Management can be viewed as an effort made for accomplishing the vision, mission, goals, and objectives through planning, organizing, staffing, directing, and controlling all the business activities accordingly.
Other Definitions of Management
Views on the definition and scope of management include:
- Henri Fayol (1841-1925) stated: "to manage is to forecast and to plan, to organize, to command, to co-ordinate and to control."
- Fredmund Malik (1944- ) defines management as "the transformation of resources into utility". Management is included as one of the factors of production – along with machines, materials, and money.
- Ghislain Deslandes defines management as "a vulnerable force, under pressure to achieve results and endowed with the triple power of constraint, imitation, and imagination, operating on subjective, interpersonal, institutional, and environmental levels".
- Peter Drucker (1909–2005) saw the basic task of management as twofold: marketing and innovation. Nevertheless, innovation is also linked to marketing (product innovation is a central strategic marketing issue). Peter Drucker identifies marketing as a key essence for business success, but management and marketing are generally understood as two different branches of business administration knowledge.
- Van Fleet and Peterson define management ‘as a set of activities directed at the efficient and effective utilization of resources in the pursuit of one or more goals.’
- Megginson, Mosley, and Pietri define management as ‘working with human, financial and physical resources to achieve organizational objectives by performing the planning, organizing, leading and controlling functions.
- Kreitner’s definition of management: ‘Management is a problem-solving process of effectively achieving organizational objectives through the efficient use of scarce resources in a changing environment.’
- According to F.W. Taylor, ‘ Management is an art of knowing what to do when to do it and see that it is done in the best and cheapest way ‘.
- According to Harold Koontz, ‘Management is an art of getting things done through and with the people in formally organized groups. It is the art of creating an environment in which people can perform as individuals and can co-operate towards the attainment of group goals.‘
Fayol’s 6 Functions of Management
Henry Fayol gave six managerial functions, which are performed in almost every organization. Therefore we can say that these functions are universally applicable. Let us now understand each of these in detail below:
- Forecasting: The first function is to analyze the present and past information to predict the future and plan accordingly.
- Planning: The top management plans a suitable course of action, based on the business forecast.
- Organizing: The management next needs to systematically arrange the resources, i.e., raw material, capital, and human resource as per the planning.
- Commanding: The managers give instructions, directions, and orders to the subordinates in this function.
- Coordinating: In this function, the management should ensure proper synchronization among all the departments. For this purpose, weekly meetings can be held with the managers of all the departments.
- Controlling: The managers need to evaluate the performance of the personnel by establishing the standards, comparing the actual performance with the desired one, and implementing the corrective measures accordingly
Management occurs at two levels: the executive management level and the functional or departmental level. Executive management creates the big-picture strategies for a business, setting long-term goals. The team usually includes the owner or chief executive officer; a controller, who coordinates the activities of the various departments; and a chief financial officer, who handles financial strategy. To achieve corporate goals, executive teams oversee department-level managers. These managers focus on a particular function, such as marketing, sales, human resources, or finance. Managing an organization requires a clear company mission and goals that are communicated to department heads. These managers set goals for their areas that help the company achieve its strategies and oversee the staff members below them who will perform their department's work. This might include directors who oversee managers who direct coordinators who work with staff members.
Layers of Management
Large businesses and corporations often have three primary levels of management organized in a hierarchical structure. You may have heard terms that refer to these different layers of management, such as “middle management” or “senior management.”
- Low-level management: Low-level managers include roles like front-line team leaders, foremen, section leads, and supervisors. This level of management, the lowest in the three layers, is responsible for overseeing the everyday work of individual employees or staff members and providing them with direction on their work. Low-level management’s responsibilities often include ensuring the quality of employees’ work, guiding staff in everyday activities, and routing employee problems through the appropriate channels. They also are responsible for the day-to-day supervision and career planning for their team, as well as providing feedback on their employees’ performance.
