Nature and Significance of Management

MEANING OF MANAGEMENT

Management is defined as a process of getting things done with the aim of achieving goals
effectively and efficiently.
The definition of the term ‘management’ includes the following terms:

(a) Process
●​ ‘Process’ in the definition means the series of primary functions or activities that
management performs to get things done.
●​ These functions are planning, organizing, staffing, directing and controlling.

(b) Effectiveness
●​ ‘Effectiveness’ in management is concerned with doing the right task, completing
activities and achieving goals.
●​ It is concerned with the end result.
●​ Effectiveness means finishing the given task.

(c) Efficiency

‘Efficiency’ means doing the task correctly and with minimum cost.

●​ It involves cost-benefit analysis.

●​ It establishes the relationship between inputs and outputs.
●​ Efficiency is increased if:
(a)​ by using fewer resources more benefits are derived .(same inputs but more
outputs)Resources mean inputs like money, materials, equipment and
people.
(b)​for the same benefit, fewer resources are used. (fewer inputs but same
outputs)

EFFECTIVENESS AND EFFICIENCY

●​ For management, it is important to be both effective and efficient. But these two aspects
need to be balanced .It is easier to be effective and ignore efficiency.Sometimes,
effectiveness has to be sacrificed to achieve efficiency.

Example 1: A company’s target production is 5,000 units in a year.

To achieve this target, the manager has to operate on double shifts due to power failure
most of the time.

The manager is able to produce 5,000 units but at a higher production cost as more labour
cost, electricity costs were incurred.

In this case, the manager was effective but not so efficient as for the same output, more
inputs were used.

​
Example 2:A manager concentrates more on producing goods with fewer resources i.e.,
cutting down cost but not achieving the target production. Consequently, the goods do not
reach the market, hence, the demand for them declines as competitors enter the market.

In this case the manager is efficient but not effective since the goods did not reach the
market and the target was not achieved.

●​ It is important for management to achieve goals (effectiveness) with minimum resources

(efficiency) while maintaining a balance between effectiveness and efficiency.
●​ Poor management is due to both inefficiency and ineffectiveness.
Difference between Effectiveness and Efficiency

Basis of Difference Effectiveness Efficiency

1. Meaning It refers to completing It refers to completing
the job on time, no matter the job in the cost-
whatever the cost. effective manner.

2. Objective To achieve end result To conduct cost-benefit

on time. analysis.

3. Main Consideration Time Cost

FUNCTIONS OF MANAGEMENT

Management is a dynamic process consisting of several activities or functions of

management, which are PLANNING, ORGANIZING, STAFFING, DIRECTING and CONTROLLING

Planning
●​ Planning is the function of determining in advance what is to be done and who is to do it .
●​ This implies setting goals in advance and developing a way of achieving them efficiently
and effectively.
●​ Planning cannot prevent problems, but it can predict them and prepare contingency
plans to deal with them, if and when they occur.

Organising
●​ Organising is the management function of assigning duties, grouping tasks, establishing
authority and allocating resources required to carry out a specific plan.
●​ Organising involves grouping of the required tasks into manageable departments or work
units and the establishment of authority and reporting relationships within the
organisational hierarchy.

Staffing
●​ Staffing means finding the right people for the right job i.e., right people with the right
qualifications are available at the right places to accomplish the goals of the
 organisation.

●​ This is also known as the human resource function. It involves activities such as
recruitment, selection, placement and training of personnel.

Directing
●​ Directing involves leading, influencing and motivating employees to perform the tasks
assigned to them.
●​ It involves telling people what to do and seeing that they do it in the best possible
manner.
●​ There are four elements of Directing: Supervising, Motivation, Leadership and
Communication (SMLC).

Controlling
●​ It is the management function of monitoring organizational performance towards the
attainment of organizational goals.
●​ It involves establishing standards of performance, measuring current performance,
comparing this with established standards and taking corrective action where any
deviation is found.

The activities of a manager are interrelated and it is often difficult to pinpoint where one
ended and the other began.

