Principles of Management by Dr B S Moshal by Dr B S Moshal - Read Online

Book Preview

Principles of Management - Dr B S Moshal

You've reached the end of this preview. Sign up to read more!
Page 1 of 1

Studies:

Chapter 1

Conceptual Framework of Management

Learning Objectives

To understand how physical resources are utilised by labourers.

To understand the basic theme of management along with various interpretations of this term.

To bring out the main features of management.

To understand management as a process and its functions as sub-processes.

To understand management as a profession, a combination of science and art and distinct from administration.

To understand the concept of family management versus professional management, particularly with reference to India.

To remember basic management skills and styles used by managers in practice.

To understand how management knowledge can be used in every economy and society.

CONCEPT AND MEANING OF MANAGEMENT

The knowledge of management is used for organising and managing the work of people in an organisation. Managers mobilise the efforts and activities of people in the direction of achieving common goals. The knowledge of management has universal application. It is widely used in every society and economy and is needed in every walk of human life. It is more significant and useful for business organisations. Such organisations are economic entities and profit-earning bodies. They perform economic functions of producing and distributing goods and services for the satisfaction of human needs and wants.

In order to conduct these business activities, both physical and human resources are acquired and used. Physical resources such as land, building, capital, raw material, machines, technology, etc., are of a peculiar nature. They are lifeless and scarce resources. Thus, they need human resources like labour and management to utilise them towards the accomplishment of pre-determined objectives. In the process of acquiring, mobilising and utilising these limited resources for performing economic functions, a group of people commonly known as managers assume an important position and perform a key role. It is only by performing a wide range of activities and functions by these managers that physical resources are used through labour for realising goals.

Thus, in this context generally it is said that management is to get things done by others. It is one of the simplest versions of management. But actually, it is much more than that, involving a number of activities, functions, approaches, skills and knowledge to be used by the manager for managing the affairs of the organisation efficiently.

Figure 1.1. Application of management knowledge to achieve objectives of the organisation

Management scientists belonging to different disciplines offer different meanings and interpretations to this term. Economics regards it as one of the important factors of production used for creating wealth but accountants give another interpretation and consider management as a process of analysing and interpreting various facts, data and statementes, especially in relation to profitability and finance soundness. Similarly, behavioural scientists place more emphasis on the human aspect involved in management and treat it as a human and social process.

Not only this, some authors consider management as a set of managerial functions to be performed by a group of individuals known as managers. But others believe that management is a separate discipline or a systematic body of knowledge, consisting of certain principles, generalisations, concepts and rules to be applied in a particular situation for obtaining better results.

To come out from the controversy and sharp differences among various authors regarding the definition and interpretation of management, it is desirable to analyse and view it in a broader perspective in terms of its origin and gradual development. According to F. W. Taylor, who is known as the father of scientific management, management is an art of knowing what is to be done and seeing that it is done in the best possible manner.

In this definition he has highlighted two basic functions involved in the process of management and these are planning and controlling. As compared to it, a more comprehensive definition has been forwarded by Henri Fayol, the father of modern management. According to Fayol, management is to forecast, to plan, to organise, to command, to coordinate and to control. In this definition, all basic functions of management have been included.

Similarly, a functional approach has been followed by modern management scientist Peter Drucker. According to him, management is a system or organ and any system or organ can be defined only by describing and explaining functions performed by it. Lawrence Appley has submitted an oversimplified version of management which makes the purpose and process of it quite clear. According to Appley management is the accomplishment of results through the efforts of other people. More precisely, McFarland has defined the term ‘management’ as that process by which managers create, direct, maintain and operate purposive organisation through systematic co-ordinated and co-operative human efforts.

In this definition he has placed more emphasis on the dynamic nature of management in relation to organisation in which group efforts are directed and coordinated for achieving goals. Furthermore, Dale S. Beach has defined it as a social process entailing responsibility for effective economic planning and regulation of operations of enterprises. According to Beach, in the process of management more responsibility lies on managers for planning and regulating activities of employees who are working in the organisation.

In the words of Kreitner, management is a process of working with and through others to achieve organisational objectives in a changing environment. Central to this process is the effective and efficient use of limited resources. Kreitner has stressed more on two important variables such as effectiveness and efficiency in relation to the use of resources.

Review and analysis of the above definitions of management makes it clear that every author has tried to define the term ‘management’ either by placing more emphasis on one of the aspects of it or by adding a new dimension to it. So far, two identical definitions on the basic theme of management have not emerged. It all has resulted in a hazy situation. Moreover two definitions are hardly identical in respect to all relevant and basic elements of management. It is because knowledge of management deals with human behaviour which is very dynamic and complex and cannot be reduced to a formula which leaves scope for authors to interpret it differently. Besides, management is a growing and developing discipline. It has witnessed many drastic changes in its nature and scope, coverage and orientation over the last five decades. All along with technological and social development taking place in society, it has emerged as one of the important branches of social sciences.

Therefore, definitions and interpretations of the term ‘management’ have virtually become less relevant or outdated in the context of the rapidly changing environment. Historical analysis of developments taking place in this field reveals that during the initial stages of development management was simply considered a way of getting things done by others. This version was further elaborated by many authors like Henri Fayol and others and they developed it as a dynamic process. In the present context, especially on account of a growing need for professionalisation, separation of ownership from management and globalisation of economic activities, a new dimension has been added to it and it has become more popular as strategic management dealing with strengths and weaknesses of organisation and relating them to opportunities and threats arising out of a changing environment.

