has knowledge and skill of applying management principles in specific
situations. The power of management lies in application of management science. Success in
management comes not from knowledge of management but from how well that knowledge is
applied in business situations.
3. Management as Profession:
What is a Profession?
Profession means occupation in some branch of advanced learning or science (for example,
medical profession). It refers to application of specialised knowledge acquired after formal
education and training programmes.
Features of Profession:
A profession is characterised by the following features:
(a) General principles or specialised knowledge:
Professionals base their decisions on certain principles. These principles grow out of specialised
knowledge that a person acquires through formal education and training programmes.
(b) Professional status through performance:
A person becomes a professional by continuously rendering services of specialised nature.
Professionals acquire their status through work and not favouritism.
(c) Code of ethics:
A specific code of ethics governs the functions of professionals. Professionals work within the
rules and regulations of that code. This ensures fair and honest dealings on their part. Ethical
code ensures that professionals are committed to their work in the best interest of society.
Violation of this code is subject to punitive actions.
(d) Dedication:
Though professionals practice for financial gains, they are guided by the service motive also.
True professionals work with complete dedication, commitment and loyalty.
(e) Association:
Every professional is guided by the norms of the association or council under which he exercises
his profession. After attaining formal education in medicine, for example, a doctor is registered
under the Medical Council of India. The association or council establishes the standards of
performance for the professionals.
(f) Professional qualification:
A person can exercise profession only after acquiring formal qualification and training.
Chartered accountants, doctors, lawyers etc. exercise their professions after acquiring formal
education in their respective fields.
Is Management a Profession?
(a) General principles or specialised knowledge:
As management is a separate discipline, there are management principles and theories formally
taught in management schools. These principles and theories help in efficiently discharging
organisational duties, though application of these principles and theories changes according to
situations. Management can, thus, be called a profession.
(b) Professional status through performance:
In this regard management is not truly considered to be a profession, though gradually it is
moving towards professionalism Though management is formally taught in management
schools, one can find people who hold managerial positions not by virtue of their performance
but through favouritism.
People attain managerial positions through personal and political links. In today’s world where
competition is intense, we are moving towards the end where management will become a full-
fledged profession, that is, only those holding formal degree in management will acquire
managerial positions.
(c) Code of ethics:
Although code of ethics has been established by the All India Management Association, there is
no strict adherence to it. Non-compliance to the code is not followed by punitive action. Though
managers should look after the interests of the owners and other stakeholders, there is no
universally accepted code of ethics for managers.
There is no controlling body which ensures that ethical code in management is strictly observed.
The All India Management Association does not fully represent the professional managers.
Management cannot, therefore, strictly be termed as a profession on this ground. Though not
compulsory, managers follow this code and perform ethical business practices to prosper in the
competitive business world.
(d) Dedication:
In almost every organisation, managers practice principles and theories with complete dedication
and commitment. They constantly integrate organisational resources to harmonies organisational
goals with goals of individuals. They dedicatedly work towards the attainment of organisational
and individual goals. Management is, thus, a profession on this basis.
(e) Association:
Although All India Management Association exists to govern the smooth conduct of managerial
practices, it is not compulsory for managers to become members of this Association. On the
basis of an association establishing the standards of performance for managers to exercise
managerial activities, management cannot be completely called a profession.
(f) Professional qualification:
Though there are many institutions providing formal education and training in management
programmes, yet it is not rare to find practicing managers who have not acquired formal degree
in the management courses but still prove to be successful managers. This is because of the
experience they gained by holding various managerial positions. No formal code of ethics is,
therefore, followed by all successful managers. In this sense of the term, management may not
qualify to be termed as a profession.
It may be concluded that management is a profession on the basis of features like general
principles or specialised knowledge and dedication, but it cannot truly be termed as a profession
on the grounds of professional status, code of ethics and management association. Nevertheless,
management being a distinct field of study is moving towards a full-fledged profession.
In this regard, Peter F. Drucker remarks:
“Management is professional — Management is a function, a discipline, a task to be done; and
managers are the professionals who practice this discipline, carry out the functions, and
discharge these tasks.”
Management is fast moving towards professional status as is evidenced by:
(i) Growing body of systematized knowledge.
(ii) Growing number of professional institutes providing knowledge of management.
(iii) Growing awareness of ethical practices followed by business organisations.
(iv) Growing emphasis on management being practiced by management experts or consultants.
Professionalization of Management:
The society of 1900s had few, small-sized institutions managed by the family heads.
Government looked after the needs of the society. There were almost no or very few business
institutions. Small workshops, small educational and health centres and professions (medicine,
law or engineering) were practiced at the individual level.
