Chapter 1

Nature and
Significance of
Management
Prepared By: Lalit Nayyar
 LEARNING
03 04 OBJECTIVES
Features Objectives

06
02 Nature
Meaning 05
Importance 07 09
Levels Coordination
01
Introduction
08
Functions
 Introduction
 Management is essential for all organisations big or small, profit or
non profit, service or manufacturing.
 It is a deliberate process followed by organisations to achieve their
objectives.
 It consists of series of inter related functions that are performed by
managers.
 The basic function of a manager is effective and efficient utilisation
of physical, financial and human resources to achieve organisational
objectives.
 Managers take decisions as to who will do what, when they will do it
and what resources they will use.
 Managers at top level spend more time in planning and organising
than the managers at lower level.
 Meaning and Concept of Management
Modern Concept : “Management is a process of getting things done with the
aim of achieving goals effectively and efficiently.”

Process: It refers to series or sequence of steps. Management is a process

because it performs series of functions to get the things done. These functions
are Planning, Organising, Staffing, Directing and Controlling.

Effectiveness: Being effective or doing work effectively means finishing the

given task or achieving the goal on time. It is concerned with doing the right
task and achieve end result.

Efficiency: It refers to do the task in the right way i.e. with minimum cost and
optimum utilisation of resources. It involves cost benefit analysis. Its focus is
to derive maximum benefits by using less resources. Management is
concerned with efficient use of resources because reduction in cost leads to
higher profit.
 Difference between Effectiveness v/s Efficiency

Basis of Difference Effectiveness Efficiency

Meaning Completing the task on time

without considering the cost.
Completion of task with
minimum cost, optimum
utilisation of resources and in
cost effective manner.

Objective To achieve the end result on

time.
To conduct cost benefit analysis.

Main Time Cost

Consideration
Relation between Effectiveness & Efficiency
 Both of them are equally important.
 Effectiveness and efficiency are the two sides of a same coin,
one without other is of no use.
 It is not enough to complete the task on time but it shall be
done correctly as well as without wastage of resources.
 Effectiveness and efficiency together lead to higher profit and
prosperity of an organisation.
 Failure of an organisation is due to inefficiency and
ineffectiveness.

6
Relation between Effectiveness & Efficiency

Concept of Management

Process Effectiveness Efficiency

Planning, Doing work Efficiency involve

Organising, effectively means cost benefit
Staffing, Directing that we finish the analysis. It insists
and Controlling given task or on using less
achieve the goal. inputs such as
money, materials to
get more output.
7
 Keywords

Management: A process to achieve goal effectively

and efficiently.
i. Effectively: Completion of task or achievement of
goal on time.
ii. Efficiently: Completing the task or achieving the
goal with minimum cost or optimum utilisation of
resources or in cost effective manner.

8
 Case Study
Q. Happy Ltd.’s target is to produce 20000 shirts per
month at a cost of Rs 100/- per shirt. The Production
Manager achieved this target at a cost of Rs 95/- per
shirt. Do you think the ‘Production Manager” is
effective? Give one reason in support of your answer.

Ans: Yes, the Production Manager is effective because he has completed

the task and achieved the goal of producing 20000 shirts. He is also
efficient as he has achieved the target at lower cost.

9
 Practice Case Study

Q. ABC Ltd., a garment manufacturing company set the target production of

100 garments per month at the estimated cost of Rs 200 per garment.
Mohan, a worker, worked double shift and manufactured around 150
garments but at the estimated cost of Rs 230 per garment.

On the other hand, Ravi another worker focus on cost and handled resources
very carefully so he manufactured 90 garments but at the estimated cost of
Rs 190 per garment. Third worker maintained the balance and achieved
target of 100 garment at the estimated cost of Rs 200 per garment.

a) Identify the quality possessed by Ravi, Mohan and what they are lacking.
b) What quality is possessed by third worker?
c) Which worker is preferred by management?

10
 Characteristics or Features of
Management
 Management is a goal oriented process. Planning

 Management is Pervasive. Management of Work Organising

 Management is Multi-Dimensional. Controlling

(Management of work, people and
operations.) Staffing
Management of People
 Management is a continuous process. Directing
 Management is a group activity.
 Management is a dynamic function. Production
Management of
 Management is Intangible. Operations Sales
Purchase

11
 Characteristics or Features of Management
 Management is a goal oriented process. Management unites the efforts of different individuals
in the organisation towards achieving common goals.
 Management is pervasive. Management is required in all organisations, whether big or small,
manufacturing or service organisations, in all departments and at all levels. It is used in whole
world.
 Management is multidimensional. It does not mean single activity. It involves mainly three
activities, management of work, management of people and then operations.
 Management is a continuous process. Management is a never ending function. Managers
perform the functions continuously in the organisation like planning, organising, staffing, directing
and controlling.
 Management is a group activity. Management always refer to a group of people involved in
managerial activities. Its never an individual effort of one person.
 Management is a dynamic activity. Management has to make changes in goals, objectives and
other activities from time to time as and when required for surviving in the market.
 Management is intangible. Management function cannot be seen physically. But its presence can
be felt, when everything is going smooth in an organisation without chaos.