Basically, management is an integrated set of functions, processes, approaches and other skills to be used for mobilising and utilising resources for achieving predetermined objectives in a changing environment. Particularly in the context of organisations which are man-made systems, management remains an invisible force the chief organ of which directs and coordinates activities of its members to seek common goals.

Management is much more than mere performance of managerial functions of planning, organising, staffing and controlling. To get better results, managers have to be innovative and creative on their part in every sphere of the managing process. They have to use a variety of skills such as human skill, technical skill, communication skills, etc. To be more effective they have the responsibility of creating a conducive internal environment and reconciling with a rapidly changing external environment. Their success largely depends on their capabilities as to how sharply they can visualise the movement of environmental factors and how effectively they use it for optimising results.

In a nutshell, the managing process involves:

Performance of management functions, planning, organising, staffing, directing and controlling.

Using managerial skills such as conceptual, analytical, administrative, technical and human skills.

Carrying out managerial activities such as decision-making, communicating and networking.

Creating a congenial internal environment by building strong organisational culture, systems, norms and values.

Seeking optimum utilisation of both human as well as physical resources.

Scanning the external environment and devising ways to cope with a rapidly changing environment.

The features of management are:

Management is a process.

Management is a social process.

Management is a system of authority.

Management is a goal-oriented process.

Management is a dynamic process.

Management involves effective and efficient utilisation of resources.

It is a multi-disciplinary field.

It is a critical and vital sub-system of an organisation.

It is a full-fledged academic discipline.

Management is a combination of science and art.

It is all-pervasive.

It is an influence process.

The following characteristics may be derived from the definitions of management given above:

(1) Management is a Process

Although the term ‘management’ has been defined from different angles, the majority of authors believe that it is a process of getting things done by others. In this process, to get things done by others, certain basic functions are to be performed such as planning, organising, staffing, directing and controlling. These functions may also be considered as elements of the management process.

(2) Management is a Social Process

The basic responsibility of every manager is to get things done by others. To discharge this responsibility he has to establish interpersonal relations with the people working under his control. He has to understand their behaviour not only as an individual member but also as a member of a group. To get better results, it is necessary for a manager to understand the personal as well as social needs of the employees so as to motivate them.

(3) Management is a System of Authority

As stated earlier, in the process of management, a number of functions are to be performed by managers. They need to have enough authority and power for it. Without having formal authority they cannot prepare plans and direct and control the activities of subordinates for the accomplishment of predetermined objectives. Managers hold a position in an organisation and authority is vested in that position. So, their position is identified in terms of authority and responsibility given to them.

(4) Management is Goal-oriented

Some authors have viewed management as a sub-system of an organisation thereby directing and coordinating activities of members to seek goals. It is only to achieve these goals that knowledge of management is used. In the absence of these goals, there is little planning, organising, directing and controlling in an organisation. In the words of Kreitner, without organisational objectives the management process is like a trip without a specific destination and would be aimless and wasteful.

(5) Management is a Dynamic Process

Management is no more stereotyped knowledge; rather, it is ever-changing particularly in the context of a changing environment. To maintain survival of the organisation, managers have to work out new relationships, develop new approaches and new ideas so as to cope with the changing environment. By their innovativeness and creativity, they make the organisation capable of converting threats and problems arising out of changing situations into opportunities.

(6) Management Involves Effective and Efficient Utilisation of Resources

To achieve objectives, managers have to integrate physical as well as human resources and utilise them most effectively and efficiently. A proper balance is to be maintained between effectiveness of use which implies use of resources in a right way and efficiency which indicates the ratio between input and output or cost or benefit. In other words, a manager is said to be efficient if he succeeds in containing costs as much as possible and conserves limited resources.

(7) Management is Multi-disciplinary

To seek better results and improved performance in the field of management, concepts, ideas, generalisations and principles of other disciplines are also used. To make superior quality of decisions, the use of statistical devices and mathematical tools has become the style of the manager. Similarly, the use of knowledge of economics, psychology, sociology and anthropology for understanding human behaviour and analysing market forces has become a regular feature of it.

(8) Management is a Critical and Vital Sub-system of an Organisation

Organisations are man-made systems to be operated through individuals by applying management knowledge. Management is a prime mover of the organisation and it is made functional and productive by using management force which is invisible and intangible. Not only this, survival, prosperity, growth and development of the organisation to the larger extent depend on the quality of management knowledge being used by talented professional managers.

(9) Management is a Discipline

Management has emerged as one of the important branches of social sciences. It consists of principles, generalisations, concepts, approaches and rules dealing with human behaviour. Therefore, it is said to be an inexact science or soft science. These principles of management have to be applied to practical situations to get results.

(10) Management is a Combination of Art and Science

Management knowledge exhibits some characteristics of art and some of science. Therefore it is considered a combination of both.

(11) Management is All-pervasive

Management is an universal phenomenon. Its use is not confined to business or other economic activities only. It is equally important in every walk of life. Management knowledge is used in every economy, in every organisation and at every level of organisation. Thus, there is a generic, pervasive and global need to manage limited resources to get maximum benefits.

(12) Management is an Influence Process

To get better results and seek optimum utilisation of all physical resources, managers exercise an influence on the behaviour of people working under their control. There is a need to influence the behaviour of people because physical resources which are lifeless and scarce have to be used through them. In the process of influence, the managers regulate, control, mould and reshape the behaviour of subordinates to make it desirable. In order to exercise influence, he uses his position, competence, authority and resources available at his disposal. By determining and providing various stimuli (rewards and punishment) he motivates and inspires them to behave and act in a desired manner.