- Middle management: Middle managers, the next layer in the management hierarchy, are overseen by senior management. Middle management includes those working in the roles of a department manager, regional manager, and branch manager. Middle management is responsible for communicating the strategic goals developed by senior management down the line to front-line managers. In contrast with senior management, middle managers spend more of their time on directional and organizational functions. This includes defining and discussing important policies for lower management, providing guidance to lower-level management to achieve better performance, and executing organizational plans at the direction of senior management.
- Senior management: Senior management, including the chief executive officer, president, vice president, and board members, is at the top layer of this management hierarchy. Senior management needs to set the overall goals and direction of an organization. Senior management develops strategic plans and company-wide policy and makes decisions about the direction of the organization at the highest level. They also usually play an essential role in mobilizing outside resources and are held accountable to the company’s shareholders as well as the general public for the performance of the company.
Characteristics of Management
- Universal: All organizations, whether it is profit-making or not, require management, for managing their activities. Hence it is universal in nature.
- Goal-Oriented: Every organization is set up with a predetermined objective and management helps in reaching those goals timely, and smoothly.
- Continuous Process: It is an ongoing process that tends to persist as long as the organization exists. It is required in every sphere of the organization whether it is production, human resource, finance, or marketing.
- Multi-dimensional: Management is not confined to the administration of people only, but it also manages work, processes, and operations, which makes it a multi-disciplinary activity.
- Group activity: An organization consists of various members who have different needs, expectations, and beliefs. Every person joins the organization with a different motive, but after becoming a part of the organization they work for achieving the same goal. It requires supervision, teamwork, and coordination, and in this way, management comes into the picture.
- Dynamic function: An organization exists in a business environment that has various factors like social, political, legal, technological, and economic. A slight change in any of these factors will affect the organization’s growth and performance. So, to overcome these changes management formulates strategies and implements them.
- Intangible force: Management can neither be seen nor touched but one can feel its existence, in the way the organization functions.
Precisely, all the functions, activities, and processes of the organization are interconnected with one another. And it is the task of the management to bring them together in such a way that they help in reaching the intended result.
Broad Context of Management
To truly understand Management one must know its broad context
It also helps you to be acquainted with historical theories, especially to appreciate the rather recent changes (which are quite different than traditional approaches) so you might adjust your own management styles accordingly.
- Scientific Management Theory (1890-1940): At the turn of the century, the most notable organizations were large and industrialized. Often they included ongoing, routine tasks that manufactured a variety of products. Back then, the United States prized scientific and technical matters, including careful measurement and specification of activities and results. Management tended to be the same. Frederick Taylor developed the "scientific management theory” which espoused this careful specification and measurement of all organizational tasks. Tasks were standardized as much as possible. Workers were rewarded and punished. This approach appeared to work well for organizations with assembly lines and other mechanistic, routinized activities.
- Bureaucratic Management Theory (1930-1950): Max Weber embellished the scientific management theory with his bureaucratic theory. Weber focused on dividing organizations into hierarchies and establishing strong lines of authority and control. He suggested organizations develop comprehensive and detailed standard operating procedures for all routinized tasks.
- Human Relations Movement (1930-today): Eventually, unions and government regulations reacted to the rather dehumanizing effects of the current theories. More attention was given to individuals and their unique capabilities in the organization. A major belief included that the organization would prosper if its workers prospered as well. Human Resource departments were added to organizations. The behavioral sciences played a strong role in helping to understand the needs of workers and how the needs of the organization and its workers could be better aligned. Various new theories were spawned, many based on the behavioral sciences (some with names like theory “X”, “Y” and “Z”).
