The word management refers to

Management (or managing) is the administration of organizations, whether they are a business, a nonprofit organization, or a government body. It is the art and science of managing resources of the business.

Management includes the activities of setting the strategy of an organization and coordinating the efforts of its employees (or of volunteers) to accomplish its objectives through the application of available resources, such as financial, natural, technological, and human resources. «Run the business»^[1] and «Change the business» are two concepts that are used in management to differentiate between the continued delivery of goods or services and adapting of goods or services to meet the changing needs of customers — see trend. The term «management» may also refer to those people who manage an organization—managers.

Some people study management at colleges or universities; major degrees in management includes the Bachelor of Commerce (B.Com.), Bachelor of Business Administration (BBA.), Master of Business Administration (MBA.), Master in Management (MSM or MIM) and, for the public sector, the Master of Public Administration (MPA) degree. Individuals who aim to become management specialists or experts, management researchers, or professors may complete the Doctor of Management (DM), the Doctor of Business Administration (DBA), or the PhD in Business Administration or Management. In the past few decades, there has been a movement for evidence-based management.^[2]

Larger organizations generally have three hierarchical levels of managers,^[3] in a pyramid structure:

• Senior managers such as members of a board of directors and a chief executive officer (CEO) or a president of an organization sets the strategic goals and policy of the organization and make decisions on how the overall organization will operate. Senior managers are generally executive-level professionals who provide direction to middle management, and directly or indirectly report to them.
• Middle managers such as branch managers, regional managers, department managers, and section managers, who provide direction to the front-line managers. They communicate the strategic goals and policy of senior management to the front-line managers.
• Line managers such as supervisors and front-line team leaders, oversee the work of regular employees (or volunteers, in some voluntary organizations) and provide direction on their work. Line managers often perform the managerial functions that are traditionally considered as the core of management. Despite the name, they are usually considered part of the workforce and not part of the organization’s management class.

In smaller organizations, a manager may have a much wider scope and may perform several roles or even all of the roles commonly observed in a large organization.

Social scientists study management as an academic discipline, investigating areas such as social organization, organizational adaptation, and organizational leadership.^[4]

Etymology[edit]

The English verb «manage» has its roots by the XV century French verb ‘mesnager’, which often referred in equestrian language «to hold in hand the reins of a horse».^[5] Also the Italian term maneggiare (to handle, especially tools or a horse) is possible. In Spanish, manejar can also mean to rule the horses.^[6] These three terms derive from the two Latin words manus (hand) and agere (to act).

The French word for housekeeping, ménagerie, derived from ménager («to keep house»; compare ménage for «household»), also encompasses taking care of domestic animals. Ménagerie is the French translation of Xenophon’s famous book Oeconomicus^[7] (Greek: Οἰκονομικός) on household matters and husbandry. The French word mesnagement (or ménagement) influenced the semantic development of the English word management in the 17th and 18th centuries.^[8]

Definitions[edit]

Views on the definition and scope of management include:

• Henri Fayol (1841–1925) stated: «to manage is to forecast and to plan, to organise, to command, to co-ordinate and to control».^[9]
• Fredmund Malik (1944– ) defines management as «the transformation of resources into utility».^[10]
• Management is included^{[by whom?]} as one of the factors of production – along with machines, materials and money.
• Ghislain Deslandes defines management as «a vulnerable force, under pressure to achieve results and endowed with the triple power of constraint, imitation and imagination, operating on subjective, interpersonal, institutional and environmental levels».^[11]
• Peter Drucker (1909–2005) saw the basic task of management as twofold: marketing and innovation. Nevertheless, innovation is also linked to marketing (product innovation is a central strategic marketing issue).^{[citation needed]} Drucker identifies marketing as a key essence for business success, but management and marketing are generally understood^{[by whom?]} as two different branches of business administration knowledge.

Theoretical scope[edit]

Management involves identifying the mission, objective, procedures, rules and manipulation^[12] of the human capital of an enterprise to contribute to the success of the enterprise.^[13] Scholars have focused on the management of individual,^[14] organizational,^[15] and inter-organizational relationships. This implies effective communication: an enterprise environment (as opposed to a physical or mechanical mechanism) implies human motivation and implies some sort of successful progress or system outcome.^[16] As such, management is not the manipulation of a mechanism (machine or automated program), not the herding of animals, and can occur either in a legal or in an illegal enterprise or environment. From an individual’s perspective, management does not need to be seen solely from an enterprise point of view, because management is an essential^[quantify] function in improving one’s life and relationships.^[17] Management is therefore everywhere^[18] and it has a wider range of application.^{[clarification needed]} Communication and a positive endeavor are two main aspects of it either through enterprise or through independent pursuit.^{[citation needed]} Plans, measurements, motivational psychological tools, goals, and economic measures (profit, etc.) may or may not be necessary components for there to be management. At first, one views management functionally, such as measuring quantity, adjusting plans, and meeting goals,^{[citation needed]} but this applies even in situations where planning does not take place. From this perspective, Henri Fayol (1841–1925)^{[19][page needed]} considers management to consist of five functions:

1. planning (forecasting)
2. organizing
3. commanding
4. coordinating
5. controlling

In another way of thinking, Mary Parker Follett (1868–1933), allegedly defined management as «the art of getting things done through people».^[20] She described management as a philosophy.^{[21][need quotation to verify]}

Critics,^[which?] however, find this definition useful but far too narrow. The phrase «management is what managers do» occurs widely,^[22] suggesting the difficulty of defining management without circularity, the shifting nature of definitions^{[citation needed]} and the connection of managerial practices with the existence of a managerial cadre or of a class.

One habit of thought regards management as equivalent to «business administration» and thus excludes management in places outside commerce, as for example in charities and in the public sector. More broadly, every organization must «manage» its work, people, processes, technology, etc. to maximize effectiveness.^{[citation needed]} Nonetheless, many people refer to university departments that teach management as «business schools». Some such institutions (such as the Harvard Business School) use that name, while others (such as the Yale School of Management) employ the broader term «management».

English-speakers may also use the term «management» or «the management» as a collective word describing the managers of an organization, for example of a corporation.^[23]
Historically this use of the term often contrasted with the term «labor» – referring to those being managed.^[24]

But in the present era^[when?] the concept of management is identified^{[by whom?]} in the wide areas^[which?] and its frontiers have been pushed^{[by whom?]} to a broader range.^{[citation needed]} Apart from profitable organizations, even non-profit organizations apply management concepts. The concept and its uses are not constrained^{[by whom?]}. Management as a whole is the process of planning, organizing, directing, leading and controlling.^[25]

Levels[edit]

A common management structure of organizations includes three management levels: first-level, middle-level, and top-level managers. First-line managers are the lowest level of management and manage the work of non-managerial individuals who are directly involved with the production or creation of the organization’s products. First-line managers are often called supervisors, but may also be called line managers, office managers, or even foremen. Middle managers include all levels of management between the first-line level and the top level of the organization. These managers manage the work of first-line managers and may have titles such as department head, project leader, plant manager, or division manager. Top managers are responsible for making organization-wide decisions and establishing the plans and goals that affect the entire organization. These individuals typically have titles such as executive vice president, president, managing director, chief operating officer, chief executive officer, or chairman of the board.

These managers are classified in a hierarchy of authority, and perform different tasks. In many organizations, the number of managers in every level resembles a pyramid. Each level is explained below in specifications of their different responsibilities and likely job titles.^[26]

Top management[edit]

The top or senior layer of management is a small group which consists of the board of directors (including non-executive directors, executive directors and independent directors), president, vice-president, CEOs and other members of the C-level executives. Different organizations have various members in their C-suite, which may include a chief financial officer, chief technology officer, and so on. They are responsible for controlling and overseeing the operations of the entire organization. They set a «tone at the top» and develop strategic plans, company policies, and make decisions on the overall direction of the organization. In addition, top-level managers play a significant role in the mobilization of outside resources. Senior managers are accountable to the shareholders, the general public and to public bodies that oversee corporations and similar organizations. Some members of the senior management may serve as the public face of the organization, and they may make speeches to introduce new strategies or appear in marketing.