CHARACTERISTICS OF MANAGEMENT
1.​ GOAL ORIENTED
●​ Every organisation has a set of goals which are the basic reason for its existence.
Different organisations have different goals, e.g., to earn 20% Return On Investment
(ROI), to increase Sales by 10%, etc.

●​ Management unites the efforts of different individuals in the organisation towards

achieving these goals.
Example: If the target of a company is to sell 2,000 TV sets per month then then all
managerial activities are directed towards the achievement of this goal.

2.​ PERVASIVE
●​ Managerial activities are performed in all types of organisations, in all departments
and at all levels.
●​ Management is essential for all organisations, big or small, profit or non-profiteering,
service or manufacturing.

●​ The activities involved in managing an enterprise are common to all organisations

whether economic, social or political.
●​ A government, a cricket team, a hospital or a school — all require management.

3.​ CONTINUOUS PROCESS

●​ Management process is a series of continuous, composite but separate functions —
planning, organising, staffing, directing and controlling.
 ●​ These functions are simultaneously performed by all managers all the time.
●​ The task of a manager consists of an ongoing series of functions.

4.​ GROUP ACTIVITY

●​ An organisation is a group of different individuals with different needs.
●​ Every member of the group has a different purpose for joining the organization but
as members of the organization, they work towards fulfilling the common
organizational needs.
●​ This requires teamwork and coordination of individual effort in a common direction.

5.​ DYNAMIC FUNCTION

●​ Management is a dynamic function as it has to adapt itself to the changing
environment.
●​ An organisation interacts with its external environment which consists of various
economic, social, legal, technological and political factors.
●​ In order to be successful, an organisation must change itself and its goals according
to the needs of the environment.
●​ Examples:
(a)​ Samsung, the Mobile Company made major changes in its mobile features and
offered a variety of services to their customers to strengthen their position in Indian
market.
(b)​McDonald’s, the fast food giant made major changes in its menu to survive in the
Indian market.

6. INTANGIBLE FORCE
●​ Management is an intangible force that cannot be seen but its presence can be felt in
the way the organization functions.
●​ The effect of management is noticeable in an organization where targets are
achieved according to plans, employees are happy and satisfied and there is
orderliness instead of chaos.

Examples:

(a)If any company’s progress chart is declining it indicates failure of management,

i.e., mismanagement.

(b)Increasing inventory, strike by the workers, etc. are few other indicators of
mismanagement.

7. MULTI DIMENSIONAL
Management is a complex activity which has three main dimensions:
(a)​ Management of Work :
•​ All organisations exist for the performance of some work.
•​ In a factory, a product is manufactured, in garment store a customer’s need is satisfied
and in a hospital a patient is treated.
 •​ Management translates this work in terms of goals to be achieved and assigns the
means to achieve it. This is done in terms of problems to be solved, decisions to be
made, plans to be established, budgets to be prepared, responsibilities to be assigned
and authority to be delegated.

(b)​Management of People :
●​ Human resources or people are an organisation’s greatest asset. Despite all
developments in technology, ‘getting work done through people’ is still a major task
for the manager.
●​ Managing people has two dimensions:

-Dealing with employees as individuals with diverse needs and behaviours;

-Dealing with employees as a group of people.

●​ The task of management is to make people work towards achieving the

organisation's goals by making their strengths effective and their weaknesses
irrelevant.

(c)Management of Operations :

●​ Every organisation has some basic product or service to provide in order to survive.
●​ This requires a production process of transforming input material and the technology
into the desired output for consumption.
●​ This is interlinked with both the management of work and management of people.

LEVELS OF MANAGEMENT

●​ Individuals in organisations are bound together in a hierarchy of relationships.

●​ Every individual in the hierarchy is responsible for completion of a particular task
and is assigned a certain amount of authority to take decisions and action.
●​ The authority-responsibility relationships bind individuals as superiors and
subordinates and give rise to different levels of management in an organisation.

