Chapter 5: Management: Meaning, Nature and Importance
A factory employing three hundred people has purchase clerks ordering material, operators running machines, a sales team booking orders and an accounts section releasing payments. Every one of these groups may work efficiently and the firm can still fail — material arriving after the machines have been reset, orders accepted that the plant cannot deliver, cash locked up in stock that no customer has asked for. Effort is not what is missing; common direction is. Supplying that direction is the work of management, the task of getting results through others by coordinating their efforts. Wherever an organised group works towards a common goal, some form of it becomes necessary. The term is used in more than one sense: for the activity of getting things done, for the people who do it, for the subject taught in institutions, and for the process of interrelated functions by which an enterprise is run. This chapter examines management in each of these senses, together with its characteristics and objectives, its nature as a science, an art and a profession, its importance to business and to the nation, and the levels at which it is carried on.
Figure
Fig. 5.0-1 — Coordinating Work On The Factory Floor Photograph of a supervisor standing beside a production line with a small group of workers, going through a work schedule with them.
5.1 What Management Means
No individual can satisfy all his wants alone, and no undertaking of any size can be carried on by one person. People therefore work in organised groups — a business firm, a school, a hospital, a government department, a sports team — and each member of the group takes up a part of the total task.
A group of this kind does not reach its goal simply because every member works hard. The purchase section may buy well and the production section may produce well, and the firm may still fail because the two were never brought into line with each other. What the group lacks is not effort but direction. The task of getting results through others by coordinating their efforts is known as management.
The comparison often drawn is with the human mind, which regulates and holds together the separate activities of one person. Management performs that office for an organisation. Wherever an organised group works towards a common goal, some form of it becomes necessary, whether or not anyone in the group is called a manager.
The term itself is used in four different senses. It is used for the activity of getting things done, for the body of people who do it, for the subject of study, and for the process by which an enterprise is run. These are not four rival meanings but four ways of looking at the same thing.
5.1.1 Management as an Activity
As an activity, management is the art of getting things done through the efforts of other people. A manager is not judged by what he produces with his own hands; he is judged by what he obtains from those who work under him. This single feature explains the character of the activity.
- It is an interpersonal activity — since results have to be obtained through others, a manager spends most of his working time dealing with people, persuading, instructing and settling differences among them.
- It is a group activity — a manager coordinates the efforts of a number of people, and the word carries no meaning where a person works entirely alone.
- It is a goal-oriented activity — the efforts are directed at results decided in advance, since coordination without a goal has nothing to coordinate towards.
- It is a decisional activity — at every step a choice has to be made between courses of action, and managers both receive information and pass it on while running the enterprise.
The Five Ms
An enterprise works with five kinds of inputs: men, materials, machinery, money and methods. These are called the five Ms of management. None of the last four can be put to use until the first is organised to use them, and it is management that combines all five into a productive enterprise rather than a collection of idle resources. The relationship is set out in FC 5.1.
Flowchart
FC 5.1 — The Five Ms Coordinated By Management Men, Materials, Machinery, Money, Methods → integrated and directed by Management → goods and services, profits, employment, satisfied customers
5.1.2 Management as a Group
As a group, management is a collective noun standing for all those persons who perform the task of managing an organisation. It includes the board of directors, the chief executive, departmental heads, branch managers, superintendents and supervisors. Every manager from the chief executive down to the first-line supervisor forms part of it.
In ordinary use the word is applied more narrowly. When a company’s management is described as sound, the reference is usually to the senior persons who direct it rather than to the whole body of managers.
Managers do not all hold authority of the same degree. Management is therefore a hierarchy, a network of superior–subordinate relationships in which authority passes downwards and accountability upwards. Because it frames the rules of work and enforces them, it is described as a rule-making and rule-enforcing body.
Managers reach their positions by different routes.
- Family managers — persons who manage because they own the business or are related to those who own it.
- Professional managers — persons appointed on the strength of a degree or diploma in management and of their record, whether or not they hold any shares.
- Civil servants and officers — persons drawn from government service who manage public sector undertakings.
5.1.3 Management as a Discipline
As a discipline, management is a specialised branch of knowledge that can be taught and learnt. It has a systematised body of principles and techniques, a literature of its own, and a place as a separate field of study within the social sciences.
