Concept of Management, Nature, Process and Significance of Management

Concept of Management: – Management can be defined as the process of achieving organizational goals through planning, organizing, leading, and controlling the human, physical, financial, and information resources of the organization in an effective and efficient manner.

Every business needs planning for the future for a successful business and the person who is in the authority, has to take decisions and he will be responsible for the consequences of his decisions whether favorable and unfavorable.

Concept of Management

What is management?

Meaning of Management: – Management is what a manager does within the organization. All the activities whether related to decision making or implementation of such decisions are performed by the managers with the purpose of achieving common goals. 

Definition of Management

Concept of management is defined as the process of getting things done from others to achieve goals effectively and efficiently.

Efficiently: –

  • To complete a task with minimum cost.
  • For example: – ‘A’ got a task of construction of the Flyover. The estimated target for the same is 1000 crores and ‘A’ completed the construction of flyover in 900 crores. In this case, A worked efficiently.

Effectively: –

  • It is basically to complete the task on time.
  • For example: – Keeping in mind the above example, Suppose, ‘A’ got two years’ time period for the construction of flyover. If ‘A’ completes his task within the span of two years. Here, in this case, we can say A’s management is effective.

Process of Management

The process includes the functions performed by the management within the organization.

  1. Planning: Planning means thinking in advance. Planning relates to setting goals, objectives and targets and also describe a mechanism to achieve them at various levels throughout the organization.
  2. Organizing: It means the arrangement of resources to do different tasks in the organization.
  3. Staffing: It means the appointment of the right person at the right place or job.
  4. Directing: It includes the instructions, guidance and motivation given by the manager to their employees and manager adopt their leadership tasks.
  5. Controlling: Control is concerned with measuring and minimizing the difference between planned performance and actual performance, and monitoring performance as well as taking corrective actions wherever necessary. Thus management is a complex, integrated and ongoing dynamic process.

Concept of Management: Nature

  1. Goal-Oriented: The main task of management is to achieve the goals of the organisation. An organization has some goals, which are the basic reason for its existence.
    1. Goal: – It means what the organisation wants to achieve.
    2. For example, Reliance Jio; It came up with a goal to capture whole telecommunication industry and to get the highest market share.
    3. Here, in the above-mentioned example, the work of management is to achieve goals set by ‘Reliance Jio’ with effectiveness and efficiency.
    4. The goal should be clear and simply stated to each member working for the organization.
  2. Management is a Group Activity: – Management is not a one-person activity.
    1. It is a group activity and every individual working for the organization fully knows his responsibilities and duties which he/she is expected to achieve within the time allotted.
    2. Every individual joins the organization with different and multiple needs known as personal objectives but works towards the achievement of organizational goals.
  3. Management is an Intangible Force: Management cannot be touch or seen but its presence can be observed if its objectives are achieved as per the set goal.
    1. The satisfaction of stakeholders is a guiding force of good management.
    2. The decision making of managers should be in the light of objectives to be achieved.
    3. Secondly, the implementation of such decisions such target both efficiency and effectiveness.
      (The term stakeholders include all the persons who are interested in business directly and indirectly. It includes customers, government, public, investors, etc.)
  1. Management is All-Pervasive: Management is a pervasive function as it is applied to all kinds of organization.
    1. It is applied in all types of organization irrespective of the following factors: –
      • Size (small scale, medium scale or large scale)
      • Purpose (profit earning or non- profit earning organizations)
      • Level (top, middle or lower level of organizations)
    2. For example: – The lower level does day to day planning, the middle level does departmental level planning and the top-level does organizational-level planning.
  2. Management is Multi-Dimensional: It is a complex activity with three main dimensions.
    1. Management of work: – Management of work aims to manage the work i.e., which work to be performed at what time.
    2. Management of people: – Management of people includes management of individuals i.e., to allot authorities, responsibilities and their duties. Managing people has two dimensions: –
      • Management of individuals: – It means dealing with employees as individuals with their diverse needs and behaviors.
      • Management of people: – It means dealing with individuals as a group of people i.e., to maintain coordination among individuals at the same level.
    3. Management of Operations: – It is interlinked with both management of work and management of people.
      • This has some basic products and services to provide in order to survive.
      • For example: – the main activity of banks is to provide loans and to take loans from the public but they are providing other activities as well as online banking, ATM services at no cost, etc.
  3. Management is a Continuous Process:
    1. Management is a process of continuous activities, but separate functions i.e., planning, organizing, staffing, directing and controlling.
    2. Management starts with the organization and ends with organization.
  4. Management is a Dynamic Function:
    1. In order to survive, management should make changes according to the business environment. In order to ensure regular growth, managers should make changes in the policies as per the needs of the stakeholders.
    2. For example: – Paytm is making the ventures with all types of business units such as schools, universities and other companies and professionals to provide a single platform for all payment solutions.

Significance/Importance of concept of management

  1. Optimal use of resources: A manager eliminates wastage of resources that leads to efficiency in all business functions.
  2. Effective leadership and motivation: It helps employees to work in harmony and achieve goals in a coordinated manner. It provides effective leadership and motivation for employees to work hard.
  3. Sound industrial relations: A manager maintains a balance between employees demands and organizational needs, helping to reduce industrial disputes.
  4. Achievement of goals: It helps in realizing goals with maximum efficiency by minimizing unnecessary deviations, overlapping efforts and waste motions.
  5. Improvement in living standards: It improves the standard of living of people by ensuring optimum utilization of scarce resources and survival of the firm in a dynamic environment.
  6. Establishing a sound organization: Managers help to establish a sound organization through effective authority and responsibility relationships.
  7. Reduces Cost: A manager uses cost-effective techniques to reduce production costs and increase production.

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