Definition:

Management is the process of achieving goals and objectives effectively and efficiently through and with the people
“Management is a process of designing and maintaining an environment in which individuals work together in groups to effectively and efficiently accomplish selected aims”.

Management is the process of achieving organizational goals and objectives effectively and efficiently by using management functions i.e.

  • Planning
  • Organizing
  • Staffing
  • Controlling
Management is a set of activities directed at an organization’s resources with the aim of achieving organizational goals in an efficient and effective manner.

Elements of Definition:

Process – represents ongoing functions or primary activities engaged in by managers
Efficiency – getting the most output from the least amount of inputs
  • “doing things right”
  • concerned with means
  • Achieving the objectives in time
Effectiveness – completing activities so that organizational goals are attained
  • “doing the right things”
  • concerned with ends
  • Achieving the objectives on time

Management: Science or Art?

Science is a collection of systematic knowledge, collection of truths and inferences after continuous study and experiments. It has fundamental principles discovered.
Art uses the known rules and principles and uses the skill, expertise, wisdom, experience to achieve the desired result.
Management has got two faces like a coin; on one side it is art and on the other it is science. Management has got scientific principles which constitute the elements of Science and Skills and talent which are attributes of Art.
“Management is both art and science”

Manager

A manager is someone whose primary responsibility is to carry out the management process within an organization to achieve the organizational goals.
Changing nature of organizations and work has blurred the clear lines of distinction between managers and non-managerial employees

Levels of managers

Most organizations have three management levels:

  • Low-level managers;
  • Middle-level managers; and
  • Top-level managers.
These managers are classified in a hierarchy of authority, and perform different tasks. In many organizations, the number of managers in every level resembles a pyramid.
Below, you’ll find the specifications of each level’s different responsibilities and their likely job titles.
Top-level managers
The board of directors, president, vice-president, and CEO are all examples of top-level managers.
These managers are responsible for controlling and overseeing the entire organization. They develop goals, strategic plans, company policies, and make decisions on the direction of the business.
In addition, top-level managers play a significant role in the mobilization of outside resources.
Top-level managers are accountable to the shareholders and general public.
Middle-level managers
General managers, branch managers, and department managers are all examples of middle-level managers. They are accountable to the top management for their department’s function.
Middle-level managers devote more time to organizational and directional functions than top-level managers. Their roles can be emphasized as:
  • Executing organizational plans in conformance with the company’s policies and the objectives of the top management;
  • Defining and discussing information and policies from top management to lower management; and most importantly
  • Inspiring and providing guidance to low-level managers towards better performance.
Some of their functions are as follows:
  • Designing and implementing effective group and intergroup work and information systems;
  • Defining and monitoring group-level performance indicators;
  • Diagnosing and resolving problems within and among work groups;
  • Designing and implementing reward systems supporting cooperative behavior.

Low-level managers

Supervisors, section leads, and foremen are examples of low-level management titles. These managers focus on controlling and directing.

Low-level managers usually have the responsibility of:

  • Assigning employees tasks;
  • Guiding and supervising employees on day-to-day activities;
  • Ensuring the quality and quantity of production;
  • Making recommendations and suggestions; and
  • Upchanneling employee problems.
Also referred to as first-level managers, low-level managers are role models for employees. These managers provide:
  • Basic supervision;
  • Motivation;
  • Career planning;
  • Performance feedback; and
  • Staff supervision.

EVOLUTION OF MANAGEMENT AND APPROACHES IN MANAGEMENT

In study of management there are three approaches:

  •  The Classical Approach
  •  The Behavioral Approach
  •  The management Science Approach

The Classical Approach

The serious study of management began in the late 19th century with the need to increase the efficiency and productivity of the workforce.
The classical approach to management can be understood by looking at 2 perspectives:
    1. Scientific management concentrated on the problems of lower-level managers
    2. Classical organizational theory focused on problems of top-level managers.
Think about the context. At the turn of the 20th century, business was expanding and creating new products and new markets, but labor was in short supply.
The solutions were

(1) substitute capital for labor or

(2) use labor more efficiently.