It is a comparatively young discipline, but a fast-growing one, and admission to institutes of management education is keenly sought. As a subject of study it is divided into specialised areas such as financial management, marketing management, personnel management and production management.
This sense of the term explains why management can be transferred from one person to another at all. Knowledge that has been systematised can be taught, and a manager trained in one enterprise can carry that knowledge into another.
5.1.4 Management as a Process
As a process, management is what managers actually do. It is called a process because it consists of a series of interrelated functions — planning, organising, staffing, directing and controlling — performed in an orderly sequence and held together by coordination. Each of these functions is examined in a later chapter; here they matter only as the content of the process.
The functions are performed to convert inputs into outputs, that is, to turn men, materials, machinery, money and methods into goods and services. Seen in this way the process has certain features.
- It is an integrated process — it brings human, physical and financial resources together and combines them, since none of them yields a result on its own.
- It is a continuous process — the functions do not end with one cycle of work but begin again, because fresh objectives and fresh problems arise constantly.
- It is an iterative process — the functions are contained within one another, so that a manager preparing a plan is at the same time laying down the standards against which he will later control.
- It is a social process — the functions are performed with and through people, whose willingness cannot be assumed and has to be secured.
- It is a universal process — the same functions are performed in every organisation, whatever its nature, size or ownership.
The Four Senses Together
The four senses answer four different questions about the same subject: what is done, who does it, what is studied, and how it is carried on. A textbook may treat them separately, but in an enterprise they occur together — a group of persons applies a body of knowledge to carry on an activity through a process. The comparison is drawn together in Table 5.1.
5.2 Concepts and Definitions of Management
Writers on management have defined the term in widely different words, and a student meeting eight definitions for the first time may suppose that they contradict one another. They do not. Each definition was framed to answer a particular question about the manager’s task — what he does, what he is expected to achieve, whom he works through, what his distinctive contribution is — and each therefore lights up one part of the subject and leaves the rest in shadow.
For this reason the important definitions are grouped by the concept behind them rather than listed one after another. Five such concepts are recognised, and they appear below in the order in which management thought developed.
5.2.1 Classical Concept
The classical concept treats management as a process, that is, as the set of functions a manager performs. Henry Fayol described managing as forecasting and planning, organising, commanding, coordinating and controlling, and George R. Terry described it as a distinct process of planning, organising, actuating and controlling, carried on to determine and accomplish stated objectives through people and other resources.
The value of this view is that it identifies management by the work done rather than by the person doing it. Because the same functions are performed by a chief executive and by a factory supervisor, management can be recognised at every level of an enterprise and in every kind of organisation.
Its limitation is that these definitions fix attention on the attainment of the enterprise’s own objectives and say nothing of its obligations to society. They state what a manager does without stating what his work is finally for.
5.2.2 Productivity Concept
The productivity concept treats management as the art of raising output. F. W. Taylor described it as knowing exactly what one wants people to do and then seeing that they do it in the best and cheapest way, and John F. Mee described it as securing maximum results with a minimum of effort, so as to bring the greatest prosperity to employer and employees alike and give the public the best possible service.
This concept supplies management with a test of performance. A manager is judged not by activity but by the ratio of results obtained to resources consumed, and waste of any of the five Ms is a managerial failure whether or not the target was met.
Its limitation is that it makes productivity the sole object of the exercise. Men are counted with materials and machinery as inputs, and the willingness of people, on which every human activity depends, is left out of the reckoning.
5.2.3 Human Relations Concept
The human relations concept, also called the neo-classical concept, treats management as the art of working with and through people. Harold Koontz described it as getting things done through and with people in formally organised groups, and Lawrence A. Appley went further, holding that management is the development of people rather than the direction of things.
The correction it makes to the earlier view is a real one. Principles and techniques cannot raise output by themselves; they raise output only when the people who must apply them are willing to do so. On this view the manager’s business is to create an environment in which individuals can perform well and cooperate with one another, and to remove the obstacles that stand in the way of such performance.
Its limitation is the opposite of the productivity concept’s. In placing the whole weight on people it says little about the functions a manager performs and little about the systematic knowledge on which his work rests.
5.2.4 Decision-Making and Leadership Concept
The decision-making and leadership concept treats management as the art and science of choosing between courses of action and of leading others to follow the choice. Ross Moore held simply that management means decision-making, while Ralph C. Davis described it as the function of executive leadership wherever it is exercised.