Not only the behaviour of people, event, situations or variables are also influenced by him to reconcile with a changing environment. He maintains a vigilant watch on the situation, brings it under his control and sometimes makes it happen by taking suitable strategic measures. The process of influence is bilateral in the sense that on the one hand, managers exert pressure on these and, on the other hand, decisions and actions of managers are influenced by these variables.

In this connection, it is, however, to be noted that managers take proactive and reactive measures to deal with them successfully. Innovative managers, by taking suitable measures try to avert undesirable situations or ensure that it happens in a desired manner. Once an event occurs, by taking damage control action, the ill-effect of these events is reduced to a minimum. Besides, the values of the organisation, its goals, strategies and policies have to be adjusted and made in conformity with the present situation.

Furthermore, management is an integrative and dynamic process. Regular exercise on the part of managers for developing and discovering new ideals, vision, image and relationships has become a well recognised part of their activities. In order to generate these ideas, research work and analysis is undertaken on a regular basis.

Innovativeness and creativity on the part of managers is necessary. The ideas so discovered have to be further processed for ascertaining their feasibility, practicability and suitability for implementation. In brief, the process of management involves interaction with ideas, things, resources, people and goals. It is a process of converting ideas into decisions, decisions into action and action into concrete results and outcome.

MANAGEMENT AS A PROCESS

Management is a process of integrating and utilising physical and human resources to seek objectives. Management is a human and social process which is directed upon individuals to get things done by them. Like other processes, it consists of many actions or activities or functions which are to be carried out in a logical sequence. It is a result-oriented process direction related with the task of determining objectives and developing a suitable course of action to accomplish them more efficiently. It is a continuous process, because it has no definable end. The steps or elements involved in it are to be performed in a continuous cycle. The elements or activities that are performed in this process are also known as functions of management.

This popular approach of describing what managers do in the process is viewed as functional approach. It was developed by Henri Fayol and it became popular because it characterises the management process as a sequence of rational and logical steps. However, Fayol claimed that planning, organising, command, coordination and control were basic and common denominators for all managers in the process of management. But later on due to certain changes taking place in the nature and field of management, the sequence of functions was rearranged by adding some more functions. Finally, it was made as planning, organising, staff, directing and controlling. Brief descriptions of these are as under:

Figure 1.2. Management process and sub-processes planning

Commonly referred to as a basic management function, planning is a process of determining objectives, developing alternative courses of action and selecting the best course of action for achieving objectives. It is a forward-looking approach which involves futurism and making estimates or projections about the future. In order to visualise the future, the past is analysed. It is related to the present and on the basis of that the future is forecast.

Thus, the planning function focuses on the future destination of organisation which provides direction to its activities. In planning, managers decide in advance which is to be done, when, how and by whom. Successful managers visualise even at the time of making plans what problems may probably arise at the time of implementing them.

Organising

Careful organising, like planning, helps in making efficient utilisation of human resources. It is a process of establishing a working relationship among the employees. The various activities are assigned to them, authority is granted to them, and they are brought in the relationship of superior and subordinate. This working relationship brings order and discipline in the organisation. Every employee knows very well who his superior is to command his activities and who is to be commanded by him. Similarly, in organising a process the role and relation as a position of each individual in the organisation is spelt out clearly. Organising may also be considered as a process of integrating, balancing, unifying and coordinating activities of various employees for accomplishing pre-determined objectives. The process of organising also involves the creation of various units or departments, assigning a group of activities to them with enough authority and finally maintaining coordination among them.

Staffing

Once the structure of an organisation is brought into existence by determining the role and relationship of various positions, these positions have to be manned by individuals. Staffing is a process of determining the quality and quantity of the human force needed for the organisation, making all necessary arrangements for acquiring it through recruitment and selection, maintaining them for a longer period of time by making and implementing suitable personnel policies and finally developing them to the maximum of their capabilities and potential. Thus, the staffing function of management is mainly concerned with manpower planning, recruitment, selection, training and development, compensation and maintaining of human resources in the organisation.

Directing

Directing is a process of helping and guiding subordinates in the direction of achieving objectives of organisation. Basically, in the process of directing, the superior issues necessary orders and instructions to his subordinates regarding the work which has been assigned to them. He educates and guides them regarding various methods of doing the work and finally he supervises the work being performed by them on a regular basis. In the process of directing three elements are involved, namely, communication, motivation and leadership. In brief, for directing the activities of subordinates, two-way communication has to be maintained between them and simultaneously the superior has to motivate the subordinates and provide dynamic leadership to them.

Controlling

Controlling is a process of ensuring that each and every activity has been performed in a planned manner and in conformity with pre-determined standards of performance. It is essentially a process whereby standards of performance are determined for every employee and his actual performance is measured and then compared with these standards, to find out deviations and to take remedial measures to improve performance. So the process of controlling includes all activities, actions, procedures, methods used by managers for bringing actual results nearer and closer to desired results. The process of controlling is not only concerned with improving performance but it also includes all actions and techniques used by the organisation for regulating and controlling the use of resources to achieve planned goals. It also regulates the behaviour of employees to maintain order and discipline among them. It also checks distortions and deviations which may take place in the system to make it more cost-effective.

