UNIT 1: NATURE AND CONCEPT OF

MANAGEMENT

Learning Objectives:
After reading and analysing the unit, you should be
able to:
1. Elaborate the definition and functions of
management
2. Discuss the evolution of management theories
 INTRODUCTION

Every human being has several needs and desires.

But no work individual can satisfy all his wants.
Therefore, people work together to meet their mutual
needs which they cannot fulfil individually.
Management is considered a process because it
involves a series of interrelated functions. It consists of
getting the objective4s of an organization and taking
steps to achieve objectives. The management process
includes planning, organizing, staffing, directing and
controlling functions.
Management as a process has a following implications:
1. SOCIAL PROCESS: Management involves interactions among
people. Goals can be achieved only when relations between
people are productive. Human factor is he most important part of
the management.
2. INTEGRATED PROCESS: Management brings human, physical and
financial resources together to put into effort. Management
integrates human efforts so as to maintain harmony among them.
3. CONTINUOS PROCESS: Management involves continuous
identifying and solving problems. It is repeated every now and
then till the goal is achieved.
4. INTERACTIVE PROCESS: Managerial functions are contained within
each other..
DEFINITION AND FUNCTIONS OF
MANAGEMENT

MANAGEMENT means the group of persons occupying managerial

positions. It refers to all those individuals who perform managerial
functions.
There are several types of managers which are listed as under:
1. Family managers who have become managers by virtue of their being
owners or relatives of the owners of a company.
2. Professional managers who have been appointed on account of their
degree or diploma in management
3. Civil Servants who manage public sector undertakings
NATURE AND CHARACTERISTICS OF
MANAGEMENT

The salient features which highlight the nature of management are as

follows:
1. Management is goal-oriented: Management is not an end in itself. It is
a means to achieve certain goals.
2. Management is Universal: Management is an essential element of
every organized activity irrespective of the size or type of activity.
3. Management is an integrative force: The essence of management lies
in the coordination of individual efforts in to a team.
4. Management is a social process: Management is done by people,
through people and for the people
5. Management is multidisciplinary: Management has to deal with
human behaviour under dynamic conditions.
6. Management is a continuous process: Management is a dynamic
and an on-going process.
7. Management is Intangible: Management is an unseen or invisible
force.
8. Management is an Art as well as Science: It contains a systematic
body of theoretical knowledge and it also involves the practical
application of such knowledge.
 ROLE AND IMPORTANCE OF MANAGEMENT
According to Peter Drucker “ Management is a dynamic life-giving elements in an
organization, without it the resources of productions remain mere resources and never
become a production”.

The importance of management has been highlighted clearly in the following points:
1. Achievement of group goals: A human group consists of several persons, each
specializing in doing a part of total task.
2. Optimum utilization of resources: Managers forecast the need for materials,
machinery, money and manpower.
3. Minimization of the cost: Managers forecast the need for materials, machinery,
money and manpower.
4. Survival and growth: Modern business operates in a rapidly changing environment.
5. Generation of Employment: People earn their livelihood by working in these
organization.
6. Development of the nation: Efficient management is equally important at the
national level. Management is the most crucial factor in economic and social
development.
 FUNCTIONS OF MANAGEMENT
1. PLANNING: entails the setting of goals and includes the creation of a blueprint to achieve
them. It is essential that managers create objectives, which serve to focus the efforts of
employees, motivate them and provide a standard against which performance can be
measured.
2. ORGANIZING: another important managerial function which can be defined as the
allocation of resources to achieve the goals.
3. LEADING: Without the ability to influence subordinates toward goal achievement,
manager cannot be effective.
4. CONTROLLING: Control can be defined as a methodological process through which
managers monitor employees and their activities to ensure that they are in alignment with
the company’s objectives.
5. LEADERSHIP STYLES: Leadership is critical to a company’s profitability. The methods and
manner that a manager uses to spur workers toward the achievement of the company’s
objectives is termed leadership style.
 FOUR MAIN LEADERSHIP STYLES:
1. AUTOCRATIC LEADERSHIP
 Autocratic leaders control the decision-making entirely and express no interest in the
suggestions of employees. This leadership style is useful in situations that demand
speedy decision-making and when information is confidential, but it may demoralize
employees and result in less creative decision-making.

2. DEMOCRATIC LEADERSHIP
 Democratic leaders seek the input of employees in decision-making. This style
motivates employees, but it may be time-consuming because of the ongoing
consultations.

3. PATERNALISTIC LEADERSHIP
 A paternalistic leader, as the name suggests, adopts a father-like approach.

4. LAISSEZ FAIRE LEADERSHIP

 This means allowing persons to do as they please. Managers that adopt this style give
their employees significant freedom and autonomy.
 EVOLUTION OF MANAGEMENT THEORIES

Management theory originated with “scientific” and bureaucratic”

management that used measurement, procedures and routines as the basis
for operations. Organizations developed hierarchies to apply standardized
rules to the workplace and punished workers for not following them. With the
“human relations” movement, companies started emphasizing individual
workers.
 MANAGEMENT THEORIES AND PRACTICE
Management practice relies upon case studies and the individual experiences of managers when
dealing with workplace situations. Since both schools of management have flaws and benefits, a business
owner should study both styles of management in order to improve profitability.
BENEFITS:
• Employees most commonly leave their jobs due to poor management practices, a situation that
increases costs and lowers the talent present in a business, according to the University of Vermont.
CONSIDERATIONS:
• Management theories face limitations, because models of human behaviour in a business do not
consider all the variables that can impact profitability.
UNIFORMITY:
• Management theories work best from a macro perspective, such as when business determines the
appropriate model for management as a whole or starts a large project that it has never attempted
before.
PERSONALIZATION:
• Management practices focus more on dynamics between groups, which allows managers more
flexibility in making decisions and helps employees function together as a unit they work together on a
project.
APPLICATION:
* A small business owner will usually study and implement management practices, because he requires
flexibility to sustain his business mode.
IMPORTANCE OF MANAGEMENT THEORY

A popular saying holds that “ the difference between theory and

practice is that in theory there is no difference”. This witticism is
especially relevant to management theory because many
managers would deny that management theory has such
similarity to practice. The role of the management theory is to
provide guidelines for effective practice. However, the ability of
any theory to do so is a matter of debate.