An Introduction to Management Concept
Definition or Meaning of Management
Management, or business management, is the art and science of getting things done through people to accomplish planned goals and objectives efficiently and effectively, with the optimum use of limited resources. Entrepreneurs who start and run businesses by themselves do not have to manage other people. They have to manage themselves. However, if the firm has employees, then some type of management plan is necessary. Management includes the processes or functions of planning, organizing, leading, and controlling.
Management helps businesses focus on setting and meeting goals efficiently and effectively so that a profit can be made. The word management also refers to the people who are in charge of running a business. Managers need a thorough understanding of business operations, which involve all the activities of a company. They develop the objectives for a firm or a department and then figure out how to meet those objectives through people, work processes, and equipment.
Functions of Management
Most managers carry out four different functions of management: planning, organizing, leading, and controlling. Some managers may primarily focus on one or two of them. These functions are indicated in the order in which they occur. Planning must be completed first, then organizing can take place. Organizing allows managers to lead and control employees and activities to get work done. Leading involves providing guidance to employees so they can fulfill their responsibilities effectively. Controlling involves measuring how the business performs to ensure that financial and operational goals are met.
Functions of Manager
Managers are usually task-oriented. This means that they can handle many tasks at the same time. They have to plan their time and decide which tasks are most important. They also must keep accurate business records. A manager often has to work under pressure and solve many small problems. Good problem-solving and time-management skills are a must. Every manager must communicate well. Most of a manager’s day is spent interacting with other people. This involves listening, an important part of communication. Managers need human relations skills, or skills in dealing with people. All managers must have some knowledge about the technical aspects of their business.
Meaning of Management
There is no universally accepted definition for management, therefore it is difficult to define what management is. The term Management is very broad in nature.
A simple traditional definition of management is "art of getting things done by others". This definition brings in two elements namely accomplishment of goals and objectives, and direction of group activities towards the desired goal. The weaknesses of this definition is that firstly it uses the word "art", whereas management is not merely an art, but it is both art and science. Secondly, the definition does not state the various functions of a management clearly.
A more elaborate definition given by George R. Terry, defines management as a "continuous process consisting of planning, organizing, actuating and controlling, performed to determine and accomplish the objectives by the use of people and resources." Firstly, it considers management as a "continuous process" i.e. a systematic way of doing things. Secondly, it states four basic management activities: Planning, organizing, actuating, and controlling.
Planning is thinking of actions in advance.
Organizing is coordination of the human and material resources of an organization.
Actuating is motivation and direction of subordinates.
Controlling means the attempt to ensure no deviation from the norm or plan.
Thirdly, it states that manager uses people and other resources that are limited. For example a manager who wants to increase the sales, might try not only to increase the sales force, but also to increase advertising budget. And fourthly, it states that management involves the act of achieving the organization's objectives.
Broadly, management can be considered as a process, activity, discipline, group, science, art or profession. Good management practices includes both being effective and efficient. Being effective means doing the appropriate task (doing right things) i.e, fitting the square pegs in square holes and round pegs in round holes. Being efficient means doing the task correctly (doing right things rightly), at least possible cost with minimum wastage of resources.
Features or Characteristics of Management
Management is Goal-Oriented
The success of any management activity is assessed by its achievement of the predetermined goals or objective. Management is a purposeful activity. It is a tool which helps use of human & physical resources to fulfill the pre-determined goals.
Management integrates Human, Physical and Financial Resources
In an organization, human beings work with non-human resources like machines, materials, financial assets, buildings, etc. Management integrates human efforts with those resources. It brings harmony among the human, physical and financial resources.
Management is Continuous Process
Management is an ongoing process. It involves continuous handling of problems and issues. It is concerned with identifying the problem and taking appropriate steps to solve it. And further improving the results. This is also called Continuous Improvement Process.
Management is all Pervasive
Management is required in all types of organizations at all levels whether it is political, social, cultural or business because it helps and directs various efforts towards a definite purpose. Thus clubs, hospitals, political parties, colleges, hospitals, business firms all require management. Whenever more than one person is engaged in working for a common goal, management is necessary. Whether it is a small business firm which may be engaged in trading or a large firm, management is required everywhere irrespective of size or type of activity.
Management is a Group Activity
Management is very much less concerned with individual’s efforts. It is more concerned with groups and team work. It involves the use of group effort to achieve predetermined goal of management.
Management is about Optimizing
Optimizing means maximizing the outputs with minimum possible efforts and resources. Management is basically concerned with thinking & utilizing human, material & financial resources in such a manner that would result in best combination. This combination results in reduction of various costs.
Management - Art and Science
Management involves characteristics of both art and science.
