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CHAPTER

NATURE AND SCOPE OF
MANAGEMENT
Learning Objectives

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Definition of Management
Concepts of Management
Role and Importance of
Management
Distinction between
Management and Administration

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Levels of Management
Nature of Management
Professionalisation of
Management
Skills of Management
Scope of Management

very human being has several needs and desires
...
Therefore, people work together to meet
their mutual needs which they cannot fulfil individually
...
It is
by working and living together in organised groups and institutions
that people satisfy their economic and social needs
...
, family, school, government, army, a
business firm, a cricket team and the like
...
The
task of getting results through others by coordinating their efforts is
known as management
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Management—Principles and Practices

1
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Different scholars from different disciplines view and interpret
management from their own angles
...
The
bureaucrats look upon it as a system of authority to achieve business
goals
...

The definitions by some of the leading management thinkers and
practitioners are given below:
(i) Management consists in guiding human and physical resources
into dynamic, hard-hitting organisation unit that attains its
objectives to the satisfaction of those served and with a high
degree of morale and sense of attainment on the part of those
rendering the service
...
Appley
(ii) Management is the coordination of all resources through the
process of planning, organising, directing and controlling in
order to attain stated objectives
...
Sisk
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—James L
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—American Society of Mechanical Engineers
(v) Management is the creation and maintenance of an internal
environment in an enterprise where individuals, working in
groups, can perform efficiently and effectively towards the
attainment of group goals
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—F
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Taylor
(vii) To manage is to forecast and to plan, to organise to command,
to coordinate and to control
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—Ralph C
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—E
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L
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—George R
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—American Management Association
(xii) Management is a multipurpose organ that manage a business
and manages Managers and manages Workers and work
...
2 CONCEPTS OF MANAGEMENT
The term management has been interpreted in several ways; some of
which are given below:

Management as an Activity
Management is an activity just like playing, studying, teaching etc
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Management is a group
activity wherein managers do to achieve the objectives of the group
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It consists of getting the objectives of an organisation and taking steps to achieve objectives
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Management as a process has the following implications:
(i) Social Process: Management involves interactions among people
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Human factor is the most important part of the
management
...
Management also
integrates human efforts so as to maintain harmony among them
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It is repeated every now and then till
the goal is achieved
...
For example, when a manager prepares plans, he is also
laying down standards for control
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Management occupies the central place among productive factors as it combines and coordinates all other resources
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Fig
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Management as resource

Management as a Team
As a group of persons, management consists of all those who have the
responsibility of guiding and coordinating the efforts of other persons
...
Some of these managers have
ownership stake in their firms while others have become managers by
virtue of their training and experience
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As a group managers have become an elite class in
society occupying positions with enormous power and prestige
...
It
comprises principles and practices for effective management of
organisations
...
Management offers a very rewarding and challenging
career
...
It refers to all those individuals who perform managerial
functions
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g
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For example, when one remarks that the management of Reliance
Industries Ltd
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There are several types of managers which are listed
as under
...

(ii) Professional managers who have been appointed on account of
their degree or diploma in management
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Managers have become a very powerful and respected group in
modern society
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For example,
if the managers of Reliance Industries Limited decide to expand production it will create job for thousands of people
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Senior managers also enjoy a high standard of living in
society
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Nature and Characteristics of Management
The salient features which highlight the nature of management are as
follows:
(i) Management is goal-oriented: Management is not an end in itself
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Management has no
justification to exist without goals
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The basic goal of management is to ensure efficiency and economy in the utilisation of
human, physical and financial resources
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Thus, management is purposefull
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Management—Principles and Practices

(iii)

(iv)

(v)

(vi)

(vii)

(viii)

Wherever two or more persons are engaged in working for a
common goal, management is necessary
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g
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Thus, management is a
pervasive activity
...
Managers at all
levels perform the same basic functions
...
Management reconciles the individual goals with organisational
goals
...
It integrates human and
other resources
...
It is a social process because it is
concerned with interpersonal relations
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According to Appley, “Management is the development of people not the direction of things
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It is the pervasiveness of
human element which gives management its special character
as a social process”
...
Therefore, it
depends upon wide knowledge derived from several disciplines
like engineering, sociology, psychology, economics, anthropology, etc
...

