Chapter 1: Nature and Significance of
Management
1.1 Meaning of Management
Management is the process of planning, organizing, staffing, directing, and controlling
resources to achieve organizational goals efficiently and effectively.
Efficiency: Completing tasks with minimal resources (cost, time, effort).
Effectiveness: Achieving goals successfully within the required timeframe.
Definitions of Management
Harold Koontz: “Management is the art of getting things done through and with people
in formally organized groups.”
Henry Fayol: “To manage is to forecast, to plan, to organize, to command, to coordinate
and to control.”
1.2 Characteristics of Management
1. Goal-Oriented Process: Management aims to achieve organizational objectives (e.g.,
maximizing profit, increasing market share).
2. Pervasive: Management is required at all levels (top, middle, and lower) and in all
types of organizations (business, government, NGO).
3. Multidimensional: Management has three dimensions:
o Work Management (tasks and goals)
o People Management (employees and customers)
o Operations Management (production, logistics)
4. Continuous Process: Management is an ongoing process of planning, organizing,
staffing, directing, and controlling.
5. Group Activity: It involves people working together to achieve common objectives.
6. Dynamic Function: Management adapts to changes in the business environment
(technology, competition, government policies).
7. Intangible Force: It cannot be seen but is felt through coordination, productivity, and
employee satisfaction.
1.3 Objectives of Management
Management has three major objectives:
1. Organizational Objectives (Economic Objectives)
o Survival: Ensuring continuity of the business.
o Profitability: Earning profits for growth and sustainability.
o Growth: Expanding the business through diversification, innovation, and
acquisitions.
2. Social Objectives
o Producing eco-friendly and safe products.
o Generating employment opportunities.
o Following ethical practices.
3. Personal Objectives (Individual Objectives)
o Providing fair wages and incentives.
o Ensuring job security and career growth.
o Maintaining a good work environment.
1.4 Importance of Management
1. Achieves Organizational Goals – Helps in achieving business objectives through
effective planning and decision-making.
2. Increases Efficiency – Reduces wastage of resources and enhances productivity.
3. Creates a Dynamic Organization – Helps an organization adapt to changes in the
business environment.
4. Helps in Development of Society – Provides employment, produces useful goods and
services, and improves the standard of living.
5. Encourages Innovation – Promotes research and development (R&D), leading to new
products and services.
1.5 Management as an Art, Science, and Profession
1.5.1 Management as an Art
Art is the application of knowledge and personal skills to achieve desired results.
Features of Art (All are present in management)
1. Existence of Theoretical Knowledge – Management has principles and concepts like
art.
2. Personalized Application – Every manager applies management principles in a unique
way.
3. Practice and Creativity – Managers improve their skills with experience.
📌 Conclusion: Management is an art because it requires creativity, experience, and practical
knowledge.
1.5.2 Management as a Science
Science is a systematic body of knowledge based on experiments and observations.
Features of Science
1. Systematic Body of Knowledge – Management has well-defined principles.
2. Cause and Effect Relationship – Example: Motivation increases productivity.
3. Universally Applicable – Management principles are applied everywhere, but with
modifications.
📌 Conclusion: Management is a social science, not a pure science, because human behavior is
unpredictable.
1.5.3 Management as a Profession
A profession has specialized knowledge, formal education, and follows ethical standards.
Features of Profession
1. Well-defined Body of Knowledge – Management has theories and principles.
2. Formal Education & Training – Business schools offer MBA and management
courses.
3. Professional Association – AIMA (All India Management Association) regulates
management practices in India.
4. Ethical Code of Conduct – Managers follow business ethics and corporate
governance.
5. Service Motive – A profession aims at serving society along with earning profit.
📌 Conclusion: Management is not a fully developed profession, as anyone can become a
manager without a degree.
1.6 Levels of Management
Management is divided into three levels:
1.6.1 Top-Level Management
Includes CEO, MD, Chairperson, Directors.
Functions:
o Setting organizational goals and policies.
o Making strategic decisions.
o Coordinating with external stakeholders (government, investors).
1.6.2 Middle-Level Management
Includes Department Heads, Regional Managers.
Functions:
o Implementing plans and policies set by top management.
o Coordinating between top and lower-level managers.
o Motivating and training employees.
1.6.3 Lower-Level Management (Supervisory Level)
Includes Supervisors, Foremen, Team Leaders.
Functions:
o Managing workers and daily operations.
o Maintaining work discipline.
o Giving feedback to middle management.
1.7 Coordination: Concept and Importance
1.7.1 Meaning of Coordination
Coordination is the synchronization of efforts among different departments to achieve a
common goal.
1.7.2 Features of Coordination
1. Integrates Group Efforts – Ensures departments work together.
2. Ensures Unity of Action – Aligns individual and organizational goals.
3. Continuous Process – Coordination is needed at all levels.
4. All-Pervasive Function – Required in every organization.
5. Deliberate Function – Requires conscious effort by managers.
1.7.3 Importance of Coordination
1. Ensures Efficiency – Reduces conflicts and wastage.
2. Encourages Teamwork – Develops a cooperative environment.
3. Helps in Growth and Expansion – Smooth operations lead to business growth.