The board of directors is typically primarily composed of non-executives who owe a fiduciary duty to shareholders and are not closely involved in the day-to-day activities of the organization, although this varies depending on the type (e.g., public versus private), size and culture of the organization. These directors are theoretically liable for breaches of that duty and typically insured under directors and officers liability insurance. Fortune 500 directors are estimated to spend 4.4 hours per week on board duties, and median compensation was $212,512 in 2010. The board sets corporate strategy, makes major decisions such as major acquisitions,^[27] and hires, evaluates, and fires the top-level manager (chief executive officer or CEO). The CEO typically hires other positions. However, board involvement in the hiring of other positions such as the chief financial officer (CFO) has increased.^[28] In 2013, a survey of over 160 CEOs and directors of public and private companies found that the top weaknesses of CEOs were «mentoring skills» and «board engagement», and 10% of companies never evaluated the CEO.^[29] The board may also have certain employees (e.g., internal auditors) report to them or directly hire independent contractors; for example, the board (through the audit committee) typically selects the auditor.

Helpful skills of top management vary by the type of organization but typically include^[30] a broad understanding of competition, world economies, and politics. In addition, the CEO is responsible for implementing and determining (within the board’s framework) the broad policies of the organization. Executive management accomplishes the day-to-day details, including: instructions for preparation of department budgets, procedures, schedules; appointment of middle level executives such as department managers; coordination of departments; media and governmental relations; and shareholder communication.

Middle management[edit]

Consist of general managers, branch managers and department managers. They are accountable to the top management for their department’s function. They devote more time to organizational and directional functions. Their roles can be emphasized as executing organizational plans in conformance with the company’s policies and the objectives of the top management, they define and discuss information and policies from top management to lower management, and most importantly they inspire and provide guidance to lower-level managers towards better performance.

Middle management is the midway management of a categorized organization, being secondary to the senior management but above the deepest levels of operational members. An operational manager may be well-thought-out by middle management or may be categorized as non-management operate, liable to the policy of the specific organization. The efficiency of the middle level is vital in any organization since they bridge the gap between top level and bottom level staffs.

Their functions include:

• Design and implement effective group and inter-group work and information systems.
• Define and monitor group-level performance indicators.
• Diagnose and resolve problems within and among workgroups.
• Design and implement reward systems that support cooperative behavior. They also make decisions and share ideas with top managers.

Line management[edit]

Line managers include supervisors, section leaders, forepersons and team leaders. They focus on controlling and directing regular employees. They are usually responsible for assigning employees’ tasks, guiding and supervising employees on day-to-day activities, ensuring the quality and quantity of production and/or service, making recommendations and suggestions to employees on their work, and channeling employee concerns that they cannot resolve to mid-level managers or other administrators. First-level or «front line» managers also act as role models for their employees. In some types of work, front line managers may also do some of the same tasks that employees do, at least some of the time. For example, in some restaurants, the front line managers will also serve customers during a very busy period of the day. In general, line managers are considered part of the workforce and not part of the organization’s proper management despite performing traditional management functions.

Front-line managers typically provide:

• Training for new employees
• Basic supervision
• Motivation
• Performance feedback and guidance

Some front-line managers may also provide career planning for employees who aim to rise within the organization.

Training and education[edit]

Colleges and universities around the world offers bachelor’s degrees, graduate degrees, diplomas and certificates in management; generally within their colleges of business, business schools or faculty of management but also in other related departments. In the 2010s era, there has been an increase in online management education and training in the form of electronic educational technology (also called e-learning). Online education has increased the accessibility of management training to people who do not live near a college or university, or who cannot afford to travel to a city where such training is available.

Requirement[edit]

While some professions require academic credentials in order to work in the profession (e.g., law, medicine, engineering, which require, respectively the Bachelor of Law, Doctor of Medicine and Bachelor of Engineering degrees), management and administration positions do not necessarily require the completion of academic degrees. Some well-known senior executives in the US who did not complete a degree include Steve Jobs, Bill Gates and Mark Zuckerberg. However, many managers and executives have completed some type of business or management training, such as a Bachelor of Commerce or a Master of Business Administration degree. Some major organizations, including companies, non-profit organizations and governments, require applicants to managerial or executive positions to hold at minimum bachelor’s degree in a field related to administration or management, or in the case of business jobs, a Bachelor of Commerce or a similar degree.

Undergraduate[edit]

At the undergraduate level, the most common business programs are the Bachelor of Business Administration (BBA) and Bachelor of Commerce (B.Com.).
These typically comprise a four-year program designed to give students an overview of the role of managers in planning and directing within an organization.
Course topics include accounting, financial management, statistics, marketing, strategy, and other related areas.

There are many other undergraduate degrees that include the study of management, such as Bachelor of Arts degrees with a major in business administration or management and Bachelor of Public Administration (B.P.A), a degree designed for individuals aiming to work as bureaucrats in the government jobs.
Many colleges and universities also offer certificates and diplomas in business administration or management, which typically require one to two years of full-time study.

Note that to manage technological areas, one often needs an undergraduate degree in a STEM area.

Graduate[edit]

At the graduate level students aiming at careers as managers or executives may choose to specialize in major subareas of management or business administration such as entrepreneurship, human resources, international business, organizational behavior, organizational theory, strategic management,^[31] accounting, corporate finance, entertainment, global management, healthcare management, investment management, sustainability and real estate.

A Master of Business Administration (MBA) is the most popular professional degree at the master’s level and can be obtained from many universities in the United States. MBA programs provide further education in management and leadership for graduate students. Other master’s degrees in business and management include Master of Management (MM) and the Master of Science (M.Sc.) in business administration or management, which is typically taken by students aiming to become researchers or professors.

There are also specialized master’s degrees in administration for individuals aiming at careers outside of business, such as the Master of Public Administration (MPA) degree (also offered as a Master of Arts in Public Administration in some universities), for students aiming to become managers or executives in the public service and the Master of Health Administration, for students aiming to become managers or executives in the health care and hospital sector.

Management doctorates are the most advanced terminal degrees in the field of business and management. Most individuals obtaining management doctorates take the programs to obtain the training in research methods, statistical analysis and writing academic papers that they will need to seek careers as researchers, senior consultants and/or professors in business administration or management. There are three main types of management doctorates: the Doctor of Management (D.M.), the Doctor of Business Administration (D.B.A.), and the Doctor of Philosophy (PhD) in Business Administration or Management. In the 2010s, doctorates in business administration and management are available with many specializations.

Good practices[edit]

While management trends can change so fast, the long-term trend in management has been defined by a market embracing diversity and a rising service industry. Managers are currently being trained to encourage greater equality for minorities and women in the workplace, by offering increased flexibility in working hours, better retraining, and innovative (and usually industry-specific) performance markers. Managers destined for the service sector are being trained to use unique measurement techniques, better worker support and more charismatic leadership styles.^[32] Human resources finds itself increasingly working with management in a training capacity to help collect management data on the success (or failure) of management actions with employees.^[33]

Good practices identified for managers include «walking the shop floor»,^[34] and, especially for managers who are new in post, identifying and achieving some «quick wins» which demonstrate visible success in establishing appropriate objectives.^[35] Leadership writer John Kotter uses the phrase «Short-Term Wins» to express the same idea.^[36] As in all work, achieving an appropriate work-life balance for self and others is an important management practice.^[37]

Evidence-based management[edit]

Evidence-based management is an emerging movement to use the current, best evidence in management and decision-making. It is part of the larger movement towards evidence-based practices. Evidence-based management entails managerial decisions and organizational practices informed by the best available evidence.^[38] As with other evidence-based practice, this is based on the three principles of: 1) published peer-reviewed (often in management or social science journals) research evidence that bears on whether and why a particular management practice works; 2) judgement and experience from contextual management practice, to understand the organization and interpersonal dynamics in a situation and determine the risks and benefits of available actions; and 3) the preferences and values of those affected.^[39][40]

History[edit]

Some see management as a late-modern (in the sense of late modernity) conceptualization.^[41] On those terms it cannot have a pre-modern history – only harbingers (such as stewards). Others, however, detect management-like thought among ancient Sumerian traders and the builders of the pyramids of ancient Egypt. Slave-owners through the centuries faced the problems of exploiting/motivating a dependent but sometimes unenthusiastic or recalcitrant workforce, but many pre-industrial enterprises, given their small scale, did not feel compelled to face the issues of management systematically. However, innovations such as the spread of Arabic numerals (5th to 15th centuries) and the codification of double-entry book-keeping (1494) provided tools for management assessment, planning and control.

