1. Management is Organized Activities:
Management is essentially a group effort. Unless groups are properly organized through proper coordination and control, management loses its essence.
Proper organization of activities with a clear structure showing authoritative relationships is important for managing an organization.
2. Management is aligned with Organizational Objectives:
Every organization develops clearly stated objectives. Peter Drucker had put emphasis on management by objectives (MBO) for achieving results in organization. For deciding the objectives of an organization, a participative approach is followed to increase the commitment from all cross-sections of employees working in an organization.
MBO, though, traditionally emphasizes on deciding the objectives at the corporate or highest level in the organization, in order to make it participative, we frame Key Result Areas (KRAs)/Key Performance Areas (KPAs) for individual employees of the organization. KRAs/KPAs are individual qualitative and quantitative targets and are mutually decided by the superior and subordinates. KRAs/KPAs are framed within the ambit of MBO. Aggregation of KRAs/KPAs leads to the achievement of MBO.
3. Management Optimizes Constraining Resources:
Appropriate resource allocation and optimization of those resources is another important feature of management. Objectives are set, keeping in view the resource constraints. Manager has to rationalize the utilization of constraining resources, so as to achieve best results. Let us understand this with an illustration. Suppose a manager has two options before him; one is to buy new technology with huge capital investment and another is to sub-contract or outsource the job.
Capital investment will require the organization to borrow the fund required, pay-back period of which is more than ten years, whereas sub-contracting will enable the organization to manage the activity, once proper vendor is identified.
If the manager faces this situation, what will he do? He will obviously go for the second option as there are examples of many companies who have done very well by even outsourcing their manufacturing activities.
4. Management Works with and through People:
Organization is not just brick and mortar, nor is it just system and structure. It consists of its people or employees. The competitive advantage of any organization is its people. Hence, managing people successfully is the most important priority for an organization. More than two centuries old Encyclopedia Britannica collapsed because it could not succeed to manage its people to respond to change.
When Microsoft’s sister concern Encarta introduced CD version of Encyclopedia in the market, Britannica could not respond to this change positively, as the CD version would have reduced the commission income of its sales force.
Ultimately, the company had to sell its stake to another new investor at less than half of its price. Therefore, without taking people or employees into confidence, a manager cannot succeed.
5. Management Is about Decision Making:
One of the most important tasks of a manager is decision making. A manager has to evaluate various decision alternatives and select the best one. Proper decision making minimizes the risk. Various decision-making tools have been discussed in a separate chapter later in the book.
6. Management is a Science as well as an Art:
Management is both a science and an art. Learning of management is possible through a scientific process. Management as a discipline is a science. However, effective application of management is an art. That is why managerial styles differ.
A manager may be too formal with subordinates and maintain task- oriented relationship while another may be informal and people oriented. Both may lead to results but a long-term effectiveness is achieved only through people orientation.
7. Management is Universal:
Management encompasses everything, not merely a business organization. Even for managing a temple or a church or a mosque, one has to apply management principles, though approaches may differ. Universality also implies transferability of management knowledge and skills across countries.
There are arguments for and against universality of management principles. Proponents of cross-cultural management are against universality of management as they consider management to be situational and there is nothing like universal principles of management. However, those who subscribe to the concept of universality of management suggest that management is universal and can be found in all types of organizations.
8. Management is Intangible:
Management is not something tangible or visible; it is intangible. It is an intellectual process to facilitate proper functioning of an organization. Information and knowledge are key elements of management, and these are now most important inputs. Entire process of management, i.e., planning, organizing, staffing, direction, etc., are intangible inputs, which add value to the organization.
9. Management is an Interdisciplinary Approach:
Management is a structured approach encompassing different fields like, Political Science, Economics, Sociology, Psychology, Mathematics and Statistics, Anthropology and even Engineering. Inputs from all these disciplines have strengthened management and managerial functions.
10. Management is a Social Process:
As a social process management has to be responsive to the social needs. Social Responsibility of Organization is now a well-developed concept which requires management to take inputs from society and give outputs to society. Social well-being can be related with the quality of management. Efficient management through proper utilization of resources of society can improve the quality of life.
