Management – Concept, Nature and Importance

By : SHOBHIT KUMAR

Concept of Management• Management is a relatively newer discipline

• It has drawn concepts and principles from various other disciplineslike economics, sociology, psychology, anthropology and so on

• The pertinent concern with this is that each discipline has treatedManagement from within its own view-point

• Economists look at management from a production prism, sociologistfrom a social group or class perspective and governments from anadministrative and implementation angle

• This makes it difficult for management to be defined comprehensively

Concept of Management• Management is needed to convert the disorganized resources of men,

machines, materials and methods into a useful and effectiveenterprise.

• Management is a pipeline, the inputs are fed at the end and they areproceeded through management functions and ultimately we get theend results or inputs in the form of goods, services, productivity,information and satisfaction.

• In the narrow sense, it signifies the technique of taking work fromothers. In this way a person who can take work from others is calledmanager. In the wider sense, the management is an art, as well asscience, which is concerned with the different human efforts so asachieve the desired objective.

Concept of Management

Concept of Management - Divisions

• Management as process / activity

• Management as noun / group of personnel

• Management as a discipline

Management as Process• Management scholars like Kimball, Koontz, O'Donnell, Newmann,

Summer, Stanley Vance, Theo Haimann, F.C. Hooper and E.F.T Breachall call it a process. It is evident from the following definitions also:

• According the Kimball, management may be broadly defined as theart of applying the economic principles that underlie the control ofmen and materials in the enterprise under consideration

• According to Koontz, "Management is the art of getting things donethrough and with people in formally organized groups”

• According to Theo Haimann, "Management is the function of gettingthings done through people and directing the efforts of individualstowards a common objective"

Management as Process• According to Sisks, "Management is the process of working with oneanother to effectively achieve organizational objectives by efficientlyusing limited resources in changing environment”

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• A process can be defined as a systematic method of handlingactivities

• But the management process is often considered a complex one –An identifiable flow of information through interrelated stages ofanalyses directed towards the achievement of an objective or set ofobjectives

• The activities through which these objectives can be achieved areclassified into operational and managerial

Management as Process• Operational activities are those which are of operative nature –

through which actual work is accomplished (machine handling byworkers, putting finished product cartons in godown etc.)

• Managerial activities, on the other hand, are performed to getthongs done by others (supervisor instructing a worker to dosomething, call center team lead overlooking daily activities at a BPO,etc.)

• Managerial activities are different from operational activities in thatthey are supervisory in nature and intended to get things done byothers.

• Thus, Management can be defined as the process of ‘getting workdone by others or through efforts of others’

Management as Process - Orientations

• Production or Efficiency oriented

• Decision oriented

• People oriented

• Function oriented

Management – Production / Efficiency oriented definition

• Theorists have put forth management as concerned with generatingefficiency in organizational settings

• Taylor has defined management as the art of knowing what you wantto do and then seeing that it is done in the best and cheapest way

• This definition of management emphasizes the relationship betweenefforts and results as its primary objective but does not lay down howto achieve this causality can be achieved

• This is where the definition falters

Management – Decision oriented definition

• Stanley Vance defined management as simply the process of decisionmaking and control over the action of human beings for the expressedpurpose of attaining pre-determined goals

• Decision theorists have seen management in terms of decisionmaking

• Whatever a manager does is through decision making

• This definition suggests that decision making powers provide adynamic force for managers to transform the resources of businessorganizations into productive, cooperative concerns

• The flaw of this decision is that it does not provide the processes inwhich context decision making is applied

Management – People oriented definition• In this group of definitions, management is defined as a process of

coordinated efforts of people in organizational settings

• Management is the direction of people and not of things

• Lawrence Appley defines management as the accomplishment ofresults through the efforts of other people

• Koontz has defined management as the art of getting things donethrough and with people in formally organized groups

• These definition offer a better definition of management but theflaw arises in that they do not specify functions or activitiesinvolved in the process of getting things done by or with thecooperation of other people

Management – Function oriented definition• This group of definitions puts emphasis on the various functionsperformed by managers in organizations though there is nouniformity in these functions in various definitions

• McFarland states that management is defined for conceptual,theoretical and analytical purposes as that process by whichmanagers create, direct, maintain and operate purposiveorganizations through systematic, coordinated and cooperativehuman efforts

• These definitions are more relevant to understand the exact natureand scope of management

• Management is a process involving planning, organizing, directingand controlling human efforts to achieve stated objectives in anorganization

Management as Activity• According to this approach management consists of those activities,

which are performed by managers in attaining the predeterminedobjectives of the business. This approach may be referred to HenryFayol, who classified management activities into the followingcategories:

• Technical - referred to production department

• Commercial - relates to buying, selling and exchange

• Financial concerned with maximum utilization of capital

• Security concurred with protection of property and person

• According concerned with maintenance of accounts, presentation andstatistics

• Management concerned to planning, organizing, commanding, coordinatingand controlling

Management as Noun/Group of Personnel• According to this approach human factor plays an important role inaccomplishing business objectives. Management is concerned withthose who have been managing the affairs of the business.Managers are assigned duties and are also granted requisiteauthority to perform their duties efficiently and thus, managementis effective direction, coordination and control of individual andgroup efforts to accomplish business objectives.