12
 Case Study
Q. Anju and Manju are good friends. Considering the fact that the activities involved in
managing an enterprise are common to all organizations, after completing their masters in
business management, both of them take up a job at managerial level in different
organizations as per their individual areas of interest. Anju takes up a marketing job in a
retail company and strives to increase sales whereas Manju joins an NGO and works
diligently to realize its objective related to providing employment to specially abled
persons. Both of them have to perform a series of continuous, composite, but separate
functions. On some days, Anju may spend more time in planning a future display layout
and on another day, she may spend time in sorting out an employee’s problem. Both Anju
and Manju make conscious efforts to build a feeling of team spirit and coordination among
diverse individuals with different needs who work under them. The effect of their
management is noticeable in their respective departments as the targets are met
according to plans, employees are happy and satisfied, and there is orderliness in its
functioning rather than chaos.

In context of the above case:

Identify the various features of management highlighted in the above paragraph by
quoting lines from it.

13
Ans. The various features of management highlighted in the above paragraph are

Case
stated below:

• Management is all pervasive: “Considering the fact that the activities involved in
managing an enterprise are common to all organizations, after completing their masters
in business management, both of them take up a job at managerial level in different Study
organizations as per their individual areas of interest.”
• Management is a goal-oriented process: “Anju takes up a marketing job in a retail
company and strives to increase sales whereas Manju joins an NGO and works
diligently to realize its objective related to providing employment to specially abled
persons.”
• Management is a continuous process: “Both of them have to perform a series of
continuous, composite, but separate functions. Like on some days, Anju may spend
more time in planning a future display layout and on another day, she may spend time in
sorting out an employee’s problem.”
• Management is a group activity: “Both Anju and Manju make conscious efforts to build a
feeling of team spirit and coordination among diverse individuals with different needs
who work under them.”
• Management is an intangible force: “The effect of their management is noticeable in
their respective departments as the targets are met according to plans, employees are
happy and satisfied, and there is orderliness in its functioning rather than chaos.”

14
 Practice Case Study

Q. The General Manager – GM of Shinobitech has divided all the employees of the
company into three levels (Top Level, Middle Level and Lower Lever). Often, it is observed
that the managers at all levels remain busy sometimes with the planning of their respective
departments and sometimes coordinating with other departments. The General Manager
knows that the job of management cannot be done by a single person alone, but when all
join hands together the meaning of management is realised. This is why he makes all his
efforts to coordinate the activities of all his employees. All the employees are working with
the team spirit.

In the above paragraph, two special features of management have been described,
Identify them by quoting the relevant lines and explain them.

15
 Management is
Multidimensional
Management Management Management
of Work of People of Operations
• It aims at achieving goals • People refers to human • Operations refer to
or tasks to be resources. activities such as buying
accomplished. • Management has to get raw materials,
• It makes sure that work is task accomplished production into semi
accomplished effectively through people finished goods or
and efficiently. depending upon their finished goods.
strengths and • Management helps in
competencies. assigning work to human
resource, which leads to
management of
operations.

16
 Case Study
Q. Miss Suruchi Saini is a Senior Manager in “Anand Soaps Pvt. Ltd.”. She has got the
administrative qualities of a good manager and all the qualities of a leader in her. She is
running the whole business successfully. She divides the work among her workers on the
basis of their respective capability and interest. Not only does she hands over the work to
them, but also gives them the authority to take decisions.
She pays full attention to making them capable enough to participate in the realization of
the objectives of business. In her company people of several religions and castes are
working. Even then she has succeeded in uniting them in a group.
She knows that the success of her company depends upon the level of production. This is
the reason that Miss Saini is keeping a special watch over this department of hers.
Actually, this is the department on the performance of which depends the survival of
company in the market for a long time.

Identify and explain the characteristics of management described in the paragraphs above
by quoting the relevant lines.

17
 Case Study
Ans. In the above paragraphs the characteristic of management described
is that ‘management is multi-dimensional’. In this discussion the following
dimensions of management have been touched.

‘Not only does she hand over….take decisions.’ Management of Work

‘She pays full attention to…….uniting them in a group.’ Management of
People
‘She knows that the success…….department of hers.’ Management of
Operations

18
 Objectives of Management
Objectives are the ends towards which the activities of an organisation are directed.

Organisational Social Personal

Objectives Objectives Objectives

Adequate Salary,
Quality Products,
Survival Reasonable price
Good working
conditions

