NATURE, FUNCTIONS AND IMPORTANCE OF MANAGEMENT

In modern days management is a key factor for success of any organisation activity .Now-
a-days organisations are large highly complex and innovative. Therefore quality management is
needed for long term and successful existence. Management is one of the most important factors
in stimulating forces of economic growth.
DEFINITIONS: The term management has several meanings and definitions depending upon the
context and purpose .
According to Peter F.Drucker “Management is a specific economic organ of an enterprise”

According to Henry Fayol” To manage is to forecast and plan to organise,to command, to co-
ordinate and to control”.

In view of Taylor management is “Doing the best in the chepest way “.

Management deals with individuals and groups in the organisation to achieve the objectives.
Management is the process of formulation of plans and objectives. It is an art of getting things done
through others

NATURE AND FEATURES:

1. GOAL –ORIENTED -: Basically organisations are formed to achieve the goals. Without goals it
becomes difficult to define the direction to where group activities lead to. The main object of
management is to utilise the human, physical and financial resources efficiently. Generally the
success of management is measured by the extent of achievement of goals. Therefore the
management is a purpose oriented.

2. SOCIAL PROCESS -: Management is an integral part of social process.Here social process refer to
series of activities that are performed in the society .Management is done by the people, through
the people and for the people in the society. Management is related to human factor. Management
is a social process because it is concerned with interpersonal relations. Management consists of
setting things done through others. Therefore management is a social process.

3. UNIVERSAL -: Management principles apply to all organisations at all levels. Management is

required in every organised activity irrespective of size or type of the of activity. Whenever two or
more persons are working for a common goal management is necessary. The fundamental
principles of management are applicable in all areas of organisational activities.

4. INTER-DISCIPLINARY -: Management is depending and using the contents of other disciplines and
techniques. For example, the manager uses the theories of consumption and production from
economics, probability theories, correlation and regression techniques from statistics, theories of
group behaviour from sociology, tools of matrices, calculus, integration etc. from mathematics and
so on. Therefore, management is a multidisciplinary in its nature.

5. SITUATIONAL IN NATURE -: Management is situational in nature. Same type and style is not
suitable in every situation. According to the changing situations there is a need of change in
functioning of management. At different points of time , the style of functioning of management

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must be different. Therefore the management must be situational in nature. The managers do not
wait for the future and they make the future.

6. CONTINUOUS PROCESS -: Management is a dynamic and it is a continuous process. Continuity is

very important in the organisations. Some new people come and some others may leave
organisations, but the management must continue and keep the organisation in stable manner.
Therefore, the continuity is ensured.Organisation should not be collapsed when some key people
leave the organisation.

7. MANAGEMENT IS BOTH SCIENCE AND ART -: There is a discussion on whether management is a

science or art. Management is an organised body of knowledge consisting of well-defined concepts,
principles and techniques which can be applied. Therefore management is treated as a science. The
term art means the knowledge required to accomplish the desired results. This knowledge requires
creative power and skill and management has this power and therefore it is an art.

8. INTANGIBLE -: Management is a invisible force. It cannot be seen. But its presence can be noticed
by the results of its efforts. The manager who performs the functions of management are very much
tangible and visible.

FUNCTIONS OF MANGEMENT
Management is the process of working with people and resources to accomplish
organisational goals. Management must do these things effectively and efficiently. According to
Koontz, management is performing the following functions:

1. PLANNING -: Planning refers to choosing the best course of action to achieve the goals for future.
The management must first of all identify the goals to be achieved. Later explore the course of
action and find out the merits and demerits of each course of action. Finally management must
select the best course of action for implementation. Therefore planning is referred as the process of
determining the best course of action to achieve the given goals. In planning a line of action is
identified in each stage.

2. ORGANISING -: Organising involves the identification of activities required for the achievement of
the predetermined objectives of the firm and implementation of the plans. It is the duty of the
management to assemble and co-ordinate the human, financial, physical and other resources
needed to achieve the goals. So organising is the function of making arrangement for all the
necessary resources required to work for achieving the objectives. Organising shows how the tasks
can be achieved with the given resources and it paves the way for formal communication.

3. STAFFING -: Staffing is the process of filling all in the positions of the organisation with the
qualified persons. Putting of a right man in the right place is the main function of the management.
Staffing is a process which includes recruitment, selection, training, placement, appraisal, promotion
and career planning. This promotes the organisational abilities of the production units.

4. DIRECTING -: Directing consists of guiding and supervising the subordinates in activities allocating
them. The subordinates have to be properly guided and supervised in their respective jobs and so
that the common goal can be achieved. Therefore directing is a process of issuing orders and

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instructions to guide the subordinates and suggest various methods of work and ensuring that they
perform their jobs in a planned manner. Leading, motivating, communicating and co-ordinating are
included in this function.

