Nature and Importance of Management

Chapter 1. NATURE AND IMPORTANCE OF MANAGEMENT

Management is universal in modern industrial world. Every organization requires the making of decisions, the coordination of activities, handling of people, and the evaluation of the performance directed towards organizational objectives. Specialization and increase in the scale of operations have increased the importance of management.

Management is the process of designing and maintaining an environment in which individuals working together in groups accomplish effectively selected aims. If we expand this definition we understanding that:

* Management is present in any kind of organization (business or non-business).

* Its aim is to create a surplus, i.e., management is concerned with productivity which is measured through effectiveness and efficiency.

* A manager works in coordination with both the internal and external environment.

* It is essentially decision making under various constraints.

* It is an integrated as well as continuous process.

* It is use of means to accomplish given ends.

For achieving the objectives the Managers have to assume responsibility, achieve a balance among competing (and often conflicting) goals, and have to be conceptual thinkers. The term management is often used to refer to a group of managerial personnel of an enterprise. Sometimes, this term is used as a way of referring to the process of managing. On other occasions it is used as a substantive to describe the subject, the body of knowledge and practice as a whole, the discipline. Strictly speaking, management is a functional concept and does not include persons who practice management. Such persons are designated as Managers, Executives, etc. However, in our daily transaction we generally include the practitioners within the scope of this term.

The managerial process is a complex social activity. It is a process because it comprises of a series of actions that lead to accomplishment of objectives. It is known as a social process because these actions are concerned with relations between people, i.e., inter-personal relationship. It is a continuous process, there is always fresh minds to stimulate, newer area and approaches to explore, and ever changing situations to tackle. Management is a mental or intellectual process involving thought, judgement and decision, the fundamental aim being achievement of certain objectives.

Technological development has continuously changed the setting of management. However, the chief characteristics of management are the integration and application of the knowledge and analytical approaches developed by numerous disciplines. This involves:

1. Formation of policy and its translation into plans,

2. Execution and implementation of plans, and

3. Exercising administrative control over the plans.

Utilisation of resources has been one of the most common and yet perhaps the most complex management activity. Maximum return and utility from limited available resources has been the main aim of any manager. Traditionally, only three factors of production were recognised i.e., Man, Machine, and Material. However, with the development of thought, a fourth factor of production was recognised, in the absence of which the other three factors could be rendered useless. This fourth vital factor of production was entrepreneurship. The entrepreneur could be a person having his own resources or a custodian of someone else's resources, organising it with a view to attain maximum output and efficiency with minimum input. As such, Management can also be defined as a process through which all the resources are organised and utilised to attain maximum output and efficiency through minimum input.

A liberal point of view is not merely a sum of number of narrow approaches. Its emphasis is on freedom to choose from widest

range of possibilities already available or newly evolved. The stress is on expanding the mental horizon with utmost freedom with an effort to strive towards an ultimate in life. The paradox of management is that it is based on identifiable and rigorous framework of concepts, but at the same time it continues to strive towards breaking out of any set discipline.

The characteristics of a good manager may be described in broad terms as initiative, intelli- gence, judgement, dependability, integrity, perseverance, and so on. Thus, management can also be defined as a process of bringing about improvement in knowledge, skill, habits, and attitudes of the employees in an organization. In other words it refers to development of people in the organization. Management involves improvement in knowledge factors, attitude factors, and ability factors of the employee in an organization.

* Knowledge factors refer to ideas, concepts, or principles that are conscious, able to be expressed, and are accepted because they are subject to logical proof.

* Attitude factors relates to those beliefs, feelings, desires, and values that may be based on emotions and may not be subject to conscious verbalization. interest in ones work, desire to accept responsibilities, respect for the dignity of one's associates, and desire for creative contribution are some of the attitude factors.

* Ability factors are too often treated as being unaffected by environment. Skill, art, judgement and wisdom are the four most important ability factors required in management. Although these are abstract, but nevertheless they can be developed and sharpened through practice.

One of the most important characteristics regarding the nature of management is that its prin ciples have universal application. Management problems are present in all joint activity, be it a family, school, small-scale or large corporation, or a trade union. The head of these institutions use the same managerial techniques and principles in solving their problems and achieving their desired goals.

Universality of managerial principles means that they are transferable, i.e., the same principles can be used by various departments regardless of the nature of their functions. Not only that, the universality of managerial principles also means that they can be transferred from one level to another. All managers perform the same managerial function regardless of their position in the organizational hierarchy.

Different