New Paradigm in Management
- Driving Forces of Change: Around the 1960s and today, the environment of today’s organizations has changed a great deal. A variety of driving forces provoke this change. Increasing telecommunications has “shrunk” the world substantially. The increasing diversity of workers has brought in a wide array of differing values, perspectives, and expectations among workers. Public consciousness has become much more sensitive and demanding that organizations be more socially responsible. Much of third-world countries have joined the global marketplace, creating a wider arena for sales and services. Organizations became responsible not only to stockholders (those who owned stock) but to a wider community of “stakeholders.” As a result of the above driving forces, organizations were required to adopt a “new paradigm,” or view of the world, to be more sensitive, flexible, and adaptable to the demands and expectations of stakeholders demands. Many organizations have abandoned or are abandoning the traditional top-down, rigid, and hierarchical structures to more “organic” and fluid forms. Today’s leaders and/or managers must deal with continual, rapid change. Managers faced with a major decision can no longer refer back to an earlier developed plan for direction. Management techniques must continually notice changes in the environment and organization, assess these changes and manage change. Managing change does not mean controlling it, but rather understanding it, adapting to it where necessary, and guiding it when possible. Managers can’t know it all or reference resources for every situation. Managers must count on and listen more to their employees. Consequently, new forms of organizations are becoming more common, e.g., worker-centered teams, self-organizing and self-designing teams, etc.
- Traits of the New Paradigm: Marilyn Ferguson, in The New Paradigm: Emerging Strategic for Leadership and Organizational Change (Michael Ray and Alan Rinzler, Eds., 1993, New Consciousness Reader), provides a very concise overview of the differences between the old and new paradigm. (The following is summarized.)
- Contingency Theory: Basically, contingency theory asserts that when managers make a decision, they must take into account all aspects of the current situation and act on those aspects that are key to the situation at hand. Basically, it’s the approach that “it depends.” For example, the continuing effort to identify the best leadership or management style might now conclude that the best style depends on the situation. If one is leading troops in the Persian Gulf, an autocratic style is probably best (of course, many might argue here, too). If one is leading a hospital or university, a more participative and facilitative leadership style is probably best.
- Systems Theory: Systems theory has had a significant effect on management science and understanding organizations. First, let’s look at “what is a system?” A system is a collection of parts unified to accomplish an overall goal. If one part of the system is removed, the nature of the system is changed as well. For example, a pile of sand is not a system. If one removes a sand particle, you’ve still got a pile of sand. However, a functioning car is a system. Remove the carburetor and you’ve no longer got a working car. A system can be looked at as having inputs, processes, outputs, and outcomes. Systems share feedback among each of these four aspects of the systems. Let’s look at an organization. Inputs would include resources such as raw materials, money, technologies, and people. These inputs go through a process where they’re planned, organized, motivated, and controlled, ultimately to meet the organization’s goals. Outputs would be products or services to a market. Outcomes would be, e.g., enhanced quality of life or productivity for customers/clients, productivity. Feedback would be information from human resources carrying out the process, customers/clients using the products, etc. Feedback also comes from the larger environment of the organization, e.g., influences from government, society, economics, and technologies. This overall system framework applies to any system, including subsystems (departments, programs, etc.) in the overall organization. Systems theory may seem quite basic. Yet, decades of management training and practices in the workplace have not followed this theory. Only recently, with tremendous changes facing organizations and how they operate, have educators and managers come to face this new way of looking at things. This interpretation has brought about a significant change (or paradigm shift) in the way management studies and approaches organizations. The effect of systems theory in management is that writers, educators, consultants, etc. are helping managers to look at the organization from a broader perspective. Systems theory has brought a new perspective for managers to interpret patterns and events in the workplace. They recognize the various parts of the organization, and, in particular, the interrelations of the parts, e.g., the coordination of central administration with its programs, engineering with manufacturing, supervisors with workers, etc. This is a major development. In the past, managers typically took one part and focused on that. Then they moved all attention to another part. The problem was that an organization could, e.g., have a wonderful central administration and a wonderful set of teachers, but the departments didn’t synchronize at all. See the category Systems Thinking
- Chaos Theory: As chaotic and random as world events seem today, they seem as chaotic in organizations, too. Yet for decades, managers have acted on the basis that organizational events can always be controlled. A new theory (or some say “science”), chaos theory, recognizes that events indeed are rarely controlled. Many chaos theorists (as do systems theorists) refer to biological systems when explaining their theory. They suggest that systems naturally go to more complexity, and as they do so, these systems become more volatile (or susceptible to cataclysmic events) and must expend more energy to maintain that complexity. As they expend more energy, they seek more structure to maintain stability. This trend continues until the system splits, combines with another complex system, or falls apart entirely. Sound familiar? This trend is what many see as the trend in life, in organizations, and in the world in general.
