Importance of Management

In this world, resources are limited, but human needs are insatiable.Management has important role to play at society , organisational and individual levels.

At larger context management has following importance for society.

1. Sustainable use of resources- Since civilizations have to satisfy their needs but also to care the needs of next generations, since use of resources should be made in the way that they should not deplete but enough restored and conserved for next generations.
2. Need satisfaction of society- Management is responsible for the functioning of organizations which are established to satisfy the needs of society. Organisations serve the society by offering goods and services to satisfy the needs.
3. Employment to public- Management offers employment to workers.
4. Increased per capita income- By employment people earn their livelihood and their income is increased
5. Improved quality of life- Increased income and good service and production facilities are resulted in good quality of life for people.
6. Management is needed in any type of social organisation regardless of what product it offers.

At organisational level Management is very important because- 

1. It makes efficient use of resources. 
2. Gives organisations a clear purpose and direction
3. No organisation can exist without some sort of 'management' and few people who can take care of managerial roles.
4. Management is a major factor of production like man, machinery, manpower and material.
5. Management brings innovations and new energy in the organisation and prevents the natural decline of an organisation. It means each organisation can go to decline with course of time due to entropy, but this is management who brings innovations and new energy,skills and technology into organisations and prevent them from decline( responsible for maintaining negative entropy

 An individual also needs to manage his daily affairs,career, public and even personal life. Avoidance of management at present times is not possible. It is all pervasive.

Management as art and science

Management as a science:

Management is a science because:

1. As a discipline it is having a systematic collection( or body ) of knowledge, facts, information, theories, principles
2. It uses advance scientific analysis and synthesis of information for forecasting and understanding the situations and problems.
3. It is dependent on systematic scientific inquiry.
4. Like other sciences it also tries to explain, predict and control the behavior of people teams and structure- The organisational behavior , thus it is not only science but applied science
5.  it is based on systematic planning( thinking ) and then execution( doing) rather than doing things with trial and error, in unplanned manner with intuition.

Management is an Art because:

1.  some times managers use intuition, personal mastery and subjective judgments to solve the problems in organisations
2. Managers don't do all the work with prior planning and then doing, rather than they also involve most often in the unplanned work and problems which require their personal experience and use of subjective judgments
3. Managers deal with human being and thus have to understand the emotions, relations with their subordinate employees and team. Dealing with the team and human relations is an based on personal understanding and empathy rather than use of science and laboratory methods. It is totally art of a manager that how to manage the emotions and keep up the team spirit.
4. Getting things done by others: this is what some time called getting results either hook or by crook. This is not the science but art of the manager to achieve the target in anyway.

Management is art as well science:

Above discussed points reveal that management is science as well as art because managers use both methods: 

Managers work in systematic, planned and scientific manner, use the theories of management to get the solution of the problems: so it is a science.

Managers also face situations and problems out of the scope of their plan and then they use their personal skill, mastery and intuition to solve the problem and get the results.

Both the things are practiced by managers and are complementary to each other. Management as science gives managers a scientific orientation and art focus on human aspects and result orientation. Thus management is science as well art both., 