(a)​ TOP LEVEL

●​ Top management consists of the senior- most executives of the organisation.
●​ They are usually referred to as the Chairman, President, Vice-President, Chief
Operating Officer (COO) , Chief Executive Officer (CEO),Chief Marketing Officer
(CMO),Chief Financial Officer (CFO),Managing Director.
●​ Their basic task is to integrate diverse elements and coordinate the activities of
different departments according to the overall objectives of the organization.

FUNCTIONS OF TOP LEVEL

(i) To formulate overall organisational goals and strategies for their achievement.
(ii) To coordinate the activities of different departments according to the overall objectives
of the organisation.

(iii) To be responsible for welfare and survival of the organisation.

(iv) To analyse the business environment and its implications for the survival of the firm.

(v) To be responsible for all the activities of the business and for its impact on society.

Thus, the job of the top management is complex and stressful, demanding long-hours and
commitment to the organisation.

(b) MIDDLE LEVEL

●​ Middle management is the link between top and lower level managers; they are
subordinates to top managers and superior to first line managers.
●​ Middle management consists of divisional/departmental heads like Production
Manager, Marketing Manager, Operations Manager, Plant Superintendent, Regional
Manager , Branch Head.
●​ The main task of middle management is to carry out the plans formulated by the top
managers.

FUNCTIONS OF MIDDLE LEVEL

(i) To interpret the policies framed by top management.

(ii) To ensure that their department has the necessary personnel.

(iii) To assign necessary duties and responsibilities to the employees of their respective
departments.

(iv) To motivate employees of their respective departments to achieve the desired

objectives.

(v) To cooperate with other departments for smooth functioning of the organisation.

Thus, Middle management is responsible for implementing and controlling plans

developed by top management and also for all the activities of first line managers.

(c )SUPERVISORY LEVEL

●​ Supervisory or operational management refers to the lower level in the hierarchy of

the organisation.
●​ Foreman, Supervisors , Superintendent, Section Officer comprise the operational
management.
●​ Their authority and responsibility is limited according to the plans drawn by the top
management.

FUNCTIONS OF SUPERVISORY LEVEL

 (i) Supervisors directly oversee the efforts of the workforce. They interact with the
actual workforce and pass on instructions of the middle management to the
workers.

(ii) Through their efforts quality of output is maintained, wastage of materials is

minimised and safety standards are maintained.

Thus, the quality and quantity of output depends upon the hard work, discipline
and loyalty of the workers.

OBJECTIVES OF MANAGEMENT
•​ Objectives are the ends or goals towards which the activities of a business are directed.

•​ They are the standards against which the performance is measured.

•​ Management strives to achieve all its objectives in an effective and efficient manner.

A. ORGANISATIONAL / ECONOMIC OBJECTIVES

​ The main objective of any organisation should be to utilise human and material
resources to the maximum possible advantage, i.e., to fulfill the economic objectives of
a business.

1.​ SURVIVAL
●​ Management of an organisation must ensure the survival of the organisation by
earning enough revenues to cover costs. (R=C)
●​ The basic objective of any business is survival.

2.​ PROFIT
●​ Management must ensure that the organisation makes a profit, which is an
incentive for the continued successful operation of the enterprise. (R>C)
●​ Profit is essential to cover costs and risks of the business.

3.​ GROWTH
●​ Management must fully exploit the growth potential of the organization .
●​ Growth of a business can be measured in terms of
(i) increase in sales/ turnover,
(ii) increase in the number of products,
(iii) increase in number of employees,
(iv) increase in capital investment

B. SOCIAL OBJECTIVES
​ Social objectives of management involve the creation of benefits or economic value for
the society. This includes :

•​ Using environmental friendly methods of production,

 •​ Providing basic amenities like schools and crèches to society.

•​ Giving employment opportunities to the disadvantaged sections of the society, etc.

EXAMPLES
•​ Steel Authority of India Ltd. (SAIL) is contributing regularly in fields of education,
agriculture, health care and clean drinking water supply for the people living near to
their steel plants.

