POM - Introduction

Unit I - Introduction

Nature and Scope of Management

Meaning of Management

Management is an art of getting things done by a group of people in a manner that results in optimum utilization of available recourses. An activity done by the manager or the owners of the business in the direction to achieve the management goals can be called as management. Management can also be referred as the process of Planning, Organizing, Staffing, Directing, Co-ordinating and Controlling.

Definition of Management

Different people have defined management differently at different times.

Some of the most common definitions of Management are –

Mary Parker Follett – “Management is an art of getting things done through others.”

Louis Allan – “Management is what manager does.”

Henry Fayol – “To Manage is to forecast and plan, to organize, to compound, to co-ordinate and to control.”

Harold Koonz – “Management is the art of getting things done through and with help of people in formally organized groups.”

Nature/ Feature/ Characteristics of Management

1.      Management is an Art as well as Science

2.      Management is an Activity

3.      Management is a Continuous  Process

4.      Management is Goal Oriented

5.      Management is a Factor of Production

6.      Management is Omnipresent

7.      Management is a Distinct Entity

8.      Management is a Dynamic Function

9.      Management is Universal in Nature

10.  Management aims at Maximizing Profits.

Administration V/s Management

Administration is a function which determines the corporate policy, the co-ordination of Finance, Production and Distribution. Wherein the Management is a function which is concerned with implementation of policies within the framework set up by Administration.

Is Management An Art or Science?

Management as a Profession

Management is regarded as a profession due to the development of business in size and nature. However it is important to understand as to whether Management can be considered as a profession or not?

Here are a few requisites of a Profession which we will examine as to are they present in Management or not.

1.      Well Defined Body of Knowledge:

Every profession needs to have a distinct and well developed body of knowledge which helps professionals to gain the required knowledge. Management has been developed as a distinct body of knowledge over past few decades by various management thinkers and practitioners.

Thus management fulfils this requirement of profession.

2.      Professional Associations:

An occupation needs to have an association; if not so it cannot be considered as a profession. An association consisting of professionals needs to regulate and develop the professional activities.  This body sets the criteria of minimum education and training for those entering the profession. For Eg. To Practice as a Chartered Accountant you should be a member of Institute of Chartered Accountants of India.

There are various National and International Bodies of Management, however it is not legally binding on anyone to be a member of any such body to be a manager or part of management.

Thus management Not fulfils this requirement of profession.

3.      Restricted Entry:

The entry to a particular profession is controlled by professional body. A person intending to enter that profession must acquire the prescribed educational qualifications. For example, to become a lawyer you need to qualify the LLB exam i.e. you need to graduate in law.

In case of management there is no such specific qualification prescribed for becoming a manager. A person can become a manager irrespective office educational qualifications just based on his abilities.

Thus management does not fulfil this requirement of profession.

4.      Ethics

There are some ethical standards or a code of conduct for every profession. Every individual of the concerned profession is expected to maintain conformity with these standards.

However, in management there are no such ethical standards for managers.

Thus management does not fulfill this requirement of profession.

Conclusion:
From the above we can see that the Management does not meet with most of the criteria’s of a Profession, hence as of now it is not considered as a profession.

Scope of management

As we are aware management is omnipresent, hence the scope of management is very wide. It has to deal with almost all the functional areas of the business. Some of the important functional areas forming a part of scope of management are as follows:

1.      Production management

2.      Marketing management

3.      Financial management

4.      Personnel management

5.      Office management

Importance/ significance of management

Presence of management is a must for every organisation. The existence of management ensures proper functioning of the business and helps in securing maximum prosperity with minimum efforts.Any business to grow and develop needs a proper plan and the directions to achieve such plans it is management that provides the direction to the plans for their implementation. As it is rightly said that “anything minus management amounts to nothing.”

The following points briefly explain the importance of management:

1.      Accomplishment of group objectives

2.      Optimum utilisation of available resources

3.      Cost reduction

4.      Increased profits

5.      Meets the challenge of change

6.      Effective functioning of business

7.      Provides innovation

8.      Stability to business

9.      Integrates various interest.

Functions of management:

Various philosophers and thinkers of management have their own classification of functions based on their experiences and their experiments. Some of the most important functions of management are discussed in detail here.