MBA 011 : PRINCIPLES & PRACTICE OF MANAGEMENT
Max. Hours : 40
UNIT I (8 Sessions)
Management: Concept, Nature, Importance; Management : Art and Science, Management As a
Profession, Management Vs. Administration, Management Skills, Levels of Management,
Characteristics of Quality Managers.
Evolution of Management: Early contributions, Taylor and Scientific Management, Fayol’s
Administrative Management, Bureaucracy, Hawthorne Experiments and Human Relations, Social
System Approach, Decision Theory Approach.
Social Responsibility of Managers and Ethics in Managing.
UNIT II (10 Sessions)
Introduction to Functions of Management
Planning: Nature, Scope, Objectives and Significance of Planning, Types of Planning, Process of
Planning, Barriers to Effective Planning, Planning Premises and Forecasting, Key to Planning,
Decision Making.
Organizing: Concept, Organisation Theories, Forms of Organisational Structure, Combining Jobs:
Departmentation, Span of Control, Delegation of Authority, Authority & Responsibility, Organisational
Design.
UNIT III (10 Sessions)
Staffing: Concept, System Approach, Manpower Planning, Job Design, Recruitment & Selection,
Training & Development, Performance Appraisal
Directing: Concept, Direction and Supervision
Motivation: Concept, Motivation and Performance, Special Motivational techniques: Money,
participation, reward systems, Quality of Work Life, Job Enrichment & Morale Building.
UNIT IV (12 Sessions)
Leadership: Concept and Functions, Process and models of Leadership Development, Contemporary
views on Leadership: Transformational-Transactional, Charismatic-Visionary leadership.
Controlling: Concept, Types of Control, Methods: Pre-control: Concurrent Control: Post-control, An
Integrated Control System, The Quality Concept Factors affecting Quality, Developing a Quality
Control System, Total Quality Control, Pre-control of Inputs, Concurrent Control of Operations. Post
Control of Outputs.
.
Suggested Reading:
1. Stoner, Freeman & Gilbert Jr - Management (Prentice Hall of India, 6
th
Edition)
2. Koontz Harold & Weihrich Heinz – Essentials of management (Tata Mc Graw Hill, 5th Edition 2008)
3. Robbins & Coulter - Management (Prentice Hall of India, 9th
Edition)
4. Robbins S.P. and Decenzo David A. - Fundamentals of Management: Essential Concepts and
Applications (Pearson Education, 6th
Edition)
5. Weihrich Heinz and Koontz Harold - Management: A Global and Entrepreneurial Perspective (Mc
Graw Hill, 12
th
Edition 2008)

Competitive Intelligence

Today's Business Environment of organisations is characterized by hypercompetition, where too many organisations are pursuing too little business. There is not enough demand to go around for all providers and services.
The knowledge base and capability to manage in this hyper- competitive world is called Competitive intelligence. It is the process of insight about future scenario and requires that we go from data to intelligence.

for example-
Data- Prices for our products have dropped by 5%
information - It is because of lower labor costs
intelligence- our key competitors is about to acquire new facility in India and that will increase the competition in next year/months.


Difference between data, information and intelligence


Data- Unrelated pieces of information and

Information- Increase knowledge derived by understanding the relation of data.

Intelligence- Organizing information to fully appreciate the implication and impact on the organisation.



Competitive intelligence has some basic forms such as market research and benchmarking. Good Competitive goes beyond simple research. It attempts to answer specific critical questions that can impact the organisations.

1. How is the competitor XYZ is able to to grow XYZ able to grow and capture market share.
2. What new products will competitor ABC develop and when will release this products.
3. What are the core competencies of competitor DEF?
4. Can we compete with new business lines or should we acquire another company to establish our market share.


Competitive Intelligence requires old fashioned analysis and filtering, somewhat like a detective who wants to solve a case- you can't automate the insights derived form C.I. It takes very intense and serious focus in a very short period of time.

Regardless of the tools businesses use, the single indispensable element to C.I is the human factor : the smart experience and instinct that can turn huge collection of dead facts into live intelligence that plays a central part in making business decisions

Competitive intelligence helps in decision making in the illusive and uncertain conditions. Strategy formulation process deals with incomplete options, ambiguous strategic options, difficult to evaluate . Competitive intelligence helps in this process.

Importance of Competitive intelligence

1. Sources of best practices
2. Strategy formulation and strategic analysis.
3. Isolates performance gaps in relation to competion.
4. Helps areas of improvement risks threats opportunities.

Tools of C.I
1.Environmental mapping - five forces model.
2.Organisational Appraisal
3. Wargames
4.Four Concerns analysis

5. Market Research 

6.Bench Marking- 

Imitating the industry leader, comparing resource, capabilities, processes strategy at the industry best practices

.