• An organisation is more stable if members have the right to express their differences and solve their conflicts within it.
• While one person can begin an organisation, «it is lasting when it is left in the care of many and when many desire to maintain it».
• A weak manager can follow a strong one, but not another weak one, and maintain authority.
• A manager seeking to change an established organization «should retain at least a shadow of the ancient customs».

With the changing workplaces of industrial revolutions in the 18th and 19th centuries, military theory and practice contributed approaches to managing the newly popular factories.^[42]

Given the scale of most commercial operations and the lack of mechanized record-keeping and recording before the industrial revolution, it made sense for most owners of enterprises in those times to carry out management functions by and for themselves. But with growing size and complexity of organizations, a distinction between owners (individuals, industrial dynasties or groups of shareholders) and day-to-day managers (independent specialists in planning and control) gradually became more common.

Early writing[edit]

The field of management originated in ancient China,^[43] including possibly the first highly centralized bureaucratic state, and the earliest (by the second century BC) example of an administration based on merit through testing.^[44] Some theorists have cited ancient military texts as providing lessons for civilian managers. For example, Chinese general Sun Tzu in his 6th-century BC work The Art of War recommends^{[citation needed]} (when re-phrased in modern terminology) being aware of and acting on strengths and weaknesses of both a manager’s organization and a foe’s.^{[45][need quotation to verify]} The writings of influential Chinese Legalist philosopher Shen Buhai may be considered^{[by whom?]} to embody a rare premodern example of abstract theory of administration.^[46][47] American philosopher Herrlee G. Creel and other scholars find the influence of Chinese administration in Europe by the 12th century.^{[48][49][50][51]} Thomas Taylor Meadows, Britain’s consul in Guangzhou, argued in his Desultory Notes on the Government and People of China (1847) that «the long duration of the Chinese empire is solely and altogether owing to the good government which consists in the advancement of men of talent and merit only,» and that the British must reform their civil service by making the institution meritocratic.^[52] Influenced by the ancient Chinese imperial examination, the Northcote–Trevelyan Report of 1854 recommended that recruitment should be on the basis of merit determined through competitive examination, candidates should have a solid general education to enable inter-departmental transfers, and promotion should be through achievement rather than «preferment, patronage, or purchase».^[53][52] This led to implementation of Her Majesty’s Civil Service as a systematic, meritocratic civil service bureaucracy.^[54] Like the British, the development of French bureaucracy was influenced by the Chinese system. Voltaire claimed that the Chinese had «perfected moral science» and François Quesnay advocated an economic and political system modeled after that of the Chinese.^[55] French civil service examinations adopted in the late 19th century were also heavily based on general cultural studies. These features have been likened to the earlier Chinese model.^[56]

Various ancient and medieval civilizations produced «mirrors for princes» books, which aimed to advise new monarchs on how to govern. Plato described job specialization in 350 BC, and Alfarabi listed several leadership traits in AD 900.^[57] Other examples include the Indian Arthashastra by Chanakya (written around 300 BC), and The Prince by Italian author
Niccolò Machiavelli (c. 1515).^[58]

Written in 1776 by Adam Smith, a Scottish moral philosopher, The Wealth of Nations discussed efficient organization of work through division of labour.^[58]
Smith described how changes in processes could boost productivity in the manufacture of pins. While individuals could produce 200 pins per day, Smith analyzed the steps involved in manufacture and, with 10 specialists, enabled production of 48,000 pins per day.^{[58][need quotation to verify]}

19th century[edit]

Classical economists such as Adam Smith (1723–1790) and John Stuart Mill (1806–1873) provided a theoretical background to resource allocation, production (economics), and pricing issues. About the same time, innovators like Eli Whitney (1765–1825), James Watt (1736–1819), and Matthew Boulton (1728–1809) developed elements of technical production such as standardization, quality-control procedures, cost-accounting, interchangeability of parts, and work-planning. Many of these aspects of management existed in the pre-1861 slave-based sector of the US economy. That environment saw 4 million people, as the contemporary usages had it, «managed» in profitable quasi-mass production^[59]
before wage slavery eclipsed chattel slavery.

Salaried managers as an identifiable group first became prominent in the late 19th century.^[60] As large corporations began to overshadow small family businesses the need for personnel management positions became more necessary.^[61] Businesses grew into large corporations and the need for clerks, bookkeepers, secretaries and managers expanded. The demand for trained managers led college and university administrators to consider and move forward with plans to create the first schools of business on their campuses.

20th century[edit]

At the turn of the twentieth century the need for skilled and trained managers had become increasingly apparent. The demand occurred as personnel departments began to expand rapidly. In 1915, less than one in twenty manufacturing firms had a dedicated personnel department. By 1929 that number had grown to over one-third.^[62] Formal management education became standardized at colleges and universities.^[63] Colleges and universities capitalized on the needs of corporations by forming business schools and corporate placement departments.^[64] This shift toward formal business education marked the creation of a corporate elite in the US.

By about 1900 one finds managers trying to place their theories on what they regarded as a thoroughly scientific basis (see scientism for perceived limitations of this belief). Examples include Henry R. Towne’s Science of management in the 1890s, Frederick Winslow Taylor’s The Principles of Scientific Management (1911), Lillian Gilbreth’s Psychology of Management (1914),^[65] Frank and Lillian Gilbreth’s Applied motion study (1917), and Henry L. Gantt’s charts (1910s). J. Duncan wrote the first college management textbook in 1911. In 1912 Yoichi Ueno introduced Taylorism to Japan and became the first management consultant of the «Japanese management style». His son Ichiro Ueno pioneered Japanese quality assurance.

The first comprehensive theories of management appeared around 1920.^{[citation needed]} The Harvard Business School offered the first Master of Business Administration degree (MBA) in 1921. People like Henri Fayol (1841–1925) and Alexander Church (1866–1936) described the various branches of management and their inter-relationships. In the early 20th century, people like Ordway Tead (1891–1973), Walter Scott (1869–1955) and J. Mooney applied the principles of psychology to management. Other writers, such as Elton Mayo (1880–1949), Mary Parker Follett (1868–1933), Chester Barnard (1886–1961), Max Weber (1864–1920), who saw what he called the «administrator» as bureaucrat,^[66] Rensis Likert (1903–1981), and Chris Argyris (born 1923) approached the phenomenon of management from a sociological perspective.

The 1930s and 1940s saw the development of a militarization trend in management in parts of Eurasia – both the NKVD (in the Soviet Union) and the SS (in the Greater Germanic Reich), for example, managed labor camps as industrial enterprises using slave labor supervised by uniformed cadres.^[67][68]
Military habits persisted in some management circles.^[69]

Peter Drucker (1909–2005) wrote one of the earliest books on applied management: Concept of the Corporation (published in 1946). It resulted from Alfred Sloan (chairman of General Motors until 1956) commissioning a study of the organisation. Drucker went on to write 39 books, many in the same vein.

