Understanding Management: Definitions and Principles

• Management involves the efficient and effective use of resources to achieve goals.
• Van Fleet and Peterson define management as using resources efficiently and effectively to pursue goals.
• Megginson, Mosley, and Pietri define management as using human, financial, and physical resources via planning, organizing, leading, and controlling.
• Kreitner defines management as a problem-solving process using scarce resources in a changing environment.
• F.W. Taylor defines management as knowing what to do and ensuring it's done well and economically.
• Harold Koontz defines management as getting things done with people in organized groups and fostering cooperation to achieve group goals.
• Management principles relate to planning, organizing, directing, and controlling resources to achieve organizational goals efficiently and effectively.

Nature of Management

• Management is both an art, involving managing skill, and a science, developing principles applicable where activities are coordinated.
• Management is an activity relating to the use of men, money, materials and machines for production.
• Management is a continuous process consisting mainly of planning, organizing, directing, and controlling resources.
• Management is goal-oriented, justifying its existence through the accomplishment of pre-determined goals and objectives.
• Management involves organized activities, requiring systematic organization of activities by a group to achieve objectives.
• Management can be considered a discipline, with boundaries continuously increased by discoveries in business enterprise.
• Management is also a profession because it involves imparting and transferring knowledge, with established principles applied in practice.
• Management has universal application, applicable to every type of industry, though practices vary based on the organization's nature.
• Management is dynamic, adapting to new techniques in the fast-developing business world and changing according to social changes.
• Management is intangible, its results observed by comparing well-managed with poorly managed organizations.
• Management is multidisciplinary using knowledge and skill from Sociology, Psychology, Engineering, Economics, Anthropology, and Mathematics.
• Management is situational, adapting suitable approaches based on circumstances.

Importance of Management

• Management increases efficiency by minimizing wastage and improving productivity through planning, organizing, staffing, directing, and controlling.
• Management achieves goals by arranging production factors, assembling and organizing resources, integrating them effectively, and directing group efforts.
• Management utilizes resources productively by maximizing the use of scarce resources through best alternatives, involving experts to avoid wastage.
• Management reduces costs by optimal resource combination via proper planning, maximizing output with minimum input.
• Management contributes to the development of society by creating employment opportunities and providing quality products and services.
• Management helps achieve individual objectives, guiding individuals towards personal goals which aligns with organizational objectives.
• Management provides effective leadership, creating a sense of security, making group efforts effective, enabling cooperation, and motivating employees.
• Management improves industrial relations, minimizing disputes by balancing employee demands and organizational requirements.
• Management improves the standard of living by using resources efficiently, ensuring firm survival, exploiting new ideas, and developing employee talents.
• Management encourages creativity, which helps bringing innovation like new products or services, and face competition effectively.

Principles of Management

• Henri Fayol's 14 management principles are universally accepted guidelines for managers.
• Division of Work: Dividing work to create specialization, increasing efficiency, productivity, and profitability.
• Authority and Responsibility: Balancing authority (power) and responsibility (duties) to prevent misuse or frustration.
• Discipline: Respecting formal and informal agreements and rules, needing good supervision and impartial judgment.
• Unity of Command: Subordinates receiving orders from only one superior to avoid dual subordination.
• Unity of Direction: One head and one plan for activities with the same objective, ensuring organized effort.
• Subordination of Interest: Prioritizing the overall good over individual or group interests to prevent organizational collapse.
• Remuneration: Fair pay for services, satisfying both employee and firm, including financial and non-financial incentives based on performance.
• Centralization: Balancing centralization and decentralization based on company size and quality of managers.
• Scalar Chain: Formal communication and authority line from top to bottom.
• Order: Arranging material things and people in the right place, with human and material resources available at the right time.
• Equity: Managers being kind and just to employees equally to foster loyalty and devotion.
• Stability of Tenure: Providing job security to ensure employees settle into their jobs for efficiency.
• Initiative: Encouraging employees to show initiative and execute their own plans.
• Esprit De Corps: Fostering unity, cooperation, and team spirit among employees.

