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Note for Fundamentals of Management - FOM By ritesh rocks

  • Fundamentals of Management - FOM
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UNIT - 1 Definition of management: Mary Parker defines the term management as “the art of getting things done through others.” According to Taylor “Management is the art of knowing what you want to do and then seeing that it is done in the best and cheapest way.” According to Henry Fayol “To manage is to forecast and to plan, to organize, to co-ordinate and to control.” Characteristics of Management 1. Goal oriented Process: It is a goal oriented process, which is undertaken to achieve already specified and desired objectives by proper utilization of available resources. 2. Pervasive: Management is universal in nature. It is used in all types of organizations whether economic, social or political irrespective of its size, nature and location and at every level. 3. Multidimensional: It is multidimensional as it involves management of work, people and operations. 4. Continuous: It consists of a series of function and its functions are being performed by all managers simultaneously. The process of management continues till an organization exists for attaining its objectives. 5. Group Activity: It is a group activity since it involves managing and coordinating activities of different people as a team to attain the desired objectives. 6. Dynamic function: It is a dynamic function since it has to adapt according to need, time and situation of the changing environment. For example, Mc Donald’s made major changes in its ‘Menu’ to survive in the Indian market. 7. Intangible Force : It is intangible force as it can't be seen but its effects can be felt in the form of results like whether the objectives are met and whether people are motivated or not and there is orderliness and coordination in the work environment. Scope of Management It is difficult to precisely define the scope of management, yet the following areas are included in it: 1. Subject-matter of management: Planning, organizing, directing, coordinating and controlling are the activities included in the subject matter of management. 2. Functional areas of management: These include:

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Financial management includes accounting, budgetary control, quality control, financial planning and managing the overall finances of an organization. Personnel management includes recruitment, training, transfer promotion, demotion, retirement, termination, labor-welfare and social security industrial relations. Purchasing management includes inviting tenders for raw materials, placing orders, entering into contracts and materials control. Production management includes production planning, production control techniques, quality control and inspection and time and motion studies. Maintenance management involves proper care and maintenance of the buildings, plant and machinery. Transport management includes packing, warehousing and transportation by rail, road and air. Distribution management includes marketing, market research, price-determination, taking market risk and advertising, publicity and sales promotion. Office Management includes activities to properly manage the layout, staffing and equipment of the office. Development management involves experimentation and research of production techniques, markets, etc. 3. Management is an inter-disciplinary approach: For the correct implementation of the management, it is important to have knowledge of commerce, economics, sociology, psychology and mathematics. 4. Universal application: The principles of management can be applied to all types of organizations irrespective of the nature of tasks that they perform. 5. Essentials of management: Three essentials of management are:  Scientific method  Human relations  Quantitative technique 6. Modern management is an agent of change: The management techniques can be modified by proper research and development to improve the performance of an organization.

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Importance of Management 1. It helps in Achieving Group Goals - It arranges the factors of production, assembles and organizes the resources, integrates the resources in effective manner to achieve goals. It directs group efforts towards achievement of pre-determined goals. By defining objective of organization clearly there would be no wastage of time, money and effort. Management converts disorganized resources of men, machines, money etc. into useful enterprise. These resources are coordinated, directed and controlled in such a manner that enterprise work towards attainment of goals. 2. Optimum Utilization of Resources -Management utilizes all the physical & human resources productively. This leads to efficacy in management. Management provides maximum utilization of scarce resources by selecting its best possible alternate use in industry from out of various uses. It makes use of experts, professional and these services leads to use of their skills, knowledge, and proper utilization and avoids wastage. If employees and machines are producing its maximum there is no under employment of any resources. 3. Reduces Costs - It gets maximum results through minimum input by proper planning and by using minimum input & getting maximum output. Management uses physical, human and financial resources in such a manner which results in best combination. This helps in cost reduction. 4. Establishes Sound Organization - No overlapping of efforts (smooth and coordinated functions). To establish sound organizational structure is one of the objective of management which is in tune with objective of organization and for fulfillment of this, it establishes effective authority & responsibility relationship i.e. who is accountable to whom, who can give instructions to whom, who are superiors & who are subordinates. Management fills up various positions with right persons, having right skills, training and qualification. All jobs should be cleared to everyone. 5. Establishes Equilibrium - It enables the organization to survive in changing environment. It keeps in touch with the changing environment. With the change is external environment, the initial co-ordination of organization must be changed. So it adapts organization to changing demand of market / changing needs of societies. It is responsible for growth and survival of organization. 6. Essentials for Prosperity of Society - Efficient management leads to better economical production which helps in turn to increase the welfare of people. Good management makes a difficult task easier by avoiding wastage of scarce resource. It improves standard of living. It increases the profit which is beneficial to business and society will get maximum output at minimum cost by creating employment opportunities which generate income in hands. Organization comes with new products and researches beneficial for society. Challenges of Management

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1. Increasing Opportunities as a result of all round globalization, privatization and liberalization. 2. The changing lifestyles and changing values. 3. More expectations of customers and employees, in particular, and society as a whole, in general. 4. Eroding business ethics. 5. Depleting financial and non-financial resources 6. Changing technology 7. Bottlenecks in the basic infrastructure 8. Environmental degradation, through pollution Functions of management Management has been described as a social process involving responsibility for economical and effective planning & regulation of operation of an enterprise in the fulfillment of given purposes. It is a dynamic process consisting of various elements and activities. These activities are different from operative functions like marketing, finance, purchase etc. Rather these activities are common to each and every manger irrespective of his level or status. Different experts have classified functions of management. According to George & Jerry, “There are four fundamental functions of management i.e. planning, organizing, actuating and controlling”. According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to control”. Whereas Luther Gullick has given a keyword ’POSDCORB’ where P stands for Planning, O for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for reporting & B for Budgeting. But the most widely accepted are functions of management given by KOONTZ and O’DONNEL i.e. Planning, Organizing, Staffing, Directing and Controlling. For theoretical purposes, it may be convenient to separate the function of management but practically these functions are overlapping in nature i.e. they are highly inseparable. Each function blends into the other & each affects the performance of others. 1. Planning

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