The concept rests on a sound observation. A manager is called upon to decide at every step — what to produce, from whom to buy, whom to appoint, when to expand — and the quality of these decisions largely settles the future of the enterprise. Leadership is the second half of the same point, since a decision that subordinates will not follow is of no use.
Its limitation is that management is wider than deciding and leading. A decision changes nothing until it is put into effect, and securing that effect calls for organising, staffing and control besides.
5.2.5 Integration Concept
The integration concept is the modern view and treats management as the force that brings the resources of an enterprise into a single working combination. Keith and Gubelini described management as the force that integrates human and non-human resources into an effective operating unit, and Robert L. Trewatha and M. Gene Newport described it as the process of planning, organising, actuating and controlling operations so as to achieve the coordination of human and material resources needed for the effective and efficient attainment of objectives.
The concept does not reject the four earlier views; it absorbs them. Functions are performed, productivity is sought, people are worked with and decisions are taken, but none of these by itself explains why an enterprise succeeds where a rival with the same men, machines and money fails. What separates the two is the degree to which the resources have been brought into combination, and supplying that combination is held to be the manager’s distinctive contribution.
Seen this way, the various definitions of management are not contrary to one another. Management is the sum of these viewpoints, and the differences between them are differences of emphasis. Table 5.2 sets the five concepts side by side.
5.3 Characteristics of Management
The features of management are not a list to be committed to memory for its own sake. Each of them follows from the one fact established earlier — that a manager secures results through the efforts of other people. Because he works through others and not by himself, his work must be of a certain kind, and the twelve characteristics below describe that kind.
They are also the form in which the subject is most often tested. A situation is described and the feature at work in it has to be named, so the reason behind each feature matters as much as its name.
The Salient Features of Management
- Goal-oriented — management exists to secure results and is measured by the results secured, not by the effort spent. Since it is judged by the fulfilment of desired goals, effective management is always management by objectives.
- Universal or all-pervading — the problem of coordinating group effort arises wherever people work together, so management is required in business and non-business organisations alike, in small firms and large ones, and at every level of authority from the top to the shop floor.
- A group activity — it is concerned with the efforts of a number of people and unites those efforts so that the members function as a team. Where a person works entirely alone there is nothing to coordinate and no management.
- A system of authority — coordination is possible only if someone is entitled to direct and others are bound to comply. Management is therefore a rule-making and rule-enforcing authority, resting on a chain of command and on well-defined superior–subordinate relationships at every level of decision-making.
- A social process — results are obtained with and through human beings, whose willingness cannot be assumed and has to be secured by direction, regulation and coordination. The human factor is an indispensable part of the task and not one input among several.
- A dynamic function — the environment in which an enterprise works keeps changing, so policies and practices have to be moulded to it continuously; managers also attempt to modify the environment in the enterprise’s favour. On both counts management is a never-ending process.
- Both an art and a science — it is a science in that it rests on principles of general application, and an art in that the results obtained depend on the personal skill with which those principles are applied. The two are complementary rather than opposed.
- A distinct entity — management is a distinct process performed to determine and accomplish objectives, and is separate from the activities, techniques and procedures it directs. Managing a factory is not the same work as operating its machines.
- Intangible — management is an invisible force. It cannot be seen, but its presence is felt in the form of results: orders delivered on time, materials available when needed, work carried on without confusion. The people who manage are visible; the management itself is not.
- An integrating force — it reconciles individual goals and activities so that the total result is greater than the sum of the separate contributions, and it combines human effort with non-human resources.
- Multi-disciplinary — the problems a manager faces do not fall within any single subject, so knowledge drawn from economics, sociology, psychology, anthropology and mathematics is applied to solve them. Management is in this sense an applied discipline.
- Creative — management makes things happen that would not otherwise happen. It activates the other resources and makes them productive, for without it resources remain resources and never become output.
How the Features Hang Together
Taken singly the twelve features may look like unrelated items. Taken together they describe a single kind of work: a purposeful, continuous, invisible activity, carried on by a group under authority, drawing on knowledge from several subjects, and applied through personal skill to turn scattered resources into results.