Prof. A. Dasgupta pointed out that the activities of every enterprise ‘must be so conducted that it can serve its own objectives as well as social purpose.’ Social responsibilities of management are not always fixed. They keep on changing. To focus on the importance of social responsiveness of an enterprise, Keith Davis and William C. Frederick said that social responsiveness is ‘the ability of a corporation to relate its operations and policies to the social environment in ways that are mutually beneficial to the company and to the society.’
It is measured in terms of organizational contributions to charitable and civic projects like assisting voluntary social organizations or non-governmental organizations (NGOs) in fund raising, emphasis on employee involvement in civic activities, and equal employment opportunity, extent of fair treatment of employees, fair pay and safe working conditions, safe and quality products to consumers, pollution avoidance and control.
Howard R. Bowen advocated the concept of social audit defining it as ‘a commitment to systematic assessment of and reporting on some meaningful, definable domain of the company’s activities that have social impact.’ It is distinguished in two types:
(i) Those required by the government
(ii) Those which are voluntary in nature
Since organizational social responsibility and responsiveness ultimately depend on the ethical standards of managers, many organizations in order to make them more socially responsive, try to impart training on managerial ethics and values also.
11. Management Is a System of Authority:
Management involves decision making. In any organization, the onus of decision making ultimately lies with management. Traditionally, organizational structure, therefore, puts management on the top, from where authority and reporting relationships flow. Even though now-a-days we try to make more participative organization diluting the power through horizontal, matrix and also to some extent hybrid organizational structure, the ultimate planning and controlling functions still rest with management personnel.
12. Management is Dynamic:
An organization has to relate to the environmental forces that exist around it. Therefore, to adapt to the changes, an organization has to be dynamic. Without a dynamic approach, an organization may lose its competitive advantage. Using SWOT (strength, weakness, opportunities and threat) model, BCG (Boston Consulting Group) matrix or Porter’s model, an organization decides its course of action to respond to the changing requirements and frame their plans and strategies accordingly.
13. Management Principles are Relative and Not Absolute:
Management principles are not absolute. It depends on the situation. Each organization may have different situation than others. Difference may be for time, place, and socio-cultural factors. Therefore, principles of management should be in the light of prevailing culture or situations. Let us explain this using one example.
If a multinational organization in Peru wants to apply the principles, which are applicable for their US operations, the results are more likely to be disastrous because of the difference in the working conditions between the US and Peru. Unlike in the US, workers in Peru, get long lunch break in between their working hours, which even extend up to three hours, giving scope to the workers to take a siesta. They, however, start early morning to maintain the schedule of actual working hours.
14. Management is an Emerging Profession:
The word profession has variety of meanings. It is characterized as an occupation based on specialized knowledge and skill, a theoretical structure, learning of science. Management as an occupation fits the above characteristics. On the other hand, management lacks the characteristic of a true profession because it does not fulfil certain characteristics of a profession.
In order to be a profession in a true sense, management has to satisfy following important characteristics: (i) existence of an organized and systematized body of knowledge, (ii) formal method of acquisition of knowledge, (iii) existence of an association with professionalism as its goals, (iv) formulation of ethical codes and (v) service motives. Many authors argue that management does not satisfy all these characteristic; hence, it is wrong to designate management as a profession.
It is better to call management as an emerging profession. Whatever may be the arguments, management is increasingly getting recognized in India as a profession. To substantiate the claim, there are a number of professional management bodies like All India Management Association, National Institute of Personnel Management, Indian Society for Training and Development, etc., who are furthering the cause of management by regular membership services. They came out with the professional ethics, which largely focus on service motives, taking profession beyond one’s individual livelihood.
15. Management is a Strategic Function:
Every organization now has to move strategically to chart their action plan to sustain their competitive edge in a changing environment. Whether to emphasize new market development or enhance scope for repeat buying with better customer relationship management (CRM), it is a strategic choice which an organization has to make. This aspect has been discussed in our chapter on Planning.