Management is a continuous Process: Management is a dynamic
and an on-going process
...

Management is Intangible: Management is an unseen or invisible
force
...
However, the managers who perform the
functions of management are very much tangible and visible
...
Management is also a discipline
involving specialised training and an ethical code arising out of
its social obligations
...
It
involves both the determination and the accomplishment of organisational goals
...

(i) Organisational objectives: Management is expected to work for the
achievement of the objectives of the particular organisation in
which it exists
...
e
...

(c) Growth and expansion of the enterprise
(d) Improving the goodwill or reputation of the enterprise
...
These objectives are as follows:
(a) Fair remuneration for work performed
(b) Reasonable working conditions
(c) Opportunities for training and development
(d) Participation in management and prosperity of the enterprise
(e) Reasonable security of service
...
It is expected to fulfil the objectives of the society which are given below:
(a) Quality of goods and services at fair price to consumers
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(c) Conservation of environment and natural resources
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(e) Preservation of ethical values of the society
...
3 ROLE AND IMPORTANCE OF MANAGEMENT
Management is indispensable for the successful functioning of
every organisation
...

No business runs in itself, even on momentum
...

According to Peter Drucker,“ management is a dynamic lifegiving
element in an organisation, without it the resources of production
remain mere resources and never become production”
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Each
person may be working efficiently, but the group as a whole
cannot realise its objectives unless there is mutual cooperation

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Management—Principles and Practices

(ii)

(iii)

(iv)

(v)

(vi)

and coordination among the members of the group
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He
reconciles the objectives of the group with those of its members
so that each one of them is motivated to make his best contribution towards the accomplishment of group goals
...

Optimum utilisation of resources: Managers forecast the need for
materials, machinery, money and manpower
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They create and maintain an
environment conducive to highest productivity
...
They provide training and guidance to
employeers so that they can make the best use of the available
resources
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Management directs day-to-day operations in such a manner that all
wastage and extravagance are avoided
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Survival and growth: Modern business operates in a rapidly
changing environment
...
Management keeps
in touch with the existing business environment and draws its
predictions about the trends in future
...
Changes in business environment create risks as well as opportunities
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In this way, managers facilitate the
continuity and prosperity of business
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People
earn their livelihood by working in these organisations
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He must
also learn to apply his knowledge in solving managerial
problems in practical life
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(ii) Personal skill: Every artist has his own style and approach to his
job
...
This is
due to the level of their personal skills
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Similarly, management is personalised
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The success of a manager depends on his
personality in addition to his technical knowledge
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The process of management is also directed towards the accomplishment of desirable goals
...
He uses men,
money, materials and machinery to promote the growth of the
organisation
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Therefore, every piece
of art requires imagination and intelligence to create
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A manager effectively combines and coordinates the factors of production to create goods
and services
...

(v) Improvement through people: Practice makes one perfect
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A dancer, for example, learns to perform better by continuously practicing a dance
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Nature and Scope of Management

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Thus, “management is both a science as well as an art”
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It is known as an art because it involves creating results through practical application of knowledge and skills
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They are not
mutually exclusive
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Art
without science has no guide and science without art is knowledge
wasted
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Similarly, a successful manager must know the principles of
management and also acquire the skill of applying those principles for
solving managerial problems in different situations
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One cannot become an effective
manager simply by learning management principles by heart
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Management as a Profession
A profession is calling that requires specialised knowledge and often,
long intensive academic preparation
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In
order to practice a profession, a person requires specialised
knowledge of its principles and techniques
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There exists a
substantial and rapidly expanding body of knowledge in
management
...

In addition, there should be competent application or judicious
utilisation of this knowledge in solving complex problems
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Management—Principles and Practices

(ii) Restricted entry: There exists institutions and universities to
impart education and training for a profession
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For example one must pass the Chartered Accountancy
examination to practice accountancy profession
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Several
management consultancy firms have also come into existence to
offer advise for solving managerial problems
...