Employment Peer recognition,

Profit Opportunity, Training and
Economic Wealth Development

Education, health
& vocational
Growth training
Social Recognition
programmes

Eco friendly
methods of
production

19
Organisational Objectives: Related to Business

1. Survival: Basic purpose of every organisation is to survive and

Objectives
exist in the competitive market. This is possible only if they are
able to cover their costs.
2. Profit: The next objective is profit as it’s the most crucial for
survival, growth and expansion of business. Personal Objectives: Related to
3. Growth: Business organisation must grow and expand their individuals working in an organisation
activities. The success of an organisation is measured through 1. Competitive Salary shall be given to
its growth rate i.e. number of branches, number of products, employees.
number of employees etc. 2. Promotion, training, personal growth and
development of employees.
3. Peer recognition, self respect, respect for
colleagues.
4. Good and healthy working conditions for
safety of employees.
Note: Management must try to integrate
Social Objectives: Related to consumers, society organisational objectives with the
1. Supply of quality products at reasonable prices.
personal objectives in order to keep their
2. Generation of employment.
3. Using Eco friendly methods of production. employees motivated.
4. Financial support to community.
5. Contribution towards social activities
6. Developing backward and rural areas.

20
 Case Study
Q. XYZ Power Ltd. set up a factory for manufacturing solar lanterns in a remote village as there was
no reliable supply of electricity in rural areas. The revenue earned by the company was sufficient to
cover the costs and the risks. As the demand of lanterns was increasing day- by-day, the company
decided to increase production to generate higher sales. For this/they decided to employ people from a
nearby village as very few job opportunities were available in that area. The company also decided to
open schools and crèches for the children of its employees. Identify and explain the objectives of
management discussed above.

Ans. The objectives of management discussed above are:

Organisational objectives: An organisation strives to achieve multiple organizational
objectives in the interest of its stakeholders like owners, employees etc. The main
organisational objectives are survival, profit and growth.
Social Objectives: It is the obligation of every organisation to undertake such activities
which will benefit the society at large like using eco-friendly methods, contributing towards
weaker sections of the society, generating employment opportunities, promoting literacy etc.

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 Practice Case Study
Q. Real Alliance Ltd. is a well-known cement company in India. It is able to earn
adequate revenues to cover costs. Its capital base, number of employees and production
turnover has increased manifolds over the years. The rate of profitability of the business is
also creditable. The employees of the company are happy and satisfied with their
remuneration, working conditions, promotion policy etc. As a part of its moral obligation,
the company has taken many initiatives for providing employment to specially abled
persons and promoting literacy in the villages adopted by it.

In the context of the above case:

Identify and explain the various types of objectives of management being fulfilled by Real
Alliance Ltd by quoting lines from the paragraph.

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Importance of Management
Creates
dynamic
organisation

Helps in
Helps in achieving
development of
society personal
objectives
Importance of
Management

Helps in
Improves
achieving
Efficiency
group goal

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 Importance of Management
Management helps in achieving group goal: It tries to
integrate the objectives of individuals with the organisational
goals. It directs the efforts of all individuals in the common
direction so that ultimate goals are achieved. Management helps in achieving personal objectives: Management leads
the organisation in such a manner that along with organisational goal,
individual goals of employees are also met. The organisational goal and
individual goal are in one direction only. Individual wants to earn more
and organisation wants more production. Employees can earn more by
producing more. This will fulfill the objective of both the groups.
Management increases efficiency: It tries to reduce the cost
of operations, improve productivity with minimum wastage of
resources. Management insist on increasing efficiency and
effectiveness in the work through its various functions like
Planning, Organising, Staffing, Directing and Controlling. Management helps in development of society: Management has to
fulfill the responsibilities towards various interest groups like
employees, consumers, government, suppliers and society. It insists on
providing quality products, create employment opportunity, give
competitive salaries. By increasing production, management helps in
Management creates a dynamic organisation: The business contributing towards the GDP and leads to growth of nation.
environment is very dynamic in nature, hence the organisation
has to be dynamic in approach. Management motivates
employees to adapt the changes in order to be successful. The
improvements and changes lead to success and growth of
organisation as well as employees.

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 Case Study
Q. Esha works as the cost and risk management head of a company in power sector. As
a result of her excellent managerial competence, the company is able to reduce costs and
increase productivity. The company belongs to infrastructure sector, wherein regular
amendments are made in the government regulations and policies. She holds regular
meetings to ensure that people in her department are not only aware of the related
changes but are also able to adapt to these changes effectively. This helps the company to
maintain its competitive edge. She motivates and leads her team in such a manner that
individual members are able to achieve personal goals while contributing to the overall
organisational objective. In the process of fulfilling her duties for the growth of the
organisation, she helps in providing competitive services, adopting new technology,
creating more employment opportunities etc. for the greater good of the people at large. In
context of the above case:

Identify the various reasons that have made management so important by quoting lines
from the paragraph.