H. Dodge, Ronald Fisher (1890–1962), and Thornton C. Fry introduced statistical techniques into management-studies. In the 1940s, Patrick Blackett worked in the development of the applied-mathematics science of operations research, initially for military operations. Operations research, sometimes known as «management science» (but distinct from Taylor’s scientific management), attempts to take a scientific approach to solving decision-problems, and can apply directly to multiple management problems, particularly in the areas of logistics and operations.

Some of the later 20th-century developments include the theory of constraints (introduced in 1984), management by objectives (systematised in 1954), re-engineering (early 1990s), Six Sigma (1986), management by walking around (1970s), the Viable system model (1972), and various information-technology-driven theories such as agile software development (so-named from 2001), as well as group-management theories such as Cog’s Ladder (1972) and the notion of «thriving on chaos»^[70] (1987).

As the general recognition of managers as a class solidified during the 20th century and gave perceived practitioners of the art/science of management a certain amount of prestige, so the way opened for popularised systems of management ideas to peddle their wares. In this context many management fads may have had more to do with pop psychology than with scientific theories of management.

Business management^[when?] includes the following branches:^{[citation needed]}

1. financial management
2. human resource management
3. Management cybernetics
4. information technology management (responsible for management information systems )
5. marketing management
6. operations management and production management
7. strategic management

21st century[edit]

In the 21st century observers find it increasingly difficult to subdivide management into functional categories in this way. More and more processes simultaneously involve several categories. Instead, one tends to think in terms of the various processes, tasks, and objects subject to management.^{[citation needed]}

Branches of management theory also exist relating to nonprofits and to government: such as public administration, public management, and educational management. Further, management programs related to civil-society organizations have also spawned programs in nonprofit management and social entrepreneurship.

Note that many of the assumptions made by management have come under attack from business-ethics viewpoints, critical management studies, and anti-corporate activism.

As one consequence, workplace democracy (sometimes referred to as Workers’ self-management) has become both more common and more advocated, in some places distributing all management functions among workers, each of whom takes on a portion of the work. However, these models predate any current political issue, and may occur more naturally than does a command hierarchy. All management embraces to some degree a democratic principle—in that in the long term, the majority of workers must support management. Otherwise, they leave to find other work or go on strike. Despite the move toward workplace democracy, command-and-control organization structures remain commonplace as de facto organization structures. Indeed, the entrenched nature of command-and-control is evident in the way that recent^[when?] layoffs have been conducted with management ranks affected far less than employees at the lower levels.^{[citation needed]} In some cases, management has even rewarded itself with bonuses after laying off lower-level workers.^[71]

According to leadership-academic Manfred F.R. Kets de Vries, a contemporary senior-management team will almost inevitably have some personality disorders.^[72]

Nature of work[edit]

In profitable organizations, management’s primary function is the satisfaction of a range of stakeholders. This typically involves making a profit (for the shareholders), creating valued products at a reasonable cost (for customers), and providing great employment opportunities for employees. In case of nonprofit management, one of the main functions is, keeping the faith of donors. In most models of management and governance, shareholders vote for the board of directors, and the board then hires senior management. Some organizations have experimented with other methods (such as employee-voting models) of selecting or reviewing managers, but this is rare.

Topics[edit]

Basics[edit]

According to Fayol, management operates through five basic functions: planning, organizing, commanding, coordinating and controlling.

• Planning: Deciding what needs to happen in the future and generating plans for action (deciding in advance).
• Organizing (or staffing): Making sure the human and nonhuman resources are put into place.^[73]
• Commanding (or leading): Determining what must be done in a situation and getting people to do it.
• Coordinating: Creating a structure through which an organization’s goals can be accomplished.
• Controlling: Checking progress against plans.

Basic roles[edit]

• Interpersonal: roles that involve coordination and interaction with employees.

Figurehead, leader, liaison

• Informational: roles that involve handling, sharing, and analyzing information.

Nerve centre, disseminator, spokesperson

• Decision: roles that require decision-making.

Entrepreneur, negotiator, allocator, disturbance handler

Skills[edit]

Management skills include:

• Political: used to build a power base and to establish connections.
• Interpersonal: used to communicate, motivate, mentor and delegate.
• Diagnostic: ability to visualize appropriate responses to a situation.
• Leadership: ability to communicate a vision and inspire people to embrace that vision.^[74]
  • cross-cultural leadership: ability to understand the effects of culture on leadership style.
• Behavioral: perception towards others, conflict resolution, time-management, self-improvement, stress management and resilience, patience, clear communication.^[75]

Implementation of policies and strategies[edit]

• All policies and strategies must be discussed with all managerial personnel and staff.
• Managers must understand where and how they can implement their policies and strategies.
• An action plan must be devised for each department.
• Policies and strategies must be reviewed regularly.
• Contingency plans must be devised in case the environment changes.
• Top-level managers should carry out regular progress assessments.
• The business requires team spirit and a good environment.
• The missions, objectives, strengths and weaknesses of each department must be analyzed to determine their roles in achieving the business’s mission.
• The forecasting method develops a reliable picture of the business’s future environment.
• A planning unit must be created to ensure that all plans are consistent and that policies and strategies are aimed at achieving the same mission and objectives.

Policies and strategies in the planning process[edit]

• They give mid and lower-level managers a good idea of the future plans for each department in an organization.
• A framework is created whereby plans and decisions are made.
• Mid and lower-level management may add their own plans to the business’s strategies.

See also[edit]

• Certificate in Management Studies
• Engineering management
• Outline of business management

References[edit]

External links[edit]

Management is the coordination and administration of tasks to achieve a goal. Such administration activities include setting the organization’s strategy and coordinating the efforts of staff to accomplish these objectives through the application of available resources. Management can also refer to the seniority structure of staff members within an organization.

[toc]

In other words, Management is a technique of extracting work from others in an integrated and coordinated manner for realizing specific objectives through the productive use of material resources.

Mobilizing the physical, human, and financial resources and planning their utilization for business operations in such a manner as to reach the defined goals can be benefited management.

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Meaning of Management

Let’s understand the meaning of management in detail:

Management is a very broad term that can be analyzed in different ways. The meaning of management varies depending upon the context in which it is used. A few important meanings of management are stated below:

1. Management as a Noun
2. Management as a Process
3. Management as a Discipline
4. Management as a Profession

Management as a Noun

Management as a noun refers to all those persons who are engaged in managing a business organization and have both responsibility and authority to manage an organization and for those who are responsible for the work of others at all levels.

Management as a Process

Management as a process refers to a continuous and dynamic business process. Planning, organizing, staffing, directing, coordination, communication, motivation, and control are important aspects of the modern managerial process.

Management as a Discipline

Management as a discipline refers to various principles, practices, and techniques of management of a business organization. Like Economics, Sociology, and Philosophy it is an entirely different field and new subject.

As a branch of knowledge, it denotes a code of conduct for managers and prescribes the techniques, methods, and skills for managing things. It is a young discipline.

Management as a Profession

Like medicine, law, and teaching, management is also a profession. In any profession specialized knowledge, experience, and competency are needed, likewise, these things are also needed in studying management.

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Definition of Management

These are the simple and easy-to-understand definitions of management by authors:

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Nature of Management

Following are the nature of management explained below:

1. Art as Well as Science
2. Management is an Activity
3. A Continuous Process
4. To Achieving Pre-determined Objectives
5. Organized Activities
6. A factor of Production
7. Management as a System of Activity
8. Management is a Discipline
9. Management is a Purposeful Activity
10. Aims at Maximizing Profit
11. Decision-Making
12. Management is a Profession
13. Universal Application
14. Management is Getting Things Done
15. Management as a Class or a Term
16. Management as a Career
17. Direction and Control
18. Dynamic
19. Management is Needed at All Levels
20. Leadership Quality

Art as Well as Science

Management is both an art and a science. It is an art in the sense of possessing managing skills by a person. In another sense, management is a science because developing certain principles of laws that are applicable in a place where a group of activities is co-coordinated.

Management is an Activity

Management is the process of activity relating to the effective utilization of available resources for production. The term ‘resources’ includes men, materials, money, and machine in the organization.