Some Observations

On the basis of the above discussion on the management process, the following observations can be made:

The management process essentially consists of some basic steps which are known as functions or elements or sub-processes of management such as planning, organising, staffing, directing and controlling.

These functions or elements of management are primary or basic in nature. These are to be performed by every manager in all situations to get things done by others. In practice, there are many more other functions which may be derived from these known as subsidiary functions like reporting, budgeting, forecasting, representation, innovations, etc.

Planning is a starting point of the management process followed by other functions. Obviously, without planning there is little organising, staffing, directing and controlling. The process of management comes to an end at controlling. Thus, these basic functions of management are to be performed in a definite and logical sequence to get better results.

The management process operates through these elements or functions which may also be considered as sub-processes of management. All these sub-processes contribute to the functioning of the management process and get essential strength and power from it.

Being sub-processes, all these management functions are closely related, inter-dependent and independent. Although these functions are to be performed by managers independently such as making a plan and designing the organisation, recruitment and selection and exercising control are independent functions. But they are organically or functionally related to each other such as planning paves the way for organising and organising for staffing and other functions and the like. Similarly, all these will have little meaning if not followed by controlling. In other words, if we consider these functions separately and in isolation they are bound to lose their relevance, meaning and importance. Therefore, these can produce the desired results only when they are perceived in totality and considered as a part of the management process.

In the process of management, the above-mentioned functions are performed for seeking goals, therefore they are considered as the means of achieving goals. It is because by performing these functions efficiently and in logical sequence better results can be produced.

NATURE OF MANAGEMENT

Besides the above discussion on management, to understand its basic nature precisely it may further be studied and analysed in terms of many of its other aspects such as management as combinations of both art and science, its relation with administration, management as a profession, managerial skills, styles of a manager, etc.

Management is Combination of Art and Science

Management knowledge shows the characteristics of both art and science. In fact, these two disciplines are not mutually exclusive but they are supplementary to each other. Every discipline of art is always backed by science which is basic knowledge of that art. Similarly, every discipline of science is complete only when it is used in practice for solving various kinds of problems faced by a human being in the organisation or in other fields of social life which is more related to an art. Art basically deals with an application of knowledge, personal skill and know-how in a specific situation for achieving given objectives efficiently. So it is concerned with the best way of doing things and seems to be personalised in nature.

During the initial stages of the development of management, it was considered as an art. It is because at that time there was a jungle of managerial knowledge and it was not codified and systematic. People used to get things done by others in their own way giving an impression to others that whosoever uses it knows the art of using it. This kind of loose and inadequate understanding of management further supported that it is an art. Management can be well understood as an art on the following counts:

Management as an Art

It has practical application in a given situation.

The experience of a manager is not transferable.

It involves the use of creativity and innovativeness.

It implies the use of personal judgement, perception and intuition.

Management as a Science

Systematic and organised body of knowledge.

Developed through observations, research and experiment.

Based on relationship of cause and effect.

Knowledge of it is transferable.

Has universal application.

Management as an Art

The knowledge of management like other arts has a practical application. It is capable of being used in specific situations to get better results. In every situation, the manager attempts to solve problems efficiently or make superior quality decisions and realise objectives or targets with minimum effort and resources. He does it only by using management knowledge. The application of management knowledge to some extent is personalised depending on the individual manager. Though knowledge about principles, concepts and generalisations of management remains the same, the manner in which it is used differs from one manager to another.

At the same time, continuous application of management knowledge to a practical situation by a manager results in gaining experience on his part. With the passage of time he gains more and more experience which is personal in nature and becomes his possession and which cannot be transferred to others. Therefore, managers having more experience of using the principles of management in practice normally become more efficient in their functioning. They develop more skills and abilities to translate management knowledge into practice.

Application of management knowledge also calls for using innovativeness and creativity on the part of managers. On the basis of the fundamentals of managerial knowledge, analytical abilities, farsightedness, etc., the manager can discover new ideas, relationships and more efficient ways of doing things. It is possible only through rigorous research and analysis, creative approach and scientific outlook on the part of managers. Thus, the use of innovativeness and creativity makes it an art.

One more reason for considering management as an art is that in many situations, theoretical knowledge of management may not be adequate or relevant for solving problems. It may be due to complexities involved in the problem or size of the problem or it may be the uniqueness of it. In such situations, the manager has to rely more on his past experience, perception, intuition and judgement. He may use the ‘rule of thumb’ (hit or miss approach) or the trial-and-error method to solve such problems. Added to this, sometimes he may redefine and reformulate the problem by applying creativity and personal experience to get the problem solved. In this way, more use of art is inevitable.

Management as a Science

Management as a science bears the following characteristics:

Management is a systematic body of knowledge, consisting of principles, generalisations, approaches and concepts to be applied to practical situations. This knowledge serves as a basis for managers to understand the process of management and the problems involved in it. The manager can manage the situation or organisation in a systematic and scientific manner only if he possesses adequate knowledge of management and its principles. In the words of Peter Drucker, managers need a systematic supply of an organised body of knowledge for taking risky decisions of business enterprises in a complex and rapidly changing technology, economy and society. Organisational and managerial needs, goals and values can come into sharp focus through scientific knowledge.

Secondly, the principles, generalisations and concepts of management have been developed and formulated on the basis of observation, research and analysis and experimentation as in the case of principles of other sciences. These principles of management are supported by valid evidence, are precise in nature and more purposeful.

