Management: An Overview

In this section we will discuss:

• Definitions of Management
• The Role of Management
• Functions of Managers
• Levels of Management
• Management Skills and Organizational Hierarchy
• Approaches to Management

INTRODUCTION
One of the most important activities in business is the management of the 4M’s – men, machines, material and money. The term ‘management’ can be interpreted differently in different contexts. Hence, it is difficult to define. In one context, it may comprise the activities of executives and administrative personnel in an organization, while in another, it may refer to a system of getting things done. In a broad perspective, management can be considered as the proper utilization of people and other resources in an organization to accomplish desired objectives. With increasing global competition, changes in the world of technology, changing business practices and increasing social responsibility of organizations, the role of managers has become all the more significant.

In this chapter, we will first examine the definitions of management given by some eminent management thinkers to understand the essence of management. Secondly, we will discuss the five basic functions of management i.e., planning, organizing, staffing, leading and controlling. The chapter also focuses on the managerial skills required at various levels of the organizational hierarchy and briefly explains the various approaches to management.

DEFINITIONS OF MANAGEMENT
The term ‘management’ can be interpreted in a variety of ways. To gain a better insight into the nature of management, let us look at some of the definitions of management:

Harold Koontz and Heinz Weihrich define management as “the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims.”

Louis E. Boone and David L. Kurtz define management as “the use of people and other resources to accomplish objectives.”

Dalton E. McFarland defines management as “a process, by which managers create, direct, maintain, and operate purposive organizations through systematic, coordinated, cooperative human effort.”

Mary Parker Follet termed management as “the act of getting things done through people.”

Definitions by Follet and Louis E. Boone and Kurtz call attention to the fact that managers achieve organizational goals by getting others to do the necessary tasks. The other two definitions suggest that management is much more than “just getting the work done” and (as shown in Figure 1.1) suggest the following aspects of management:

1. Managers carry out the functions of planning, organizing, staffing, leading and controlling: Henry Fayol was the first management thinker to outline the five basic functions carried out by managers. Every manager performs these basic functions. These functions are discussed in detail in the later part of this chapter.

2. Management is essential to any kind of organization: Wherever there are groups of people working together to achieve some common objectives, it becomes essential to guide, organize and control them. The term ‘management’ applies to any organization irrespective of the size or nature of operations. The prime concern of a CEO of a multinational company, the General Manager of a hotel, the first-level supervisor, the manager of a cricket team and the student president in a college is to manage their people and resources effectively.

3. Management is essential at all hierarchical levels: Management is necessary at all levels. However, the type of skills and the degree to which various skills are required at different levels of the hierarchy may vary. In order to perform their duties satisfactorily, managers need technical, human, conceptual and design skills.

4. The goal of all managers is to generate surplus: The aim of all business managers is to create a surplus. To accomplish this objective, the manager has to create an environment which encourages people to accomplish as much as possible with the least amount of resources and personal dissatisfaction. Even in non-profit organizations, the aim of managers is to accomplish their goals with the minimum amount of resources or to make as much surplus as possible with available resources.

5. The aim of all managers is to improve productivity, efficiency and effectiveness: Productivity is defined as “the output-input ratio within a time period with due consideration for quality.” It can be expressed as:

Productivity = Outputs / Inputs (within a time period, quality considered)

Productivity can be improved in the following ways:

• By producing more output with the same inputs.
• By reducing inputs, but maintaining the same level of outputs.
• By increasing outputs and reducing inputs, thereby, making the ratio more favorable.

Productivity can be improved by ensuring efficiency and effectiveness in the operations of the firm. Effectiveness refers to achievement of stated organizational objectives while efficiency denotes the judicious use of resources to achieve organizational objectives. In the words of Peter Drucker, efficiency means “doing things right”, while effectiveness means “doing the right things.” In his book, “Management – Tasks, Responsibilities, Practices”, Drucker states that effectiveness is the foundation of success whereas efficiency is a minimum condition for survival after success has been achieved.