This is also why no organisation outgrows the need for management. As an enterprise becomes larger the coordination problem becomes harder, not easier, and the features described above become more pronounced rather than less.
5.4 Objectives of Management
The characteristics describe what management is like; its objectives state what it is for. An objective is an end that management is set to achieve, and since management exists only to secure results, it is by its objectives that its success is finally judged.
These ends are not chosen by managers to suit themselves. An enterprise depends on investors who expect a return, on employees who expect a livelihood and fair treatment, and on customers and the community who expect goods worth what is paid for them. The objectives below are the claims of these different groups, translated into the work of management.
The Main Objectives of Management
- Profitability — management must see that the enterprise earns profits sufficient for its various needs, since investors have to be given a reasonable return in the form of dividend or interest, and a firm that does not earn cannot replace what it uses up. Profits are earned by making the best use of men, money, materials and machinery, that is, by securing maximum output at the lowest possible cost.
- Prosperity and growth — management should aim at improving the performance of the organisation continuously and at creating conditions for expansion and diversification. A firm that merely maintains itself in a growing market is in fact losing ground to its rivals.
- Change and innovation — an enterprise works in an environment that will not stay still, so management must aim at technological and other innovations that allow it to meet the uncertainties of the future. In this it serves as the agent of change and progress, and continuous research and development becomes necessary rather than optional.
- Development of people — people matter more than things, and an enterprise cannot grow faster than the people who run it. Management should therefore mobilise the best talent available and develop it by encouraging initiative, skill and technical competence, and by providing opportunities for training and for participation in management.
- Discipline and morale — management aims at improving discipline by exercising authority, assigning responsibility and introducing procedures of evaluation and control. Discipline maintained by these means alone would be resented, so it is accompanied by financial and non-financial incentives and by a work environment in which people feel a sense of achievement.
- Rightful decision-making — decisions are taken at every step of the business, and their quality often settles the future of the enterprise. Management therefore aims not merely at deciding but at making the right decision at the right time, since a sound decision taken too late is of little use.
- Improving image — good management attempts to build and maintain a sound reputation for the organisation, because customers, lenders and prospective employees deal with a firm partly on the strength of its standing. The image is built by efficient and smooth running of the business through better planning and effective control, not by publicity alone.
- Quality goods at fair prices — management aims at supplying products of better quality at reasonable prices. To do so it eliminates wastage of every kind and reduces the cost of production, and in this way serves the community while keeping the enterprise competitive.
5.5 Nature of Management: Science, Art and Profession
Asking what kind of subject management is may look like a question for the classroom alone, but a good deal follows from the answer. If management is a science, it can be set down in books and taught to a person who has never managed anything. If it is an art, no amount of reading will make a manager out of someone who cannot handle people. If it is a profession, entry to it can be regulated, standards can be enforced and misconduct can be punished, as they are in medicine and in accountancy.
The question is settled the same way in each case. The essential features of a science, of an art and of a profession are stated first, and management is then measured against them. The three tests and what each requires are set out in FC 5.2.
Flowchart
FC 5.2 — Nature Of Management Nature of Management → Science, Art, Profession; Science → systematised body of knowledge, principles based on observation and experiment, cause and effect relationship, universal validity of principles; Art → practical knowledge, personal skill, creativity, perfection through practice; Profession → specialised body of knowledge, formal education and restricted entry, service motive, statutory body, ethical code of conduct
5.5.1 Management as a Science
A science is a systematised body of knowledge built up by observation and experiment, made up of principles that establish a relationship between causes and their effects. Its essential features are a systematised body of knowledge, principles based on observation and experiment, an established cause-and-effect relationship, and the universal validity of those principles.
Management answers to these requirements, though not equally to all four.
- Systematised body of knowledge — management has a body of principles and concepts arranged in an orderly way, which is why it can be taught as a subject and carried by a manager from one enterprise to another.
- Principles based on observation and experiment — the knowledge has been built up by practitioners and researchers through careful observation, enquiry and experience. The observation is not wholly objective, however, because the subject matter is human beings, whose behaviour cannot be watched without affecting it.
- Cause and effect relationship — the principles do connect causes with effects. Placing a subordinate under two superiors, for instance, is known to produce confusion and divided loyalty.
- Universal validity of principles — the principles apply widely and their results can be tested, but they do not hold with the exactness of the physical sciences and have to be modified to suit the situation.