A Continuous Process

The process of management mainly consists of planning, organizing, directing, and controlling the resources. The resources (men and money) of an organization should be used for the best advantages of the organization and its objectives.

The management function of anyone alone cannot produce any results in the absence of any other basic functions of management. So, management is a continuous process.

To Achieving Pre-determined Objectives

The objectives of an organization are clearly laid down. Every managerial activity results in the achievement of objectives fixed well in advance.

Organized Activities

Management is a group of organized activities. A group is formed not only in a public limited company but also in an ordinary club. All organizations have their own objectives. These objectives will be achieved only by a group of people.

These persons’ activities should be organized in a systematic way to achieve the objectives that cannot be achieved without any organized activities.

A factor of Production

The factor of production includes land, labor, capital, and entrepreneurs. Here, land refers to a place where production is carried on. Labour refers to the paid employees of the organization who are working at different levels as skilled, unskilled, semi-skilled, managers, and supervisors and like capital refers to the working capital in the form of cash, raw materials, and production.

According to Peter. F. Drucker, “whatever rapid economic and social development took place after World War II, it occurred as a result of systematic and purposeful work of developing managers and management. Development is a matter of human energies rather than of economic wealth and the generation of human energies is the task of management. Management is the mover and development is the consequence.”

Management as a System of Activity

A system may be defined as a set of component parts working as a whole. Authority may be defined as a right to command others for getting a particular course of organizational work done. Individuals are the foundation stones of management.

An individual has some goals as a member of the organization. There may be a conflict between his own goals and the management’s expectations of that individual. Such conflict is resolved by the management by ensuring the balance between individual goals and organizational expectations.

Authority is vested with many persons to take decisions and influence the behavior of the sub-ordinates. The very purpose of using authority rest with superiors as given in the organization chart and social norms. The utilization of authority is based on the personality factors of the user and the behavior of the person over whom it is used.

Management is a Discipline

The boundaries of management are not exact as those of any other physical science. It may be increased by the continuous discovery of many more aspects of business enterprise. So, the management status as a discipline is also increased in the same manner.

Management is a Purposeful Activity

Management is concerned with the achievement of the objectives of an organization. These objectives are achieved through the functions of planning, organizing, staffing, directing, controlling, and decision-making. The organizational objectives are clearly defined and explained to every employee.

Management is a Distinct Entity

Management is distinct from its functional activities. The functions have the nature of “to do” but the management has the nature of “how to get things done” A manager requires some amount of skill and knowledge to get work done.

Aims at Maximizing Profit

the available resources are properly utilized to get desired results. The results should be the maximizing profit or increasing profit by the economic function of a manager.

Decision-Making

There are a number of decisions taken by the management every day. Decision-making arises only where there is the availability of alternative courses of action. If there is only one course of action, the need for decision-making does not arise the quality of decisions taken by the manager determines the organization’s performance.

The success or failure of an organization depends upon the degree of the right decision taken by the manager.

Management is a Profession

Management is a profession because it processes the qualities of a profession. A fund of knowledge is imparted and transferred in this profession and the same is followed by management. The established principles of management are applied in practice.

Universal Application

The principles and practices of management are applicable not to any particular industry alone but applicable to every type of industry. The practice of management is different from one organization to another according to its nature.

Management is Getting Things Done

A manager does not actually perform the work but he gets the things done by others. According to Koontz and O’Donnell, “Management is the art of getting things done through and with people in formally organized groups”.

Management as a Class or a Term

A class may be defined as a group of people having homogenous characteristics to achieve common objectives. Engineers and doctors are grouped as a class in society. Each and every doctor has the same objectives in life just like engineers and doctors, the management people have got similar aspirations to achieve corporate objectives.

Management as a Career

Nowadays, management is developed as a career focused on certain specializations. Financial management, cash management, portfolio management, Marketing management, Personnel management, industrial management, and Business management are some of the specializations of management. Specialists are appointed to the key posts of top management.

Direction and Control

A manager can direct his subordinates in the performance of a work and control them whenever necessary. If the available resources are not unlisted properly by him, he fails to achieve the corporate objective in the absence of direction and control. Generally, direction and control deal with the activities of human effort.

Dynamic

The management is not static. In the fast-developing business world, new techniques are developed and adopted by the management. Management is changed according to social change. Social change is the result of the changing business world.

Management is Needed at All Levels

The functions of management are common to all levels of the organization. The top executive performs the functions of planning, organizing, directing, controlling, and decision-making. The same functions are also performed by the lower-level supervisor.

Leadership Quality

Leadership quality is developed in the persons who are working at the level of management. According to R.C. Davis, “Management is the function of executive leadership everywhere”.

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FAQ Related to Management

Management is a social process entailing responsibility for the effective and economical planning and regulation of the operations of an enterprise, in fulfilment of a given purpose or task, such responsibility involves:

• Judgment and decision in determining plans and in using data to control performance, and progress against plans; and
• The guidance, integration, motivation and supervision of the personnel composing the enterprise and carrying out its operations

In other words, Management is the process of controlling the whole productive machinery.”

So, management is an important factor in the business. It is considered as important as a brain in human body. Without a brain human body is only a collection of bones and fleshes which is of no use; likewise, if management is not in business it is only collection of money, machines, material and men which is not useful in achieving the objectives.

The management is not a matter of pressing a button, pulling a lever, issuing orders, scanning profit and loss statements, promulgating rules and regulations. Rather it is the process to determine what shall happen to the personalities and happiness of entire people, the power to shape the destiny of a nation and all the nations which make up the world.

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Definitions of Management

Management may be defined in many different ways. Many eminent authors on the subject have defined the term “management”, some of these definitions are reproduced below:

According to Lawrence A. Appley, “Management is the development of people and not the direction of things”.

According to Joseph Massie, “Management is defined as the process by which a co-operative group directs action towards common goals”.

In the words of George R Terry, “Management is a distinct process consisting of planning, organizing, actuating and controlling performed to determine and accomplish the objectives by the use of people and resources”.

According to James L Lundy, “Management is principally the task of planning, coordinating, motivating and controlling the efforts of others towards a specific objective”.

In the words of Henry Fayol, “To manage is to forecast and to plan, to organize, to command, to co-ordinate and to control”.

According to Peter F. Drucker, “Management is a multi-purpose organ that manages a business and manages managers and manages worker and work”.

In the words of J.N. Schulze, “Management is the force which leads guides and directs an organization in the accomplishment of a pre-determined object”.

In the words of Koontz and O’Donnell, “Management is defined as the creation and maintenance of an internal environment in an enterprise where individuals working together in groups can perform efficiently and effectively towards the attainment of group goals”.

According to Ordway Tead, “Management is the process and agency which directs and guides the operations of an organization in realizing of established aims”.

According to Stanley Vance, “Management is simply the process of decision-making and control over the actions of human beings for the express purpose of attaining pre-determined goals”.

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Concept of Management

The concept is the idea or image or understanding about things, activity or a person that emerges in the mind of a person. There are several different concepts about management. Economists have treated management as a factor of production; sociologists have treated it as a class or group of persons; practitioners have treated it as a process comprising different activates.

There are three basic concepts of Management

1. Management as a Discipline
2. Management as a Group of People
3. Management as a process

Management as a Discipline

Discipline refers to a field of study having well-defined concepts and principles. When we refer to management as a discipline, we include in it the various relevant concepts and principles, the knowledge of which aids in managing.

Management as a Group of People

We refer to management as a group of people in which we include all those personnel who perform managerial functions in organizations. We refer to two distinct classes or groups of personnel in the organization.

In the first category, we include all those persons who are responsible for managerial functions and in the second category, we include non-managerial personnel.