These functions can be understood with the help of an anycrom

P - planning

O - organising

S – staffing

D - directing

Co - coordinating

R - reporting

B–budgeting

Let us understand each one of them individually –

1.      Planning:

Planning is the primary function of management also considered as the basic managerial function. Nothing can be performed without planning. In simple words planning means deciding in advance what is to be done, who is to do it, when is it to be done and how it is to be done. Planning is an activity of “thinking before doing”.

As planning is the first function of management, the other functions such as organising, staffing, directing etc. can be performed only after planning. Planning is a continuous process that takes place at all levels of management.

Plans may be of different kinds, such as short term plans, medium term plans, long term plans, operational plans, etc.  All the plans made should be flexible so that at the time of implementation if need arises they can be changed.

2.      Organising

Organising means the distribution of work in groups or departments for the effective performance of the organisation. The function of organising is to arrange, guide, co-ordinate, direct and control the activities of all the factors of production so as to achieve the objectives of the business.

Organisation provides the necessary framework and infrastructure within which the people can work towards the achievement of the organisational goals.

There can be different types of organisations such as-

- Line organisation

- Functional organisation

- Line and staff organisation.

3.      Staffing:

This function comprises the activities of selection and placement of competent personnel. This function works on the principle of, “right person, for the right job”. Staffing involves various activities like recruiting, selecting, training, placement, appraisal and promotion of the staff.

Every manager in the organisation performs this function in one or the other form, in order to get the work done from others. It is a continuous process.

4.      Directing:

The actual performance of work starts with directing. Planning, organising and staffing functions are concerned with the preliminary work however direction deals with making the workers. Directing involves guiding, supervising and motivating the employees. Directing is concerned with implementing the desired plans.Initiates an organised and planned action to ensure effective performance by the employees in order to achieve organisational goals.

Directing is a continuous function which needs to be performed at all levels of management at all times.

Directing involves various activities like leadership, communication, motivation and supervision.

5.      Coordinating:

On the business activities are divided group wise and department wise under the organising function, now the need to be channelised in one direction for the achievement of organisational goals. This function of channelising various other functions is called coordination.Each individual or a group or a department is given their targets and they have to see that they achieve their targets without being concerned about the others. It is the responsibility of management to co-ordinate the activities of different individuals or groups to see that the work is going as per the plan.

Coordination creates team spirit and helps in achieving the organisational goals through collective efforts.

6.      Reporting:

Reporting is keeping the management and others informed as to what is going on in the business so that they can take the necessary corrective actions for the better implementation of plans and execution of such plans.

It is usually done by the subordinate to his immediate supervisor. The main objective of reporting is to keep the higher management informed about the progress of each activity in the organisation.

7.      Budgeting

This is the financial function of the management. Here the management is expected to plan for the possible incomes and the expected expenses to be incurred over a given period of time. This function helps the organisation to decide in advance as to the amount of resources that would be needed for the smooth functioning of the business.

budgeting acts as a tool to support the controlling activity of the management.

Levels of management

All the organisations may have a separate hierarchy systems as per their requirements. However it is to be noted that irrespective of the organisation or its nature or size all the organisations will have 3 Levels of Management.

Top Level Management:

It consist of the senior most executives of the organisation, Such as –

Board of Directors, CEO, CFO, M.D., President, etc.

Functions of Top Level Management

1.      Determining Objectives

2.      Framing Plans & Policies

3.      Directing Middle Level Management

4.      Co-ordination

5.      Organising (Arranging Resources)

6.      Growth & Survival of Organisation

Middle Level Management:

It consist of the Departmental Managers. Such as –

Production Manager, Finance Manager, Marketing Manager, Etc.

Functions of Middle Level Management

1.      Interpretation of Policies

2.      Implementing Policies

3.      Organising

4.      Staffing

5.      Motivating

6.      Controlling

7.      Co-operation

Lower Level Management:

This is the lowest level in the hierarchy of management and the actual implementation of the policies are the responsibility of this level. It consist of –

Supervisors, Foremen, Team Leaders, Etc.

