WHAT IS MANAGEMENT?

Management is essential for an organized life and necessary to run all types of management. Good
management is the backbone of successful organizations. Managing life means getting things done
to achieve life’s objectives and managing an organization means getting things done with and
through other people to achieve its objectives.

Whether management is an art or science, will continue to be a subject of debate. However, most
management thinkers agree that some form of formal academic management background helps in
managing successfully. Practically, all CEO’s are university graduates. Hence, the reason for including
business degree programs in all academic institutions.

Management is a set of principles relating to the functions of planning, organizing, directing and
controlling, and the application of these principles in harnessing physical, financial, human and
informational resources efficiently and effectively to achieve organizational goals.

Definition of Management

Many management thinkers have defined management in their own ways. For example, Van Fleet
and Peterson define management, ‘as a set of activities directed at the efficient and effective
utilization of resources in the pursuit of one or more goals.’

Megginson, Mosley and Pietri define management as ‘working with human, financial and physical
resources to achieve organizational objectives by performing the planning, organizing, leading and
controlling functions.

Kreitner’s definition of management:

‘Management is a problem-solving process of effectively achieving organizational objectives through

the efficient use of scarce resources in a changing environment.’

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 ‘.

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 and can co-operate towards attainment of group goals. ‘

A leader has certain inherent qualities and traits which assist him in playing a directing role and
wielding commanding influence which others. Leadership is an integral part of management and
plays a vital role in managerial operations, while management is an integral component of technical
as well as social processes. The practice of management is as old as human civilization. However, the
study of management in a systematic and scientific way as a distinct body of knowledge is only of
recent origin.

Management in some form or another is an integral part of living and is essential wherever human
efforts are to be undertaken to achieve desired objectives. The basic ingredients of management are
always at play, whether we manage our lives or our business.

For example, let us look at the managerial role of a simple housewife and how she uses the
managerial ingredients in managing the home. First, she appraises her household and its needs. She
forecasts the needs of the household for a period of a week or a month or longer. She takes stock of
her resources and any constraints on these resources. She plans and organizes her resources to
obtain the maximum benefits out of these resources. She monitors and controls the household
budget and expenses and other activities. In a large household, she divides the work among other
members and coordinates their activities. She encourages and motivates them to do their best in
completing their activities. She is always in search of improving, mention goals, resources and in
means to attain these goals. These ingredients, generally, are the basic functions of management.

Management can be defined in detail in the following categories:

Management as a Process

Management as an Activity

Management as a Discipline

Management as a Group

Management as a Science

Management as an Art

Management as a Profession

The concept of management is as old as the human race itself. The concept of ‘family’ itself required
that life be organized and resources of food be apportioned in a manner so as to maximize the utility
of such resources. Taking proper steps to safeguard the family from attacks by wild animals,
planning on where to go fishing and hunting and whom to go with, organizing these groups into
chiefs and hunting and fishing bands where chiefs gave directions, and so on, are all subtle
ingredients of management and organization.

A study of various people around the world shows good examples of organizational structures and
organizational evolution over the years. A village open market in a tribe and a large department
store in a modern city serves the same needs in a similar fashion, which is putting things together
that people need. While the tribal organization was simple in nature, the modern organization is
much more sophisticated and complex with many technological innovations. However, the basic
form of management and organizational structure seem to have existed since the beginning of the
organized human activity.
Even the recorded history shows the application of some current management techniques as far
back as 5000 BC. when the ancient Sumerians used written records in assisting governmental
operations. The Egyptian pyramids, built as early as 3000 BC., required the organized efforts of over
1,00,000 workers. It would be natural to assume that all functions of modern management, namely,
planning, organizing, directing and controlling played a significant role in the construction of these
monuments. Similarly, the early civilization of India bears witnesses to organized living.

Management, as a system, is not only an essential element of an organized society but also an
integral part of life when we talk about managing our lives. Managing life is not much different from
managing an organization and this ‘art’ of management has been with us from time immemorial.
Just as a well-managed life is much better organized, goal-oriented and successful, ‘good’
management of an organization makes the difference between the success and the failure of the
organization.

Perhaps, the importance of management was highlighted by the late President of the United States,
John F. Kennedy when he said that, the role of management in our society is critical in human
progress. It serves to identify a great need of our time: to improve standards of living for all people
through the effective utilization of human and material sources.

Similarly, Peter F. Drucker, a noted management authority has emphasized the importance of
management to social living. He proclaimed nearly 25 years ago that, ‘effective management was
becoming the main resource of developed nations and that it was the most needed resource for
developing nations.’

A manager’s job is highly crucial to the success of any organization. The more complex the
organization, the more crucial is to the manager’s role in it. A good manager makes things happen.
The importance of management in any organization was emphasized by Professor Leonard R. Sayles
in his address to a group of management development specialists, as follows:

‘We must find ways of convincing society as a whole, and those who train managers in particular,
that the real leadership problems of our institutions-the getting things done, the implementation,
the evolving of a consensus, the making of the right decisions at the right time with the right people
is where the action is. Although we as a society haven’t learned to give much credit to managers, I
hope we can move toward recognizing that managerial and leadership jobs are among the most
critical tasks of our society. As such, they deserve the professional status that we give to more
traditional fields of knowledge.’