Frederick W. Taylor made an important contribution to scientific management. He observed workers producing far less than capacity in steel firms. He recognized their were no studies to determine expected daily output per worker in the form of work standards and the relationship between these standards and wages.  Then he tried to find the one best way to do a job, determining the optimum work pace, the training of people to do the job properly and successful rewards for performance but using an incentive pay system.
Taylor’s work lead to the following 4 principles:
Principle 1. Study the way workers perform their tasks, gather all the informal knowledge that workers possess, and experiment with ways to improves the performance of tasks.
Principle 2. Codify the new methods of performing tasks into written rules and standard operating procedures (sops).
Principle 3. Carefully select workers so that they possess skills and abilities that match the needs of the task and train them to perform according to rules and procedures.
Principle 4. Establish a fair or acceptable level of performance for a task and then develop a pay system that awards acceptable performance.

Classical Organizational Theory

Another body of ideas developed at the same time. While scientific management focused on the management of work, the Classical approach focused on the management of organizations.
The classical organizational theory focus was on

(1) developing principles that could guide the design, creation, and maintenance of large organizations and

         (2) to identify the basic functions of managing organizations.
Engineers were the main contributors to scientific management while practicing executives were the major contributors to classical organizational theory

The Contributors to Classical Organizational Theory: Weber and Fayol

Max Weber was the primary architect of the theory of the organization as a bureaucracy.
His view of a bureaucracy was a smoothly functioning, highly efficient machine in which each part is tuned to perform its prescribed function.
Weber believed  that an efficient organization should be based on 5 principles
  • Principle 1. In a bureaucracy, a manager’s formal authority comes from the position held in the organization.
  • Principle 2. In this context people should occupy positions because of their performance, not because of their social standing or personal contacts.
  • Principle 3. The extent of each position’s formal authority and task responsibilities should be clearly understood.
  • Principle 4. Positions should be arranged hierarchically to that authority is exercised effectively and employees know to whom they are to report and who reports to them.
  • Principle 5. Managers must create a will-defined systems of rules, standard operating procedures, and norms to control behavior within an organization.

Henry Fayol was the other major contributor and devised his 14 principles of effective management:

  • Principle 1. Division of Labor: Advocated specialization and increasing worker’s responsibilities.
  • Principle 2. Management Authority and Responsibility: Managers must have the authority to give orders and be responsible for effectiveness of their departments.
  • Principle 3. Unity of Command: Employees should receive orders from and report to only one supervisor
  • Principle 4. Line of Authority:  Restricting the organization’s number of levels enable it to act quickly and flexibly.
  • Principle 5. Centralization: Managers must decide how much authority to centralize at the top and how much to give to workers.
  • Principle 6. Unity of Direction: All workers should be committed to the same plan of action.
  • Principle 7. Equity: Workers are expected to perform at high levels and to be treated with respect and justice.
  • Principle 8. Order: Order is the methodical arrangement of jobs to provide the greatest benefits and career opportunities.
  • Principle 9. Initiative: Managers must encourage workers to act on their own to benefit the organization.
  • Principle 10. Discipline: Employees would be expected to be obedient, energetic and concerned about the organization’s welfare.
  • Principle 11. Remuneration: Managers should use reward systems, profit sharing and bonuses to acknowledge high performance.
  • Principle 12. Stability of Tenure of Personnel: Long term employment helps employees develop the skills to make significant contributions.
  • Principle 13. Coordination of Individual Interest to the Common Interest: Employees subordinate their individual interest to those of the firm.
  • Principle 14. Espirit de Corps: Importance of a shared commitment and enthusiasm in an effective organization.

Contributions of the Classical Approach

The greatest contribution of the classical approach was the identification of management as an important element of organized society. The identification of management functions: planning, organizing and controlling provided the basis for training new managers and was a valuable practice. Many management techniques used today: time and motion analysis, work simplification, incentive wage systems, production scheduling, personnel testing, and budgeting are techniques from the classical approach

Limitations of the Classical Approach

One major criticism is that the majority of insights are to simplistic for today’s complex organization. The classical approach and the scientific management approach worked in organizations that were very stable and predictable and today little of that exists.

Behavioral Approach

The behavioral approach to management has 2 branches: the Human relations approach from the 1950’s and the behavioral science approach. In the human relations approach managers must know why their subordinated behave as they do and what psychological and social factors influence them. Advocates of this approach try to show how the process and functions of management are affected by differences in individual behavior and the influence of groups in the workplace. This approach requires managers to recognize employees’ need for recognition and social acceptance and this results in training in human relation skills for managers.