Functions of Management

• Management involves getting things done through people in organized groups with the manager performing fundamental managerial functions.
• Planning: Determining objectives and the course of action, deciding what, how, when, and who will do it.
• Organizing: Assembling manpower and material resources to achieve enterprise objectives, increasing efficiency and reducing costs.
• Staffing: Concerned with the quality of people, involving recruitment, selection, training, and appraisal of subordinates.
• Directing: Actuating members to work effectively towards goals, involving instructing, guiding, supervising, and motivating.
• Controlling: Ensuring activities conform to plans, checking progress, and correcting deviations.
• Coordination: Channeling activities to achieve common goals, developing an orderly pattern of group effort among subordinates.
• Communication: Modifying subordinate behavior, essential for decision-making, planning, and increasing managerial capacity.
• Motivation: Creating the urge among subordinates to behave in a desired manner, providing incentives.
• Supervision: Overseeing subordinates to ensure maximum resource utilization, correcting errors.
• Cooperation: Individuals willingly helping each other, essential for coordination.

Management Skills and Competencies

• Management skills are attributes or abilities for specific tasks, including performing duties, avoiding crises, and solving problems.
• Technical Skills: Using techniques to achieve objectives, including operating machines, software, and designing products/services.
• Conceptual Skills: Abstract thinking and formulating ideas, analyzing problems, and finding creative solutions.
• Human or Interpersonal Skills: Interacting and relating effectively with people and motivate employees.
• Communication Skills: Information flow within the organization, enabling teamwork, and conflict resolution.
• Decision Making: Making proper decisions for the organization's success.
• Delegation: Passing on tasks and authorities to subordinates for quick results.
• Problem Solving: Tackling and solving frequent problems.
• Motivating: Bringing forth desired behavior from employees.
• Leadership: Inspirational and effective leaders setting norms for staff behavior.
• Building Effective Team: Making every person feel valued and creating a positive team atmosphere.

Evolution of Management Thoughts

• Pre-Scientific Management Era: Management evolved from early human organization where tasks were chiared according to strength, mental capacities, and intelligence.
• Classical Management Era: emphasized the industrial revolution and direction as a managerial purpose.

Classical Approach

• Scientific Management Theory by F.W.Taylor sought efficiency in industry. Advocated adopting a scientific approach for managing enterprises. Benefits included, Replacement of traditional rule of thumb method by scientific techniques, Proper selection and training of workers, Incentive wages to the workers for higher production, Elimination of wastes and rationalization of system of control, Standardization of tools, equipment, materials and work methods, Detailed instructions and constant guidance of the workers, Establishment of harmonious relationship between the workers and Better utilization of various resources.

• Satisfaction of the needs of the customers by providing higher quality products at lower prices.

• Administrative Theory by Fayol, also included Technical activities - production, manufacture, adaptation, Commercial activities - buying, selling and exchange, Financial activities - search for and optimum use of capital, Security activities - protection of property and persons, Accounting activities - stock-taking, balance sheet, cost, and statistics and Managerial activities - planning, organization, command, co- ordination and control. Six functions had to be performed to operate successfully any kind of business with the last function most important.

• Theory of Max Weber included Hierarchy of authority, Division of labour based upon functional specialization, A system of rules and A system of work procedures. Features of Bureaucracy are, Rigidity, impersonality and higher cost of controls, Anxiety due to pressure of conformity to rules and procedure, Dependence on superior and Tendency to forget ultimate goals of the organization.

• Neo-classical Theory gave greater emphasis to individual and group relationship in the workplace. The neo- classical theory pointed out the role of psychology and sociology in the understanding of individual and group behaviour in an organization.

• Hawthorne Experiments brought out that the productivity of the employees is not the function of only physical conditions of work and money wages paid to them. Productivity of employees depends heavily upon the satisfaction of the employees in their work situation. The Hawthorne experiment consists of four parts, Illumination Experiment, Relay Assembly Test Room Experiment, Interviewing Programme and Bank Wiring Test Room Experiment. Important features of experimentation are, A business organization is basically a social system, The employee can be motivated by psychological and social wants because his behaviour is also influenced by feelings, emotions and attitudes, Management must learn to develop co-operative attitudes and not rely merely on command, Participation becomes an important instrument in human relations movement, Productivity is linked with employee satisfaction in any business organization and Group psychology plays an important role in any business organization. The neo-classical theory emphasizes that man is a living machine and he is far more important than the inanimate machine. Hence, the key to higher productivity lies in employee morale. High morale results in higher output.