• This approach is advocated by management authorities like Taylor,Wilson and others.

• As per F.W. Taylor's approach, "Management is the art of knowingexactly what you want your men to do and then seeing that they doit in the best and cheapest way."

Management as a Discipline• Some times the term 'Management' is used to connote neither theactivity nor the personnel who exercise it, but as a substantivesubject, a body of knowledge and as a subject of study.Management is being taught in different college and universities asa distinct subject.

• Thus, management, as such is a process, an activity, a discipline andas effort to coordination, control and direct individual and groupefforts towards desired goal of any business.

Concept of Management - Nature• Management is an activity: Management is an activity which is

concerned with the efficient utilization of human and non-humanresources of production

• Invisible Force: Management is an invisible force. Its existence can befelt through the enterprise or institution it is managing

• Goal Oriented: Management is goal oriented as it aims to achievesome definite goals and objectives. According to the Haimann,"Effective management is always management by objectives".Managers and other personnel officers apply their knowledge,experience and skills to achieve the desired objectives

Concept of Management - Nature• Accomplishment through the efforts of Others: Managers cannot do

everything themselves. They must have the necessary ability andskills to get work accomplished through the efforts of others

• Universal activity: Management is universal. Management is requiredin all types or organizations. Wherever there are some activities,there is management. The basic principles of management areuniversal and can be applied anywhere and in every field, such asbusiness, social, religious, cultural, sports, administration,educational, politics or military

• Art as well as Science: Management is both an art and a science. It isa science as it has an organized body of knowledge which containscertain universal truths and an art as managing requires certain skillswhich apply more or less in every situation

Concept of Management - Nature• Multidisciplinary Knowledge: Though management is a distinct

discipline, it contains principles drawn from many social sciences likepsychology, sociology etc.

• Management is distinct from ownership: In modern times, there is adivorce of management from ownership. Today, big corporations areowned by a vast number of shareholders while their management isin the hands of paid qualified, competent and experiencedmanagerial personnel

• Need at all levels: According to the nature of task and scope ofauthority, management is needed at all levels of the organization, i.e.,top level, middle and lower level

Concept of Management - Nature• Integrated process: Management is an integrated process. It

integrates the men, machine and material to carryout the operationsof the enterprise efficiently and successfully. This integrating processis result oriented

Concept of Management - Importance• Management has assumed importance due to the emergence of large

sized organizations and the complexities they bring with them

• Another aspect that accords management its importance is thechanging nature of society and its various constituents (country,religion, morality, patriotism, family, economy etc.)

• Urwick has highlighted the importance of management by observingthat no ideology, no ism, or political theory can win greater outputwith less efforts from a given complex of human and managerialresources than sound management. And it is on such greater outputthat a higher standard of life, more leisure and more amenities for allmust necessarily be found

Concept of Management - Importance• Effective utilization of resources

• Management aims to utilize resources effectively due to the scarcity ofresources premise

• Since demand of society has to be met, the contribution of scarce resourcesshould be maximum for its general interest

• Management not only decides in which way a particular resource be used,but also takes action to utilize the particular resource in the best way

Concept of Management - Importance• Development of Resources

• Management develops various resources, both human and non-human

• Lawrence Appley has emphasized that management is the development ofpeople

• Most resource development is carried out in an organized way andmanagement leads these activities

Concept of Management - Importance• To Incorporate Innovations

• Changes are rampant in both technology and social processes and structure

• Such changes have to be incorporated to keep the organization alive andkicking

• Management helps organizations to strategize for the future by helping themacquire / develop high levels of competence, specialization and technology

Concept of Management - Importance• Integrating various Interest Groups

• Organized efforts of businesses witness pressures from various interestgroups for maximum share in the combined output

• Pressure groups such as shareholders, employees, governments, vendors,etc. put various demands on the organization

• Management has to balance these pressures so as to ensure optimumallocation of output / resources

Concept of Management - Importance• Stability in Society

• Management provides stability in society by modifying or changing resources/output in accordance with the changing social environment

• Today, innovation sways society and it is management’s role to provideintegration between traditions and innovations