NATURE AND SIGNIFICANCE OF MANAGEMENT

1. Management. Management is a process of planning, organizing, staffing,

directing and controlling the resources of an enterprise efficiently and effectively for
achieving the organizational goals.
2. Characteristic of Management
(a) Management is a Goal oriented process
(b) Management is a continuous Process
(c) Management is all pervasive
(d) Management is an intangible force.
(e) Management is a group activity
(f) Management is a dynamic function
(g) Management is multi-dimensional.
3. Functions of Management
(a) Planning
(b) Organising
(c) Staffing
(d) Directing
(e) Controlling
4. Objective of Management
(a) Organisational Objectives
(i) Survival
(ii) Profit
(iii) Growth
(b) Social Objectives
(c) Personal Objectives
(i) Financial needs
(ii) Social Needs
(iii) Higher level needs
5. Importance of Management
(a) Management helps in achieving group goals
(b) Management increases efficiency
(c) Management creates a dynamic organization
(d) Management helps in achieving personal objectives
(e) Management helps in the development of society
 2
6. Level of Management
(a) Top Level
(i) COO, CEO, CMO, Chairman, Managing Director, President, Vice
President & Functions
(b) Middle Level
(i) Production Manager, Marketing Manager, Finance Manager, HR
Manager & Functions
(c) Supervisory or Operational Management & Functions
7. Management as Art, Science and Profession
(a) Management as an Art
(i) Existence of theoretical knowledge
(ii) Personalised application
(iii) Based on practice and creativity
(b) Management as a science
(i) Systematised body of knowledge
(ii) Principles based on observation and experimentation
(iii) Universal validity
(c) Management as Profession
(i) Well defined body of knowledge
(ii) Restricted entry
(iii) Service motive
(iv) Ethical code of conduct
8. Coordination – Coordination is a process by which a manager synchronises the
activities of different department is called coordination.
9. Nature/ Characteristics / Features of Coordination
(a) Coordination integrates group effort by unifying diverse interests and by
giving a common focus to group effort.
(b) Coordination ensures unity of action by acting as a binding force between
departments
(c) Coordination is a continuous process as it starts at the planning stage and
continues till controlling
(d) Coordination is pervasive function as it is required at all levels of
management and in all departments.
(e) Coordination is the responsibility of all managers at the top, middle and
lower level.
 3
9. Need and Importance of Coordination
(a) Growth in size
(b) Functional differentiation
(c) Specialization

Principles of Management

1. Principles of Management. The concept

(a) Managerial Principles are the general guidelines for decision making and
behaviour.
(b) Framed on the basis of standard human behaviour patterns applied as per
the need or demand of a situation.
(c) Help managers to perform managerial activities more effectively and
efficiently
2. Principles of Management vs Principles of Pure Science
(a) Flexible and update
(b) Related to human behaviour
(c) Cannot be tested
(d) Different results in Different situations
3. Nature or Features of Management Principles
(a) Universal applicability
(b) General Guidelines
(c) Formed by practice and experimentation
(d) Flexible
(e) Mainly Behavioral
(f) Cause and effect relationship
(g) Contingent
4. Taylor’s Principles of Scientific Management.
(a) Science Not Rule of Thumb
(b) Harmony, Not Discord
(c) Cooperation, Not individualism
(d) Development of each and every person to his/her greatest efficiency and
prosperity.
 4
5. Taylor’s Techniques of Scientific Management
(a) Functional Foremanship
(i) Instruction Card Clerk
(ii) Route Clerk
(iii) Time and Cost Clerk
(iv) Speed Boss
(v) Gang Boss
(vi) Repair Boss
(vii) Inspector
(b) Standardlisation and simplification of work
(c) Method Study
(d) Motion Study
(e) Time Study
(f) Fatigue Study
(g) Differential Piece Wage System
6. Fayol’s Principles of General Management
(a) Division of Work
(b) Authority and Responsibility
(c) Discipline
(d) Unity of Command
(e) Subordination of Individual interest to general interest
(f) Remuneration of Employees
(g) Centralisation and Decentralisation
(h) Scalar Chain
(i) Order
(j) Equity
(k) Stability of Personnel
(l) Initiative
(m) Esprit De Corps (Unity of strength)
 5
7. Comparison of Fayol’s and Taylor’s Contributions

Basic Taylor Fayol

Concept Scientific Management General Theory of
administrative Management

Focus Factory Shop floor, working to Explain what must be included

improve productivity as managerial tasks to improve
overall administration

Perspective Shop level or operating level Top and middle level

management in a factory management

Methodology Standards developed after Information based on personal

observations, experimentations, experience while working in
and analysis of methods used in various managerial positions
the past to complete a specific
tasks

Beliefs He believed in functional He believed in one man one

Foremanship where workers boss concept and developed
received commands/ the principles like unity of
instructions from more than one command, unity of direction,
specialized bosses scalar chain etc

Application Applicable to business Applicable to all kinds of

enterprises involved in business enterprises,
manufacturing activities manufacturing, trading or
service organisations
 STAFFING

1. Staffing. Staffing consist of Estimate Manpower requirement , Recruitment,

Selection, Training, Compensation, Promotion of managerial personal. Staffing is
process of recruiting right people for the right job
2. Importance of Staffing

(a) Discovering Competent Personnel. Proper staffing helps in

discovering and obtaining competent personnel for various jobs.

(b) High Performance. Proper staffing ensures higher performance by

appointing the right person for the right job.

(c) Continuous Growth of Enterprise. Proper staffing ensures

continuous survival and growth of the enterprise.

(d) Optimum Utilization of Human Resources. It prevents under-

utilization and overmanning of personnel and thus reduces labour cost.

