CONCEPT AND NATURE OF MANAGEMENT

Management is a universal phenomenon. It is a very popular and widely used term. All
organizations - business, political, cultural or social are involved in management because
it is the management which helps and directs the various efforts towards a definite
purpose. According to Harold Koontz, “Management is an art of getting things done
through and with the people in formally organized groups. It is an art of creating an
environment in which people can perform and individuals can co-operate towards
attainment of group goals”. According to F.W. Taylor, “Management is an art of
knowing what to do, when to do and see that it is done in the best and cheapest way”.

Management is a purposive activity. It is something that directs group efforts towards the
attainment of certain pre - determined goals. It is the process of working with and through
others to effectively achieve the goals of the organization, by efficiently using limited
resources in the changing world. Of course, these goals may vary from one enterprise to
another. E.g.: For one enterprise it may be launching of new products by conducting
market surveys and for other it may be profit maximization by minimizing cost.

Management involves creating an internal environment. It is the management which puts

into use the various factors of production. Therefore, it is the responsibility of
management to create such conditions which are conducive to maximum efforts so that
people are able to perform their task efficiently and effectively. It includes ensuring
availability of raw materials, determination of wages and salaries, formulation of rules &
regulations etc.

Therefore, we can say that good management includes both being effective and efficient.
Being effective means doing the appropriate task i.e, fitting the square pegs in square
holes and round pegs in round holes. Being efficient means doing the task correctly, at
least possible cost with minimum wastage of resources.

The study and application of management techniques has kept on changing with time.
Various dimensions have got added with the changing nature of the discipline of
management as various contributions came forth from time to time. In the present day
context, the following dimensions are integral to the nature of management:
• Continuous Process: Management is a never ending process. It will remain the
part of organization till the organization itself exists. Management is an unending
process as past decisions always carry their impact for the future course of action.
• Universal in Nature: Management is universal in nature i.e. it exists everywhere
in universe wherever there is a human activity. The basic principles of
management can be applied anywhere whether they are business or non-business
organization.

1
 • Multidisciplinary: Management is basically multidisciplinary. Though
management has been developed as a separate discipline, it draws knowledge and
concepts of various other disciplines like sociology, psychology, economics,
statistics etc. Management links ideas and concepts of all these disciplines and
uses them for the benefit of the organization.
• Management is a group activity. Management is a vital part of group activity.
As no individual can satisfy all her/his needs herself/himself, (s)/he unites with
her/his co-workers and work together as an organized group to achieve what
(s)/he cannot achieve individually.
• Management is goal oriented: Management is a goal oriented activity. It works
to achieve some predetermined objectives or goals which may be economic or
social.
• Dynamic: Management is dynamic in nature i.e. techniques to mange business
changes itself over a period of time.
• System of authority: Authority is power to get the work done by others and
compel them to work systematically. Management cannot perform in absence of
authority. Authority and responsibility depends upon position of manager in
organization.
• Relative principles: Management principles are relative and not absolute, and
they should be applied according to the need of the organization. Each
organization is different from the other, and the differences might exist because of
time, place, socio-cultural factors etc.
• Management is an art: Management is considered as art as both requires skills,
knowledge, experience and creativity for achievement of desired results.i
• Management is science. Management is considered as science. Science tells
about the causes and effects of applications and is based on some specific
principles and procedures. Management also uses some principles and specific
methods. These are formed by continuous observations.

SCOPE OF MANAGEMENT

Generally, the scope of management hovers around the following functional areas:
Ø Production management
Ø Marketing management
Ø Financial management
Ø Personal management

Production management:
Production means creation of utilities by converting raw material into final product by
various scientific methods and regulations. It is very important field of management.
Various sub-areas of the production department are as follows.
• Plant lay out and location: This area deals with designing of plant layout, decide
about the plant location for various products and providing various plant utilities
• Production planning: Managers have to plan about various production policies
and production methods.

2
 • Material management: This area deals with purchase, storage, issue and control
of the material required for production department.
• Research and Development: This area deals with research and developmental
activities of manufacturing department. Refinement in existing product line or
develop a new product are the major activities.
• Quality Control: Quality control department works for production of quality
product by doing various tests which ensure the customer satisfaction.

Marketing management:
Marketing management involves distribution of the product to the buyers. It may need
number of steps. Sub areas are as follows

• Advertising: This area deals with advertising of product, introducing new product
in market by various means and encourage the customer to buy thee products.
• Sales management: Sales management deals with fixation of prices, actual
transfer of products to the customer after fulfilling certain formalities and after
sales services.
• Market research: It involves in collection of data related to product demand and
performance by research and analysis of market.

