7/30/2019 12th chap 1

1/24

CHAPTER 1NATURE & SIGNIFICANCE OF

MANAGEMENT

7/30/2019 12th chap 1

2/24

7/30/2019 12th chap 1

3/24

When India had hardly 250 computers across nation, Shiv Nadarand his passionately driven young team believed that there is hugepotential in IT industry.

The vision came into in existence in 1976, today HCL is 4 bn US $company having almost 50k employees and having corporate officesin countries like US, Europe and Japan.

HCLs main business is IT hardware manufacturing, systemintegration and soft wares.

HCLs basic plan was to develop Microcomputers which started in1978 same as the time of Apple. The observers of IT industry believed that this is the birth of an

Indian Computer Industry. Shiv was very much known for his risk taking abilities. In 1988 when

software industries were booming he foresaw the huge potential in

the area of IT education & give birth to NIIT. All credit goes to MrShiv Nadar for his strong convictions.

Being a CEO of this company, he gives all the credit to themanagement of the company who handled all the challenges ofrapidly changing environment and converted into opportunities.

7/30/2019 12th chap 1

4/24

Management - intro

Management is the process of working with and throughothers to effectively achieve organizational objectives byefficiently using limited resources in the changingenvironment. Kreitner

Process means various management functions likeP O S D C

Effectively means doing the right task, completing all theactivities related to that task and achieving goals.

Efficiently means doing the task with minimum cost.

7/30/2019 12th chap 1

5/24

Effectiveness VS Efficiency:

EFFICIENCY EFFECTIVENESS

It refers to doing things withminimum cost

It refers to doing the rightthings or tasks

It involves continuous cost-benefit analysis

It involves in identifying theright tasks for achieving thegoal in stipulated time.

The main aim behind efficiency

is to minimize the cost andthere by increasing the profit

The main aim behind

effectiveness is to achievingend state result in given timeframe.

7/30/2019 12th chap 1

6/24

Characteristics of Management:

1. MANAGEMENT IS GOAL ORIENTED PROCESS:

An organization always have set ofgoalsand these goals arethe actual reason because of which management is existing.

Goal should be clearly stated and it has to be simple.

Different org have different goals. E.g. goals of a Reliancefresh and goals of Nature club India.

The job of management is to unite the effort of all individualtowards achieving these goals.

2. MANAGEMENT IS ALL PERVASIVE:

Management activities are common to all type of organizationswhether they are economic, social or political.

Either managing petrol pump or managing school,management is essential in both the aspect.

7/30/2019 12th chap 1

7/24

3. MANAGEMENT IS MULTIDIMENSIONAL:

A. Management of work:

All org perform some work. E.g. factories a product is produced, hospitals a patient is cured.

So producing the product or curing the person is nothing but a work. Mgmt translates this work is goals and assigns the way of dong it.

B. Management of people:

This aspect states that Human Resources is an asset of an organization

Organization can have all the technologies, but, getting work done through

people is always a major task. Mgmt of people have two broad dimensions

(i) Dealing with employees as an individuals with diverse needs and (ii)Dealing with employees as a group.

C. Management of operations:

Every organizations has some basic product and services. This requires production of input materials and making output for

consumption.

Mgmt of operation is totally incomplete without mgmt of work and mgmt ofpeople.

7/30/2019 12th chap 1

8/24

4. MANAGEMENT IS A CONTINUOUS PROCESS:

Management process consist of continuous but separatemanagement functions. [POSDC]

Managers perform this functions simultaneously.

E.g. Suhasini : one day in planning for future, other day sortingproblems with employees, or at some other day giving newinstruction of directing to all rural artisans etc.

One functions end, the other one starts automatically.5. MANAGEMENT IS A GROUP ACTIVITY:

Organization is collection of many individuals who are havingdiverse needs.

Every member has different purpose of joining the organization,

but as the member of the organization they have to worktowards achievement of common goals.

Achievement of common goals leads to increased team workand coordinationand there by achieving individual goals.

7/30/2019 12th chap 1

9/24

6. MANAGEMENT IS DYNAMIC FUNCTION:

The functions of mgmt is bound to change with the changingneed of an environment.

Organization is always connected with social, economic andpolitical factors. Such factors do have significant impact on theworking of an organization.

Thus for a organization to be successful, they have to changeaccording to the changing needs of an envt.

E.g. heavy changes made by McDonalds for surviving Indianmarkets. In terms of tastes, quality and distribution pattern.