The Behavioral Science Approach

The individuals in the behavioral science branch of the behavioral approach believe that the human is more complex than the “economic man” description of the classical approach and the “social man” description of the human relations approach. The behavioral science approach concentrates more on the nature of work itself and the degree to which it can fulfill the human need to use skills and abilities.
Mary Parker Follett (1868-1933) provided much of the management theories helping     organizations recognize that they could be viewed form the perspective of individual or group behavior.  She was a social philosopher whose writings provided a more people-centered view of the organization than the predominant scientific management writing.
According to Follett, the manager’s job was to harmonize and coordinate group efforts and managers and workers should view themselves as partners in a common project. Managers would act more from their knowledge of human behavior than from their formal authority.
The Hawthorne Studies: a series of research studies conducted at the Hawthorne Works of General Electric helped lend support to the behavioral approach to management theory.
The research used varying lighting levels in the plant’s secretarial pool to determine the effects of different levels on productivity expecting productivity levels to drop when lighting levels dropped. The Result was surprising: productivity only dropped when workers could no longer see well enough to do their work.
The results showed that the presence of the researchers was affecting the results because the workers enjoyed the attention and produced the results they believed the researchers wanted.
Summary: The Hawthorne effect was used to describe this effect of increased productivity due to increased attention.
Contributions of Behavioral Approach
Contributions of the Behavioral Approach include increased use of teams to accomplish organizational goals, focus on training and development of employees, and the use of innovative reward and incentive systems. In addition the focus on modern management theory resulted in empowering employees through shared information.
Limitations of the Behavioral Approach
The limitations included the difficulty for managers in problem situations and the fact that human behavior is complex. This complicated the problem for managers trying to use insights from the behavioral sciences which often changed when different behavioral scientists provided different solutions.

The Management Science Approach

The Management Science approach is a modern version of the early emphasis on the “management of work” in scientific management. It features the use of mathematics and statistics to aid in resolving production and operations problems, thus focusing on solving technical rather than human behavior problems.
The management science approach was used in World War II when the English formed teams of scientists, mathematicians, and physicist into units called operations research teams, and today businesses use these teams to deal with operating issues.
Contributions of the Management Science Approach
Most important contributions are in production management focusing on manufacturing production and the flow of material in a plant and in operations management solving production scheduling problems, budgeting problems and maintenance of optimal inventory levels.
Limitations of the Management Science Approach
The shortfall of this approach is that management science does not deal with the people aspect of an organization.

Attempts to Integrate the Three Approaches to Management

  • One attempt to integrating the three approaches to management is the Systems Approach. The Systems Approach stresses that organizations must be viewed as systems in which each part is linked to each other.
  • The other approach is the Contingency Approach. The Contingency Approach stresses that the correctness of a managerial practice is contingent on how it fits the particular situation.
  • The system’s approach views the elements of an organization as interconnected and as being linked to its environment.
  • It is important to understand that most organizations must operate as open systems to survive and use a systems perspective to management. And the objectives of the individual parts of the organization must be compromised for the objectives of the entire firm.
  • The contingency theorists believe that most workplace situations are too complex to analyze and control as the scientific management approach suggests.  Paul Hersey has developed a situationalist theory of leadership. He believes managers should not ascribe to one best approach. Instead managers should identify the appropriate principles, along with relevant contingency variables and then evaluate these factors.  In summary, the contingency approach involves identifying the important variables in different situations, evaluating the variables, and then applying appropriate management knowledge and principles in selecting an effective approach to the situation
  • Although both the systems approach and the contingency approach have developed value to insights on management. It is early in their stage of development and the report card is not complete on how these approaches will contribute compared to other methods.

Principles of management

Henry Fayol 14 principles of management:

