Nature and Significance of Management

What management is, effectiveness and efficiency, its objectives and features, whether it is an art, a science or a profession, its levels and functions, and coordination.

Key ideas

Management is getting things done to achieve goals effectively (on time) and efficiently (at the least cost of resources).
It is goal-oriented, pervasive, multidimensional (work, people, operations), continuous, a group activity, dynamic and intangible.
Its objectives are organisational (survival, profit, growth), social (benefit to society) and personal (the needs of employees).
Management is an art (personal skill and creativity) and an inexact science (principles about human behaviour), but not a full profession, because entry is not restricted to holders of a set degree.
Top management sets goals and policies, middle management carries them out through departments, and supervisory management oversees the workers.
Its functions are planning, organising, staffing, directing and controlling.
Coordination binds all the functions and departments together; it is the essence of management, deliberate, continuous, pervasive and every manager’s job.

Remember

Cost per unit	total cost ÷ units made; the lower cost per unit is the more efficient
Effective?	the target is met on time (units made ≥ target)
Efficient?	the cost stays within the budget (cost ≤ budget)
Top management	board of directors, chief executive
Middle management	departmental heads
Supervisory management	foremen and supervisors
Why coordination is needed	growth in size, functional differentiation and specialisation

Watch out

Swapping effectiveness (done on time) and efficiency (done at least cost).
Calling coordination a separate function of management: it is the essence of all of them.
Saying management is a full profession.

Worked example

Two units make the same product. Varun’s unit made 4,000 units for ₹3,120,000; Dev’s unit made 5,000 units for ₹2,550,000. Find the cost per unit of each. Which unit is more efficient?

Working: 3,120,000 ÷ 4,000; 2,550,000 ÷ 5,000

Answer: ₹780 and ₹510; Dev’s unit