Management as a process

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Scope of Management

The scope of management is too wide to be covered in a few pages. It is very difficult to precisely state the scope of management. However, management includes the following aspects:-

• Economic Resource
• System of Authority
• Class or Elite
• Subject-matter of Management
• Functional Areas of Management
• Management is an Inter-Disciplinary Approach
• Principles of Management
• Management is an Agent of Change
• The Essentials of Management

Economic Resource

Business Economics classifies the factors of production into four basic inputs, viz. land, labour, capital and entrepreneur. By the use of all these four, basic production can be done. But to turn that into a profitable venture, an effective utilization of man, money, material, machinery and methods of production has to be ensured.

This is guaranteed by the application of management fundamentals and practices. The better is the management of an enterprise; the higher is its growth rate in terms of profit, sales, production and distribution. Thus management itself serves as an economic resource.

As already discussed, management is a system of authority. It formalizes a standard set of rules and procedure to be followed by the subordinates and ensures their compliance with the rules and regulations. Since management is a process of directing men to perform a task, authority to extract the work from others is implied in the very concept of management.

Class or Elite

Management is considered to be a distinct class that has its own value system. Managerial class, often referred to as a collective group of those individuals that perform managerial activities is essential component of each organization. The importance the class has become so huge that the entire group of mangers is known as “management” in every organization.

Subject-matter of Management

Management is considered as a continuing activity made up of basic management functions like planning, organizing, staffing, directing and controlling. These components form the subject matter of management.

Functional Areas of Management

Management covers the following functional areas:-

• Financial Management: Financial management includes forecasting, cost control, management accounting, budgetary control, statistical control, financial planning etc.
• Human Resource Management: Human Resource Management covers the various aspects relating to the employees of the organization such as recruitment, training, transfers, promotions, retirement, terminations, remuneration, labour welfare and social security, industrial relations etc.
• Marketing Management: Marketing management deals with marketing of goods, sales promotion, advertisement and publicity, channels of distribution, market research etc.
• Production Management: Production Management includes production planning, quality control and inspection, production techniques etc.
• Material Management: Material management includes purchase of materials, issue of materials, storage of materials, maintenance of records, materials control etc.
• Purchasing Management: Purchasing management includes inviting tenders for raw materials, placing orders, entering into contracts etc.
• Maintenance Management: Maintenance Management relates to the proper care and maintenance of the buildings, plant and machinery etc.
• Office Management: Office management is concerned with office layout, office staffing and equipment of the office.

Management is an Inter-Disciplinary Approach

Though management is regarded as a separate discipline, for the correct application of the management principles, the study of commerce, economics, sociology, psychology, and mathematics is very essential. The science of management draws ideas and concepts from a number of disciplines making it a multi-disciplinary subject.

Principles of Management

The principles of management are of universal application. These principles are applicable to any group activity undertaken for the achievement of some common goals.

Management is an Agent of Change

The techniques of management can be improved by proper research and development.

The Essentials of Management

The essentials of management include scientific method, human relations and quantitative techniques.

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Characteristics of Management

An analysis of the various definitions of management indicates that management has certain characteristics. The following are the salient characteristics of management.

• Management is universal
• Management is a social process
• Management is an integrating/unifying force
• Management is objective/ target oriented
• Management is dynamic, and not static
• Management is a system of authority
• Decision-making
• Continuous process
• Management is born as well as acquired ability
• Proper utilization of resources
• Intangible
• Management is a science as well as an art
• Modern management can be regarded as a profession
• Distinct Process
• Management is a group activity
• Management implies good leadership
• Management draws ideas and concepts from various disciplines
• Different Levels of Management
• Need of organization
• Management need not be owners

Management is universal

Management is applicable to all forms of human organizations whether it is profit- making or non- profit making. Management is not applicable to business undertakings only. It is applicable to political, social, religious and educational institutions also. Management is necessary when group effort is required

Management is an integrating/unifying force

Management is integrating people into a single working force with available physical resources. The essence of management is the integration of human and other resources to achieve the desired objectives. Managers seek to harmonize the individuals’ goals with the organizational goals for the smooth working of the organization.

Management is objective/ target oriented

Management is purposeful or goal-oriented activity. The success of management is measured by the extent to which organization goals are achieved.

Management is dynamic, and not static

Management is not a stereotype activity but is ever changing. It is a complex and dynamic activity. Management adapts itself to changes in environment, and also initiates and introduces changes i.e. Innovations, change in methodology etc.

Management is a purposeful activity. It coordinates the efforts of workers to achieve the goals of the organization. The success of management is measured by the extent to which the organizational goals are achieved. Management is concerned with directing and controlling of the various activities of the organization to attain the pre-determined objectives.

Every managerial activity has certain objectives. In fact, management deals particularly with the actual directing of human efforts.

Management is a system of authority

Decision-making

Continuous process

Management is not one time activity, but it is continuous activity. The cycle of management continues to operate so long as the organizations continue to exist.

Management is born as well as acquired ability

Management is considered not only as an inborn ability but also an acquired ability by proper training.

Proper utilization of resources

Management is concerned with the best and proper utilization of the resources.

Intangible

Management is intangible, it cannot be seen with eyes, it is evidenced or measured only by the quality results of organization, such as increased productivity, the increased morale of the employees etc. Management has been called an unseen force.

Its presence is evidenced by the result of its efforts – orderliness, informed employees, buoyant spirit and adequate work output. Thus, feeling of management is result-oriented.

Management is a science as well as an art

Management has an organized body of knowledge consisting of well-defined concepts, principles and techniques which have wide applications. So it is treated as a science. The application of these concepts, principles and techniques requires specialized knowledge and skills on the part of the manager. Since the skills acquired by a manager are his personal possession, management is viewed as an art.

Modern management can be regarded as a profession

Management is gradually becoming a profession because there are established principles of management which are being applied in practice, and it involves specialized training and is governed by ethical code arising out of its social obligations.

Distinct Process

Management is a distinct process consisting of such functions as planning, organizing, staffing, directing, and controlling. These functions are so interwoven that it is not possible to lay down exactly the sequence of various functions or their relative significance. Management enjoys the separate status in the organization, so, management is a distinct activity.

Management is a group activity

Management comes into existence only when there is a group activity towards a common objective. Management is always concerned with group efforts and not individual efforts. To achieve the goals of an organization management plans organizes, coordinates, directs and controls the group effort.

Management implies good leadership

A manager must have the ability to lead and get the desired course of action from the subordinates. According to R. C. Davis – “management is the function of executive leadership everywhere”. Management of the high order implies the capacity of managers to influence the behavior of their subordinates.

Management draws ideas and concepts from various disciplines

Management is an interdisciplinary study. It draws ideas and concepts from various disciplines like economics, statistics, mathematics, psychology, sociology, anthropology etc.

Different Levels of Management

Management is needed at different levels of an organization namely top level, middle level and lower level.

Need of organization

There is the need of an organization for the success of management. Management uses the organization for achieving pre-determined objectives.

Management need not be owners

It is not necessary that managers are owners of the enterprise. In joint stock companies, management and owners (capital) are different entities.

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Importance of Management

Management acts as a creative and life-giving force in the organization. Management by right men through right methods may give better results. It is properly said that business is built not by the technical ability of specialists but largely by good managers who can effectively utilize human skill, energy and efficiency for transforming resources with higher productivity.

Management is considered to be the brain of business, which plans, coordinates resources of production, gets the things done through other people and accomplishers objectives.

More significance or importance of management can be explained with the help of the following points:

• Management meets the challenge of change
• Accomplishment of various interests of different groups
• Effective utilization of resources
• Stability to society
• Innovation
• Co-ordination and team spirit
• Social responsibilities
• Development of country
• Effective functioning of business
• Resource development
• Sound organizational structure
• Management directs the organization
• It integrates various interests
• It stabilizes the fluctuations
• Tackling and solving problems
• Management is a tool for personality development

Management meets the challenge of change

Accomplishment of various interests of different groups

There are various groups such as shareholders, society, which have various interests in the business. The survival of the business depends on the satisfaction of these stakeholders. Management can skillfully integrates the interests of these different groups and obtain their support.