But no minimum qualification or course of study has been
prescribed for managers by law
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For example, a doctor earns his living from his medical
practice
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He has a concern for the suffering of others and a desire
to help the community
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Similar is the case with managers
...

(iv) Representative association: In every profession there is a statutory
association or institution which regulates that profession
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In management also associations have been established
both in India and abroad
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In India,
there is the All India Management Association
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No university accepted criteria or
standard exists for their evaluation
...

(v) Code of conduct: Members of one profession have to abide by a
code of conduct which contains rules and regulations providing
the norms of honesty, integrity and professional ethics
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The code of conduct is by the representative
association to ensure self-discipline among its members
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The All India Management Association has
framed code of conduct for managers
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Members

Nature and Scope of Management

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of the association are expected not to disclose the trade secrets
of their employers and to make personal gain from the
knowledge of internal working of the organisation
...
However, observing business
ethics is always helpful in becoming a more effective manager
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But like other professions, management does
not restrict the entry into managerial jobs to people with a special
academic degree
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No management association has the authority
to grant certificates of practice or to regulate entry into management
careers
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The management associations have no legal right to
enforce their code of conduct
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Moreover, there is no single client group to which
managers owe complete loyalty
...

But managers are responsible to the owners as well as to other social
groups
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Some experts
believe that there should be no control over entry into management
careers
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Drucker, “Management is a practice rather
than a science or profession through containing elements of both
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Management still
remains a developing field, changes are taking place regularly in its
nature, significance and scope
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In the recent past, society has been challenging ethical and moral
basis of management decisions and demanding professionalisation of
management
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(i) In a popular firm of business organisation, that is, joint stock
company, ownership has been separated from its management
and control
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Modern managers have to

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(ii)

(iii)
(iv)

(v)

Management—Principles and Practices

promote and protect the interest of many social groups such as
consumers, employers and the society, as a whole, and balance
it with the profit motive
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Rapid expansion and growth of universities and other institutions for imparting management knowledge and growing
significance of training programmes in business organisations
are indicative of the trend of professionalisation in the days to
come
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Multinational corporations have been attempting to
enhance their global market share strictly by adopting
professional outlook and approach towards management of
operations
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Several skills are required to manage successfully a large organisation
in a dynamic environment
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(i) Technical Skills
Technical skills refer to the ability and knowledge in using the equipment, technique and procedures involved in performing specific tasks
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Ability in programming and operating computers is, for instance, a technical skill
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In the first place, he must
know which skills should be employed in his particular enterprise and
be familiar enough with their potentiality to ask discerning questions
of his technical advisors
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Nature and Scope of Management

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(ii) Human Skills
Human skills consists of the ability to work effectively with other people
both as individual and as members of a group
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Such skills
require a sense of feeling for others and capacity to look at things from
others point of view
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An awareness of the
importance of human skills should be part of a managers orientation
and such skills should be developed throughout the career
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(iii) Conceptual Skills
Conceptual skills comprise the ability to see the whole organisation
and the interrelationships between its parts
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Such skills help the manager to conceptualise the environment,
to analyse the forces working in a situation and take a broad and farsighted view of the organisation
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Such competence is necessary for
rational decision-making
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These types of skills are interrelated
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As one moves up the management hierarchy, technical
skills become less important
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Conceptual skills are very important for top
management in formulating long-range plans, making broad policy
decisions, and relating the business enterprise to its industry and the

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Management—Principles and Practices

economy
...
This would be self evident as management is the process of getting things done through
people
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(iv) Diagnostic Skills
Diagnostic skills include the ability to determine by analysis and
examination the nature and circumstances of particular conditions
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It is the ability to cut
through unimportant aspects and quickly get to the heart of the problem
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The operational areas of business management may be classified into the following categories:
(i) Production Management: Production management implies
planning, organising, directing and controlling the production
function so as to produce the right goods, in right quantity, at
the right time and at the right cost
...

(ii) Marketing Management: Marketing management refers to the
identification of consumers needs and supplying them the goods
and services which can satisfy these wants

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