Like other scientific principles, management principles are also based on the relationship between cause and effect. They indicate that the same cause under similar circumstances will produce the same effect. For instance, according to the principle of personnel management, if you pay more to workers, they will produce more. Payment made to them serves as an incentive or stimulus which ultimately activates them to produce more. Though these principles have been formulated through observation and research and analysis, they cannot be compared with the principles of physical science which produce uniform results in similar situations.

Management knowledge and its principles are codified and systematised and therefore can be transferred from one to another person and can be taught and learned.

Management principles are universally applicable to all types of organisations in every economy. They are generalised in nature and provide general guidelines for managers to use them in practice. The basic nature of management knowledge indicates that like other sciences it is also a combination of both art and science which are not mutually exclusive disciplines. In the words of Robert H. Hilkert in the area of management, science and art are two sides of the same coin. Thus, one must acquire knowledge of management theory, principles and generalisations to become a manager. It is because this knowledge may help him in understanding and analysing problems and to solve them.

Application of theoretical knowledge in practice for solving problems and making decisions has actually broadened the horizons of management knowledge. It is because by using it repeatedly special skill, experience and competence is developed among managers and every successive problem is solved by them more efficiently. Thus, the process of management involves both science and art. To become a good manager one has to acquire a theoretical knowledge of management and subsequently by using it in practice he has to develop and gain experience from it. Consequently, proper combination of theory as well as personal experience gained by managers may lead to better results.

Management as a Profession

Besides, a combination of art and science, management may also be considered as a quasi-profession because it possesses some characteristics of it. The following criteria of a profession will help in identifying that part of management knowledge which may be considered as a profession:

A profession is a body of specialised knowledge consisting of principles, concepts and techniques which are proven, systematic and capable of being applied to practical situations.

Since professional knowledge is systematised and codified, it can be acquired and learned through the formal education system and training programmes.

A profession emphasises on having a central body or apex body or an association to formulate a code of behaviour for its members. It also prescribes minimum qualifications to obtain entry into the profession to become a member.

A profession also calls for rendering competent and specialised services to clients. So the service to clients as well as to society becomes a motive of the professional members.

A profession demands a scientific attitude and commitment to discover new ideas on a regular basis to upgrade the existing knowledge of the profession. It is done to improve quality of service and the level of efficiency that is provided to clients.

In addition to the above, one more important feature of a profession may be that it also requires that the members exercise restraint and self-discipline, a high degree of objectivity and integrity in the process of providing services to customers. This is done to command respect from them.

Having enumerated and described the various basic characteristics of a profession, one can evaluate and judge whether management is a full-fledged profession or where or what does it lack. So far as the first two characteristics are concerned, management knowledge meets them fully because it has developed as a systematic body of knowledge made up of principles, generalisations and concepts which are codified and applicable in practice. Similarly, due to the nature of management principles and theory, one can acquire management knowledge through formal education imparted by universities and institutions and training provided by business organisations.

Although there have been some attempts to form a central organisation for regulating and controlling the profession, namely, the Indian Management Association, it could not emerge as an apex body with a formal and legal character. Therefore, it could not formulate a code of conduct for practising managers and could not even bring them under its fold as members. Likewise, there is no minimum qualification prescribed either to get entry into the management profession or to become a member of it. In practice, whosoever manages is known as a manager, irrespective of his qualifications.

In respect of other characteristics such as motive, the manager in every situation attempts to produce higher output by using lesser input so as to maintain higher profitability. But in modern times, the manager’s responsibility towards society has increased and he is expected to work not only as a representative of the owner but also to represent the interests of customers, employees, financiers, community and society.

Similarly, like in all other professions, he has to strive to discover new ideas, relationships and concepts on a regular basis and to act in a dynamic and innovative manner to cope with the changing environment. Managers are not respected so much as professionals of other streams like doctors, advocates, chartered accountants, etc. This is because no uniform code of conduct has been developed and applied to them.

Thus, management has some features of a professional body of knowledge. But till now it could not acquire the status of a full-fledged profession even in highly developed economies.

Professionalisation of Management

That management is an art, science and profession is not merely an academic statement, but it raises certain issues that are concerned with future development of this branch of knowledge. Management still remains a developing field. Many changes are taking place regularly in terms of its nature, significance, scope, etc. In a modern society, it is occupying a more important position which has ultimately added many new dimensions to it.

In the recent past, on many occasions, society has been challenging the ethical and moral values and bases of management decisions. More emphasis is being placed on the need for professionalisation of management. In detail, the following reasons may be attributed to the growing need of professionalisation of management knowledge:

In the more popular form of business organisation, that is, joint stock companies, ownership has been separated from its management and control. This situation has really contributed to the development of management as a profession. Modern managers have to promote and protect the interests of many social groups such as consumers, employees and society as whole, along with the economic motive of earning a profit. To resolve conflicts and integrate and balance contradictory interests, the professional outlook of a manager may help him in a big way.

The rapid expansion and growth of universities and other institutions imparting management knowledge and the growing significance of training programmes in business organisations also indicate more professionalisation in the days to come.

In a high-tech industrial society, manifold changes have occurred in the role of managers. They have to manage not only various resources, but also knowledge for the benefit of the organisation.

In the context of globalisation of economic operations, many strategic areas have been developed which require professional expertise and specialised knowledge such as strategic planning, control and research and development activities and information system, merger, collaboration, etc. Multinational corporations have been attempting to enhance their global market share strictly by adopting a professional outlook and approach towards management of operations.

