Chapt Er 1: Nature of Management

Chapt
er
Nature of 1
Management
Copyright © 2002, Authors
1– 1 Excel Books
MANAGEMENT text and cases, V S P Rao, V Hari Krishna
1 Nature of Managemen
Management is the force that unifies human as well as non-human

resources in the service of organisational goals. It is a process of
getting results with and through people.
1– 2
MANAGEMENT text and cases, V S P Rao, V Hari Krishna Excel Books
What is Management?
It is not easy to define the term management. There are certain genuine
reasons for this :
(i) Management is a vast subject. It is very extensive. It is, therefore,

not possible to put all the essential features of management in a
single formula.
(ii) Management is concerned with human beings, who are

behaviourally highly unpredictable.
(iii) Management is a young developing discipline whose concepts

are continuously changing.
1– 3
Management As A Noun
In popular usage, management refers to a group of people who direct
the activities of other people and material resources towards the
attainment of predetermined goals.
Management as a Process
Management as a process refers to a series of inter-related functions,
such as planning, organising, staffing, leading and controlling.
1– 4
Management as a Group/Team
The term ‘management’ is used to denote the persons who manage the
affairs of an organisation. Thus, as a group of persons, management
includes all those who are responsible for making decisions and
supervising the work of others.
Management as a Discipline
As a discipline, management is a specialised branch of knowledge
which involves the study of certain principles and practices.
Management as an Activity
Management refers to a separate class of activities which are
performed by managers. Managerial activity consists of planning,
organising, staffing, directing and controlling.
1– 5
Scope of Management
The scope of management is very wide. Basically, it refers to three
distinct ideas. Management may be understood as
(i) an economic resource,
(ii) a system of authority, and
(iii) a class or elite.
1– 6
Characteristics of Management
The various interpretations of management emphasise three things: (i)
management is a process and involves a series of continuing and related
activities, (ii) it tries to concentrate on reaching organisational goals, (iii)
and it reaches these goals by working with and through other people and
other organisational resources.
The important features which reveal the nature of management may be
stated thus:
 Management is intangible
 Management is goal-oriented
 Management is universal
 Management is a social process
 Management is a group activity
 Management is a system of authority
 Management is an activity Cont… Copyright © 2002, Authors
1– 7
 Management is dynamic
 Management is a science as well as an art
 Management is multidisciplinary
1– 8
Importance of Management
The importance of management can be understood from the following
points:
 Optimum use of resources
 Effective leadership and motivation
 Establishes sound industrial relations
 Achievement of goals
 Change and growth
 Improves standard of living
1– 9
Distinction between Administration and Management

Point of distinction Administration Management
 Nature Thinking function (what is to be Doing function (who should do it
done and when). and how).
 Scope Determines broad objectives Implements plans and achieves
and policies. goals through people.
 Level Top level function. Middle and lower level function.

 Skills needed Conceptual and human skills. Technical and human skills.
 Represents Owners who invest capital and Paid individuals who work for
receive profits. remuneration.
 Usage Mostly in government, military, Mostly in business
educational, social and cultural organisations.
organisations.
1– 10
Principles of Management
Nature of management principles
Management principles change with the change in the environment in
which the organisation exists.
1– 11
Why Management Principles?

By means of principles of management, a manager can avoid
fundamental mistakes in his job and foretell the results of his actions
with confidence. Principles help in the following ways:
 To increase efficiency
 To crystallise the nature of management
 To improve research in management
 To attain social goals
1– 12
What are principles of management?

 Fayol’s principles:
1. Division of work
2. Authority
3. Discipline
4. Unity of command
5. Unity of direction
6. Subordination of individual interests to the general interest
7. Remuneration
8. Centralisation
9. Scalar chain
10. Order
11. Equity
12. Stability and tenure of personnel
13. Initiative
14. Esprit de corps Cont… Copyright © 2002, Authors
1– 13
 Mooney and Reiley’s staff principle

 Taylor’s principle of management by exception
 Weber’s principles
 Likert’s principle of supportive relationship
 Human relations
 Modern organisation theories and principles of management
1– 14
Universality of Management Principles

Universality of management suggests that the manager uses the same
managerial skills and principles in each managerial position held in
various organisations. Universality implies transferability of managerial
skills across industries, countries. It means that management is generic in
content and is applicable to all types of organisations.
Arguments for Universality
 Same functions
 Universal principles
 Fundamentals are same, the techniques employed and practices
followed are different
 Practical evidence
Arguments Against Universality

 Complete substitutability is impossible
 Organisational philosophies differ
 Universality of principles: a ridiculous statement?
 Management is a product of the culture Copyright © 2002, Authors
1– 15

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Chapt

Copyright © 2002, Authors

Management is the force that unifies human as well as non-human

Copyright © 2002, Authors

(i) Management is a vast subject. It is very extensive. It is, therefore,

(ii) Management is concerned with human beings, who are

(iii) Management is a young developing discipline whose concepts

Copyright © 2002, Authors

Copyright © 2002, Authors

Copyright © 2002, Authors

(i) an economic resource,

(ii) a system of authority, and

(iii) a class or elite.

Copyright © 2002, Authors

Copyright © 2002, Authors

Copyright © 2002, Authors

Distinction between Administration and Management

 Level Top level function. Middle and lower level function.

Copyright © 2002, Authors

Copyright © 2002, Authors

Why Management Principles?

 To crystallise the nature of management

 To improve research in management

 To attain social goals

Copyright © 2002, Authors

What are principles of management?

 Mooney and Reiley’s staff principle

Copyright © 2002, Authors

Universality of Management Principles

Arguments Against Universality

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