Management is therefore a science, but a social science. Since it deals with people and their behaviour, its principles cannot be established by laboratory experiment and cannot be treated as fundamental truths that hold in every case. For this reason it is described as an inexact or soft science.
5.5.2 Management as an Art
An art is the practical application of knowledge and skill to bring about a desired result. Its essential features are practical knowledge, personal skill, creativity in the sense of concrete results, and perfection gained through practice.
- Practical knowledge — a manager is not required merely to know the principles but to put them to work in a particular firm with particular people, which is precisely what an art demands.
- Personal skill — every manager has his own style of working and tackles a problem in the light of his own understanding of it, which is why two managers with the same training and the same information handle the same difficulty differently.
- Creativity — management converts inputs into outputs and aims at the highest productivity at the lowest cost, so it produces a concrete result and does not stop at knowledge.
- Perfection through practice — an art is mastered by continuous practice, and a manager likewise improves by deciding, leading and correcting himself over the years.
Management is therefore an art as well as a science, and the two are complementary rather than opposed. Science without art remains fruitless, since knowledge that is never applied changes nothing; art without science is blind, since skill without principles has nothing to guide it. Table 5.4 sets the two aspects against each other.
Figure
Fig. 5.5-1 — A Manager At Work With A Team Photograph of a manager seated with a small group of colleagues at a table, discussing a chart of targets pinned on the wall behind them.
5.5.3 Management as a Profession
A profession is a vocation calling for specialised knowledge, formal training, a service motive and a code of conduct. Medicine, law and accountancy are the standard instances, and their essential features are a specialised and transferable body of knowledge, formal education and training with entry restricted to those who qualify, a service motive, regulation by a statutory body, and an ethical code of conduct binding on members.
Measured against these, management gives a mixed result.
- Specialised knowledge — the requirement is met. Management has a well-defined body of specialised knowledge that can be transferred from one person to another.
- Formal education and training — the requirement is met in part. Specialised institutions provide education and training in management, and those who complete it take up managerial posts, but entry to a managerial career is not restricted to management graduates and a person may rise to a senior post without any such qualification.
- Service motive — the requirement is met in part. Professional managers are expected to serve society and not merely to earn profits for the owners, but nothing compels them to do so.
- Statutory body — the requirement is not met. Chartered accountants are regulated by the Institute of Chartered Accountants of India, a body created by statute, whereas managers have associations such as the All India Management Association, which are not statutory bodies and cannot bar a person from practising.
- Code of conduct — the requirement is met in part. Managers do have codes of conduct, but these are not legally binding and carry no penalty for breach.
Management thus does not possess all the essential attributes of a profession. It has a body of knowledge and institutions to teach it, but it has neither restricted entry nor a statutory body to enforce standards. It is best described as a profession in the making rather than a full-fledged profession, and the gap between the two lies in regulation rather than in knowledge.
5.6 Importance of Management
The importance of management is most clearly seen by asking what an enterprise would be without it. The men would still be employed, the machines installed and the money in the bank, but nothing would come of any of them. Resources produce nothing until someone decides what is to be produced, arranges for it to be produced and checks that it has been. It is in this sense that management has been called the dynamic, life-giving element of a business.
The point holds beyond the single firm. What a country possesses in the way of land, minerals, capital and trained people sets a limit to what it can achieve, but does not decide how much of that limit is actually reached; that depends on how well the resources are managed.
What Management Achieves
- Achievement of group objectives — a group consists of people each doing a part of the total task, and each may work efficiently while the group as a whole achieves nothing, because the parts were never fitted together. Management supplies the coordination and team spirit that make the common objective attainable, and inspires members to contribute their best towards it.
- Optimum utilisation of resources — men, money, materials and machinery may prove ineffective if they are brought together in the wrong proportion or at the wrong time. Management assembles them in the right proportion and creates conditions in which employees can make the best possible use of the physical resources, which raises both productivity and profitability.
- Minimisation of cost — a business succeeds in a competitive market only if it can supply the required goods and services at the lowest possible cost. Better planning, sound organisation and effective control eliminate wastage and reduce cost, and a firm whose costs are lower can meet competition that would otherwise drive it out.