Increased utilisation of specialised management services like consultancy, human resource development, training programmes, etc., that are linked with a scientific attitude and thinking also requires a team of professional managers to handle these areas carefully and efficiently.

Family Management versus Professional Management

Family management implies the management and control of business operations by a group of members belonging to a particular family and by their kith and kin regardless of their knowledge about management. This kind of management practice was very common in India till recently. Even at present many Indian industrial empires remain family managed. It is because top positions in the management hierarchy are occupied by the owners. In a family-managed business, decisions are made, policies are formulated and action programmes are made on the basis of values and beliefs of the family. They are greatly influenced by family interests and business becomes more an extension of the family. Even some disputes and disagreement related to family matters would have a direct reflection in the functioning of the business organisation. There is complete identity among goals, needs and values of business and family especially in small- and medium-sized business organisations.

Family management implies:

Management and control by owners or their kith and kin.

Business is considered as an extension of the family.

Family matters and interests affect the conduct of business.

Identity between goals, values and needs of family and the business organisation.

Entrepreneurial style of management prevails.

Suitable for small and medium sized business organisations.

But in a professionally managed enterprise contrary to family managed, the ownership is separated from management and control. The authority to manage and control business operations is delegated to professionally qualified managers who have required managerial knowledge in their respective areas. Since professional managers do not have an ownership interest and they manage the enterprise independently by taking bold, balanced and factual decisions, essentially professional management implies:

Induction of professionally qualified managers into the organisation who possess the required basic knowledge of management with formal training in the various key and strategic areas.

To manage different areas and activities of organisation, relevant specialised modern management knowledge should be applied to specific situations as per requirements. It should also be followed by a scientific approach, thinking and attitude on the part of managers to make superior quality of decisions and to manage the organisation efficiently.

To get better results and performance, professional managers require to use a combination of theoretical knowledge along with practical experience, which they gain out of repetitive application of management knowledge in practice.

In addition to these, the style of a modern manager is also marked by a high degree of objectivity, creativity and use of various managerial skills and approaches so as to resolve conflicts and integrate diverse interests.

Professional managers have a different outlook and approach which is based on the philosophy of the larger interests of the organisation. They also adopt and observe high ethical and moral values and understand the implications of the human side of management in decision making.

Functional managers consider the organisation as an open adaptive system and introduce dynamism into it to cope with the changing environment, they think and act strategically.

Universality of Principles of Management

Like the principles of other sciences, managerial principles are universally applicable. These principles are a part and parcel of management theory. They explain the relationship between two or more variables. Thus, they are regarded as a fundamental statement or general truth providing guidance to the thoughts and actions of managers. The principles of management have been formulated through rigorous observation, research, analysis and experience of executives. They provide guidelines and ground rules for managers to manage the organisation efficiently. In the words of Peterson, they are modes of action.

These principles have been developed with respect to several areas and functions of management. Advocates of the classical theory of management relied too much on these principles and they considered them as prescriptive fundamental truth having universal validity and applicability for different situations. It is because these principles are applicable to all types of organisations such as economic, non-economic, social, religious, political, etc., and provide guidance to managers working at different levels. More precisely, in the words of Professor Mugginess, there exists a systematic body of knowledge that constitutes the core of principles of management that are true in all managerial situations. These principles are applicable whether it is a business organisation, a government organisation, a religious organisation, a social or any other type of organisation. These principles are also true to all levels of management from the foreman to the chief executives. But it should however be noted that these principles of management do not provide readymade stereotype solutions of management problems. Thus, these should be strictly used as guidelines to understand problems and move systematically towards a solution. By using these principles one can improve one’s understanding about the problem and get an insight into it.

Similarly, the principles of management are related to human behaviour which is very dynamic and complex and cannot be understood and predicted in all respects correctly. For applying these principles efficiently, all those factors which probably influence working behaviour of an individual should be taken into account. Henri Fayol has made it quite clear that these principles are very flexible and capable of adaptation, and to get the desired results one should know how to use the principles.

In view of the basic nature and limited scope of these principles, modern management scientists do not fully endorse the views expressed by classical theorists. They argue that these principles are merely tentative, flexible and suggestive guides to managers. Since the results produced by the application of these principles differ from one situation to another, they cannot be regarded as a fundamental truth like the principles of the physical sciences.

Sometimes, these principles prove so irrelevant that the practitioner is bound to treat them as half truths or misleading or self-contrary. They do not find proper validation in support of the usefulness of these principles.

Although these principles of management are not absolute, mainly due to the nature of the discipline to which they belong, one should not lose sight of the fact that they form a theoretical body of management knowledge calling upon managers to have the required knowledge and skill to use these principles carefully and efficiently.

Nevertheless, these principles are of crucial importance for managers in understanding problems and conditioning their styles and approaches to solve problems and make decisions. In the words of Terry: They are capsules of selected management wisdom to be used carefully and discretely.

As stated earlier, management consists of principles, processes, functions and approaches to be used in practice to get results. In modern society, management has become a basic requirement for all organisations irrespective of size, nature and goals and objectives to be pursued by them. It is general, pervasive and global in nature. But these characteristics hold good only with regard to the theoretical part of management.

However, principles, processes, functions and skills of management have universal application. But exact results arising out of their application may differ from situation to situation depending on situational variables, experience of the manager and his level of knowledge.