25
 Case Study
Ans. The various reasons mentioned in the above paragraph that have made management so
important are stated below:
1. Management increases efficiency as it leads to reduction in costs due to optimum utilisation of
resources.
Line: “As a result of her excellent managerial competence the company is able to reduce costs
and increase productivity.”
2. Management creates a dynamic organisation so that it is able to incorporate the corresponding
changes in its working with any change in its business environment.
Line: “The company belongs to infrastructure sector, wherein regular amendments are made in
the government regulations and policies. She holds regular meetings to ensure that people in
her department are not only aware of the related changes but are also able to adapt to these
changes effectively. This helps the company to maintain its competitive edge.”
3. Management helps in achieving personal objectives of the employees in the organisation.
Line: “She motivates and leads her team in such a manner that individual members are able to
achieve personal goals while contributing to the overall organisational objective.” “The
employees of the company are happy and satisfied with their remuneration, working conditions,
promotion policy etc.”
4. Management helps in the development of society by contributing effectively towards it in multiple
ways.
Line: “In the process of fulfilling her duties for the growth of the organization, she helps in
providing competitive services, adopting new technology, creating more employment
opportunities etc. for the greater good of the people at large.”

26
 Practice Case Study
Q. The top management of ‘Hari Limited’ has done proper arrangement for all the
resources of men, machines, material and money for its business. A special attention has
been paid to the running of all the activities properly. Several competitor companies were
using imported modern machines. Influenced by them, this company also had to install
similar machines. The technology of these machines was most sophisticated. Before the
employees could protest against this technology, they were given the training in it. Hence,
they accepted the installation of these machines happily. Some of the employees
understood this technology very soon. The company felt happy with their work and
rewarded them. Its impact on other employees was also positive. The top management
had directed all the employees to have free and informal communication and give
suggestions, lodge complaints and even talk about their personal matters.

Identify and explain the three points of importance of management described in the
paragraph above by quoting the relevant lines.

27
 Nature of Management
Main Characteristics/Features of Art are: Management as a Science, Art and Profession

1. Systematic body of Knowledge/Existence of theoretical knowledge:

In every art there is organised and systematic study material is
Art can be defined as
available for acquiring theoretical knowledge of art, e.g. books on
systematic body of knowledge
different ragas in music. Similarly for management systematic and which requires skill, creativity
organised study material is available. (So first feature of art is present and practice to get perfection.
in management.)
2. Personalised application: In the field of art only theoretical
knowledge is not sufficient , every artist shall have personal skill and
creativity to apply that knowledge. In management also, managers Conclusion:
learn same theories and principles but their efficiency is dependent
upon that how well they use these principles by applying their personal We find that all features of art are
skills and creativity. (Hence this feature of art is present in present in management so we can
management.) say that “Management is an art of
3. Based on practice and creativity: An artist requires continuous getting things done by others.”
practice to be fine and perfect. Without practice an artist loses its
perfection. Artist needs to put in their own creativity to the theoretical
knowledge. Similarly managers also improve upon their managerial
skills and efficiency. (So this feature of art is also present in
management.)

28
 Nature of Management
Main Characteristics/Features of Science are:
Management as a Science, Art and Profession
1. Systematic body of Knowledge: Organised and systematic
study material is available for acquiring knowledge of science,
similarly for management systematic and organised study Science can be defined as a
material. (So first feature of science is present in systematic and organised body
management.) of knowledge based on
2. Principles are based on experimentation: Scientific principles logically observed findings,
are developed through observations and then tested through facts and events.
repeated experiments. But management deals with human being
and human behaviour, which cannot be accurately predicted.
(Hence management is an inexact science as this feature of Conclusion:
science is partially present.) We find that only one feature of
3. Universal Validity: Scientific principles have universal science is present in management
application and validity. Management principles are not exact whereas two are not present. Hence
like scientific principles so their application and use is not management cannot be considered
universal. They have to be modified according to the given
pure or exact science but we can call
situation. (So this feature of science is not present in
management.) it as an inexact science or social
science.

29
 Nature of Management
Main Characteristics/Features of Profession are:
Management as a Science, Art and Profession
1. Well defined body of knowledge: In every profession there is a practice of
systematic body of knowledge which helps the professionals to gain specialized
knowledge of that profession. Similarly for management systematic and organised 5. Service Motive: The
study material is available. (So first feature of profession is present in management.) basic motive of every Profession can be defined as an
2. Restricted Entry: The entry to a profession is through an examination or degree. For profession is to serve the occupation backed by
e.g. A person can practice as a doctor only if he is having MBBS degree. But there is clients with dedication, specialized knowledge and
no legal restriction on appointment of a manager, anyone can become a manager where as basic purpose of training, in which entry is
irrespective of educational qualification. But now lot of companies prefer to appoint management is achievement
of management goal. But
restricted.
managers only with MBA degree. (Hence presently this feature of profession is not
present in management but soon it will be included with statutory backing.) nowadays only profit
maximisation cannot be the
3. Presence of professional associations: Special associations are established and
sole goal of an enterprise.
every professional has to get himself registered with his association before practicing
The organisation has to give Conclusion: We can conclude that presently all
that profession like doctors with Medical Council of India and lawyers with Bar
importance to social
Council of India. In case of management, associations like AIMA are there but its not the features of profession are not present in
objectives as well. (Hence
mandatory for managers to register and be part of these associations. (Hence presently management but very soon, may be next decade
presently this feature of
this feature of profession is not present in management but soon it will be included these will be included in management with
profession is not present in
with statutory backing.) statutory backing so we can say management is
management but very soon
4. Existence of Ethical Codes: For every profession there are set of ethical codes it will be included.) on the path of becoming a profession. Today it
fixed by professional organisations and are binding on all professionals of that
may not be recognized as a full fledged
profession. In case of management , AIMA has devised a code of conduct but it is not
necessary to abide by them for the managers. (Hence presently this feature of profession like Doctor, Lawyer, etc. but very
profession is not present in management but soon it will be included with statutory soon it will be recognised as a full fledged
backing.) profession.