- Survival and growth — the market and society keep changing, and an enterprise that does not adapt is overtaken. Managers watch environmental changes continuously, meet the threats they bring and take advantage of the opportunities, and in this way secure the continuity of the business as well as its expansion.
- Higher standard of living — management is necessary for society and not for business alone. By supplying goods and services of good quality at the lowest possible cost, it raises what an ordinary household can afford out of a given income.
- Generation of employment — by setting up new enterprises and expanding existing ones, managers create jobs on which people depend for a livelihood. They also develop human resources through training and guidance, and create conditions in which those working in the enterprise find satisfaction in the work.
- Development of the nation — the development of a country depends largely on the quality of the management of its resources. Capital investment and imported technical know-how do not by themselves produce economic growth unless the wealth-producing resources are handled efficiently, which is the ground for the remark that there are no underdeveloped countries but only under-managed ones.
Why Management Matters More in Modern Business
The need for management is not new, but it presses harder on business today than it did on the smaller and simpler firms of an earlier period. Several developments account for this.
- Growing size and complexity of business — a large firm with several plants and product lines cannot be coordinated by one owner watching over the work directly.
- Increasing competition in the market — narrow margins leave no room for the waste that a protected firm can absorb.
- Growing specialisation of work — the more finely work is divided among specialists, the more effort is needed to bring the separate contributions together.
- Development of trade unions — terms of employment are now settled by negotiation, which calls for a considered approach to industrial relations rather than an arbitrary one.
- Use of capital-intensive technology — heavy investment in plant makes idle capacity expensive, so utilisation has to be planned closely.
- Increasing government regulation of business — an enterprise must satisfy a range of legal requirements, and compliance has itself to be organised.
- Scarcity of resources such as power and materials — what is scarce must be economised, and economy is a managerial task.
- Increasing social obligations of business — an enterprise is now answerable for the effects of its working on employees, consumers and the environment, and these obligations have to be met alongside its economic ones.
5.7 Levels of Management
A small workshop can be run by one person who plans the work in the morning, watches it being done during the day and settles the accounts at night. As an enterprise grows this becomes impossible. The managerial work has to be divided, and once it is divided some managers must direct other managers. What results is a management hierarchy, a chain of command running from the top of the organisation to the bottom.
The rungs of that chain are the levels of management. They are distinguished by the degree of authority they carry and by the kind of work they do, and although the number of grades in a large company may be considerable, they fall into three levels: top, middle, and lower or supervisory. The chain is shown in FC 5.3.
Flowchart
FC 5.3 — Levels Of Management Board of Directors and Chief Executive (Top Management) → Departmental Heads and Branch Managers (Middle Management) → Factory Supervisors, Sales Officers and Office Superintendents (Supervisory Management) → Workers
5.7.1 Top Management
Top management consists of the board of directors, the chief executive — commonly the managing director — the general manager and the company secretary. It is the level at which the enterprise is looked at as a whole, and its work is accordingly concerned with the future and with the organisation’s relations with the outside world rather than with day-to-day operations.
- To analyse and interpret changes in the external environment of the company, since only this level is placed to judge what those changes mean for the enterprise as a whole.
- To establish long-term corporate plans, that is, the goals, policies and strategies within which every other level will work.
- To formulate and approve the master budget and the departmental budgets, which allot the enterprise’s funds among competing claims.
- To design the broad organisation structure and to appoint departmental heads and key executives.
- To coordinate and integrate the activities of the different departments and divisions, whose separate plans would otherwise pull against one another.
- To provide overall direction and leadership to the company.
- To exercise overall review and control of the financial and operating results.
- To represent the company to the outside world, including shareholders, government and the public.
- To decide the distribution of profits between dividend and retention in the business.
5.7.2 Middle Management
Middle management comprises the departmental and sectional heads — the production manager, sales manager, finance manager, personnel manager and branch manager among them. It stands between a level that decides policy and a level that carries out operations, and almost all its functions follow from that position.
- To interpret and explain the plans and policies formulated by top management, translating a general policy into instructions that mean something on the shop floor.
- To monitor and control operating performance and to report the results upwards.
- To cooperate with one another so that the activities of the various departments are integrated, since a departmental head who optimises his own department alone can damage the enterprise.
- To train, motivate and develop the supervisory personnel working under them.