Management Vs. Administration

Management and administration are the terms used as synonymous in the business.Few people use them interchangeably and few use them as different terms.

Every word has its meaning in its context- American scholars and European scholars have different thinking on Management and Administration.

American scholars like  Oliver Sheldon, Schultz, are having of this view that Administration and Management are two different concepts and have different use in business world. According to these American scholars, Administration is superior than Management because,  it involves thinking,decision making,high level planning, policy and strategy formulation. Management is subordinate or inferior to administration because it is doing or, executing or,and implementing function. Management is responsible for the implementation of the policies and major plans  , strategies laid down by Administration.
Thus according to American view, Administration and management are different, administration is superior than management because management has to follow the policies, plans, strategies, decisions laid down by administration. Administration is concerned with the function of top level managers but management is concerned with middle and lower level.

European scholars like Breach are opposite the American viewpoint. According to them Management is broader and superior than administration because it is responsible for formulation of strategies, policies, plans and higher level decision making and is function of top level managers in the organisation. Administration is inferior to management because it is responsible for implementation of these plans,strategies, policies and installation of systems to execute the decisions of Management( top level managers). Thus management is determinative function and administration is implementing function( Management is thinking and administration is doing).

Management and administration are same: Many writers like Henri Fayol, William Newman, Chester Barnard, George Terry, Louis. A. Allen, Koontz and O’ Donnell make no distinction between management and administration.
According to these scholars, Management and administration both are made on similar set of principles( like henry fayol's 14 principles) and have to perform overall managerial functions(planning, directing, commanding, controlling, coordinating etc.) Management can be classified in to two parts-
1. Administrative Management- Thinking, Planning
2. Operative Management- Implementing
and every manager at each level has to do perform these two functions. So there is no any practical difference between Administration and management.

Henry Fayol: Administrative theory and 14 Principles of Management

Henry Fayol was a French scholar. He was a mining engineer who worked for a French mining company Commentry-Fourchamboult-Decazeville. In his career he attained the highest managerial position of CEO.

He wrote a famous book - 1916 book Administration Industrielle et Generale in French which was translated in 1949 in English. In this classic book he popularized the famous fourteen principles and five managerial functions.

1. Division of Labour

This principle states that work can be performed more efficiently and productively if it is divided into smaller elements and assigning these specific elements to specific workers. This is similar to one best way of doing job as in scientific management and job specialisation in Bureaucracy. Each employee or a group of employee performs a specific task. Division of labour according to job specialisation is the main function.

2. Authority

Authority is the given power ( based on legitimate rule by organization) to an official to issue orders to subordinates and take work from them. This principle states that managers require authority to perform their managerial responsibilities.

3. Discipline

Discipline is related with regulation of behaviour of employees at workplace. Without discipline, authority has no meaning; there should be someone to obey the orders.

This principle suggests that there is requirement of a set of rules and procedures aimed at attaining good employee discipline and obedience.

4. Unity of command

This is the “one man one boss rule”. An employee should receive orders from only one boss only.

If a worker will receive orders from several bosses he will be confused and over burdened. Also there will be a problem regarding reporting.

So this principle emphasizes on only one boss for a worker.

5. Subordination of individual interests to the organizational interest.

Employees must sacrifice their interests for the good of the organization. The organizational goals/ tasks/work would be preferred over interest of worker or group of workers.

Thus an organization should employ only those individuals who are fully committed to its objectives and are willing to readily follow the organization’s mandates/rules.

6. Unity of direction

This principle supposes that there should be only one plan and only one boss for each group of activities having same objectives. This is to ensure that the organization is pursuing it all activities not in contradictory directions but there is alignment between activities.

7. Remuneration of personnel

Fair wages work as a good motivation for employees. Compensation for work done should be reasonable to both – employees and organization and it should be sufficiently motivational, neither overpaid nor underpaid.