30
 Nature of Management
Management as a Science, Art and Profession
Understanding:

Management is both science as well as art. Like science it has systematic and well organised
knowledge and like art it requires personal skill, creativity and practice to apply such
knowledge in the best possible way. Science and art are not in contrast to each other, both
exist together in every function of management. But Management is not exact science, its
inexact science or social science due to human element involved in it.

Presently all the features of profession are not present in management but very soon, may be
next decade these will be included in management with statutory backing so we can say
management is on the path of becoming a profession. Today it may not be recognized as a
full fledged profession like Doctor, Lawyer, etc. but very soon it will be recognised as a full
fledged profession.

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 Case Study
Q. Krishna joins an IT firm as a system analyst after completing his masters in Computer Science. As the nature of his work
demands he has to work in very close coordination with all the departmental heads in the firm, very soon Krishna realizes that
each departmental head has own individual style of working. They differ greatly in their day-to-day approach to work. They
tend to deal with a given situation, an issue or a problem through a combination of their own experience, creativity,
imagination, initiative and innovation. In the context of the above case: Identify and explain the nature of management
highlighted in the above case.

Ans: In the above case, management is being considered as an art.

Art is the skillful and personal application of existing knowledge to achieve desired results. The evaluation of management as an
art is given below:

 Existence of theoretical knowledge: Art presupposes the existence of certain knowledge. Management fulfills this criterion as
there exist a number of theories and principles on management which have been formulated by various management experts.
 Personalised application: Art is a personalized concept. Management fulfills this criterion as a good manager works through a
combination of his own experience, creativity, imagination, initiative and innovation to carry out the assigned work.
 Based on practice and creativity: All art is practical. Management fulfills this criterion as a person becomes a better manager
with constant practice and experience. This also leads to emergence of different styles of management.
S. No. Features of Art Evaluation of Management as an Art
1. Existence of theoretical knowledge Fulfills this criterion
2. Personalized application Fulfills this criterion
3. Based on practice and creativity Fulfills this criterion

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 Case Study
Q. Mr. Sidharth has completed his MBA. During the course of his MBA he got the full theoretical knowledge of management.
Now he has full knowledge of a management and is ready to work as a manager. He got selected in ‘Subbu Limited’ for the
post of Finance Manager. Within a few days of his joining the company he speeded up the working of his department,
although his predecessor, the Finance Manager working prior to Mr. Sidharth had been more qualified and experienced. Mr.
Sidharth faced several problems in the course of his working, but he never felt discouraged and overcome them with firmness.
During this period he got the opportunity of visiting several other companies. Besides, he participated in several seminars
related to the problems of management and learnt the modern methods of management. He had a special interest in reading
and writing articles on the problems of management. Because of this reason, there has been a continuous growth in his
knowledge and experience of management. Now, he is working as a successful manager. He has obtained a distinct recognition
in the field of finance. In the above paragraph, three points of a concept of the nature of management have been described. (a)
Identify this concept. (b) Describe briefly the three points of the concept identified in (a) by quoting the relevant lines.

Ans. Here the concept of management ‘Management as an Art’ has been described. Here an effort has been made that in
management all the three special features of art are present.

• ‘During the course of his MBA…..theoretical knowledge of management.’ Existence of theoretical knowledge.
• ‘Within a few days of his joining the company….working of his department.’ Personalised Application.
• ‘Because of this reason, there has been…. Knowledge and experience of management.’ Based on Practice and Creativity.

33
 Theory Question
Q. “Management is a science like physics or chemistry”. Do you agree with this statement? Give reasons in support of
your answer.

Answer. This statement is wrong. Although management can be called science but not as an exact or pure science like
physics or chemistry. It is important to apply the characteristics of science to management in order to find out
whether management is a science or not. Following are the main points:
1. Systematic body of Knowledge: Organised and systematic study material is available for acquiring knowledge of
science, similarly for management systematic and organised study material. (So first feature of science is present in
management.)
2. Principles are based on experimentation: Scientific principles are developed through observations and then tested
through repeated experiments. But management deals with human being and human behaviour, which cannot be
accurately predicted. (Hence management is an inexact science as this feature of science is partially present.)
3. Universal Validity: Scientific principles have universal application and validity. Management principles are not exact
like scientific principles so their application and use is not universal. They have to be modified according to the given
situation. (So this feature of science is not present in management.)
Conclusion: The subject matter of management is human being who is an intelligent and sensitive being and whose
behavior or conduct changes according to the changing situations. We find that only one feature of science is present in
management whereas two are not present. Hence management cannot be considered pure or exact science but we can
call it as an inexact science or social science. Management is definitely not a science like physics or chemistry.