•​ Asian Paints has contributed immensely to encourage farmers to use local resources
effectively.

•​ ITC is contributing Re1 on the sale of every four classmate notebooks to its rural
development initiative that supports, among other projects, primary education in
villages.

C. PERSONNEL OBJECTIVES
•​ Personnel objectives of management are concerned with satisfying diverse needs of the
employees such as:

•​ Financial needs by giving them competitive salary and perks.

•​ Social needs such as peer recognition.

•​ Higher level needs such as personal growth and development.

•​ Management has to reconcile personal objectives with organisational objectives for
harmony in the organisation.

IMPORTANCE OF MANAGEMENT
1.​ MANAGEMENT HELPS IN ACHIEVING GROUP GOALS
●​ Every organisation has a set of goals to achieve, e.g., to earn 20% Return on
Investment (ROI), increase sales by 10%, etc.
●​ Management helps in achieving the overall goals of the organisation by giving a
common direction to the individual efforts.

2.​ MANAGEMENT INCREASES EFFICIENCY

●​ Management helps to increase efficiency by reducing costs and increasing
productivity.
●​ This is done through better planning, organising, directing and controlling the activities
of the organisation.
For example, the Purchase Manager of a leading bookshop maintains stock on a
continuous basis. It helps him to place orders well in advance, thus, avoid facing the
situation of stock shortage.

3.​ MANAGEMENT CREATES A DYNAMIC ORGANIZATION

●​ All organizations have to function in an environment which is constantly changing.
●​ Individuals in an organisation resist changes as it often means moving from a familiar,
secure environment to a newer and more challenging one.
 ●​ Management helps people adapt to these changes so that the organization is able to
maintain its competitive edge.

4.​ MANAGEMENT HELPS IN ACHIEVING PERSONAL OBJECTIVES

●​ A manager motivates and leads his team in such a manner that individual members
are able to achieve personal goals while contributing to the overall organizational
objective.
●​ Through motivation and leadership, the management helps individuals to develop
team spirit, cooperation and commitment to group success.

5.​ MANAGEMENT HELPS IN THE DEVELOPMENT OF SOCIETY

●​ While fulfilling multiple objectives towards different groups, management helps in
the development of the organization and the society.
●​ Management helps in the development of the society by
■​ providing good quality products and services,
■​ creating employment opportunities,
■​ adopting new technology, etc.

NATURE OF MANAGEMENT
Management thinkers have different views about the nature of management.

•​ Some authors regard management as an art because more practice is needed in

management.

•​ On the other hand, some authors describe management as a science because there are
well tested and experimented principles of management.

•​ In addition, some practitioners consider that management is going towards the way of
being considered as a profession.

A.​ MANAGEMENT AS AN ART

MEANING OF ART

•​ Art is the skillful and personal application of existing knowledge to achieve desired
results.

•​ It can be acquired through study, observation and experience.

•​ Examples of art: Playing Music / Acting/ Singing / Dancing / Cooking / Painting , etc.

CHARACTERISTICS OF AN ART​

1.​ Existence of Theoretical Knowledge :

 ●​ Any art presupposes the existence of certain theoretical knowledge. Experts in their
respective areas have derived certain basic principles which are applicable to a
particular form of art. For eg. Literature on music is widely recognized.
●​ There is a lot of literature available in various areas of management (like finance,
marketing, human resource, etc.) which the manager has to specialise in.
●​ Like any artist, a successful manager practices the art of management in the
day-to-day job of managing an enterprise based on study, observation and
experience.

Thus, like art , there is the existence of theoretical knowledge in management.

2.​ Personalised Application :

●​ The use of basic knowledge of art varies from individual to individual. Art is a very
personalised concept. For example, two dancers, two speakers, two actors, or two
writers will always differ in demonstrating their art.
●​ There are various theories of management which prescribe certain universal
principles. A manager applies these scientific methods and body of knowledge to a
given situation or a problem in his own unique manner.
●​Every manager has his own unique style of managing things and people, although
all managers learn the same management theories and principles.