The Importance of Management
Management, as a system, is not only an essential element of an organized society but also an integral part of life when we talk about managing our lives. Managing life is not much different from managing an organization and this ‘art’ of management has been with us from time immemorial. Just as a well-managed life is much better organized, goal-oriented, and successful, ‘good’ management of an organization makes the difference between the success and the failure of the organization.
Perhaps, the importance of management was highlighted by the late President of the United States, John F. Kennedy when he said that, the role of management in our society is critical in human progress. It serves to identify a great need of our time: to improve standards of living for all people through the effective utilization of human and material sources.
Similarly, Peter F. Drucker, a noted management authority has emphasized the importance of management to social living. He proclaimed nearly 25 years ago that, ‘effective management was becoming the main resource of developed nations and that it was the most needed resource for developing nations.’
A manager’s job is highly crucial to the success of any organization. The more complex the organization, the more crucial the manager’s role in it. A good manager makes things happen. The importance of management in any organization was emphasized by Professor Leonard R. Sayles in his address to a group of management development specialists, as follows:
"We must find ways of convincing society as a whole, and those who train managers in particular, that the real leadership problems of our institutions-the getting things done, the implementation, the evolving of a consensus, the making of the right decisions at the right time with the right people is where the action is. Although we as a society haven’t learned to give much credit to managers, I hope we can move toward recognizing that managerial and leadership jobs are among the most critical tasks in our society. As such, they deserve the professional status that we give to more traditional fields of knowledge."
Management Vs. Leadership
Management consists of controlling a group or a set of entities to accomplish a goal. Leadership refers to an individual’s ability to influence, motivate, and enable others to contribute toward organizational success. Influence and inspiration separate leaders from managers, not power and control. The terms “leadership” and “management” are often used interchangeably. While there is some overlap between the work that leaders and managers do, there are also significant differences. John Kotter aptly defined Leadership as "the creation of positive, non-incremental change, including the creation of a vision to guide that change—a strategy—the empowerment of people to make the vision happen despite obstacles and the creation of a coalition of energy and momentum that can move that change forward.”Joe Fuller, HBS Professor, relayed his thoughts on how management compares. “Management is getting the confused, misguided, unmotivated, and misdirected to accomplish a common purpose on a regular, recurring basis,” Fuller said. “I think the ultimate intersection between leadership and management is an appreciation for what motivates and causes individuals to behave the way they do, and the ability to draw out the best of them with a purpose in mind.”
While these definitions draw parallels between the roles of leaders and managers, they also allude to some key contrasts. Here are three differences between leadership and management.
- Process vs. Vision: Effective leadership is centered on a vision to guide change. Whereas managers set out to achieve organizational goals through implementing processes, such as budgeting, organizational structuring, and staffing, leaders are more intent on thinking ahead and capitalizing on opportunities.
- Organizing vs. Aligning: Managers pursue goals through coordinated actions and tactical processes, or tasks and activities that unfold over stages to reach a certain outcome. For example, they may implement a decision-making process when leading a critical meeting, or when devising a plan for communicating organizational change. Leaders, on the other hand, are less focused on how to organize people to get work done and more on finding ways to align and influence them.