  • Principle 1. Division of Labor: Advocated specialization and increasing worker’s responsibilities.
  • Principle 2. Management Authority and Responsibility: Managers must have the authority to give orders and be responsible for effectiveness of their departments.
  • Principle 3. Unity of Command: Employees should receive orders from and report to only one supervisor
  • Principle 4. Line of Authority:  Restricting the organization’s number of levels enable it to act quickly and flexibly.
  • Principle 5. Centralization: Managers must decide how much authority to centralize at the top and how much to give to workers.
  • Principle 6. Unity of Direction: All workers should be committed to the same plan of action.
  • Principle 7. Equity: Workers are expected to perform at high levels and to be treated with respect and justice.
  • Principle 8. Order: Order is the methodical arrangement of jobs to provide the greatest benefits and career opportunities.
  • Principle 9. Initiative: Managers must encourage workers to act on their own to benefit the organization.
  • Principle 10. Discipline: Employees would be expected to be obedient, energetic and concerned about the organization’s welfare.
  • Principle 11. Remuneration: Managers should use reward systems, profit sharing and bonuses to acknowledge high performance.
  • Principle 12. Stability of Tenure of Personnel: Long term employment helps employees develop the skills to make significant contributions.
  • Principle 13. Coordination of Individual Interest to the Common Interest: Employees subordinate their individual interest to those of the firm.
  • Principle 14. Espirit de Corps: Importance of a shared commitment and enthusiasm in an effective organization.

Functions of Management

  • Management has been described as a social process involving responsibility for economical and effective planning & regulation of operation of an enterprise in the fulfillment of given purposes. It is a dynamic process consisting of various elements and activities. These activities are different from operative functions like marketing, finance, purchase etc. Rather these activities are common to each and every manger irrespective of his level or status.
  • Different experts have classified functions of management. According to George & Jerry, “There are four fundamental functions of management i.e. planning, organizing, actuating and controlling”.
  • According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to control”. Whereas Luther Gullick has given a keyword ’POSDCORB’ where P stands for Planning, O for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for reporting & B for Budgeting. But the most widely accepted are functions of management given by KOONTZ and O’DONNEL i.e. Planning, Organizing, Staffing, Directing and Controlling.
  • For theoretical purposes, it may be convenient to separate the function of management but practically these functions are overlapping in nature i.e. they are highly inseparable. Each function blends into the other & each affects the performance of others.
Functions of Management
  • Planning
            It is the basic function of management. It deals with chalking out a future course of action & deciding in advance the most appropriate course of actions for achievement of pre-determined goals. According to KOONTZ, “Planning is deciding in advance – what to do, when to do & how to do. It bridges the gap from where we are & where we want to be”. A plan is a future course of actions. It is an exercise in problem solving & decision making. Planning is determination of courses of action to achieve desired goals. Thus, planning is a systematic thinking about ways & means for accomplishment of pre-determined goals. Planning is necessary to ensure proper utilization of human & non-human resources. It is all pervasive, it is an intellectual activity and it also helps in avoiding confusion, uncertainties, risks, wastage etc.
  • Organizing
            It is the process of bringing together physical, financial and human resources and developing productive relationship amongst them for achievement of organizational goals. According to Henry Fayol, “To organize a business is to provide it with everything useful or its functioning i.e. raw material, tools, capital and personnel’s”. To organize a business involves determining & providing human and non-human resources to the organizational structure. Organizing as a process involves:
                Identification of activities.
                Classification of grouping of activities.
                Assignment of duties.
                Delegation of authority and creation of responsibility.
                Coordinating authority and responsibility relationships.
  • Staffing
            It is the function of manning the organization structure and keeping it manned. Staffing has assumed greater importance in the recent years due to advancement of technology, increase in size of business, complexity of human behavior etc. The main purpose o staffing is to put right man on right job i.e. square pegs in square holes and round pegs in round holes. According to Kootz & O’Donell, “Managerial function of staffing involves manning the organization structure through proper and effective selection, appraisal & development of personnel to fill the roles designed un the structure”. Staffing involves:
                Manpower Planning (estimating man power in terms of searching, choose the person and giving the right place).
                Recruitment, Selection & Placement.
                Training & Development.
                Remuneration.
                Performance Appraisal.
                Promotions & Transfer.
  • Directing
            It is that part of managerial function which actuates the organizational methods to work efficiently for achievement of organizational purposes. It is considered life-spark of the enterprise which sets it in motion the action of people because planning, organizing and staffing are the mere preparations for doing the work. Direction is that inert-personnel aspect of management which deals directly with influencing, guiding, supervising, motivating sub-ordinate for the achievement of organizational goals. Direction has following elements:
                Supervision
                Motivation
                Leadership
                Communication
                Supervision- implies overseeing the work of subordinates by their superiors. It is the act of watching & directing work & workers.
Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work. Positive, negative, monetary, non-monetary incentives may be used for this purpose.
Leadership- may be defined as a process by which manager guides and influences the work of subordinates in desired direction.
Communications- is the process of passing information, experience, opinion etc from one person to another. It is a bridge of understanding.
  • Controlling
            It implies measurement of accomplishment against the standards and correction of deviation if any to ensure achievement of organizational goals. The purpose of controlling is to ensure that everything occurs in conformities with the standards. An efficient system of control helps to predict deviations before they actually occur. According to Theo Haimann, “Controlling is the process of checking whether or not proper progress is being made towards the objectives and goals and acting if necessary, to correct any deviation”. According to Koontz & O’Donell “Controlling is the measurement & correction of performance activities of subordinates in order to make sure that the enterprise objectives and plans desired to obtain them as being accomplished”. Therefore controlling has following steps:
                Establishment of standard performance.
                Measurement of actual performance.
                Comparison of actual performance with the standards and finding out deviation if any.
                Corrective action.