Thus, this characteristic of art is also present in management.

3. Based on Practice and Creativity :

●​ Art involves the continuous practice of existing theoretical knowledge. It also

involves creativity. For example, Music is based on seven basic notes , but
what makes the composition of a musician different is his use of these notes
in a creative manner.
●​ Like any other art, a manager often studies various situations, formulates his
own theories for use in a given situation. This gives rise to different styles of
management.
●​ A manager gains experience through regular practice and becomes more
effective.

Thus, Management satisfies this criteria of being art.

Features of Art Does Management Fulfills this Criteria?

Existence of theoretical knowledge ✔​ Fulfills this criteria

Personalised application ✔​ Fulfills this criteria

Based on practice and Creativity ✔​ Fulfills this criteria

On comparing the characteristics of art with management we find that

All the characteristics of art are present in management.

Hence, we call management an art of getting things done through people.

B. MANAGEMENT AS SCIENCE
•​ MEANING OF SCIENCE

Science is a systematised body of knowledge that explains certain general truths or

the operation of general laws.

CHARACTERISTICS OF MANAGEMENT

1.​ SYSTEMATISED BODY OF KNOWLEDGE :

•​ Science is a systematic body of knowledge. Scientific principles are based on cause and
effect relationships. For e.g., Laws of Motion.

•​ Management also has a systematised body of knowledge. It has its own theory and
principles that have developed over a period of time. It has its own vocabulary of terms
and concepts, which is used by managers to communicate with one another for a better
understanding.

Thus, this feature of science is present in management.

2. PRINCIPLES BASED ON EXPERIMENTS AND OBSERVATION:

•​ Scientific principles are first developed through observation and then tested through
repeated experimentation.

•​ The principles of management have also evolved over a period of time through
observation and repeated experimentation in different types of organisations.

•​ However, since management deals with human beings and human behaviour, the
outcomes of these experiments are not capable of being accurately predicted.
Therefore, management can be called an inexact science.

Thus, this feature of science is partially present in management.

3.​ UNIVERSAL VALIDITY :

•​ Scientific principles have universal validity and application.

•​ Principles of management provide managers with certain standardised techniques that
can be used in different situations.

•​ However, since the principles of management are not as exact as the principles of pure
 science, their application and use is not universal. They have to be modified according
to a given situation.

•​ Thus, this feature of science is partially present in management.

COMPARISON OF ART AND MANAGEMENT

Features of Science Does Management Fulfill this Criteria?

Systematised body of knowledge Fulfills this criteria.

Principles based on experiments and Partially fulfills this criteria.

observation
Universal validity Partially fulfills this criteria

CONCLUSION
On comparing the characteristics of science with management we find that:

•​ Management is an inexact science/impure science/soft science/social science. It is

neither as precise nor as comprehensive as pure science like Physics or Chemistry.

TRUE NATURE OF MANAGEMENT

•​ Management has features both of art and science.
•​ The practice of management is an art. However, managers can work better if their
practice is based on the principles of management. These principles constitute the
science of management.

•​ Management as an art and science are, therefore, not mutually exclusive but
complement each other.

C. MANAGEMENT AS PROFESSION
•​ MEANING OF PROFESSION:

Profession refers to an occupation backed by specialised knowledge and training and to

which entry is restricted.

CHARACTERISTICS OF PROFESSION
1.​ WELL DEFINED BODY OF KNOWLEDGE :

•​ All professions (legal, accounting, medical, etc.) are based on a well defined body of
knowledge that can be acquired through instruction.

•​ Management, like other professions, has a well-defined body of knowledge comprising

well-defined principles based on a variety of business situations.
 •​ This knowledge can be acquired at different colleges and professional institutes and
through a number of books and journals. The subject of management is taught at
different institutions such as the Indian Institutes of Management (IIMs) in India.

This feature of the profession is present in management.