5. CONTROLLING -: Controlling is a process of measuring the present performance of the employees

and assess whether the given objectives are achieved or not. It involves

a. Measuring the actual performance of the employees

b. Comparing with targets
c. Taking of follow up action i.e corrective or residual action for improving the performance if
necessary

This controlling function is necessary to take appropriate action according to changes

IMPORTANCE AND SIGNIFICANCE OF MANAGEMENT

Management is indispensable for successful functioning of any
organisation. The following are the some of the advantages of management

1. ACHIEVEMENT OF GOALS -: Management is helpful to achieve the pre-determined goals

according to the requirement. If an organisation is systematically managed it can achieve the
goals even though the available resources are limited. Generally the resources are scare in their
supply and therefore these resources must be effectively allocated and utilised in an optimum
manner. This is only possible with the help of systematic management.

2. OPTIMUM UTILISATION OF RESOURCES -: Management is useful to achieve the goals by using

the resources in an optimum manner. Management provides training and guidance to
employees so that they can make the best use of the available resources. Machines, machine
tools, raw materials, money and man power can be utilised in an optimum manner with the help
of proper management.

3. COST MINIMISATION -: In modern days it is essential to minimise the cost of production to

face the cut- throat competition. Management gives direction to avoid wastages and due to this
it is possible to reduce the cost of production. Management gives proper direction for the
improvement of the efficiency of the production. It leads to minimisation of costs and
maximisation of profits.

4. SMOOTH FUNCTIONING -: Management is helpful for smooth functioning of a production unit

especially at the time of difficulties. At the time of crisis the management makes necessary
changes in the organisation by anticipating the future uncertanities. For continuous and smooth
functioning of production, management is required.

5. SURVIVAL AND GROWTH -: In modern business the changes have been taken place rapidly.
Management keeps in touch with the existing business environment and forecast the trends in
future. Management takes steps in advance to meet the future changes for survival and growth
of the firm. Management takes necessary steps to minimise the risks and maximise the benefits

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of opportunities. Moreover,the management will take the required measures to ensure
continuity in organisation.

6. EMPLOYMENT GENERATION -: Management is responsible for generation of employment

opportunities.By expanding the business enterprises, management creates job opportunities for
several people. People can earn their livelihood by working in different organisations.
Management helps to satisfy the economic and social needs of employees.

7. ECONOMIC GRTOWTH -: Efficient management plays an important role for the nation in
terms of social and economic development. Economic growth of a country mainly depends on
the quality of management of its resources. Efficient management is helpful for optimum
utilisation of resources , improvement of standard of living of the people and for the national
income. Therefore, management is playing a key role in economic growth of a nation

8. INNOVATIONS -: Management is helpful to encourage innovations. Innovations means

introducing of new things. Management tries to develop new ideas, new technology, new
methods of production, new type of product etc. These innovations make a firm more
competitive and efficient. Innovations will enhance the profit

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TAYLOR’S THEORY OF SCIENTIFIC MANAGEMENT
The concept of scientific management was introduced by Fredrick Winslow Taylor.
He developed this theory in the beginning of 20th century. Taylor is considered as the father of
scientific management. Scientific management is regarded as the attitude and philosophy of
discarding the world rule of the thumb and resolved the problem of management through
scientific investigations.

PRINCIPLES OF SCIENTIFIC MANAGEMENT: Taylor advocated the following principles of

scientific management

1. SCIENCE TO REPLACE THE RULE OF THUMB -: According to taylor in management the

scientific methods should be applied in the place of rule of thumb. It means that there should be
more accuracy in determining various aspects of work rather than estimation or what has
traditionally been accepted

2. HARMONY IN GROUP ACTIONS -: There must be understanding among the whole group of
people for the successful achievement of the goals. Therefore, there should be harmony in
group activities.

3.CO-OPERATION -: There should be co-operation between management and workers and

among workers for the successful functioning of the organisation. For achieving better results
there is a need of this type of co-operation.

4. MAXIMUM OUTPUT -: Taylor believed that scientific management should result in continuous
increase in production and productivity of workers and management.

5. DEVELOPMENT OF WORKERS -: Workers should be fully developed. Management should

scientifically select, train , teach and develop each worker and so that the right person has the
right work. There must be division of work and responsibility between managers and workers

Taylor felt that both the management and workers should get
benefits from scientific management. In his view an average worker could perform better if a
definite task was given with clear-cut standards. The workers should be fully rewarded for their
productivity without any limit. Taylor introduced the system in which workers were paid
additional wages when they did more standard work .Mutual understanding and prosperity
should replace the mutual exploitation.

ADVANTAGES OF SCIENTIFIC MANAGEMENT

The following are the advantages of scientific management

1. INCREASE OF PRODUCTIVITY -: Scientific management increases the productivity of workers

and management due to use of improved working methods.

2. BETTER EARNINGS -: In scientific management piece rate wage system was introduced. Higher
incentive were given to those workers who produce more.