7. MANAGEMENT IS INTANGIBLE FORCE:

Management cant not be seen or touched but its presence can

be felt in the organization. The effect of mgmt is noticeable when plans are properly

executed, employees are happy in terms of their work andresponsibilities and complete orderliness is maintained.

7/30/2019 12th chap 1

10/24

Management Objectives:

1. ORGANIZATIONAL OBJECTIVES:

A. Survival obj:

Its the most basic obj of the organization to survive. Mgmtmust ensure that organization atleast covers basic cost soas to survive in the market.

B. Profit obj:

Only surviving is not enough. Earning profit is also veryimportant, management also has to ensure that org alsoearns profit.

Profit is essential for long term and successful operationof business.

7/30/2019 12th chap 1

11/24

C. Growth obj:

Business must add new prospective opportunities so as to grow.Mgmt has to make sure that new ventures are timely taken

under consideration Growth of an organization can be measured by increased sales

volume, new products introduced, etc.

2. SOCIAL OBJECTIVES:

Envt friendly methods of production, employment to

disadvantaged sections of the soc, providing basic amenitiessuch as school colleges etc.

3. PERSONAL OBJ:

Org is a set of people who have diverse needs. They join org tosatisfy their own needs.

These may vary from handsome salaries + perks to personalgrowth and development.

Mgmt has to make sure that achieving common goals wouldcomplete personal or individual goals.

7/30/2019 12th chap 1

12/24

Importance of Management

1. MANAGEMENT HELPS IN ACHIEVING GROUP GOALS:

The main aim behind establishing management is to achievecommon goals.

To make this happen, a manager, gives common direction to allthe individuals for accomplishing common goals.

2. MANAGEMENT INCREASES EFFICIENCY:

By doing better P O S D C, a manager would be in a bettersituation to reduce the maximum cost.

Reduction in cost always leads to increased efficiency.

7/30/2019 12th chap 1

13/24

3. MGMT CREATES DYNAMIC ORGANIZATION:

All organization always operate in an envt which is constantlychanging, because of this management also has strong belief in

creating such organization which is flexible and dynamic. If resistance found among employees than it is the duty of mgmt to

explain that why the change is necessary and what sort of benefitscan be reaped from the change.

4. MGMT HELPS IN COMPLETING PERSONAL GOALS:

A manager must motivate and lead his team in such a way thatwhile contributing to the org goal, they are also able to achievetheir own individual goals.

A manager must ensure proper use of motivational and leadership

skills.5. MGMT HELPS IN DEVELOPING THE SOCIETY:

By providing good quality products and services, creatingemployment opportunities, adopting new technologies etc.

7/30/2019 12th chap 1

14/24

Mgmt as ART

Art means practical knowledge of the subject1. Art is an application of knowledge or know how:

Mgmt also involves application of certain managerial skills ormanagerial know how.2. Art is directed towards concrete results through deliberate efforts: Mgmt is also resulted oriented which involves great amount of

human efforts. E.g. maximizing sales, increasing profit,minimizing the cost etc.

3. Art involves creativity: Mgmt is also creative that converts raw material or input into final

goods or output.4. Art is highly personalized: Likewise art, mgmt is also highly personalized because every

manager has different and personal approach towards givensituation based on their perception. Imp to understand that artist are born rather than made, while in

case of mgmt, mangers are always made they do not born.

7/30/2019 12th chap 1

15/24

Mgmt as SCIENCE

Science refers to systematic body of knowledge acquiredthrough observation and experimentation.

1. Science has systematic body of knowledge: Mgmt also has systematic body of knowledge. Mgmt has its own

principal and theory which are developed over a period of timefrom various theories of ecology, sociology, psychology andmathematics.

2. Science principals are based on experimentation:

Mgmt principals are also developed over a period of time bydoing continuous experimentation and observation in variousorganizations.

3. Scientific principals are universally valid: Mgmt principals are not exact as science so they do not stand

for universal validity but mgmt principals act as a guidelines sothey can be mold in any given mgmt situation.

7/30/2019 12th chap 1

16/24

Mgmt as Profession:

Profession is an occupation which posses skills inspecialized area.

1. Profession has a well defined body of knowledge: Same as profession mgmt also has well defined body of

knowledge, which is developed from various principals.

2. Restricted entry:

Unlike profession as such there is not restriction of entry in mgmt.

Anyone can be called manger irrespective of his educationalqualification.

3. Professional association & Ethical code of conduct:

There are several association such as AIMA [All India MgmtAssociation] but its not compulsion for any manager to join such

body. There is no such specific list for the code of conduct

4. Service motive:

The basic motive of mgmt is to help its organization achieve statedobjectives.