Social Responsibilities of Management

The term “social responsibilities” can be defined as the obligation of management towards society and others.
Reason for Social Responsibilities: Business enterprises are creatures of society and should respond to the demands of society. If management does not react to changes in social demands, the society will either force them to do so through laws or will not permit the enterprise to survive. Therefore, the longterm interests of businesses are best served when management assumes social responsibility. The image of a business organization depends on the quality of its products and customer service; and the extent to which it fulfills the expectations of owners, employees, consumers, government, and the community at large. For long-term success it matters a great deal if the firm has a favourable image in the public mind. Every business enterprise is an organ of society and its activities have impact on the social scene. Therefore, it is important for management to consider whether their policies and actions are likely to promote the public good, advance the basic values of society, and add to its stability, strength, and harmony.
Responsibility towards owners: The primary responsibility of management is to assure a fair and reasonable rate of return on capital and fair return on investment. With the growth of business, shareholders can also expect appreciation in the value of their capital.
Responsibility towards employees: Responsibility towards employees relates to fair wages and salaries, satisfactory work environment, labour management relations, and employee welfare. Fair wages should be fixed in light of labor productivity, the prevailing wage rates in the same or neighbouring areas, and relative importance of jobs. Managers’ salaries and allowances are expected to be linked with their responsibility, initiative, and skill, but the spread between minimum wages and highest salaries should be reasonable. Employees are expected to build up and maintain harmonious relationships between superiors and subordinates. Another aspect of responsibility towards employees is the provision of welfare amenities like safety and security of working conditions, medical facilities, housing, canteen, leave, and retirement benefits.
Responsibility towards consumers: In a competitive market, serving consumers is supposed to be a prime concern of management. But in reality, perfect competition does not prevail in all markets. In the event of shortage of supply there is no automatic correction. Besides, consumers are often victims of unfair trade practices and unethical conduct of business. Consumer interests are thus protected to some extent by laws and the pressure of organized consumer groups. Management should anticipate these developments, satisfy consumer needs, and protect consumer interests. Goods must be of appropriate standard and quality and be available in adequate quantities at reasonable prices. Management should avoid resorting to hoarding or creating artificial scarcity, as well as false and misleading advertisements.
Responsibility towards the government: As a part of their social responsibility, management must conduct business lawfully, honestly pay all taxes and dues, and should not corrupt public officials for selfish ends. Business activities must also confirm to the economic and social policies of the government.
Responsibility towards the community and society: The socially responsible role of management in relation to the community is revealed by its policies with respect to the employment of handicapped persons, weaker sections of the community, environmental protection, pollution control, setting up industries in backward areas, and providing relief to the victims of natural calamities etc.

Challenges of management

  • 21st Century organizations
  • Information Technology
  • Globalization
  • Mergers and Acquisitions
  • Workplace diversity
  • Organizational structure
  • Work-life balance
  • The rate of change
  • Increased competition
  • Increased ethical and social responsibility
  • Managing human resources

Managerial ethics

  • Managerial ethics is a set of principles and rules dictated by upper management that define what is right and what is wrong in an organization. It is the guideline that helps direct a lower manager’s decisions in the scope of his or her job when a conflict of values is presented.
  • Ethics are the moral codes that govern behavior of a person or group of people regarding what is right and wrong. These moral codes revolve around established values and principles and may not be the same from culture to culture. Ethics point the way to a particular course of action defining acceptable behaviors and choices. Managerial ethics are a set of standards that dictate the conduct of a manager operating within a workplace.