8. Centralization

Too much centralization leads to ineffectiveness and so does the decentralization. There should be a balance of centralization and decentralization in organizations.

The best approach to get the balance is top management designs the broader strategy, policies and middle level and lower level of managers interpret and operationalise them to work.

9. Scalar chain

This principle assumes that there should be clear hierarchy in organization from top to down. The flow of communication must follow the hierarchy that it should be strictly vertical.

Horizontal communication is needed only when there is urgent need and permission from superiors has been obtained.

10. Order

Order means doing things in rational and logical manner. There should be a place for everything and everything should be in its place.

An organization’s materials/resources should be at right place at right time, and its employees should be assigned to the jobs best suited to them.

11. Equity

Equity means being kind, fair and just to your subordinates or employees. Equal and fair treatment, impartiality and bias free environment promotes employee motivation commitment and loyalty.

12. Stability of personnel tenure

Employees perform well when their job is secured; they are protected from arbitrary dismissals. It is necessary to retain employees with organization because high turnover rate may result high cost to organization and leads to inefficiency.

13.  Initiative

Organizations require managers who possess ability to conceive and implement new ideas. They should be having ability to  self start and take on the risk independently.

14. Esperit de corps

The maintainance of high moral and unity among employees is an essential thing for success of organization.

Nature of Management

Nature means the essential characteristics or qualities by which something is recognized. Nature of management simply can be described as a goal oriented continuous and universal social process. Management is viewed as an integrative force to bring together the factors of production and get the result done. Management is some times viewed as an Art as well Science to.

The nature of Management could be described as following points:-

1). Management is a process:- Management involves happening of a series of interrelated managerial functions/activities that simply means that it is a process.

2). Management is a continuous process:- Management is a continuous process since it exists every time during the life of the organization- Organizational Life Cycle. Continuous existence of this process is necessary for the survival of the organization and fulfillment of its objectives. Actually this is the management process which brings new energy into organization, and prevents the organization from natural process of decline- Entropy.

3). Management is a social process:- Organizations are social units and use group effort to achieve some goals. Management is a social process because some how it is related with the relationship of employees, teams. Most of the time a manager deals with the emotional aspects and team building aspects of a team to get the desired results and thus management today is no more mechanical process and employees are no more treated as machines in modern organizations.

4).Management is goal oriented:-  Management is a goal oriented process/activity because it is aimed at the accomplishment of organizational goals. Organizational goals( Providing any service or Product to the society or economy) are the reason for which an organisation and its management exist. So management is a goal oriented process

5).Management is an integrative force: Management is the force who bring together all factors of production, resources and makes it possible to accomplishment of organizational goals. Organization is a social unit in which  people from different background, culture and having different personalities, motivation,interest and career objective work together. Management also integrates individual goals and organizational goals that means it creates a balance and reconciliation of individual employee's inspiration and organisational intent/purpose.

6). Management is multidisciplinary :- Management as an area of study and subject makes use of concepts and theories from other subjects or disciplines. It uses psychology to understand the employees behavior, makes use of sociology to understand group processes, uses anthropology to describe and change  the culture of organization, applies mathematical models to predict the future

7). Management is an applied discipline:- Management as a discipline and area of study provides solutions to the fulfillment of increasing needs of society within the limited resources. In this sense it is applied in nature

8). Management is an Art as well as science:-Management is an art because it makes use of personal skills, experience, creativity,mastery in getting any thing done in varying situations. It may not involve systematic thinking and planning and then doing any work because most  often situations before managers are unpredictable, challenging and they need to use their own insight, experience, creativity and skill to get the thing done. Some scholars say management an art because it is related with doing or practicing.
Management is a science in the sense it involves systematic planning and doing, based on logical and rational exercises. Management as a science makes use of principles, theories,scientific method to understand and solve the problem. Management as an art and science are complementary to each other.