- Position vs. Quality: “Manager is a title. It’s a role and set of responsibilities,” says leadership coach Doc Norton in Forbes. “Having the position of manager does not make you a leader. The best managers are leaders, but the two are not synonymous. Leadership is the result of action. If you act in a way that inspires, encourages, or engages others, you are a leader. It doesn't matter your title or position.” Leadership is a quality that needs to be shaped. Through developing emotional intelligence and learning how to influence others, professionals of all levels can build greater self-awareness and understand how to bring out the best in themselves and others.
Trends in Management
Modern trends in management favor agile, iterative processes that focus on innovation, software development, and social impacts.
Management is a rapidly evolving field. Even now startups all over the world are trying out new, innovative ways of looking at how to align their resources, how to make decisions, and what managerial approaches (or lack of managerial approaches) might yield the best culture for growth. It’s an intriguing time for management, and experimentation is constant. When looking at new management approaches, it’s useful to consider the area in which these organizations operate. Software, non-profit, and entrepreneurship are all seeing substantial deviations from standard corporate management approaches.
The two big words in software management over the past decade or two have been Scrum and Agile. Each of these approaches is a management philosophy equipped for rapid construction, iteration, and implementation.
The agile management philosophy is an adaptation of iterative management. The concept is fairly simple. All production of new and innovative products and services will require constant refinement and improvement through iterative experimentation.
Scrum has been around since the late 1980s but was not particularly prevalent until the early 21st century. Scrum is defined as a feedback-driven empirical approach that highlights transparency, inspection, and adaptation. In terms of values, scrum discards traditional hierarchy and promotes commitment, courage, focus, openness, and respect in a team-oriented, objectives-driven environment. In terms of structure, you’ll find three groups:
- Development Team – This will be your functional specialists, all collaborating on a daily basis to construct a facet (or perhaps the entirety) of a new piece of software. In scrum, this is quite often cross-functional.
- Scrum Master – A facilitator, this individual focuses on removing impediments and acting as a buffer between the team and external distractions (usually, integration with other teams). The scrum master will also assess progress holistically, and ensure alignment with the scrum mentality.
- Product Owner (PO) – The PO focuses on being the voice of the customer and the representation of stakeholders in the team environment. Stakeholders, in this context, represent anyone with an interest in the output of that team (primarily organizational owners and other teams). The PO is not a manager, but instead a bridge between the team and the external environment they operate in.
Utilizing the ever-evolving perspectives of start-up companies and entrepreneurs, non-profit organizations and other community-oriented groups have begun replacing the traditional management approach with a more grassroots perspective. A key metric to a social entrepreneur isn’t profit but community impact, usually in areas such as poverty alleviation, health care, education, and community development. This management style is small, focused, innovation-driven, and non-hierarchical.
Information Technology and Management
The relationship between management and IT is close and interdependent. Information technology plays a crucial role in the operations of modern businesses and is used to support a wide range of business activities, including communication, collaboration, data analysis, and decision-making. IT can also help management to improve efficiency, reduce costs, and increase competitiveness.
At the same time, effective management is essential for the successful implementation and use of IT within an organization. Managers are responsible for setting goals and objectives for the use of IT, allocating resources, and ensuring that IT systems are used effectively and efficiently to support the business. They also play a key role in developing and implementing policies and procedures related to the use of IT and in ensuring that IT systems are secure and compliant with relevant regulations and standards.
- Management Principles
- Management Accounting
- Management Consulting
- Management Development
- Management Accounting
- Management Buy-Out
- Management Metaphors
- Management Model
- Management Approach
- Management Style
- Management Succession Planning
- Lean Management
- Value Based Management
- IT Management (Information Technology Management)
- Definition - What is the meaning of Management
- Various Definitions of Management
- Fayol’s 6 Functions of Management
- Management Hierarchy
- The Three layers of management
- Characteristics of Management
- The Broad Context of Management -Management Help
- The Importance of Management
- Leading people vs Managing work
- How is Leadership Different from Management?
- Trends in Management -Lumen Learning