(e) Higher Job Satisfaction. It improves job satisfaction and morale of

employee.

3. Features of Staffing

(a) It is an integral part of the management.

(b) It is a pervasive function of the management related to manpower or

human resources.

(c) It is a continuous process.

(d) It has a wide scope

(e) It is a multiple objective activity

4. Staffing as a Part of Human Resource Management (HRM). In small

organizations, the function of staffing is performed by all the managers but in large
organisations, the function of staffing is responsibility of a separate department called
the HRM. The success of an organization in achieving its goals is determined of its
HRM. The following are the activities and duties to be performed by HRM:-

(a) Recruitment

(b) Preparation of Job descriptions

(c) Selection

(d) Preparation of compensation and descriptions plans

(e) Placement and orientation

(f) Training and development

 2

(g) Providing for social security and welfare of employees

(h) Handling grievances and complaints

(i) Defending the company in law suits and avoiding legal complication.

5. Staffing Process.

(a) Estimating the manpower requirement

(b) Recruitment

(c) Selection

(d) Placement and orientation

(e) Training and Development

(f) Performance Appraisal

6. Recruitment. Recruitment refer to the process of finding possible

candidates for a job. Recruitment as the process of searching for prospective
employees and stimulating them to apply for jobs in an organization.

7. Source of Recruitment.

(a) Internal Source of Recruitment. It refers to re-arrangement of existing

staff to fill up the vacant jobs. The following types of internal source of
recruitment:-

(i) Transfer. It means shifting an employee from one job to

another, one department to another or from one shift to another, with no
change in salary, status and responsibility. It is practically a horizontal
movement of employees.

(ii) Promotion. Business enterprises generally follow the practice of

filling higher jobs by promoting employees from lower jobs.

(b) Advantage of Internal Source of Recruitment.

(i) Motivates employees to improve their performance

(ii) Simplifies the process of selection and placement

(iii) No need of induction training

(iv) Maintenance of adequate workforce in an organization

(v) Jobs are filled economically

 3

(c) Disadvantage of Internal Source of recruitment

(i) Scope for induction of fresh talent is reduced.

(ii) Time bound promotions make employees lethargic

(iii) Not applicable to new enterprise

(iv) Frequent transfer reduce the employees productivity

(d) External Source of recruitment. It refers to searching for employees

from the sources outside the organization. The following types of internal source
of recruitment:-

(i) Direct Recruitment. A notice is placed on the notice board of

the enterprise specifying the details of the jobs available. Job seekers will
assemble on the specified date and selection is done on the spot.

(ii) Advertisement. Here Job vacancies are advertised in

newspapers, journals, website etc.

(iii) Employment Exchange. Employment exchanges run by the

government as a good source of recruitment. Job seekers register their
name in employment exchanges.

(iv) Placement Agencies. These firms help the organization to

recruit technical, professional personnel. These agencies compile bio
data of a large number of candidates and recommend suitable names to
their clients.

(v) Campus Recruitment. College and institutes of management

have become a popular source of recruitment.

(e) Advantage of External Source of Recruitment.

(i) Attracts qualified personnel to apply for the jobs

(ii) Give a wider choice to management while selection

(iii) Brings fresh talent in the organization.

(iv) Develops competitive spirit amongst the existing staff.

(f) Disadvantage of Internal Source of recruitment

(i) Develops dissatisfaction among existing staff

(ii) Lengthy process

(iii) Heavy cost on advertisement and selection process

 4

8. Selection. And Selection is the process of identifying and choosing the best
person out of a number of prospective candidates for a job.

(a) Preliminary Screening. After applications have been received, they are
properly checked for qualification, age, gender etc by screening committee.

(b) Selection Test. Includes intelligence tests, aptitude test, personality

test, trade and interest tests..

(c) Employment Interview. Face to face interaction between employer and

candidate to check candidate’s personality confidence, knowledge.

(d) Reference Checks. Prior to final selection, the prospective employer

makes an investigation of the applicant ats.

(e) Selection Decisions. A list of candidates who clear the employment

test, interviews and reference checks and then the selected candidates are listed
in order of merit.

(f) Medical Examination. Medical examination is done to check medical

conditions of employee before his joining.

(g) Job Offer. Formally appointed by issuing him an Appointment letter.

(h) Contract of Employment. After acceptance both employer and

employee will sign a contract of employment contains terms & conditions, pay
scale, leave etc.
 CONTROLLING

1. Controlling. Controlling function can be defined as comparison of actual

performance with the planned performance. If there is any difference or deviation then
finding the reason for such difference and taking corrective measures or action to stop
those reason so that in future there is match between actual and planned performance.
2. Nature/ Feature / Characteristics of Controlling
(a) It is Goal oriented Process
(b) It is Pervasive (at all level) in nature
(c) It is continuous process
(d) It is both backward (past) as well as forward (Future) looking fuction
3. Importance of Controlling.
(a) Helps in achieving organizational goals
(b) Judging accuracy of standards/ target
(c) Making efficient use of resources/ Minimum wastage
(d) Improve employee motivation
(e) Ensure order and discipline
(f) Facilitates coordination in action
4. Relationship between planning and controlling
(a) Planning without controlling is meaningless
(b) Planning is backward looking and Controlling is forward looking
(c) Planning is prescriptive whereas controlling evaluative
5. Controlling Process
(a) Setting up of Standards (Qualitative and Quantitative)
(b) Measuring of performance
(c) Compare performance against standards
(d) Analyzing Deviations
(i) Critical Point control (KRA Key Research Area)
(ii) Management by exception
(e) Taking corrective measures
(f) Feedback in controlling
6. Limitations of Controlling
(a) Difficult to set quantitative standards
(b) Little control on external factors
(c) Resistance from employees (d) Costly affair