- To lay down the rules and regulations that supervisory personnel are to follow.
5.7.3 Lower or Supervisory Management
Lower management, also called operating or supervisory management, is the first level of management in an organisation. It consists of supervisors, foremen, sales officers, accounts officers and purchase officers. Its distinguishing feature is that it deals with non-managers, that is, with workers, whereas every level above it deals with executives.
- To plan day-to-day production within the goals laid down by higher authorities.
- To assign jobs to workers and to make arrangements for their training and development.
- To issue orders and instructions for the day’s work.
- To supervise and control the operations of workers and to maintain personal contact with them.
- To arrange materials and tools and to see that machinery is maintained, since a stoppage for want of either falls first on this level.
- To advise and assist workers by explaining work procedures and solving the difficulties they meet.
- To maintain discipline and good human relations among workers.
- To report feedback information and the problems of workers to the higher authorities.
Because supervisors alone are in daily contact with the rank and file, they serve as the channel of communication between management and the workforce. Instructions reach the workers through them and the difficulties of the workers reach management the same way, which is why a weak supervisory level leaves the higher levels planning in ignorance of what is actually happening.
Figure
Fig. 5.7-1 — A Supervisor With The Shift Team Photograph of a supervisor on a factory floor handing out the day’s work assignments to a group of workers gathered around him.
The Three Levels Compared
The three levels differ in composition, in the kind of decisions taken and in the people with whom they deal, but they are parts of one chain and not separate authorities. Policy set at the top is of no effect unless the middle level converts it into workable instructions and the supervisory level sees it carried out; and the top level cannot plan sensibly unless information travels back up the same chain. Table 5.5 sets out the differences.
5.8 Summary
- Management is the task of getting results through other people by guiding, directing, regulating and coordinating their efforts towards common goals. Wherever an organised group works towards a common goal, some form of management becomes necessary.
- The term is used in four senses, which are four views of one subject and not four different things:
- As an activity — the art of getting things done through others; it is interpersonal, a group activity, goal-oriented and decisional.
- As a group — all those who manage, from the chief executive down to the first-line supervisor; a rule-making and rule-enforcing body arranged in a hierarchy of authority.
- As a discipline — a specialised and transferable body of knowledge, a comparatively young but fast-growing field of study.
- As a process — a series of interrelated functions, namely planning, organising, staffing, directing and controlling, held together by coordination; the process is integrated, continuous, iterative, social and universal.
- Management combines the five Ms — men, materials, machinery, money and methods — and converts them into goods and services, profits and employment.
- The important definitions of management are grouped under five concepts, each stressing one part of the same task:
- Classical concept — management as a process of interrelated functions.
- Productivity concept — management as the art of securing maximum results at minimum cost.
- Human relations concept — management as the art of working with and through people.
- Decision-making and leadership concept — management as the art and science of deciding and leading.
- Integration concept — management as the force that integrates human and non-human resources into an effective operating unit; this is the modern synthesis of the other four.
- The characteristics of management are that it is goal-oriented, universal, a group activity, a system of authority, a social process, a dynamic function, both an art and a science, a distinct entity, intangible, an integrating force, multi-disciplinary and creative.
- The objectives of management are profitability, prosperity and growth, change and innovation, development of people, discipline and morale, rightful decision-making, improving the image of the organisation, and quality goods at fair prices. Economic and social objectives are pursued together, not one at the cost of the other.
- The nature of management is examined against three tests:
- As a science — it has a systematised body of knowledge, principles built on observation and experience, an established cause-and-effect relationship and principles of wide validity; but because it deals with human behaviour it is an inexact or soft science.
- As an art — it calls for practical knowledge, personal skill, creativity and perfection through practice; science and art are complementary, since science supplies the knowledge and art the skill to apply it.
- As a profession — it has a specialised body of knowledge and institutions that teach it, but entry is not restricted and its associations are not statutory bodies, so it is a profession in the making rather than a full-fledged profession.
- Management is important because it secures the achievement of group objectives, the optimum utilisation of resources and the minimisation of cost, ensures the survival and growth of the enterprise, raises the standard of living, generates employment and contributes to the development of the nation.
- Its importance has increased in modern business because of the growing size and complexity of firms, increasing competition, growing specialisation of work, the development of trade unions, the use of capital-intensive technology, increasing government regulation, scarcity of resources such as power and materials, and the increasing social obligations of business.