Institutions were owned by individuals who fulfilled their financial and non-financial needs.
These individuals, as heads and owners of the institutions were also the managers of the
institutions. Development, at that time, was a function of savings and capital investment.
Management was primarily family-managed as:
(i) Both ownership and control of business were in the hands of the family heads, and
(ii) The focus was an profit than social values.
As control was in the hands of family heads with delegated positions to other members of the
family, they managed the business according to value system of the family, and since different
families had different value systems, the organisations headed by different families were
managed differently.
Though professional services like those of accountants, engineers and lawyers were hired, these
professional were paid for their services. They did not have the decision-making authority as that
was centralised with the head of the family who managed the business on the basis of his
knowledge and judgment rather than professionalism.
Even in the public sector, management was more or less non-professional. Bureaucracy prevailed
and the top-level managers represented the voice of the bureaucrats. The professional
competence was, thus, lacking which largely contributed to low performance at the micro level
and economic development at the macro level. Though resources were not scarce, they were not
optimally utilised for lack of professional competence.
1. Competition was not intense and organisations were not very large in size. Profit was the
major yardstick used to measure organisational success which was often achieved even without
professionalization of management. This developed a belief that family heads and bureaucrats
could achieve organisational success even without professionalization of management.
2. Being small in size, ownership and management remained in the same hands. Even in large
organisations, though the Board was legally constituted, control was in the hands of few
influential people who were the owner entrepreneurs. While the flavour of professionalisation
was missing, the centralised approach to management proved successful. This did not encourage
professionalisation of management.
3. Public sector organisations were managed by civil servants appointed by the Government.
These civil servants were better technocrats than managers. Though, however, they managed the
business enterprises, they did not adopt professional managerial practices.
Professional management was, thus, almost unknown to most of the business enterprises until
after the outbreak of World War I. After the First World War, management came to be
recognised as a distinct field of study. Herbert Hoover (1874-1964) and Thomas J. Masaryk
(1850-1937) were amongst the pioneers who felt the need for principles of management to
restore the economies destroyed during the war.
With emergence of large scale business and non-business organisations (schools, hospitals,
research organisations etc.) during mid 1900s, our society became a society of institutions. It
became a pluralist society in the sense that people relied on a number of institutions to satisfy
their varied needs, like economic goods, health care, social and security needs, education,
research etc. These institutions became so large in size that owners could neither meet their
financial requirements nor manage them effectively. There was, thus, diversion of ownership
from management.
Managers were appointed who helped these enterprises by:
1. Increasing their productivity.
2. Analysing the impact of organisational activities on social values, culture and beliefs.
3. Creating new business opportunities rather than optimising the existing ones. This created
manager-entrepreneurs.
4. Improving the performance in the field of economic tasks, health care, education or
environment.
5. Producing economic and social development along with savings and capital investment.
In the era of globalisation, management is viewed as a:
1. Force to bring economic, organizational and social reforms.
2. Work with its own tools, skills and techniques.
3. Discipline with an organised body of knowledge which can be applied in almost every
situation and every organisation — business or non-business.
4. Culture with a set of traditional values, customs and beliefs. This helps in moulding cultural
aspects of the society.
5. Practice where management as a discipline is not just a codified set of knowledge.
Management is practiced, performed and is result-oriented.
6. Multi-institutional force, where the need for management is felt in all institutions, business as
well as non-business.
7. Multinational discipline. The world today is a single market and management cannot be
confined within the boundaries of the country. Management is becoming an institution of a
global economy.
“Management is independent of ownership, rank or power. It is an objective function and ought
to be grounded in the responsibility for performance. Professional-management is a function, a
discipline, a task to be done; and mangers are the professionals who practice this discipline, carry
out the functions, and discharge these tasks. It is no longer relevant whether the manager is also
an owner; if he is, it is incidental to his main function, which is to be a manager.” — Peter F.
Drucker
Management is becoming a professional discipline because of the following reasons:
1. As business firms grew in size, it became difficult to manage them in the traditional way. The
management policies were re-examined and sophisticated management techniques were applied
which required professionalisation of management.
2. Initially the public sector was managed by non-professional managers. With increase in their
complexity and growing internationalization, the market did not remain protective and free from
competition. Ownership and management got separated and professionally qualified managers
were appointed to manage these enterprises.
3. Trained, skilled and educated managers also led to professionalisation of management.
Management education is imparted on full-time and part-time basis. Short-term management
development courses are offered by many institutes.
Many business organisations in the private and public sector have management development
centres to train the managers. Even small companies prefer their managers to attend the short-
term management development programmes. The entire viewpoint is changing from owner-
managers to professional managers.