2. RESTRICTED ENTRY :

•​ The entry to a profession is restricted through an examination or through acquiring

an educational degree. For example, to become a Chartered Accountant in India, a
candidate has to clear a specified examination conducted by the Institute of Chartered
Accountants of India (ICAI).

•​ Professional knowledge and training is considered to be a desirable qualification for

being a manager since there is greater demand for those who possess degrees or
diplomas from reputed institutions.

•​ However, there is no restriction on anyone being designated as manager in any

business. Anyone can be called a manager irrespective of the educational qualifications
possessed. Unlike professions such as medicine or law which require a practicing
doctor or lawyer to possess valid degrees, nowhere in the world it is mandatory for a
manager to possess any such specified degrees.

This feature of the profession is not fully present in management.

3. PROFESSIONAL ASSOCIATION :

•​ All professions are affiliated to a professional association which regulates entry,

grants certificate of practice and formulates and enforces a code of conduct. For
example, to be able to practice in India, Lawyers have to become members of the Bar
Council which regulates and controls their activities.

•​ There are several associations of practicing managers in India. All India Management
Association (AIMA) has laid down a code of conduct to regulate the activities of their
members.

•​ However, there is no compulsion for managers to be members of such an association

nor does it have any statutory backing.

This feature of profession is not fully present in management.

4. ETHICAL CODE OF CONDUCT :

•​ All professions are bound by a code of conduct which guides the behaviour of its
members. For example, all doctors take the oath of ethical practice at the time they
enter the profession.

•​ AIMA has laid down a code of conduct to regulate the activities of its members.

•​ But its membership is not compulsory for all managers.

 This feature of profession is not fully present in management.

5. SERVICE MOTIVE :

•​The basic motive of a profession is to serve their clients’ interests by rendering dedicated
and committed service. For example, the task of a lawyer is to ensure that his client gets
justice.

•​ The basic motive of management of an organisation is to help the organization achieve

its stated goal. This may be profit maximization for a business organization.

•​ However, profit maximisation as the objective of management does not hold true and is
fast changing. Therefore, if an organisation has good management team which is
efficient and effective, it automatically serves society by providing good quality
products at reasonable prices.

This feature of profession is not fully present in management.

COMPARISON OF PROFESSION AND MANAGEMENT

Features of Profession Does Management Fulfills this Criteria?

Well defined body of knowledge Fulfills this criteria.

Restricted entry Does not fulfills this criteria completely.

Professional association Does not fulfills this criteria completely.

Ethical code of conduct Does not fulfills this criteria completely.

Service motive Does not fulfills this criteria completely.

COORDINATION

MEANING
●​ The process by which a manager synchronises the activities of different
departments is known as coordination
●​ Coordination is the force that binds all the other functions of management.
●​ It is the common thread that runs through all activities such as purchase,
production, sales, and finance to ensure continuity in the working of the
organisation.

“Coordination harmonises, synchronises and unifies individual efforts for

better action and for the achievement of the business objectives.”​ —Henri
Fayol
Examples of coordination:
●​ Time Table in school
●​ Award Ceremony
●​ Orchestra
EXAMPLE 1:Suppose in a pen manufacturing company, the sales department
has received an order of supplying 10,000 units.
It cannot execute the order unless production department produces 10,000 units.
The production department cannot produce 10,000 units unless purchase
department purchases raw materials and provides the same to the production
department.
Thus, if production and sales plans are not properly coordinated, objectives in
respect of these activities of the enterprise cannot be efficiently accomplished.

COORDINATION- THE ESSENCE OF MANAGEMENT

Coordination is not a separate function of management, but the essence of

management, for achieving harmony among individual efforts towards the
accomplishment of group goals.

●​ The process of coordinating the activities of an organisation begins at the

planning stage itself. Top management plans for the entire organisation.
●​ According to these plans, the organisation structure is developed and staffed.
●​ In order to ensure that these plans are executed according to plans, directing is
required.
●​ Any discrepancies between actual and realised activities are taken care of by
controlling.

