NATURE AND SIGNIFICANCE OF MANAGEMENT

Nature and Significance of Management:

The organization and coordination of the activities of a business for the purpose of achieving defined objectives effectively and efficiently, is defined as management.

Efficiency and Effectiveness

Efficiency (completing the work at low cost) refers to execution of the task correctly at the lowest cost via optimum utilization of resources. On the other hand, effectiveness (completing the work on time) refers to execution of the task correctly, in the given time limit. Management of the two to maintain a balance between the two is extremely essential.

Examples:

Raj was asked to prepare a detailed presentation on the customer feedback received. He made an impressive report without any expenditure but could not submit it by the deadline. [Efficient but not effective]

Meera was then given the same task and she submitted it before time, but made a lot of expenses for the same. [Effective but not efficient]

Characteristics of Management

1. Goal oriented Process: The process of management comes with the purpose of achieving the organizational goals correctly and meaningfully. Hence, it is a goal oriented process.
2. All Pervasive: Management is used by all departments of an organization and by all organizations, irrespective of size, nature and location. It is also practiced at each level of an organization.
3. Multidimensional: Management covers all aspects of an organization ranging from work, people and operations. Different mechanisms and systems are set up for each aspect.
4. Continuous Process: A series of functions are performed in organization by all its managers simultaneously. It keeps running in a cycle that repeats itself over and over again.
5. Group Activity: Management is never done in solidarity. It is a group activity that involves participation of all the people of an organization, including the managers and the workers, for the desired achievement of objectives.  
6. Intangible Force: Management in its essence cannot be seen or touched, and hence is termed as intangible. But its effect can be felt and measured based on the results achieved by way of the organizational functions.

 Objectives of Management

Management can have various objectives. They can be categorized into the following:

(1) Organizational objectives:

The organization as a whole has some goals to meet. They are as under:

• Survival –Ensuring existence in a competitive market is one of the prime goals of any organization and hence, a key objective of management.
• Profit –Gains act as motivators for future success and as a cushion for business risk, hence maintaining their importance as an objective of management.
• Growth –Steady growth is another vital aspect of management which can be measured via increase in sales, expansion of business, etc.

(2) Social Objectives:

An organization’s duty towards the society has to be taken care of while carrying out its operations. Hence, an important objective of management is to ascertain a payback to the society in terms of services and other benefits.

(3) Personal Objectives:

Personal Objectives of the employees (such as remuneration, working conditions, rewards, recognition, etc.) have to be taken care of. It has to be ensured that the same are in alignment with the organizational goals.

 Importance of Management

• Achieving Group Goals: Management fuels team work and coordination amongst employees. A common direction needs to be given to the personal and organizational objectives in order to successfully achieve goals.
• Increases Efficiency: Management increases efficiency by using resources in the best possible manner in order to reduce cost upscale productivity.
• Creates Dynamic organization: Management tackle the dynamic environment by ensuring that these changes are well received internally and that resistance to change is curbed.
• Achieving personal objectives: Management facilitates leadership and provides motivation to the employees to work efficiently in order to achieve their personal goals while working towards the organizational objectives.
• Development of Society: Management helps in the development of society by producing good quality products, creating employment opportunities and encouraging new technologies.

 Management as an Art

Art refers to personalized application of fundamental theoretical principles for achieving best possible results. It consists of the key aspects of practice, creativity and theoretical knowledge. It can be acquired through study, observation and experience. The features of art are as follows:

(1) Existence of theoretical knowledge: Well-structured study material is required to acquire theoretical knowledge.

(2) Personalized application: The application of the knowledge gained varies from person to person and thus, it is a personalized concept.

(3) Based on practice and creativity: Art requires consistent and creative practice of the theoretical knowledge acquired.

Since management is concerned with application of the knowledge, skills, principles, and theories of management for the purpose of achieving the desired goals and to solve management dilemmas in an organization, management is considered as an art.