Finance and accounting management:

Financial and accounting management deals with managerial activities related to
procurement and utilization of fund for business purpose. Its sub areas are as follows

• Financial accounting: It relates to record keeping of various financial

transactions, their classification and preparation of financial statements to show
the financial position of the organization.
• Management accounting: It deals with analysis and interpretation of financial
record so that management can take certain decisions on investment plans, return
to investors and dividend policy
• Taxation: This area deals with various direct and indirect taxes which an
organization has to pay.
• Costing: Costing deals with recording of costs, their classification, analysis and
cost control.

Personnel Management:
Personnel management is the phase of management which deals with effective use and
control of manpower. Following are the sub areas of personnel management

• Personnel planning: This deals with preparation inventory of available

manpower and actual requirement of workers in organization.
• Recruitment and selection: This deals with hiring and employing human being
for various positions as required.

3
 • Training and development: Training and development deals with process of
making the employees more efficient and effective by arranging training
programmes. It helps in making team of competent employees which work for
growth of an organisation.
• Wage administration: It deals in job evaluation, merit rating of jobs and making
wage and incentive policy for employees.
• Industrial relation: It deals with maintenance of overall employee relation,
providing good working conditions and welfare services to employees.

FUNCTIONS OF MANAGEMENT

For theoretical purposes, it may be convenient to separate the function of management

but practically these functions are overlapping in nature i.e. they are highly inseparable.
Each function blends into the other & each affects the performance of others.

Planning:
It is the 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. According to KOONTZ, “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 a 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’s”. To organize a
business involves determining & providing human and non-human resources to the
organizational structure. Organizing as a process involves:

• Identification of activities.
• Classification of grouping of activities.
• Assignment of duties.
• Delegation of authority and creation of responsibility.
• Coordinating authority and responsibility relationships.

Staffing:

4
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 o
staffing is to put right man on right job. According to Kootz & O’Donell, “Managerial
function of staffing involves manning the organization structure through proper and
effective selection, appraisal & development of personnel to fill the roles designed un the
structure”. Staffing involves:

• Manpower Planning (estimating man power in terms of searching, choose the

person and giving the right place).
• Recruitment, selection & placement.
• Training & development.
• Remuneration.
• Performance appraisal.
• Promotions & transfer.

Directing:
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. Direction is that inert-personnel
aspect of management which deals directly with influencing, guiding, supervising,
motivating sub-ordinate for the achievement of organizational goals. Direction has
following elements:
• Supervision
• Motivation
• Leadership
• Communication
Supervision- implies overseeing the work of subordinates by their superiors. It is the act
of watching & directing work & workers.

Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to

work. Positive, negative, monetary, non-monetary incentives may be used for this
purpose.
Leadership- may be defined as a process by which manager guides and influences the
work of subordinates in desired direction.
Communications- is the process of passing information, experience, opinion etc from one
person to another. It is a bridge of understanding.

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.
According to Theo Haimann, “Controlling is the process of checking whether or not

5
proper progress is being made towards the objectives and goals and acting if necessary, to
correct any deviation”. According to Koontz & O’Donell “Controlling is the
measurement & correction of performance activities of subordinates in order to make
sure that the enterprise objectives and plans desired to obtain them as being
accomplished”. Therefore 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.
• Corrective action.

http://www.managementstudyguide.com/what_is_management.htm

http://www.authorstream.com/Presentation/rai.jeetendra-224007-nature-scope-
management-product-training-manuals-ppt-powerpoint/

http://www.allsubjects4you.com/Management-Nature-of-management.htm

6
Production management
• Designing the product
• Location and layout of plant and building
• Planning and control of factory operations
• Operations of purchase and storage of materials
• Repairs and maintenance
• Inventory cost and quality control
• Research and development
Marketing Management
• Marketing research to determine the needs and expectation of consumers
• Planning and developing suitable products
• Setting appropriate price
• Selecting the right channel of distribution
• Promotional activities like advertisement and salesmanship to communicate with
the customers
Financial Management
• Selecting the appropriate source of funds
• Raising the required funds at the right time
• Administration of earnings
• Estimating the volume of funds
Personnel management
• Manpower planning
• Recruitment
• Selection
• Training
• Appraisals
• Promotions
• Transfers
• Compensation
• Employee welfare services
• Personnel records, research etc.

7
i
Art is about creative communication of ideas and emotions. Science is about establishing truth or finding objective facts
through verifiable experimentation.