CONCLUSION
●​ It is through the process of coordination that a manager ensures orderly
arrangement of individual and group efforts to ensure unity of action in the
realisation of common objectives.
●​ It provides for timings and sequencing of efforts to ensure achievement of
planned objectives.

NATURE/ CHARACTERISTICS OF COORDINATION

1.​ COORDINATION INTEGRATES GROUP EFFORTS
●​It unifies unrelated or diverse interests into purposeful work activity.
●​It gives a common focus to group effort to ensure that the performance is
according to the plans.

2.​ COORDINATION ENSURES UNITY OF ACTION

●​ It ensures unity of action by acting as a binding force between departments.
 ●​ It ensures that all action is aimed at achieving the goals of the organisation.

3.​ COORDINATION IS A CONTINUOUS PROCESS

●​ Coordination is not a one-time function but a continuous process.
●​ It begins at the planning stage and continues till controlling.
●​ Top management plans for the entire organisation.
●​ According to these plans, the organisational structure is developed and
staffed.
●​ Directing is required for execution of plans.
●​ Controlling corrects the deviation between planned standards and actual
performance.

4.​ COORDINATION IS A PERVASIVE FUNCTION

●​ It is required at all levels of management and in all departments. It
integrates the efforts of different departments and different levels.
●​ The purchase, production, finance and sales departmental efforts have to
be coordinated for achieving organisational objectives harmoniously.

5.​ COORDINATION IS THE RESPONSIBILITY OF ALL MANAGERS

Coordination is the function of every manager in the organisation.
●​ Top level managers need to coordinate with their subordinates to ensure that
the overall policies of the organisation are duly carried out.
●​ Middle level management coordinates with both the top level and first line
managers.
●​ Operational level management coordinates the activities of its workers to
ensure that work proceeds according to plans.

6.​ COORDINATION IS A DELIBERATE FUNCTION

●​ A manager has to coordinate the efforts of different people in a conscious and
deliberate manner.
●​ Even where members of a department willingly cooperate and work,
coordination gives a direction to that willing spirit.
●​ Cooperation in absence of coordination may lead to wasted effort and
coordination without cooperation may lead to dissatisfaction among
employees.

IMPORTANCE/ NEED OF COORDINATION

●​ Coordination is important as it integrates the efforts of individuals,

departments and specialists.
●​ Coordination is needed because departments and individuals are
interdependent on each other for information and resources to perform their
respective activities.
●​ Managers need to reconcile the differences in approach, timing and interests.
●​ There is a need to harmonise individual goals and organisational goals.
1.​ GROWTH IN SIZE
●​ As an organisation grows in size, the number of people employed by it also
increases. At times, it may become difficult to integrate their efforts.
●​ For management, it is necessary to ensure that all individuals work towards the
common goals of the organisation. But employees may have their own
individual goals also.
●​ Thus, for organisational efficiency it is important to harmonise
individual goals and organisational goals through coordination.

2.​ FUNCTIONAL DIFFERENTIATION :

●​ In an organisation, there may be separate departments of production,
finance, marketing and human resource departments. All these departments
have their own objectives and their own style of working.. So, there may arise
conflict between them.
●​ For example, the marketing department’s objective may be to increase sales by
10 per cent by offering discounts. But, the finance department may not approve
such discounts as it means loss of revenue. Such kind of conflicts arise if
departments perform in isolation from others.
●​ Therefore, coordination is needed to ensure unity of action by acting as a
binding force between departments and to avoid conflicts between them.

3.​ SPECIALISATION
●​ In modern organisations, there is high degree of specialisation. (modern
technology)
●​ Therefore, organisations need to employ a number of specialists. Specialists
usually think that they only are qualified to evaluate, judge and decide
according to their professional criteria. They do not take advice or
suggestions from other members of the organisation. This often leads to
conflict between them.
●​ Therefore, coordination is required to avoid conflict between the
specialists and the other members of the organisation.
​