• Quantitative math models and science to improve, mathematical or quantitative approach for decision making and often called Operations Research. Techniques such as linear programming, simulation, queuing, project crashing, etc., extensively use mathematical symbols, relationships and models in analysing the management problems such as cost minimisation, profit maximisation, resource optimization, etc.

• The features of an organization as an open adaptive system include, It is a sub-system of its broader environment., It is a goal-oriented – people with a purpose, It is a technical subsystem – using knowledge, techniques, equipment and facilities, It is a structural subsystem – people working together on interrelated activities, It is a psychosocial system – people in social relationships and It is co-ordinate by a managerial sub system, creating, planning, organizing, motivating, communicating and controlling the overall efforts directed towards set goals.

• In a Contingency (Situational) Approach the approach one should adopt depends on characteristics or requirements of the situation in which a problem crops up. For example, when there is low productivity in a facility, classical theory prescribed higher wages for workers while neo-classical theory favours enhancing the morale, motivation and job satisfaction of workers. Operation Management requires that government should take tough measures and enforce environment laws strictly if environment is to be protected.

Characteristics of Modern Management Thought

• The Systems Approach components:
• Input, Process, Output, Feedback, and Environment.
• Dynamic: We have a dynamic process of interaction occurring within the structure of an organisation.
• Multilevel and Multidimensional includes Production subsystem, Finance subsystem, Marketing subsystem and Personnel subsystem.
• Multi-Motivated System approach recognises that there may be several motivations behind our actions and behaviour.
• Multidisciplinary: Systems approach integrates and uses with profit ideas emerging from different schools of thought.
• Multivariate: It is assumed that there is no simple cause-effect phenomenon.
• Adaptive: The survival and growth of an organisation in a dynamic environment demands an adaptive system which can continuously adjust to changing conditions.
• Probabilistic: Management principles point out only probability and never the certainty of performance and the consequent results.

Dimensions of Management

• Key ideas of the father of modern management- Peter Drucker
• Managing the Organization's Mission and Purpose: This dimension emphasizes the importance of defining and understanding the organization's mission, purpose, and goals.
• Managing Organizational Structure: Drucker highlighted the significance of organizational structure in achieving efficiency and effectiveness.
• Managing People: Managing people is a critical aspect of effective management.
• Managing Performance: This dimension focuses on measuring and improving organizational performance.
• Managing Social Responsibility and Ethical Behavior: Drucker recognized the importance of organizations being socially responsible and adhering to ethical standards.

Indian Management Thoughts

• Spirituality and Ethics: Indian management thoughts often emphasize the integration of spirituality and ethics into the business world.
• Holistic Approach: Indian management tends to adopt a holistic approach that considers the interconnectedness of various aspects of business.
• Leadership and Servant Leadership include,
• Gurukul System, Timeless Wisdom from Scriptures, Collectivism and Social Responsibility,Inclusive Leadership and Tolerance for Ambiguity.

Changing Dimensions of Business Environment include

• Scale: A organization's potential to handle increased production.
• Geographical Spread: Way of reducing portfolio risk by avoiding excessive concentration in any one market.
• Fast Changing Business Environment: The external environment for all enterprises the change is fuelled by technology, particularly digital technology and increasing information processing power.
• Users Expectations: By definition, customer expectations are any set of behaviors or actions that individuals anticipate when interacting with a company.
• Risk Management: Risk management encompasses the identification, analysis, and response to risk factors that form part of the life of a business.
• Social Responsibility towards Environment includes companies engaging in environmental preservation efforts, ethical labour practices, philanthropy, and promoting volunteering.
• Social Responsibility of Business towards Society,
• Business efforts, Protection of Environment and Use of Resources include Weaker Sections, Backward Region, Financial Assistance and Employment Generation. Social Responsibility of Business include Payment of Taxes, Rules and Regulations and Earning Foreign Exchange.
• Business, Political Stability and Socio-Economic Programmes must be stable.