Module 1

Basic Concepts of Management

By: Vishal Doshi

Introduction
Some companies like Reliance Industries, Procter and Gamble, Hindustan Unilever, ITC, Dr. Reddys Labs, HDFC bank, Tata, etc., are most successful companies. On other side companies like Agrifural chemicals Ltd., Binny mills, LML, etc belong to the unsuccessful category. Why do companies perform differently when they operate under the same environmental conditions, serve the same customer, use the same raw material and technology and employ the people with similar skills? The answer for this question is Management Practices. Thus Management makes remarkable difference between the companies performance in terms of Productivity, Products, Sales Profitability, Service to customer, Employees welfare, etc.

What Management is?

In this subject we shall discuss the meaning of the term Management.

Definition of Management:

Mary Parker defines the term management as the art of getting things done through others. but research studies concluded that management is a field of effort that combines art and science.

Conti
According to Koontz, Heinz and Weihrich, Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently to accomplish selected aims.

According to Peter F. Drucker Management is a multipurpose organ that manages a business And manages managers and mangaes worker and work

Need and Scope of Management

1. Management purpose is to formulate effective organizational strategies and efficiently based on the missions objectives and goals. 2. It deals with both internal and external environment. 3. It concerned with all kinds of sources i.e. Human, Financial, Material, Machines, Technology and Technical. 4. Management functions include: Planning, Organizing, Directing, Staffing and Controlling. 5. Managers should possess varied skills in order to play a variety of roles.

6. It applies to managers at all levels in an organization.

Conti
7. It is applicable to all kinds of organization i.e. both Profit and Non-profit oriented business. 8. Management is both an Art and a Science in order to create a surplus.

9. Management needs to be a profession to achieve goals continuously with an incremental efficiency.

Nature of Management
1. Multidisciplinary: It freely draws ideas and concepts from such disciplines as Psychology, Sociology, Anthropology, Economics, Ecology. Statistics, Operations Research, etc.

2. Dynamic Nature of Principles: Principle is a fundamental truth which establishes cause and effect relationships of a function. Because of the continuous development in the field, many older principles are being changed by new principles.
3. Relative, not Absolute Principles: Management principles are relative not absolute, and they should be applied according to the need of the organization.

Conti
4. Management as Profession: Management has been regarded as a profession by many ways, i.e. Existence of Knowledge, Acquisition of Knowledge, Professional Association, Ethical Codes, Service Motives.

5. Universality of Management: Management is a universal phenomenon. However, management principles are not universally applicable but are to be modified according to the needs of the situation.
6. Management: Science or Art: There is a controversy whether management is Science or Art. However, management is discuss next.

Management: A Science or Art

First we should know what is science and what is an art before discussing whether management is a science or an art? What is a Science? Science is a body of knowledge developed systematically, based on observation, measurement, experimentations and drawing conclusion based on data. The knowledge provides principles, theory and laws. Management is a developing science. Most of the managerial activities like Decision-making, Planning, Organizing and Directing cannot be an exact science

Conti
What is an Art? Art can be acquired by conscious Effort and Practice.

Management is getting things done by and through other people. They have to continuously analyze the environment and formulate the plans and strategies. Managers have to modify the strategies based on environmental changes.
The principles of management and theories of management cannot be implemented as learnt, in the real world. They are to be applied after making necessary modifications based on the real life situations. Thus, management is both a Science and an Art as it acquires the characteristics of both.

Management Functions
Planning Company mission is the basis for planning, planning is deciding in advance what should be done. Managers think logically to achieve goals. Organizing Organizing is the process of linking and arranging activities in a sequence. It includes allocating work, authority and resources.

Staffing Staffing is acquiring, developing, utilizing and compensating human resources necessarily to achieve organizational goals. HR helps the process of converting inputs into output and achieving customer satisfaction Directing Directing involves leading, influencing and motivating the people to perform organizational tasks & to convert input into output. It includes: Motivation, Leadership, Communication.

Controlling Controlling is to make sure that the organization is moving towards its mission and objectives.

Managerial Skills
According to Robert L. Katz, there are three types of managerial skills, i.e. Technical Skills, Human Skills and Conceptual Skills.

More Conceptual Skills

Top Level Manager

More Human Skills

Middle Level Manager Lower Level Manager

More Technical Skills