CHAPTER 1

NATURE OF MANAGEMENT
PRINCIPLES OF MANAGEMENT 1

Introduction

A business develops in course of time with complexities. Management is not only essential to business concerns but also essential to Banks, Schools, Colleges, Hospitals, Hotels, Religious bodies etc. Every business unit has objectives of its own. These objectives can be achieved with the co-operative efforts of several personnel. As E. Demock has rightly said the management is not a matter of pressing a button, pulling a lever, issuing orders, scanning P&L statement, promulgating(belief) rules and regulations. Rather it is the power to determine what shall happen to the personalities and happiness of entire people, the power to shape the destiny of a nation and of all the nations which make up the world 2
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Meaning of Management

Management is the art of getting things done by a group of people with the effective utilization of available resources. There are various definitions given by various management gurus but simply management is the process consisting of the functions of planning, organizing, staffing, directing and controlling the operations to achieve specified objectives
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Features or Characteristics of Management

1) 2) 3) 4) 5) 6) 7) 8) 9) 10)

Art as well as science Management is an activity Management is a continuous process Management achieving pre-determined objectives: Organized Activities Management is a factor of production Management as a system of activity Management is a discipline Management is a purposeful activity Management is a distinct entity

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PRINCIPLES OF MANAGEMENT

Features or Characteristics of Management

11) 12) 13) 14) 15) 16) 17) 18) 19)

20)
21)

Management aims at maximizing profit Decision making Management is a profession Universal application Management is getting things done Management as a class or a team Management as a career Direction and control Dynamic Management is needed at all levels Leadership quality
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Characteristics of Management

Art as well as science: Management is both an art of possessing of managing skill by a person and a science because of developing certain principles or laws applicable in a place where a group of activities are co-coordinated. Management is an activity: It is a process of activity relating to the effective utilization of available resources.
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Characteristics of Management

Management is a continuous process: The process of management mainly consists of planning, organizing, directing and controlling the resources. The resources (men and money) of an organization should be used to the best advantages of the organization to achieve the objectives. Management achieving pre-determined objectives: The objectives of an organization are clearly laid down. Every managerial activity results in the achievement of objectives fixed well in advance.
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Characteristics of Management

Organized Activities : Management is a group of organized activities. It can be in the form of limited company or a small club. All the organizations have an objectives and these objectives is achieved through systematic way of organized activities. Management is a factor of production : The factors of production includes land, labor, capital and entrepreneurs. Land means a place where production is carried on. Labour refers to paid employees either skilled, unskilled, semi-skilled, manager, supervisor and the like. Capital refers to the working capital in the form of cash, raw material and finished goods and fixed capital as in the form of plant facilities and production facilities. These land, labour and capital can not achieve the organizations goals. It can be achieved only by an entrepreneur in case of small organization and by management in case of large organizations.
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Characteristics of Management

Management as a system of activity : Individuals are foundation of the management. Management ensures the goal congruence between individuals and organization objectives. Management is a discipline: The boundaries of management are not exact like other physical science. It may be increased by continuous discovery of more aspects of business enterprise. Management is a purposeful activity: Management is concerned with objective achievement through planning, organizing, staffing, directing, controlling and decision making.
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Characteristics of Management

Management is a distinct entity: Management is distinct from its functional activity. As function is to do while management is to how to get things done Management aims at maximizing profit: The available resources are properly utilized to get desired results. Decision making: Decision making arises because there is availability courses of actions. The quality of decision taken determines the organization performance

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Characteristics of Management

Management is a profession: It posses the qualities of a profession. Universal application: The same principles of management are applicable in every type of industry only the practice differs from one to another. Management is getting things done: Manager gets things done by others. Management as a class or a team: Class means group of people having homogeneous characteristics to achieve common objectives.
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Characteristics of Management

Management as a career: Now a days management is developed as a career focused on specialization like Finance, Marketing, Systems, Personal etc and they are appointed in the key posts of the management. Direction and control: Manager directs his subordinates in the performance whenever necessary. Direction & control deals with the activities of human effort. Dynamic: The management is not static in the ever changing fast developing business world as new techniques are developed and adopted by the management
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Characteristics of Management

Management is needed at all levels: The functions of planning, organizing, directing, controlling and decision making is performed by all the level of organization. Leadership quality: Leadership quality is developed in the persons who are working in the top level management.
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Functions of Management
The important functions of management are as below Planning Organizing Staffing Directing Co-coordinating Motivating or actuating Controlling Innovation Representation Decision Making Communication
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According to Luther Gullik

i.

Luther Gullik classifies the functions of management as POSDCORB: Planning, Organizing, Staffing, Directing, Coordinating, Reporting and Budgeting.

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Importance of Management
Management meets the challenge of change 2. Accomplishment of group goals 3. Effective utilization of business 4. Effective functioning of business 5. Resource development 6. Sound organization structure 7. Management directs the organization 8. Integrates various interests 9. Stability 10. Innovation 11. Co-ordination and team spirit 12. Tackling problems 26 March 2012 PRINCIPLES OF MANAGEMENT 13. A tool for personality development
1.

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Importance of Management

Management meets the challenge of change: In this ever changing business world, an efficient management saves the business brought by the challenges. Accomplishment of group goals: The achievement of objectives depends upon proper planning of available resources and quality of decision taken and control made by the unit.

Effective utilization of business: In eight Ms .. man, money, materials, machines, methods, motivation, markets and management, management has control over remaining Ms. Effective functioning of business: Ability, experience, mutual understanding, co-ordination, motivation and supervision are the factors for effective functioning of business. Management utilizes the abilities of workers and fulfills their executions through motivation techniques.
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Importance of Management

Resource development: Resources like men, material, money and machines are identified and developed by the management. Sound organization structure: Sound organization structure clearly defines the authority and responsibility. Management directs the organization: Management directs and controls the org. Integrates various interests: Management takes steps to integrate various interests to achieve the objectives of an organization. Stability: The fluctuations caused by changing policy of the government, pressures from competitors and changing preferences by customers in the business are stabilized by the management.

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Importance of Management

Innovation: New ideas are developed by management and implemented in the organization. Co-ordination and team spirit: Management coordinates the activities of different departments and establishes team spirit to achieve the objectives. Tackling problems: Good management acts as a friend of workers while tackling problems. A tool for personality development: Management gives direction and training to the workers that help them to raise their efficiency and productivity
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Administration and Management

There are various opinions of writers for the meaning of administration and management. In general, administration is distinguished as a top level function while management as a lower level functions

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Difference between Administration and Management

Sr. No. Basis of Distinction 1 Policy and Objectives Administration Management Determines policy to be Implements the policy followed and decide the and achieve the objectives to be achieved. objectives.

Directing of efforts

human Not directly involves in the Directly involves in the execution of plan and execution of plan achievement of objectives. and achieving objectives.
Planning, organizing staffing. and Direction, motivation and control.

Main functions

Levels of executives

Top level executives (owners or Lower level executives( board of directors) Manager, supervisor and workers)
Acts as a principal Acts as an agency

5 6

Position Knowledge

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Requires administrative ability Requires technical more than technical ability ability more than administrative 21 PRINCIPLES OF MANAGEMENT ability.