Management as a Science

“Science is a systematic body of knowledge pertaining to a specific field of study that contains general facts which explains a phenomenon.” It establishes a relationship between the cause and effect or between two or more variables and highlights the principles which play a role in this relationship. The features of Science are as follows:

(1) Systematized body of knowledge: Science has a systematized body of knowledge based on principles and experiments.

(2) Principles based on experiments and observation: Scientific methods of observation and verification through testing lead to the development of scientific principles.

(3) Universal validity: Scientific principles have universal validity and application that is verifiable.

Management too has an existent systematic body of knowledge, the principles of which are developed over a period of time based on repeated experiments & observations which are universally applicable. As the principles of management are not as exact, since management is a social and behavioral science as it deals with the unpredictable behaviors of human, it may be called an inexact science.

Management as Profession

Profession can be referred to as an occupation necessitating specialized knowledge, the entry to which is regulated by a special representative body. The main characteristics of profession are as follows:

(1) Well-defined body of Knowledge: Every professional makes an effort to acquire expertise in the principles and techniques of his/her profession. All professions are backed by specialized body of knowledge.

(2) Restricted Entry: Many institutes have been set up for imparting education and training.  Entry to every profession is restricted to some extent via the means of examinations or some minimum qualification requirements.

(3) Professional Associations: All professions are associated with some professional association bodies which regulate entry and decide upon the code of conduct to be followed.

(4) Ethical Code of Conduct: All professions are governed by a certain code of conduct which regulates the behavior of the members.

(5) Service Motive: The primary purpose of a profession is to serve its clientele.

Management does not tick all the boxes required to be called a profession and hence cannot be categorized as a full-fledged profession like doctors, chartered accountants, lawyers, etc.

Levels of Management

The whole of management system or hierarchy can be divided into three primary parts: top, middle and lower levels. This division is done based on the relative responsibilities, authority and status of each person.

1. Top Level: People of this level have their key tasks of integrating and coordinating the various activities of the business, devising policies, charting out organizational goals & strategies, etc.
2. Middle Level: This level primarily works on interpretation of the policies of the top management to ensure the availability of resources to execute the same, to align all activities, ensure availability of required human resources and give duties to them.
3. Lower Level/Supervisory Level: This level ensures actual execution and implementation of the plans as per directions given to them by the middle level, informs about the  problem points of the workers to the management & maintains discipline among the shop floor workers.

Functions of Management

1. Planning: In simple terms, planning is the process of deciding in advance what is to be done in the future, how is it to be done and who shall do it. It helps in bridging the gap between where we are and where we want to reach.
2. Organizing: Organizing is the process of starting the execution of plans by clearly assigning jobs and clarifying working relationships and judiciously deploying resources to achieve goals.
3. Staffing: It refers to recruitment, selection, training, development and appointment of the human resources so that adequate man power is available to carry out the tasks.
4. Directing: The function of directing involves, leading, motivating and inspiring one’s subordinates to carry out the tasks efficiently and effectively.
5. Controlling: This function ensures that the activities being performed conform to the plans set up for the organization in order to achieve objectives.

Coordination (The Essence of Management):

Coordination refers to the synchronization of the activities of different units and departments. The absence of coordination usually leads to overlapping of efforts, duplication of work, delay in decision making and a chaos overall.

It has the following features:

1. Coordination integrates group efforts: It brings together different business activities into a meaningful whole, thus ensuring the alignment of everybody’s efforts in a single direction to achieve organizational goals.
2. Coordination ensures unity of action: It guides the activities of different departments and employees towards achievement of common organizational goals.
3. Coordination is a continuous process: It required at all levels and in all departments of the organization. It is necessary right from the planning till the controlling stage and then again in the same cycle.
4. Coordination is all pervasive function: It required at all levels and in all departments of the organization to maintain a balance.
5. Coordination is the responsibility of all managers: It is equally important at all the three levels of management and hence, it is the responsibility of all managers that they ensure coordination.
6. Coordination is a deliberate function: It is a conscious effort that is to be made by every manager to ensure smooth running of the organization.