7/30/2019 12th chap 1

17/24

Levels of ManagementFunctions performed by TOP LEVELMGMT.

They are senior most executives of the company referred aschairman, COO, CFO, CEO, MD, VP

1. To establish and describe overall objective of the company.

2. To plan (policy formulation), organize (determining the structure)and exercise control over middle and lower levels of

management.3. To decide the overall budget of the organization and budget ofthe various departments.

4. To decide that how the corporate earnings will be distributed andhow much would be retained as re investment of profit.

5. To maintain cordial relations with outside party such as financialinstitutions, suppliers, govt departments, media etc.

7/30/2019 12th chap 1

18/24

Second level mgmt functions

2nd level mgmt is the link between top mgmt and operative levelmgmt.

They are subordinates for the top level mgmt and superiors foroperative level mgmt.

Designation they hold such as Divisional Head, DepartmentalHead, Operation Manger, Development Manager etc.

This 2nd

level managers are responsible for implementingstrategies of 1st level mgmt and they are also responsible for allthe activities performed by operative level mgmt.

Functions:

1. Interpreting policies framed by top level management.

2. Ensuring that department has proper amount of personnel.

3. Assigning necessary duties & responsibilities to them

4. Motivating employees to achieve their objectives.

5. Co operating with other departments for the smooth functioning of

the business.

7/30/2019 12th chap 1

19/24

Operational level mgmt functions:

These are the managers who have lowest rank in the hierarchy. Itconsist of foreman, supervisor etc.

1.Translating the plans of middle level mgmt into operation plans.

2. Directing the lower level employees by assigning jobs andthereby evaluating and correcting their work performance.

3. Arranging for necessary tools, materials and other facilities.

4. Ensuring implementation of work as per instruction.

5. Sending information and progress reports to higher level of mgmt.

6. Creating better human relation and conducive work envt.

7/30/2019 12th chap 1

20/24

Mgmt functions

Planning

Organizing

Staffing

Directing

Controlling

7/30/2019 12th chap 1

21/24

Co-ordination The Essence of Mgmt

The main job of the manager is to link the diverse group towardsthe achievement of common goals.

The process by which, a manager synchronizes the activities ofdifferent departments, is known as Coordination.

It is the force that binds all other functions of mgmt. Because of this common thread all the activities such as

purchase, production, distribution, sales, finance, collectionensures their continuity in the org.

Coordination may be termed as yet another separate function of

mgmt but actually it is essence of mgmt bcoz It is inherentlyavailable in all the function of the mgmt.

7/30/2019 12th chap 1

22/24

Characteristics of Coordination:

1. IT INTEGRATES GROUP EFFORTS: Coordination unifies diverse activities into purposeful work

activity. It gives common focus to group efforts.

2. IT ENSURES UNITY OF ACTION:

The main purpose for having coordination is to secure unity ofaction for the realization of common purpose.

It generally act as a binding force and ensures that actions of allthe departments are in the direction of achieving common goal.

3. IT IS A CONTINUOUS PROCESS:

Its not one time functions. It generally initiates at planning stageand lasts till controlling.

7/30/2019 12th chap 1

23/24

4. COORDINATION IS ALL PERVASIVE:

Co ordination is applicable to all the levels as well as all thedepartment of the organization.

If co ordination is not made applicable at all the levels than it wouldalways results in over lapping of activities.

5. COORDINATION IS THE RESPONSIBILITY OF MANAGERS:

It is the function of every manager in the org. Top mgmt has tocoordinate with 2nd level mgmt.

2nd

level mgmt interacts with top level as well as 3rd

levelsubordinates.

3rd level coordinates with 2nd level of mgmt.

6. COORDINATION IS DELIBERATE FUNCTION:

The function of co ordination is being executed with the deliberate

efforts of the manager. Whether the people in the organization cooperate or not but its the

duty of the manager to coordinate with them.

7/30/2019 12th chap 1

24/24

Importance of Coordination:

1. Growth in the size of the organization:

When organization grows in terms of increased numbers of

activities as well as numbers of people than requirement ofcoordination is must.

Other wise integrating the activities of all individuals becomes reallydifficult.

2. Functional Differentiation:

The activity of the organization is always divided into severalspecialized functions such as purchase, production, finance, sales,marketing etc.

Coordination synchronizes the activates of all the department in

uniform direction.3. Specialization:

Specialization is a vital important for any organization to survive incompetitive world.

With the help of coordination organization would in a better situationto achieve specialization in an organization