34
 Practice Case Study

Q. Management has evolved like a discipline. There are number of books on

management. Students are learning from these books various principles and
theories of management. But all students of MBA do not become successful only by
learning these principles. The success depend upon creative application of these
principles. Today many companies have started giving importance to corporate social
responsibility and Business Ethics.

In the above para one feature of Science, Art and Profession are given. Identify each
one of them by quoting lines.

35
 Top Level Management
 Middle Level Management/
Levels of Management
Operation Level
 Supervisory Level, Operational or
Lower Level of Management Board of Directors
Chairman
General Manager,
President, Vice
Top
President,
CEO, CFO, COO

Ac
Purchase Manager, Sales
Manager, Marketing

co
ity
Manager, Executive Officer,

u
nt
Middle

or
Plant Superintendent,

ab
th
Divisional Heads,

Au

i
Department Heads

lit
y
Supervisor,
Superintendent,
Foreman, Section Officer,
Clerk, Sub-Department Lower
Executive etc.

36
 Levels of Management

Platform Area: It’s a Top

Non Managerial Level.
Middle

Lower
Workers, Gardeners,
Peons, Other non
managerial members Platform Area

37
 FUNCTIONS / Responsibilities at various levels of management personnel
Top Level Middle / Operation Level Lower /Supervisory/ Operational level

Determining Overall Objectives Interpretation of plans and policies to lower Representing grievances of workers
(Long term and Short Term) level
Framing Overall Plans and Policies Organising activities of their respective Providing good working conditions
department
Organising Activities i.e. jobs / tasks for the Recruitment and Selection of employees Looking after Safety of Workers
middle level management

Assembling all the resources such as Motivating people to perform their best Helping middle level in recruitment and
finance, fixed assets etc. selection
Welfare and Survival of the organisation Controlling and instructing employees Maintaining quality standards

Liaison with the outside world Cooperate with other departments for Boosting the morale of workers, minimising
(government. competitors, suppliers, media smooth functioning. the wastage of resources.
etc.)

Note: Job of top level managers is complex Note: They act as a linking pin between top Note: Managers of this group actually carry
and stressful. Analyse Business and lower level management. They also on the work or perform the activities
Environment, Integrate diverse elements exercise the functions of top level for their according to the plans of top and middle
and coordinate the activities of different own department as they make plan and level management. Their authority is
departments. Overall resource policies for their own department and limited. They pass on instructions to
management. organise the resources. workers and report to the middle level
management. 38
 Case Study

Q. Arundhati has been promoted to the post of Marketing Division Head of a soft drink company. Identify the
level of management at which she will be working henceforth. State any four functions that she will have to
perform at this level.

A. Henceforth, Arundhati will be working at middle level of management.

The four functions that she will have to perform at this level are stated below:
1. She has to ensure that her department has the necessary staff.
2. She has to assign duties and responsibilities to the people in her department.
3. She has to motivate the people in her department to achieve the desired objectives.
4. She has to co-operate with the other departments for ensuring smooth functioning of the organization.

39
 Case Study
Q. Three groups of employees of ‘Gama Limited’ are working at different posts. The first group of employees is
responsible for the welfare and survival of the organisation. In order to discharge its responsibility properly, this
group continuously keeps a watch over the Business Environment. With a view to coping with the changes
going on in the Business Environment, this group immediately discusses the change to be brought about in the
company’s plans. The second group of employees is responsible for maintaining quality and safety standards
and minimising wastages. The responsibility of third group of employees is to explain the policies decided by
the top management and developing the feeling of cooperation among all the departments of the company.
a. Identify the concept of management described in the paragraphs given above.
b. Identify the three types of the concept identified in “a” by quoting the relevant lines.

Ans. (a) Three levels of management have been described.

(b) Following are the three levels of management which have been highlighted in (a) above:
(i) “The first group of employees is responsible for the welfare and survival of the organisation” Top Level Management.
(ii) “The second group of employees is responsible for maintaining quality and safety standards and minimising wastages” Lower
Level Management
(iii) “The responsibility of third group of employees is to explain the policies decided by the top management and developing the
feeling of cooperation among all the departments of the company.” Middle Level Management

40
 Practice Case Study

Q. Name the levels of management engaged in:

1. Introducing a new product line and deciding the capital structure of the company.
2. Recruitment of casual labourers.
3. Devise a suitable advertising campaign to sell a new product/service a company is launching.
4. Saraansh is the manager of Northern division of a large corporate house.
5. Your uncle is serving as foreman in a factory.
6. Principal of your school.
7. Managers responsible for maintaining the quality of output and the safety standards.
8. Managers responsible for implementing and controlling the plans and strategies of the organisation.
9. Managers are responsible for the welfare and survival of the organisation.
10.Managers who are responsible for coordinating the activities of different departments according to the
overall objectives of the organisation.