Effective utilization of resources

The efficient management can make optimum use of resources, (i.e. – Men, Money, Materials, Machines, Methods, Motivation, Markets and Management.) Underutilization or over utilization of resources should be avoided and this can be done by management only because Management has control over other remaining ‘M’s.

Stability to society

If there is no smooth supply of goods and services to society, the society becomes vibrant. There fluctuations in supply can be stabilized by the management.

Innovation

New ideas are developed by the management and implemented in the business for better performance.

Co-ordination and team spirit

Management coordinates the activities of different department and establishes team- spirit to achieve the objectives.

No organization can run its function in isolation from society. A number of responsibilities have to be discharged for the upliftment of society. The management plays an important role in discharging the responsibilities towards society.

Development of country

The management helps in infrastructural development of the nation, in increasing GDP, capital formation, national income etc.

Effective functioning of business

Ability, experience, mutual understanding, coordination, motivation and supervision are the factors responsible for effective functioning of the business.

Resource development

The resources viz. men, machines, materials and money have to be developed by the management.

Sound organizational structure

It clearly defines the authority and responsibility relationship of employees. Care must be taken to appoint right persons to the right job.

Management directs the organization

Similar to human mind directing and controlling human body, management directs and controls the organization.

It integrates various interests

Management takes steps to integrate various interests of employees working in the organization.

It stabilizes the fluctuations

The business always has ups and downs. These fluctuations are stabilized by the management.

Tackling and solving problems

Good management acts as a friend and guide to the employees to solve the day-to-day problems for effective performance.

Management is a tool for personality development

New methods and techniques are taught to workers. Training facilities are arranged by the management. Thus, there is personality development in the employees.

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Functions of Management

There are five major functions of management which are given below:

1. Planning
2. Organising
3. Staffing
4. Directing
5. Controlling
6. Other Functions of Management

Planning

It involves anticipating all possible future conditions and deciding the future course of action. In other words, planning involves setting future goals and objectives and devising the methods and means for achieving those objectives. The function is carried out at all levels of an organisation i.e., top, middle and lower management levels, and in all divisions, departments, business units and sub-units.

Organising

It involves two major activities: one is to establish an organisational structure and the other is to arrange all necessary resources (such as men, machines, materials, methods, money and market) so that work can be performed effectively.

An organisational structure is a diagrammatic representation of how different roles, powers, authorities and responsibilities are assigned in an organisation. You will study the organisational structure and its functions in detail later in the book.

Staffing

This function is all about recruiting people with the required skill sets. It involves evaluating the existing skills and knowledge of candidates before offering them specific job roles. Staffing is an ongoing function as employees keep on leaving and joining an organisation.

Directing

After the managers have established goals, created the organisational structure, recruited people and trained them, it is time for directing the employees and facilitating coordination among them so that work can be performed on time in order to meet the set goals.

Controlling

This function involves ensuring that work is performed as per the plans developed and instructions issued. The controlling function includes three main activities, which are:

• Establishing the required performance standards
• Assessing the current performance level and comparing it with the established standards
• Take corrective actions in case the actual performance deviates from the established standards.

Other Functions of Management

1. Coordinating
2. Reporting
3. Budgeting

Coordinating

This key function of management implies interrelating the various work components and processes to ensure smooth functioning in an organisation. Coordination is used to synchronise and integrate the activities, responsibilities, command control, structures and resources of an organisation to achieve organisational objectives.

Reporting

This function of management is significant for controlling and planning functions. The reporting function involves giving a regular update to the superiors about the progress of the work assigned to subordinates. The information is disseminated through records or inspection.

Budgeting

The budgeting function of management comprises all the activities that fall under auditing, accounting, fiscal planning and control. Budgeting is used to do all forms of planning related to the sources of income, accounting and control of expenditures.

It is the process of creating a plan to spend the available money. It is used to determine in advance whether an organisation has enough money to execute activities smoothly or not.

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Functional Areas of Management

As mentioned above, management has a wide scope in different areas due to its social and universal nature. Therefore, the functional areas of management have widened due to its inter-disciplinary approach.

There are four major functional areas of management as shown in Figure below:

• Production and operations
• Marketing
• Finance
• Human Resource (HR)
• Information Technology (IT)/Information and Communication Technology (ICT)
• Logistics and Distribution

Production and operations

The production and operations function converts inputs, such as land, labour and raw materials into goods and services in the right quantity at the right cost and at the right time.

The production function includes various subordinate functions which are as follows:

• Developing product designs
• Selecting the plant location and layout
• Purchasing and storing materials
• Planning and controlling the production operations
• Carrying out repair and maintenance works
• Ensuring inventory control
• Ensuring quality control

Marketing

Under the marketing function, managers need to identify consumers’ needs and provide them the goods and services to satisfy their needs. The scope of the marketing function is quite wide and it includes various subordinate functions which are as follows:

• Carrying out marketing research to determine the exact needs and expectations of consumers
• Developing suitable products
• Setting prices
• Selecting marketing strategies
• Selecting appropriate marketing channels

Finance

Finance is an extremely important functional area of management and the main activity of finance is to ensure that there are sufficient funds in the organisation for carrying out different activities, such as procurement, working capital management, debt repayment, etc. In addition, the finance function involves determining financial strategies, such as expansion, diversification, joint ventures, mergers and acquisitions.

The three major subordinate functions of finance are as follows:

• Financial planning: This sub-function relates to decisions, such as raising funds, deciding about the amount to be raised and estimating the costs (interests) and risks associated with raising funds.
• Financial control: This sub-function involves monitoring the finance-related operations of an organisation.
• Financial decision-making: This sub-function relates to the use of funds that have been raised by the organisation.

Human Resource (HR)

The human resource function relates to the management of various aspects related to human resources such as:

• Taking care of employee compensation and benefits
• Maintaining employee database
• Planning the staff and workforce requirements
• Appraising employee performance and promotions
• Devising HR policies
• Taking care of recruitment, selection and training and development processes

Information Technology (IT)/Information and Communication Technology (ICT)

It involves managing information and communication technology tools and techniques that collect, organise, and distribute data for use in the organisation’s decision-making purposes.

The significant aspects related to IT/ICT are as follows:

• It is committed to develop the organisation’s hardware, software, and other computing and communicating technologies.
• It develops the organisation’s management information system (MIS) tailored to the needs of the firm’s units.
• It also encourages e-commerce through the use of the Internet.

Logistics and Distribution

In simple terms, logistics refers to the planning and controlling the movement of goods. Logistics and distribution functional area ensure that goods are delivered to the right place on time and in the right condition.

Some major aspects of logistics and distribution are as follows:

• Ensuring that the process of the finished goods leaving a factory and arriving at a store is predefined and hurdle free
• Ensuring the proper storage of goods before dispatch
• Ensuring that dispatched goods are firmly packed and appropriately labelled
• Ensuring the dispatch of goods at the right time
• Ensuring the completion of the delivery documents

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Levels of Management

Management involves a set of functions performed by people in an organisation who are bound together in a hierarchy of relationships. Every person in the organisational hierarchy is responsible for the successful completion of particular tasks. To perform these tasks successfully and make decisions, individuals are given a certain degree of authority, which lead to the creation of different levels in the organisational hierarchy.

Generally, there are three levels of management as shown in Figure:

Let us now study about these three levels of management:

• Top-level management
• Middle-level management
• Lower-level management

Top-level management

This level is comprised of corporate heads, such as chief executive officer (CEO), chief financial officer (CFO), chief operating officer (COO), and chief information officer (CIO), president, vice president, chairman, managing directors and executive directors.