While certain aspects of management make it a science, certain others which involve application of skills make it an art. Every discipline of art is always backed by science which is basic knowledge of that art. Similarly, every discipline of science is complete only when it is used in practice for solving various kind of problems. In the area of management, science and art are tho sides of the same coin.
In the beginning of development of management knowledge, it was considered as an art (Traditional Theory). There was a jungle of management knowledge. Any one used it to get things done in his own way. But later by codifying and systemizing the management, it became a science as well as being an art (Modern Theory).
Management as an Art
Management as an art has the following characteristics:
- Just like other arts it has practical application. The knowledge of management should be learned and practiced by managers, just as medical or legal practitioners practice their respective sciences. In this sense, management is an art.
- The manager gains experience by continuous application of management knowledge. This experience helps them to develop more skills and abilities for translating management knowledge into practice.
- Application of management knowledge calls for innovativeness and creativity.
- The fourth reason to consider management as an art is that in many situations, theoretical knowledge of management may not be adequate or relevant for solving the problem. It may be because of complexity or unique nature of the problem.
Management as a Science
Management as a science has the following characteristics:
- Its principles, generalizations and concepts are systematically . In this case the manager can manage the situation or organization in a systematic and scientific manner.
- Its principles, generalizations and concepts are formulated on the basis of observation, research, analysis and experimentation, as is the case with the principles of other sciences.
- Like other sciences, management principles are also based on relationship of cause and effect. It states that same cause under similar circumstance will produce same effect. Suppose if workers are paid more (cause), the produce more (effect).
- Management principles are codified and systematic, and can be transferred from one to another and can be taught.
- Management principles are universally applicable to all types of organizations.
History of Management
The verb manage comes from the Italian maneggiare (to handle), which in turn derives from the Latin manus (hand). The French word mesnagement influenced the development in meaning of the English word management in the 17th and 18th centuries.
The concept of management emerges from the Industrial Revolution.
Four Functions of Management
Management has been described as a social process involving responsibility for economical and effective planning & regulation of operation of an enterprise in the fulfillment of given purposes. It is a dynamic process consisting of various elements and activities. These activities are different from operative functions like marketing, finance, hr, purchase, etc. Rather these activities are common to each and every manger irrespective of level or status.
There are four fundamental functions of management - Planning, Organizing, Leading and controlling.
According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to control”. Luther Gullick has given a keyword ’POSDCORB’ where P stands for Planning, O for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for reporting & B for Budgeting.
Thsese four fuctions of mangement are separated for theoretical purpose only but in practice these functions are overlapping in nature and are highly inseparable. Each function blends into the other & each affects the performance of others.
Planning
It is the most basic function of management. It deals with chalking out a future course of action & deciding in advance the most appropriate course of actions for achievement of pre-determined goals. Planning is deciding in advance - what to do, when to do & how to do. It bridges the gap from where we are & where we want to be. A plan is a future course of actions. It is an exercise in problem solving & decision making. Planning is determination of courses of action to achieve desired goals. Thus, planning is continuous process of systematic thinking about ways & means for accomplishment of pre-determined goals. Planning is necessary to ensure proper utilization of human & non-human resources. It is all pervasive, it is an intellectual activity and it also helps in avoiding confusion, uncertainties, risks, wastages, etc.
Organizing
It is the process of bringing together physical, financial and human resources and developing productive relationship amongst them for achievement of organizational goals. According to Henry Fayol, “To organize a business is to provide it with everything useful or its functioning i.e. raw material, tools, capital and personnel”. To organize a business involves determining & providing human and non-human resources to the organizational structure. Organizing as a process involves:
- Identification of activities or tasks.
- Classification or grouping of activities.
- Assignment of duties and roles.
- Delegation of authority and creation of responsibility.
Staffing:
It is the function of manning the organization structure and keeping it manned. Staffing has assumed greater importance in the recent years due to advancement of technology, increase in size of business, complexity of human behavior, etc. The main purpose of staffing is to put right man on right job (popularly known as Job Fit). Staffing also includes recruitment, selection & placement, training & development, remuneration, performance appraisal, etc.
Leading
It is that part of managerial function which actuates the organizational methods to work efficiently for achievement of organizational purposes. It is considered life-spark of the enterprise which sets it in motion the action of people because planning, organizing and staffing are the mere preparations for doing the work. Leading is that inert-personnel aspect of management which deals directly with influencing, guiding, supervising, motivating for the achievement of organizational goals.
Controlling
It implies measurement of accomplishment against the standards and correction of deviation if any to ensure achievement of organizational goals. The purpose of controlling is to ensure that everything occurs in conformities with the standards. An efficient system of control helps to predict deviations before they actually occur. Controlling is the process of checking whether or not proper progress is being made towards the objectives and goals and acting if necessary, to correct any deviation. Controlling has following steps:
- Establishment of standard performance.