Thus, many authors consider it as situation-bound. It is because some principles of giving incentive for raising productivity will certainly have different implications and results in different situations. For instance, monetary incentives may prove more effective in Indian organisations for motivating employees, but in a highly developed economy like the U.S.A. employees do not bother for these incentives; rather they are more inclined to other higher order non-monetary incentives such as appreciation, recognition, self-fulfilment, etc.

MANAGERIAL SKILLS

Management is a result-oriented process. To get better results, apart from application of management knowledge, certain abilities are also used by managers. These abilities are known as managerial skills. These abilities include both inherited and acquired ones. These are primarily required for effective implementation of the principles of management. The skills or abilities required to be possessed by managers may be classified as under:

1. Conceptual Skills

It is an ability to visualise the organisation as a whole system and form an image and develop vision in the context of the future environment. By applying these abilities managers successfully coordinate various subsystems and relate them in a meaningful manner with the larger system to seek its smooth functioning. Conceptual skills are used for developing thinking in an abstract term to visualise and understand the future. Managers need these abilities for scanning the changing environment and discovering the various opportunities provided by it and the problems and threats arising out of it and finally relating them to the strengths and weaknesses of the organisation. The conceptual skills also include an ability to determine the overall objectives of organisation by integrating them with sub-objectives and formulating basic strategies for the whole organisation.

2. Analytical Skills

These skills are more related with scientific attitude and thinking on the part of the manager for solving different problems and making decisions. Analytical skills refer to those abilities which are needed by managers for studying the problem in a systematic way, gathering necessary information on its various aspects, and establishing and describing the relationship between two or more variables. These abilities are also used for decomposing a complex and complicated phenomenon into various components to get an insight into it. A manager may become analytical in his approach for judging the performance of his subordinates, solving problems and making decisions.

3. Human Relations or Behavioural Skills

The basic responsibility of every manager is to get things done by others. In this process he needs behavioural skills. These skills refer to those abilities which are needed by the manager to deal with subordinates effectively. To manage them he has to understand their needs, interest and values. He interacts with them to know the general tendencies of human behaviour and factors influencing it. By using behavioural skills he may establish good rapport, warm relationships and conducive inter-personal relations with his subordinates. Human relations skills are also needed to provide a dynamic and effective leadership and build team spirit among employees (Table 1.1).

TABLE 1.1: MANAGERIAL SKILLS

Technical skills

to have knowledge of jobs and job content

to have knowledge of using technology for them

to train subordinates

to supervise work performed by them

4. Administrative Skills

Generally, decisions are made at higher levels and have to be got implemented by managers working at lower levels. Managers with the responsibility for the implementation of the decisions require administrative skills. It refers to those abilities which he uses for coordinating various activities, seeking effective utilisation of allotted resources and getting things done by subordinates. This type of skill also includes the ability to be practical or pragmatic, both in thinking and in action. By applying these skills he performs managerial functions taking into account the ground realities of the situation and behaves likes an ‘administrative man.’

5. Technical Skills

These skills refer to abilities to use specialised knowledge and proficiency in handling methods, procedures and techniques for doing a specific job. It also includes knowledge about jobs and job content and logical sequence of the procedures needed to perform them.

Such skills are more related with the nature and content of the job and technology to be used to complete it. Technical skills are needed by managers to provide training to their subordinates regarding the use of new techniques and methods and also to provide technical guidance and help to them.

In practice, it is found that conceptual skills are more important for managers working at higher levels and technical skills seem to be more important at lower levels, particularly at the supervisory levels. The reasons are that the supervisor is directly concerned with the various activities and jobs to be assigned to and performed by core workers. He has to help and guide them for using relevant methods and techniques.

Similarly, managers at the top have to have an integrated approach and thinking. They perceive problems in the context of the whole organisation and make such decisions which are in the larger interests of the entire organisation. But other types of skills are equally important for all managers at all levels.

STYLES OF MANAGERS

A manager is a distinct personality and belongs to an elite group and enjoys respect, status and authority. He performs a very complex job which is not marked by certain functions only but it is much more than that.

He has three major inputs, namely things (physical resources), ideas and people. By processing these he produces outputs. He performs a variety of functions as per the demand of the situation. He acts as an entrepreneur, planner, leader, change agent, damage controller, problem solver and handler of conflicting situations.

The style of a manager refers to the manner or way in which he performs managerial functions, plays various roles on the one hand and on the other hand, how he looks at a situation or problem, his reaction to it and how he solves it are all included in his style. The style of a manager is wider in scope covering not only people but also things and ideas.

Managerial style is mainly conditioned by the rank-and-file in the organisation, level of knowledge, skill and abilities, internal and external environment, philosophy and values of the management. In practice, the following styles are exercised by managers:

1. Entrepreneurial Style

If the style of a manager is highly marked by ownership-orientation, that is, the manager behaves more like an owner, it is known as the entrepreneurial style. He makes bold decisions based on his intuition without going through prescribed policies and procedures. He is highly ambitious, enthusiastic, energetic and dominant in his approach. He is a pragmatic and result-oriented person commanding a team of loyal workers. He takes calculated risks to exploit new business ideas and opportunities. His behaviour is more influenced by his emotions and sentiments rather than rationality and intellect. He seeks a high degree of compliance with orders and instructions given by him to the employees. He also expects them to work hard to achieve targets and fires them casually. He may not be very sure about the outcome of his decisions, even then he goes on deciding. He has no set pattern to follow, rather he is unstructured and unsystematic in his approach. He does not respect rules and formalities, rather he moves in a direct manner adopting shortcut methods (Table 2).