5. Notes on the Importance of Management:
Management plays important role in shaping the culture of organisation. The performance and
survival of organisation depends on its management.
Peter F. Drucker, in this regard remarks:
“Management is the specific organ of the modern institution. It is the organ on the performance
of which the performance and the survival of the institution depends.”
The modern society is dependent upon organisations for its survival. Organisations help
the society in the following ways:
1. They help in the attainment of individual goals.
2. They preserve knowledge by maintaining records of past achievements and provide
knowledge for future generations.
3. They provide career opportunities to individuals.
A well-managed organisation can effectively utilise its resources (human, physical and financial)
and achieve its objectives as well as meet the society’s needs. Effectiveness (doing the right
things) along with efficiency (doing things right) is the fundamental key to managerial success.
As Drucker puts it, the manager’s need to make the most of opportunities “implies that
effectiveness rather than efficiency is essential to business. The pertinent question is not how to
do things right, but how to find the right things to do, and to concentrate resources and efforts on
them.” It was the effectiveness of management that helped the economies restructure their
operations in the post World War II period.
The importance of management is as follows:
(i) Achievement of organisational goals:
Management helps to effectively design the goals and frame plans to achieve them efficiently.
(ii) Optimum utilisation of organisational resources:
Management helps the organisation utilise its scarce resources (human, physical and financial
resources) efficiently.
Human resources are the people with their talent, skill, knowledge, experience and abilities for
effective conversion of inputs into outputs.
Material or physical resources are the raw material or plant and machinery for producing goods
and services.
Financial resources are the funds needed to meet organisational short-term and long-term
requirements of current and fixed assets.
(iii) Develop analytical and conceptual ability of managers:
Management helps to analyse the organisational problems, link them with other organisational
matters and arrive at solutions geared towards organisational goals.
(iv) Balance between multiple goals:
At a point of time, managers face multiple goals. Deciding about what is more important so that
scarce organisational resources can be optimally allocated to different organisational goals, is
facilitated through management.
(v) Economic and social development:
Drucker asserts that “developing countries are not underdeveloped, they are undermanaged.” If
knowledge of management is transferred from developed to developing countries, developing
countries will develop their entrepreneurial ability, managerial excellence, rate of savings, capital
formation and, thus, economic and social development.
“Savings and capital investment do not produce management and economic development. On the
contrary, management produces economic and social development, and with it savings and
capital investment.” — Drucker
(vi) Coordination between individual and organisational goals:
Effective management coordinates individual goals with formal goals of the organisation. It
motivates employees to put their best efforts to contribute to organisational goals and through it,
achieve their personal goals.
(vii) Face competition:
Management helps to face tough competition in the contemporary business environment.
Effectively managed firms outperform those which are not effectively managed and, thus,
capture bigger share of the market.
Management promotes innovation as fast changing technology, social processes and organisation
structures have become inevitable part of organisational working. It helps to adopt the complex
environmental changes and promote their level of competence.
(viii) Social upliftment:
Management promotes social development by generating and directing human energies towards
the needs of the society such as health care, education, clean environment etc.
(ix) Reform Government and society:
Management teaches respect for individual values, tradition and social culture. “It will
increasingly stand for the quality of life of a society as much as for its standard of living.”
“Management will increasingly be concerned as much with the expression of basic beliefs and
values as with the accomplishment of measurable results.” — Drucker
(x) Social innovation:
The social and economic development is more a result of social innovation than technical
innovation. The needs of our society, educare, health care, clean environment, entrepreneurship,
productivity etc. are fulfilled through able and skilled managers.
Management, therefore, plays important role in the social upliftment of society. “Economic and
social development are the result of management. Development is a matter of human energies
rather than of economic wealth. And the generation and direction of human energies is the task
of management. Management is the mover and development is a consequence.”
(xi) Foundation to organisation:
Clearly defined tasks, their distribution to people with authority provides foundation to the
organisation. It assigns right task to the right person to avoid duplication and confusion in
organisational activities.
(xii) Environmental analysis:
Management enables an organisation to analyse its strengths and weaknesses and relate them
with environmental threats and opportunities. (This is done with the help of SWOT analysis). It
helps to minimize risks and maximise environmental opportunities and business gains.

6. Notes on the Functions of Management:

“Management is the coordination of all the resources through the process of planning,
organising, directing and controlling in order to attain stated objectives.”
“Management is principally the task of planning, coordinating, motivating and controlling the
efforts of others towards specific objectives.”
Management is a process because it involves a series of inter-related functions. The management
process includes planning, organising, staffing, directing and controlling functions.