- Measurement of actual performance.
- Comparison of actual performance with the standards and finding out deviation (if any).
- Taking corrective action.
Three Levels of Management
Levels of Management refers to a line of demarcation between various managerial positions in an organization. The number of levels in management increases as the size of the organization and work force increases. The level of management determines a chain of command, the amount of authority and level of status enjoyed by any managerial position. Most organizations have three management levels:
- Top level or Administrative
- Middle level or Executory
- Low level or First-line managers
These managers are classified in a hierarchy of authority, and perform different tasks. In many organizations, the number of managers in every level resembles a pyramid.
Top Level of Management
It consists of board of directors, chief executive officers, managing director, president and vice president. The top management is the ultimate source of authority and it manages long-term objectives, goals and policies for an enterprise. It devotes more time on planning and co-ordinating functions.
They are responsible for controlling and overseeing the entire organization. They develop goals, strategic plans, company policies, and make decisions on the direction of the business. In addition, top-level managers play a significant role in the mobilization of outside resources and are accountable to the shareholders and general public.
Middle Level of Management
It consists of general managers, branch managers and department managers. They are accountable to the top management for their department's function. They devote more time to organizational and directional functions. Their roles can be emphasized as executing organizational plans in conformance with the company's policies and the objectives of the top management, they define and discuss information and policies from top management to lower management, and most importantly they inspire and provide guidance to lower level managers towards better performance. Some of their functions are as follows:
- Designing and implementing effective group and intergroup work and information systems.
- Defining and monitoring group-level performance indicators.
- Diagnosing and resolving problems within and among work groups.
- Designing and implementing reward systems supporting cooperative behavior.
Lower Level of Management
It consists of supervisors, section leads, foremen, etc. They focus on controlling and directing. They usually have the responsibility of assigning employees tasks, guiding and supervising employees on day-to-day activities, ensuring quality and quantity production, making recommendations, suggestions, and upchanneling employee problems, etc. First-level managers are role models for employees that provide:
- Basic supervision
- Motivation
- Career planning
- Performance feedback
- supervising the staffs
Leadership versus Management
Although sometimes used synonymously, leadership and management can be quite different. Leaders may be managers, but not all managers are leaders. So just what are the differences? While managers tend to have their eyes on the bottom line, leaders are more often looking toward the horizon, trying to find new opportunities for growth and development. A manager is usually satisfied with the status quo, whereas the leader is often challenging it.
Leadership often involves reinventing the job; strong leaders create their role in an organization or in the world system. Managers are often responsible for executing the task at hand, not thinking of future goals. Managers are responsible for maintaining, but leaders look to innovate. Managers may involve employees in their activities, but often on a need to know basis. Leaders, in contrast, work to inspire those around them by trying to help others gain personal growth and development from their activities and by turning weaknesses into strengths.
Companies that have “leader-managers” throughout the corporate hierarchy are the most successful.
Roles of Manager
Management is often expressed as the process of achieving an organization’s objectives through guiding development, maintenance, and allocating resources. The primary roles of managers are planning, organizing, leading, and controlling.
Planning
Planning is the process of determining a course of action for future conditions and events with the goal of achieving the company’s objectives. Effective planning is necessary for any business or organization that wants to avoid costly mistakes. There are four different types of planning that are associated with management: strategic, tactical, operational, and contingency planning.
Strategic planning involves creating long-range goals and determining the resources required for achieving these goals. Strategic planning is the most far-reaching level of planning and involves plans with time frames from one to five years. Essential to the notion of strategic planning is that it involves an assessment and consideration of the organization’s external environment, and that the organization is adaptive to these outside, uncontrollable variables, adjusting and possibly redirecting its strategy to account for this changing environment.
Tactical planning denotes the implementation of the activities defined by the strategic plans. Generally, tactical planning involves shorter-range plans with time frames of less than one year.
Operational planning involves the creation of specific methods, standards, and procedures for different functional areas of an organization. In addition, the organization chooses specific work targets and assigns employees to teams to carry out plans.
Contingency planning involves the creation of alternative courses of action for unusual or crisis situations. In today’s society, companies are placing greater importance on contingency planning in order to respond to crisis situations.
Organizing
This management role involves blending human and capital resources in a formal structure. The manager will divide and classify work by determining which specific tasks need to be carried out in order to accomplish a set of objectives.
Leading
Managers also have the role of leading or directing employees and plans. Some managers may be more successful at leadership than others. The goal of leading is to guide and motivate employees in order to accomplish organizational objectives. This role involves explaining procedures, issuing directives, and ensuring that any mistakes are corrected.