Functions of Lower Level Management

1.      Maintaining Good Working Conditions

2.      Assisting in Staffing

3.      Maintaining Quality

4.      Motivating Workers

5.      Minimising Wastage

6.      Grievance Redressal

Managerial Skills

As a manager is to perform a wide variety of jobs, he/she is required to have a large skill set.

However, Robert Katz have complied the skills in just three main groups-

-          Technical Skills

-          Human Skills

-          Conceptual Skills.

The level of different skill sets needed by each manager depends on his position in the 

management hierarchy. 

Scientific Management

F.W. Taylor invented the Scientific Management in the 19^th Century.   F.W. Taylor is also called as the Father of Scientific Management.

F.W. Taylor defined Scientific Management as the Substitution of exact scientific investigations and knowledge for the old individual judgement or opinion; either of the workmen or the boss, in all matters relating to the work done in the establishment.

Principles of Scientific Management

1.      Science not rule of thumb

2.      Harmony in group action

3.      Co-operation

4.      Maximum output

5.      Improvement of workers

Criticism of Scientific Management

1.      It is said that Taylor has not found anything new in management rather he just made a scientific approach to the existing knowledge to management.

2.      Scientific Management forces workers to work hard to produce maximum output, ignoring the well being of the workers.

3.      Much importance is given to production management and other functions like financial management, sales management etc. are ignored.

4.      The wages of workers are not increased in proportion to increased output.

5.      It is also argued that time study, motion study, standardization of wage rate, etc. was not scientifically measured.

6.       Wages are paid on piece rate bases spoiling the quality of production.

Henry Fayol’s Principles of Management

Fayol developed a general theory of management. In 1916 he published the book Administration Industriella et Generale in French, which was translated into English in 1929 as General & Industrial Management In the year 1949 his book freely available in US and got popular.

Fayol’s 14 Principles of Management

1.      Division of Work

2.      Authority & Responsibility

3.      Discipline

4.      Unity of Command

5.      Unity of Direction

6.      Subordination of Individual interest to group interest

7.      Remuneration of personnel

8.      Centralisation

9.      Scalar chain

10.  Order

11.  Equity

12.  Stability of tenure of personnel

13.  Initiative

14. Esprit De Corps

{ DAD U SEE USSR O I C }

Management By Objectives - MBO

INTRODUCTION TO MBO

Management by objectives is one of the techniques which helps in the achievement of organisational objectives. Peter Drucker said that, “Management by Objectives is a basis for measuring the performance of managers in an organisation. Edward shells supported MBO as a means of integrating individuals with the organisation.

Management by objectives is also known as Management by Results”.

MBO is a new technique of management developed in the recent past. Though it is now practiced around the world yet there is no unanimity about its meaning. Some think of it is an appraisal tool, others see it as a motivational technique, still others consider it as a control device.

Definition of MBO

Terry and Franklin, “A managerial objective is the intended goal that prescribes definite scope and suggests direction to the planning efforts of a manager”.

S.K. Chakravarthy, “MBO is a result centres non specialist operational managerial process for the effective utilisation of material physical and human resources of the organisation by integrating the individual with the organisation and organisation with the environment.”

We can understand MBO better with the help of following facts-

1.       It is a system superior and subordinate identify objectives.

2.       It is an effort to achieve organisational and individual objectives.

3.       It is a result centred exercise for utilising various resources effectively.

4.       Mutually agreed objectives become the basis of performance evaluation.

5.       It is a periodic review of objectives by superior and subordinate.

Features of MBO

1.       It is a philosophy

2.       Objectives are decided collectively

3.       Basis for measuring performance

4.       Regular review of performance

5.       Matching of objectives and resources

6.       More freedom to subordinate

7.       Integration of objectives.

Objectives of MBO

1.       Measuring performance

2.       Increasing growth of subordinates

3.       Increasing efficiency

4.       Relating individual performance to organisational goals

5.       Basis for deciding salary and promotion

6.       Improving communication among superiors and subordinates

7.       Device of organisational control.