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 3. BETTER WORKING CONDITION -: There was a drastic changes in the attitudes of the owners
and working conditions of the labourers have been improved.

4. BETTER DECISIONS -: In scientific management the thumb was replaced by the scientific
methods and therefore the decisions can be taken in a better way with higher quality

5. RESEARCH DEVELOPMENT -: Scientific management develops and promotes the research

activities in the field of production and marketing.

6. STANDARDISATION -: There was a standardisation of tools and work methods and materials
due to scientific management.

7. OPTIMUM UTILISATION OF RESOURCES -: Scientific management helps for optimum

utilisation of resources like man power, material, money, and machines

8. INNOVATIONS -: It is possible to introduce several new things with the help of scientific
management.

CRITICISMS
The theory of scientific management was criticised in the following way

1. COSTLY METHOD -: According to the employers the scientific method is costly and
unworkable.

2. IGNORED FUNCTIONAL AREAS -: Scientific management ignored the functioning areas of

management like marketing, finance etc.

3. NO INDIVIDUAL CREATIVITY -: Due to mechanical work in scientific management the individual

creativity is completely ignored.

4. LABOUR IMMOBILITY -: Mobility among the workers got reduced because of narrow
specifications.

5. ADVERSE EFFECT ON HEALTH OF LABOURERS -: Scientific management encourages the piece

wage rate system because of this the labourer want to do more work and it adversely effect the
health of the workers.

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 FAYOL’S PRINCIPLES OF MANAGEMENT
Henry Fayol is considered the “FATHER OF PRINCIPLES OF MANAGEMENT“ or ”FATHER OF
ADMINISTRATIVE MANAGEMENT.” Fayol defined managerial functions as forecasting and
planning, organising, commanding, co-ordinating and controlling.
Fayol classified the organisational activities into six functions -:
a. Technical, for production.
b. Commercial, for buying and selling.
c. Financial, for procuring capital.
d. Security, for protecting organisational resources.
e. Accounting, for maintaining account books.
f. Managerial, for planning and controlling.

FAYOL’S PRINCIPLES OF MANAGEMENT : Fayol developed 14 principles of management in

the following way -:
1. DIVISION OF WORK -: The organisational work must be divided among different employees
based on their skills and talents. Division of work leads to specialisation. It further leads to
improvement of quality and quantity of output, reduction of costs, saving of time and
energy.
2. AUTHORITY AND RESPONSIBILITY -: Authority and responsibility go together. Fayol stressed
upon the balance between power to give orders and responsibility for performing necessary
functions. Therefore, authority must be equal to responsibility for the successful completion
of any work.
3. DISCIPLINE -: Both the employer and employees should respect each other by observing the
rules. Following the orders and instructions given by the superiors must be there for the
successful completion of the work.
4. UNITARY OF COMMAND -: A subordinate should receive orders from only one superior. This
helps in smooth functioning of the organisation.
5. UNITARY OF DIRECTION -: Same directions should be given to all employees doing the
similar work. Each activity must be directed with the help of a single plan in order to avoid
confusion.
6. SUBORDINATION OF INTEREST -: Group interest of organisation must prevail over the
individual interest. Every employee or group should work in the interest of the organisation
and not for self-interest.
7. REMUNERATION -: Wages and salaries paid to employees must be fair. Wages must be paid
on the basis of cost of living, ability of the company to pay, prevailing wage rate and so on.
Apart from financial benefits, some other benefits must also be provided.
8. CENTRALISATION OF AUTHORITY -: Fayol started that certain matters are to be centralised
and others to be decentralised. Authority is said to be centralised when decision-making
powers are retained for the top level. Any how the degree of centralisation or
decentralisation is determined by the needs of the company.
9. SCALAR CHAIN -: Scalar chain indicates how the authority flows from top to bottom. Each
communication coming down or going up must flow through each position in the line of
authority.

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10. ORDER -: Every person should be appointed for the right work based upon the skill and
experience of the people. This is essential for the best utilisation of the resources.
11. EQUITY -: Equity means social justice. All members of the organisation should be given fair
and equal treatment. There should not be any partiality in transfer, promotions, etc.
Managers must exercise justice and kindness while dealing with their subordinates.
12. STABILITY OF TENURE -: An employee should be given security of job which will allow
sufficient time to the employee to settle down and successfully perform his duties. Generally
an average employee who works in the company for a long time is much better than an
outstanding employee who merely come and go.
13. INITIATIVE -: The staff should be encouraged to show initiative to generate suggestions. This
develops the sense of responsibility of employees.
14. ESPRIT DE CORPS -: This means team work. It implies that there is unity in strength.
Superiors must encourage team spirit to their subordinates

The above principles reflect how the organisation should be structured and managed.
Fayol contributed much for the growth of professional management and therefore, he is
considered as” FATHER OF MODERN MANAGEMENT “

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