FUNCTION OF MANAGEMENT:

Management in some form or another is an integral part of living and is essential wherever human
efforts are to be undertaken to achieve desired objectives. The basic ingredients of management are
always at play, whether we manage our lives or business. Management is a set of principles relating
to the functions of planning, organizing, directing, and controlling, and the applications of these
principles in harnessing physical, financial, human and informational resources efficiently and
effectively to achieve organizational goals.

Management is essential for an organized life and necessary to run all types of organizations.
Managing life means getting things done to achieve life’s objectives and managing an organization
means getting things done with and through other people to achieve its objectives.

There are basically five primary functions of management. These are:

1. Planning

2. Organizing

3. Staffing

4. Directing

5. Controlling

The controlling function comprises coordination, reporting, and budgeting, and hence the controlling
function can be broken into these three separate functions. Based upon these seven functions,
Luther Gulick coined the word POSDCORB, which generally represents the initials of these seven
functions i.e. P stands for Planning, O for Organizing, S for Staffing, D for Directing, Co for Co-
ordination, R for reporting & B for Budgeting.

But, Planning, Organizing, Staffing, Directing and Controlling are widely recognized functions of
management.

Planning

Planning is future-oriented and determines an organization’s direction. It is a rational and systematic

way of making decisions today that will affect the future of the company. It is a kind of organized
foresight as well as corrective hindsight. It involves predicting of the future as well as attempting to
control the events. It involves the ability to foresee the effects of current actions in the long run in
the future.

“Planning is the continuous process of making present entrepreneurial decisions systematically and
with best possible knowledge of their futurity, organizing systematically the efforts needed to carry
out these decisions and measuring the results of these decisions against the expectations through
organized and systematic feedback”.

An effective planning program incorporates the effect of both external as well as internal factors.
The external factors are shortages of resources; both capital and material, general economic trend
as far as interest rates and inflation are concerned, dynamic technological advancements, increased
governmental regulation regarding community interests, unstable international political
environments, etc.
The internal factors that affect planning are limited growth opportunities due to saturation requiring
diversification, changing patterns of the workforce, more complex organizational structures,
decentralization, etc

Organizing

Organizing requires a formal structure of authority and the direction and flow of such authority
through which work subdivisions are defined, arranged and coordinated so that each part

relates to the other part in a united and coherent manner so as to attain the prescribed objectives.

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”.

Thus the function of organizing involves the determination of activities that need to be done in order
to reach the company goals, assigning these activities to the proper personnel, and delegating the
necessary authority to carry out these activities in a coordinated and cohesive manner.

It follows, therefore, that the function of organizing is concerned with:

Identifying the tasks that must be performed and grouping them whenever necessary

Assigning these tasks to the personnel while defining their authority and responsibility.

Delegating this authority to these employees

Establishing a relationship between authority and responsibility

Coordinating these activities

Staffing

Staffing is the function of hiring and retaining a suitable work-force for the enterprise both at
managerial as well as non-managerial levels. It involves the process of recruiting, training,
developing, compensating and evaluating employees and maintaining this workforce with proper
incentives and motivations. Since the human element is the most vital factor in the process of
management, it is important to recruit the right personnel.

According to Kootz & O’Donnell, “Managerial function of staffing involves manning the organization
structure through the proper and effective selection, appraisal & development of personnel to fill
the roles designed in the structure”.

This function is even more critically important since people differ in their intelligence, knowledge,
skills, experience, physical condition, age and attitudes, and this complicates the function. Hence,
management must understand, in addition to the technical and operational competence, the
sociological and psychological structure of the workforce.
Directing

The directing function is concerned with leadership, communication, motivation, and supervision so
that the employees perform their activities in the most efficient manner possible, in order to achieve
the desired goals.

The leadership element involves issuing of instructions and guiding the subordinates about
procedures and methods.

The communication must be open both ways so that the information can be passed on to the
subordinates and the feedback received from them.

Motivation is very important since highly motivated people show excellent performance with less
direction from superiors.

Supervising subordinates would lead to continuous progress reports as well as assure the superiors
that the directions are being properly carried out.

Controlling

The function of control consists of those activities that are undertaken to ensure that the events do
not deviate from the pre-arranged plans. The activities consist of establishing standards for work
performance, measuring performance and comparing it to these set standards and taking corrective
actions as and when needed, to correct any deviations.

According to Koontz & O’Donnell, “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”.

The controlling function involves:

a. Establishment of standard performance.

b. Measurement of actual performance.

c. Measuring actual performance with the pre-determined standard and finding out the deviations.

d. Taking corrective action.

All these five functions of management are closely interrelated. However, these functions are highly
indistinguishable and virtually unrecognizable on the job. It is necessary, though, to put each
function separately into focus and deal with it.