41
 Functions of Management

1. PLANNING
2. ORGANISING
3. STAFFING
4. DIRECTING
5. CONTROLLING
42
Regardless of size, nature and type of organisation, all the managers have Functions of
to perform some basic functions. The order of these functions will not
change. Management
Planning:
 It is always the first function performed by every manager.
 It refers to “deciding in advance what to do, how to do, when to do, and who is going to do it.”
 Planning bridges the gap between where we stand today and where we want to reach.
 Objectives are decided in advance and how to accomplish them.
 Planning is the base of all other functions of management.

Organising:
• Next function is to organise the activities and establish an organisational structure to execute the plan.
• Setting up an organisational structure is to decide the framework of working, how many units, sub units
or departments are needed.
• How many posts or designations are needed in each department.
• How to distribute the authority and responsibility.
• Once these decisions are taken an organisational structure is set.

43
 Functions of Management

Staffing:
• It refers to recruiting, selecting, appointing the employees, assigning them duties, maintaining cordial
relations, taking care of grievances of employees.
• It also includes training and development, deciding salaries, promotion, increments etc.
• Evaluating their performance and maintaining personal records of employees.
Directing:
• Directing refers to giving directions or instructions to employees by motivating them, supervising their
activities, communicating with them.
• Managers act as leaders and guide them to right direction, so directing function includes, supervising,
motivating, communicating and leadership.
Controlling:
• This is the last function of management.
• In this function managers try to match the actual performance with the planned performance.
• If there is mismatch, managers try to find out the reasons of deviations and suggest corrective
measures.
• Controlling function is measurement of performance and follow up actions to keep the actual
performance on path of plan.

44
 Case Study
Q. Jayant is working as Head Relationship Manager in the wealth management division of a private sector bank.
He has created an internal environment which is conducive to an effective and efficient performance of his
team of ten relationship management executive. A typical day at work in Jayant’s life consists of a series of
interrelated and continue functions. He decides the targets for his department which are in line with the
objectives of the organization as a whole. The future course of action for his team members is laid out well in
advance. The various resources required by the relationship managers like an iPad with GPS system, account
opening forms, brochures, details of account holders etc. are made readily available to them. The executives
are given sufficient authority to carry out the work assigned to them. Jayant works in close coordination with
the Human Resource Manager in order to ensure that he is able to create and maintain a satisfactory and
satisfied workforce in his department. Through constant guidance and motivation, Jayant inspires them to
realise their full potential. He offers them various types of incentives from time to time keeping in view their
diverse individual needs. Moreover, he keeps a close watch on their individual performances in order to ensure
that they are in accordance with the standards set and takes corrective actions whenever needed.

In context of the above case:

a. Identify the concept being referred to in the following line, “He has created an internal environment which is
conducive to an effective and efficient performance of his team of ten relationship management executives.”
b. Identify and describe the various functions of the concept as identified in part (a) of the question by quoting lines
from the paragraph.

45
 Case Study
Ans.
a. The concept of management is being referred to in the following line, “He has created an internal
environment which is conducive to an effective and efficient performance of his team of ten relationship
management executives.”
b. The various functions of the management concept mentioned in the above paragraph are listed below:
1. Planning: It is the function of determining in advance what is to be done and who is to do it. (“He decides the
targets for his department which are in line with the objectives of the organization as a whole. The future
course of action for the team members is laid out well in advance.”)
2. Organising: Organising is the process of bringing together human, physical and financial resources and
establishing productive relations among them for the purpose of achieving the desired goals efficiently and
effectively. (“The various resources required by the relationship managers like an iPad with GPS system,
account opening forms, brochures, details of account holders etc. are made readily available to them. The
executives are given sufficient authority to carry out the work assigned to them.”)
3. Staffing: The managerial function of staffing involves manning the organisational structure in order to fill in the
roles designed into the structure. (“Jayant works in close coordination with the human resource manager in
order to ensure that he is able to create and maintain a satisfactory and satisfied workforce in his
department.”)
4. Directing: Directing involves leading, influencing and motivating employees to perform the tasks assigned to them.
(“Through constant guidance and motivation, Jayant inspires them to realise their full potential. He offers
them various types of incentives from time to time keeping in view their diverse individual needs.”)
5. Controlling: Controlling is the management function of ensuring that actual performance adheres to planned
performance. (“Moreover, he keeps a close watch on their individual performances in order to ensure that
they are in accordance with the standards set and takes corrective actions whenever needed.”)
46
 Practice Case Study

Q. The marketing manager of Beta Limited fixed the target for all the sales executives and gave them all the
possible authority to achieve it. They were asked to submit to him their performance report at the end of the
month. All of them did the same. On the receipt of report the expected and actual results of sales executives
were compared, on this basis future course of action was decided. The sales executive also wrote in their report
the expectations of the customers from the company. The majority of them had written that they wanted the
company to cooperate in the construction of Dharamshala, going on in the city. The marketing manager placed
this demand before the Board of Directors. This was happily accepted.