- Managerial work is divided among three levels that form one chain of command:
- Top management — the board of directors and the chief executive; it frames long-term plans and policies, designs the organisation structure, coordinates departments, controls overall results and represents the company outside.
- Middle management — departmental and sectional heads; it interprets the plans of top management, controls operating performance, integrates departmental activities and develops supervisory personnel.
- Lower or supervisory management — supervisors and officers; it plans and directs the day’s work, deals with workers rather than with executives, and serves as the channel of communication between management and the workforce.
5.9 Points to Ponder
- Management is described as both a science and an art. If a firm had to choose between a highly qualified management graduate with no experience of the shop floor and an experienced supervisor with no formal training, which consideration should weigh more heavily in the appointment, and what would be lost either way?
- Entry to a managerial career is not restricted, and associations of managers are not statutory bodies. Would regulating management on the pattern of accountancy or medicine raise the standard of managing, or would it merely shut out capable people who learnt the work by doing it?
- Economic and social objectives are said to be pursued together rather than traded off. What is management to do when the two genuinely conflict — for instance, when the cost reduction needed to keep the firm competitive can be achieved only by employing fewer people?
- Companies sometimes remove a level of management on the ground that decisions will then travel faster. What does an enterprise give up when a level disappears, and who takes over the functions that the level was performing?
- Management is called all-pervading, since a school, a hospital and a factory all require it. Does managing a hospital differ from managing a factory in kind, or only in the setting in which the same task is carried on?
- Management is intangible and is known only by its results. On what evidence, then, can the management of an enterprise be fairly held responsible for a poor year in which the market as a whole turned against the industry?
5.10 Objective Questions
- A company sends its supervisors for a training programme in new inspection methods and pays for the course. The objective of management chiefly served here is: [1]
- Profitability
- Development of people
- Improving the image of the organisation
- Minimisation of cost
- The head of a district hospital and the works manager of a steel plant both plan the day’s work, assign duties to their staff and check the results obtained. The characteristic of management illustrated is: [1]
- Management is intangible
- Management is a distinct entity
- Management is all-pervading
- Management is creative
- Assertion (A): Management is described as an inexact or soft science. Reason (R): Management deals with human beings, whose behaviour cannot be predicted with certainty or tested by laboratory experiment. Choose the correct option: [1]
- Both (A) and (R) are true, and (R) is the correct explanation of (A)
- Both (A) and (R) are true, but (R) is not the correct explanation of (A)
- is true but (R) is false
- is false but (R) is true
- Match the sense in which the term management is used in Column I with the description in Column II: [1]
| Column I | Column II |
|---|---|
| a. As an activity | i. A series of interrelated functions performed in an orderly sequence |
| b. As a group | ii. A specialised and transferable body of knowledge |
| c. As a discipline | iii. Getting things done through the efforts of other people |
| d. As a process | iv. All those persons who manage an organisation |
- State whether the following statement is true or false: In its group sense, the term management includes every manager from the chief executive down to the first-line supervisor. [1]
5.11 Check Your Concepts
- Define management, and state one reason why it becomes necessary wherever an organised group works towards a common goal. [2]
- Explain the integration concept of management. [3]
- Distinguish between management as a science and management as an art on any three bases. [3]
- State and explain any four functions of middle management. [4]
- ‘Without management, resources remain resources and never become production.’ Explain any six points that bring out the importance of management to an enterprise and to the nation. [6]
5.12 Case-Based Questions
- Aparajita Motors Ltd. builds bus bodies. Its board has decided to enter a neighbouring state and has approved a three-year plan and the budget for it. Rohit, the works manager, has converted the plan into monthly production schedules for his plant and has trained his supervisors in a revised inspection routine. Dinesh, a shift supervisor, allots jobs to the workers each morning, arranges tools and materials for them, and reports their difficulties to Rohit. Both Rohit and Dinesh were promoted from within the firm after an in-house training programme, and neither holds a degree or diploma in management.
- Identify the level of management at which Rohit and Dinesh each work, and state one function performed by each of them in the situation. [2]
- Both were appointed without any formal qualification in management. Name the essential feature of a profession that management fails to satisfy here, and explain it briefly. [2]