2. Conservative Style

This style is usually followed by managers who strongly believe in the classical theory of management. This style is very popular with private and public sector managers in India. Conservative managers prefer to work in a close setting, and do not interact with the outside world much. They strongly believe in slow change, maintaining the status quo, stability and continuity. They do not take risks to implement new opportunities and therefore adopt only those procedures, methods and ways which have been tested and tried by them in the past. Since they are not ambitious, they do not like change and are not dynamic in their approach. They determine simple, quantitative and attainable goals and remain happy with a reasonable performance. In the event of environmental changes, they hide themselves and somehow maintain the survival of the organisation without interfering with them.

3. Methodical Style

Managers who follow this style are generally scientific in their approach. They adopt a scientific attitude and thinking and do not accept anything without reason. They are methodical in the sense that they move systematically and scientifically from one step to another to solve problems and make decisions. They are rational in goal setting and developing a suitable course of action to achieve them. In order to secure a high degree of precision, perfection and optimum performance, they prefer to use mathematical, statistical and engineering devices. They are very orderly in their approach, quit alert about events in the external environment and are capable of coping with changes in an economical manner.

Quasi-professional Style

The group of managers who adopt this style of management are by and large

TABLE 1.2: STYLES OF MANAGERS

He initiates and manages change effectively well-versed and well-equipped with modern management knowledge. They are quite familiar with modern techniques and devices to be used to solve problems. By using their specialised knowledge and providing a dynamic leadership, they make the organisation capable of coping with a changing environment. They combine rationality with reality to make timely and superior quality decisions. They are cautious and courageous, reactive and proactive and firm and flexible in their approach. They do not leave anything to chance. They maintain stability in the organisation by their firmness and introduce changes by using dynamism. They adopt both types of measures, proactive measures are initiated before the happening of an event and reactive measures are used to control damage after the happening of an event. They are capable of analysing and visualising changes that are likely to occur; they influence them, bring them under control and at the same time, reshape them. Professional managers believe in factual decision-making by rejecting intuition. They become more objective and impartial in a situation.

MANAGEMENT AND ADMINISTRATION

There has been a controversy regarding the interpretation of these two terms among various authors of management. In a real sense, both of them represent systematic integration, mobilisation and utilisation of physical resources and direction of human effort to accomplish predetermined objectives. Nevertheless, some thought may be given to the viewpoints of various authors. Some authors maintain that there is no difference between these two terms and therefore they can be used interchangeably. They believe that if at all there is any difference between management and administration it may perhaps arise out of usage of these terms in practice. The term ‘management’ is used on connection with the performance of economic activities, while, in non-academic organisations for similar activities the term ‘administration’ is used. This viewpoint is subscribed to by William Newman, Peter Drucker, etc.

But there is another group of management scientists who believe that there exists a difference between these two terms. They include William Spriegel, R. H. Landsburg ,McFarland, Oliver Sheldon, etc. Those who distinguish between these two are further divided in terms of scope and nature of management and administration. Some of them like Oliver Sheldon, William Schizo and Spriegel feel that administration is wider, more generic and all-inclusive of management. They propagated that administration is the function of determining the general purpose of an enterprise, corporate policies and general plans and procedures to achieve them whereas management is concerned with the execution of policies within the limits set by the administration. In the words of Spriegel management is essentially an executive function and deals particularly with the active direction of human effort. Administration is largely determinative whereas management is essentially executive.

On the other hand, authors like Kimball and Kimball and other British writers hold the opinion that management is a more comprehensive function than administration. In the words of Kimball and Kimball, management is a wider concept embracing all duties and functions that pertain to imitation of an enterprise and the establishment of all major policies. According to them, administration is concerned with the actual work of executing or carrying out objectives. Thus, according to this view, functions and administration is confined to doing things in a routine manner by using set procedures and norms but management is a dynamic, innovative and creative process.

The foregoing discussion on the two terms ‘management’ and ‘administration’ indicates that most American authors consider administration in a broader field including all kinds of managerial activities. In contrast, British authors of management maintain that management refers to a high level of managerial activities such as goal setting, policy formulation, strategy making, etc. and administration is an operative part of it which is concerned with lower order management activities such as implementation of plans and other decisions.

SIGNIFICANCE OF MANAGEMENT

On the basis of the discussion above on management, it can safely be inferred that it is a life-giving element in an organisation. It is because all man-made organisations do require some force to function. In fact, a group of people known as managers provide this force and make the organisation a productive unit. In every group endeavour to seek common goals, management force is used to direct and coordinate activities of the members effectively and efficiently. Management, in this sense, is regarded as a prime mover of an organisation and a critical variable for its survival, growth, prosperity and development. In the context of organisational activities its importance can be outlined as under:

Management facilitates an efficient accomplishment of predetermined goals. Activities and functions performed by various individuals in the organisation are properly directed and coordinated towards these goals by managers. A team of professional managers can successfully lead, motivate and guide others to make valuable contributions in this regard.

Management integrates physical as well as human resources for realising objectives. An effective and optimum utilisation of all these resources can be secured by applying managerial knowledge. Managers continuously strive to reduce inefficiency, wastage and spoilage in the use of these resources, thereby enhancing productivity.

Management remains a critical variable in an organisation. It is because the survival, profitability and growth of an organisation to a large extent depends on a professional approach and the abilities of