In context of the above case:

a. Identify the various functions of management highlighted in the above para by quoting relevant lines.

47
 Focus of management function at different levels

Top Level Managers focus on

Planning and Organising.
Middle Level Managers focus
on Staffing and Coordination.
Lower Level Managers focus on
Directing and Controlling as they
give direction to workers.

48
 Coordination
Coordination is another function which is very important
and every manager has to perform. It is not only a function
but it is essence of management. In general, Coordination
means bringing together the activities and resources of an
organisation and also bringing harmony in them.

“Coordination is the force that binds all other functions of

management.”

49
 Coordination
Planning

Controlling Organising

Coordination

Directing Staffing

50
 Coordination : The Essence of Note: Coordination make sure that
Management planned objectives are achieved with
minimum conflicts. It involves
Coordination brings unity of action and integrates different activities synchronisation of different actions or
of organisation. It is considered as the essence of management because efforts of various units of an
of the following reasons: organisation. Coordination helps in
effective utilisation of resources and
lesser cost. Coordination is not the
simple function of management but
• Coordination is needed to perform all the functions
the essence of management. Its like a
of management.
• Coordination is required at all the levels.
thread which ties up the flowers (all
• Coordination is the most important function of an functions i.e. Planning, Organising,
organisation. Staffing, Directing and Controlling).

51
 Nature/ Features of Coordination
◂ Coordination integrates group efforts. The concept of coordination always applies to group efforts. The
need for orderliness, integration arises only when more individuals are working, have different styles
of working so there is need to unify their
◂ Coordination ensures unity of efforts. Coordination ensures that all department work hand in hand
and create balance in all the departments. It acts as binding force in all departments.
◂ Coordination is a continuous process. It’s a non ending function. The managers work continuously to
achieve coordination and companies cannot function smoothly without coordination.
◂ Coordination is a pervasive function. Coordination is a universal function. Its applicable everywhere.
Its is required at all levels, in all the departments . All the functions are interdependent upon each
other hence coordination is very important.
◂ Coordination is responsibility of all managers. It is not only the task of top level managers but
managers working at different levels to coordinate their activities.
◂ Coordination is a deliberate function. It helps to avoid confusion and chaos. In order to harmonise the
functions of management, coordination is performed deliberately by managers.

52
 Importance/ Need of Coordination
Coordination is very important as it integrates the efforts of individuals, departments and
specialists. Coordination harmonise individual goals and organisational goals. The need and
importance of coordination can be more clear by the following points:
◂ Growth in Size of the organisation: The need for coordination increases tremendously as
the size of the organisation increases.
◂ Functional Differentiation: The functions of an organisation are divided into different
departments, sections or divisions. These departments are actually interlinked and
interdependent on each other. The coordination is required to minimise the differences
between them.
◂ Specialisation: There is high degree of specialisation and expertise in every domain. These
experts or specialists feel that they can do everything all alone and whatever they do is
right. If all specialists work on their own way, there will be chaos and confusion. So
coordination of their efforts is necessary to achieve common goals of organisation.

53
 Difference between Coordination and Cooperation
Basis Coordination Cooperation
Meaning Coordination refers to bringing together the Cooperation refers to voluntary
activities of an organisation efforts of individuals to work
together and help each other.

Nature Coordination is conscious and deliberate action It is voluntary effort of employees.

of manager.

Interdependence Coordination is interdependent upon Cooperation is also dependent upon

cooperation as it is incomplete without it. coordination as it is meaningless
without it.

Relations Coordination is achieved through both formal It is achieved through informal

and informal relations relations.

Scope It includes cooperation and hence has a wider It has a narrow scope as compared
scope. to coordination.

Requirement Coordination is essential for achievement of It arises only when people desire to
organisational goal, where a group of people work together.
work together.

54
 Case Study

Q. ABC Ltd. is facing a lot of problem these days. The company’s profit margin is declining day-by-
day. The production manager is blaming marketing management whereas marketing is blaming
production department for not maintaining the quality. Finance department is blaming both.
What quality of management do you think is lacking. Explain it briefly.

Ans. The quality which is lacking in the above case is “coordination”. The management is able to
execute all the functions but they are unable to coordinate their functions. Coordination is the
essence of management.

55
 Case Study

Q. All the members of a Cricket Team start doing any activity according to their own will in the
course of the play. The reason for this was that the team did not have any capable captain.
Whenever, the team played, it was defeated. When the manager of the team realised this, he
changed the team’s captain. The new captain divided the different activities of the game among
the players according to the individual’s interest and caliber. Now the team started winning the
game. The objective of the team was victory, earlier as well as now. But earlier there was no
integration in the efforts of the players of the team, but now it had been established. Identify the
characteristic of coordination in the para given above.

Ans. Coordination integrates group efforts.

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