These corporate heads are responsible for performing the following functions:

• Determining organisational goals and objectives and formulating plans, strategies and policies accordingly
• Organising and arranging resources
• Communicating with the public, government and other external agencies
• Controlling and overseeing organisational activities
• Preparing long-term plans (usually for 5 years or more) and making strategic (strategy-level) decisions

Middle-level management

This level comprises business heads, such as departmental heads, general managers and regional managers. These business heads are responsible for performing the following functions:

• Subordinating the top-level management
• Supervising the lower-level management
• Organising departmental activities
• Recruiting and selecting the workforce
• Controlling resources and executing organisational plans
• Ensuring adherence to the organisation’s policies
• Acting as a connecting link between the top-level and lower-level management
• Co-ordinating and communicating
• Preparing short-term plans (usually for 1-5 years or more)
• Compiling the relevant data and generating reports for top-level management
• Motivating lower-level managers

Lower-level management

This level includes functional heads, such as supervisors and team leaders, who are primarily responsible for the following functions:

• Supervising baseline workers and putting plans into actions
• Helping middle-level managers in the recruitment and selection process
• Making operational or functional-level decisions
• Controlling and directing the work of baseline workers
• Communicating with baseline workers about the decisions of middle and top levels of management.
• Preparing daily, weekly or monthly plans

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Management Topics

When we go to restaurants, why is it that we want to speak to the managers when we’re not happy with our food? A restaurant—like every other business—relies on managerial structures and levels to make sense of the roles and responsibilities of every individual member. Management is a complicated subject and it’s often viewed as a discipline or a process to enhance organizational success.

Wondering how to wrap your head around such a multifaceted concept? Read on to learn more about the nature and scope of management and see how this simple concept dominates professional environments.

1. What Is Management?

3. Tips For Effective Management

What Is Management?

The word management refers to all the tasks and activities undertaken by the people in an organization for the successful achievement of goals and targets. It involves continuous activities such as planning, organizing, leading and monitoring physical, financial and information resources. Any organization’s success depends on the strength of those in management positions.

The term management is flexible and has been used in various ways. While it refers to organizational activities, it also denotes a body of knowledge or discipline. Some describe it as a means of leadership while others view it as an economic resource. To understand the meaning and nature of management, let’s look at the concept from a broader perspective. Here are various categories that describe management in multiple contexts.

1. Management As A Process

As a process, management aims at increasing productivity and efficiency in an organization. The purpose is to strengthen the client base, improve the knowledge, skills and capacity of employees to achieve particular targets and goals. Management is also a never-ending process that brings different teams and individuals together. Everyone works in harmony to achieve common objectives.

1. Management As An Activity

As an activity, management looks at the daily tasks and accomplishments of an employee. It helps them prioritize activities and monitor progress, which further helps them grow in their roles. It prevents miscommunication and task repetition as everyone is aware of their roles and responsibilities. There is clarity and accountability—the cornerstones of business growth and success.

1. Management As A Profession

Management as a profession has been popularized by courses and academic institutions across the globe. Several organizations prefer individuals with a Master of Business Administration (MBA) degree. Specialized knowledge (such as an MBA degree) provides an individual with a competitive edge, making them more desirable for managerial roles. Therefore, management has evolved as a body of knowledge that continues to solve various workplace problems.

What Is The Nature And Scope Of Management?

As we’ve already established, different people view management differently. Therefore, defining the nature and scope of management becomes quite challenging. Let’s look at each of these terms independently and see how they play out in the context of management.

• Nature Of Management

Management—as a systematic process—helps identify a group of people who carry out particular activities, thereby improving an organization’s efficiency and effectiveness. Here are the salient features that highlight the nature of management in businesses.

1. Universality

Management is a universal process and is essential for all organizations. If there is human activity, there is management. The principles of management are applicable irrespective of the size and location of a business. The universal principle also means that managerial skills can be developed over time and they’re transferrable.

1. Social Process

The nature of management involves organizing people in groups and managing them. It requires different levels of empathy, understanding and dynamism. In addition to taking care of social and emotional well-being, the process involves developing, motivating and retaining employees.

1. Purposeful

Management always has an end goal of achieving an organization’s targets, mission and vision. The success of management can be measured by the extent to which an organization achieves its objectives. There is an underlying purpose of increasing efficiency and productivity. The objectives should be realistic, attainable and time-bound.

1. Intangible

There is no physical proof of the management process. Its success can be measured by the outcomes of its efforts. For example, lower turnover rates indicate there’s high employee engagement and job satisfaction. This further shows that managers or individuals in managerial roles have taken proactive steps toward improving employee retention.

1. Coordination

Management coordinates all the functions of an organization by bringing together different teams and departments. Without coordination, there would be ambiguity and chaos. Therefore, by getting people on the same page, there is communication and minimized duplication of efforts.

1. Creativity

Management is made up of individual components and is a composite process. Every independent component contributes in unique ways. For example, group efforts encourage creative ideas and imagination. The sum of individual efforts creates synergy and something new is born.

1. Dynamic Function

Management should be dynamic at its core because businesses are often influenced by economic, social, political and technological factors. With room for flexibility and adaptability, individuals can perform well even in stressful situations. There should be adequate training and facilitation within the process.

• Scope Of Management

Clearly defined responsibilities, concepts, theories and principles related to managerial functions define the scope of management. Let’s look at the various aspects of this.

1. Financial Management

Every enterprise prioritizes financial management because finances can get extremely tricky if not managed properly. Effective financial management ensures there are fair returns to stakeholders, proper estimation of capital requirements and laying down optimal capital. It includes preparation and examination of financial statements, creating proper dividend policies and negotiations with external stakeholders.

1. Marketing Management

The scope of management in marketing extends to planning, organizing, directing and controlling activities in the marketing department. Identifying customer requirements is crucial for providing business solutions. When a manager is fully aware of the benefits of the products and/or services the organization provides, they achieve better results. Marketing management ensures that available resources are properly utilized and the best possible outcomes are achieved.

1. Personnel Management

Personnel management—as the name suggests—deals with personnel or individuals in a business environment. It includes the recruitment, transfer, termination, welfare and social security of employees. This aspect of management is extremely important as employees form teams and teams drive an organization’s goals. Individual productivity also contributes to overall efficiency. Without attending to employee needs and wants, an organization is likely to struggle.

1. Production Management

This type of management refers to the process of creating utilities. When you convert raw materials to finished products and oversee the planning and regulation, you’re engaging in production management. Without production, there isn’t any finished good or service and without it, organizations can’t generate interest or profits. The final product must fulfill customer requirements. The process includes quality control, research and development, plan layout and simplification.

1. Office Management

This includes controlling and coordinating all office activities to achieve an organization’s goals and targets. For example, an administration’s efficiency impacts a business significantly. The more organized the departments and responsibilities are, the more effective an organization is.

Tips For Effective Management

Now that you’re aware of the nature of business management, let’s look at the different ways in which you can enhance your managerial skills.

• Communication is the key to successful management; if you want to successfully achieve an organization’s targets, you must communicate the overall needs and expectations with your team

• Management is a continuous process; there will be times when you need to assess your team’s skills and train them to foster growth and professional development

• Everyone should be on the same page when it comes to accomplishing common objectives; you need to delegate responsibilities and trust your team to do the job—hold them accountable and guide them wherever necessary

• The primary objective of management is to achieve goals; you need to be goal-oriented, have measures in place to track progress and get involved in strategic planning and development

• Management isn’t easy and there will be plenty of roadblocks and setbacks that may obstruct your progress; a positive mindset helps deal with challenges more effectively

Harappa’s Managing Teamwork course will help you meet your goals by harnessing various skills of team members. You’ll collaborate with multiple team members through open dialogue and discussion. The GRIN (Goals, Roles, Interdependence, and Norms) Framework will guide you in understanding the four characteristics of effective teams. You’ll learn to navigate your team’s needs and expectations through the Skill-Will Matrix. Leadership is a core management function; set the direction and help your team excel in every sphere of work!

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Explore Harappa Diaries to learn more about topics related to the COLLABORATE habit such as What is Teamwork, Delegation of Authority, The Difference Between Leadership and Management, Importance of Strategic Management & Functions of Management to improve your managerial skills.

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