Controlling
Controlling allows a manager to measure how closely an organization is adhering to its set goals. It is also a process that provides feedback for future planning.
- Setting performance standards. A company needs to set the standards by which performance will be measured. In a sales organization it may be sales growth or quarterly sales figures. Perhaps the manager will set the dollar amount for sales that are to be made that quarter.
- Measuring performance. Using the previous example, measuring performance for sales will require tallying up the number of sales made during the quarter.
- Comparing actual performance to the set performance standards. Now the difference between the set performance sales and the dollar amount of actual sales made during the quarter must be determined.
- Taking the necessary corrective action steps. If the sales were much below the set level, it is important to analyze what went wrong and try to correct it.
- Using information from the process to set future performance standards.
Leadership Styles
Individual managers have their own styles of managing, and within organizations there is often a predominant style of leadership. The predominant leadership styles - autocratic, democratic, and laissez-faire - have many variations. We can compare and contrast the effectiveness of each of these styles as it affects employee performance.
Autocratic Leadership
This style of leadership is both directive and controlling. The leader will make all decisions without consulting employees and will also dictate employee roles. Micromanaging is a form of autocratic leadership in which upper management controls even the smallest tasks undertaken by subordinates. The autocratic style of leadership limits employee freedom of expression and participation in the decision-making process. It may result in alienating employees from leadership and will not serve to create trust between managers and subordinates. Further, creative minds cannot flourish under autocratic leadership.
Autocratic leadership may best be used when companies are managing less experienced employees. U.S. companies operating in less developed countries often use autocratic leadership. It allows the parent corporation more control over its overseas investment. In countries where the government controls the economy, U.S. corporations often use autocratic leadership because the employees are used to making decisions to satisfy the goals of the government, not the parent corporation.
Managers should not use the autocratic leadership style in operations where employees expect to voice their opinions. It also should not be used if employees begin expecting managers to make all the decisions for them, or if employees become fearful or resentful.
Democratic Leadership
This style of management is centered on employee participation and involves decision making by consensus and consultation. The leader will involve employees in the decision-making process and they will be encouraged to give input and delegate assignments. Democratic leadership often leads to empowerment of employees because it gives them a sense of responsibility for the decisions made by management. This can also be a very effective form of management when employees offer different perspective than the manager, due to their daily involvement with work. A successful leader will know when to be a teacher and when to be a student.
Democratic leadership may best be used when working with highly skilled and experienced employees. It is most useful for implementing organizational changes, for resolving group problems, and when the leader is uncertain about which direction to take and therefore requires input from knowledgeable employees. One of the downsides of democratic leadership is that it may lead to endless meetings and therefore create frustration among employees if used for every decision made by a company. Democratic leadership is not a good idea in situations when the business cannot afford to make mistakes - for instance, when a company is facing a crisis situation such as bankruptcy.
Laissez-Faire Leadership
This free-rein form of leadership, if it is to be successful, requires extensive communication by management with employees. It is the style of leadership that makes employees responsible for most of the decisions that are made, and in which they are minimally supervised. Employees are responsible for motivating and managing themselves on a daily basis under this leadership style.
Laissez-faire leadership may best be used when employees are educated, knowledgeable, and self-motivated. Employees must have the drive and ambition to achieve goals on their own for this style to be most effective. Laissez-faire leadership is not a good idea in situations where employees feel insecure about the manager’s lack of availability or the manager is using the employees to cover for his or her inability to carry out his or her own work. This type of situation can create resentment and result in an unhealthy work environment.
Transformational and Transactional Leadership
Two additional styles of leadership are transformational and transactional. Both have strong ethical components and philosophical underpinnings.
Transformational Leadership
Leaders who have a clear vision and are able to articulate it effectively to others often characterize this style of leadership. Transformational leaders look beyond themselves in order to work for the greater good of everyone. This type of leader will bring others into the decision-making process and will allow those around them opportunity to learn and grow as individuals. They seek out different perspectives when trying to solve a problem and are able to instil pride into those who work under them. Transformational leaders spend time coaching their employees and learning from them as well.
Transactional Leadership
This leadership style is characterized by centralized control over employees. The transactional leader will control outcomes and strive for behavioural compliance. Employees under a transactional leader are motivated by the transactional leader’s praise, reward, and promise. They may also be corrected by the leader’s negative feedback, threats, or disciplinary action.
The most effective leadership style is using a combination of styles. Leaders should know when it is best to be autocratic and when to be democratic. They can also be transformational and transactional at the same time; these are not mutually exclusive styles and in fact can complement one another extremely well.
