GGSIPU BBA Notes 1st Semester – Management Process & Organizational Behaviour (MPOB)

Concept of management:

• According to Harold Koontz, “Management is an art of getting things done through and with the people in formally organized groups. It is an art of creating an environment in which people can perform and individuals and can co-operate towards attainment of group goals”
• According to F.W. Taylor, “Management is an art of knowing what to do, when to do and see that it is done in the best and cheapest way”.
• We can say that good management includes both being effective and efficient. Being effective means doing the appropriate task or doing the right things i.e. fitting the square pegs in square holes and round pegs in round holes. Being efficient means doing the task correctly or doing the things right, at least possible cost with minimum wastage of resources.

Management can be defined in detail in following categories:

• Management as a Process
• Management as an Activity
• Management as a Discipline
• Management as a Group
• Management as a Science
• Management as an Art
• Management as a Profession

Nature/Features of management:

1. Management is Goal-oriented: The purpose of management is to achieve the goals of the organization. Management of a business aims at satisfaction of customers, earning of profits and increasing the goodwill and image of the business. There is no need of management if there are no pre-determined goals or objectives. The success of management is judged by the extent to which organizational goals are achieved.
2. Management is a continuous process: Management is a continuous process i.e. its functions are repeated time and again. Management does not stop anywhere. It is an ongoing process of planning the activities and execution of plans through organizing, staffing, directing and controlling.
3. Management is a coordinative force: The essence of management is the coordination or integration of human and other resources for effective performance. It brings together physical and financial resources and leads the human resources for the efficient use of non-human resources. All these resources are properly organized and divided into various work-units for the purpose of achieving greater coordination.
4. Management balances effectiveness and efficiency: Sound management requires that all organizational activities are preformed effectively and efficiently. An organization is said to be effective if it is able to accomplish its objectives. It will be termed as efficient if it is able to accomplish its objectives by making optimum use of resources.
5. Management is pervasive and universal: Management is essential for effective performance of any organized activity. Thus, it is universal in nature. They can be applied to all types of organizations-business, social, educational and religious. The principles and techniques should be modified to suit the given situation and the type of organization.

Objectives of management :

1. Organizational objectives: a) Survival: The basic objective of any business is survival. Management must strive to ensure the survival of the business. The management must earn enough revenues to cover costs of operations. b) Profit: Mere survival is not enough for the business. Management has to ensure that the business makes reasonable profits. Profits provide the incentive for the continued successful operation of the enterprise. To remain in the market, it is essential for an organization to earn sufficient profits to meet the various costs of business expansion.
2. Social Objectives: Social objectives include the following: a) Supply of quality goods at reasonable prices b) Generation of employment opportunities. c) Providing financial support to community projects. d) Protection of environment by using environmental friendly methods of production. e) Providing employment to physically challenged people.
3. Personal Objectives: Personal objectives include the following: a) Good salary and other benefits. b) Opportunities for training, promotion etc. c) Recognition of meritorious work. d) Good and healthy working conditions.

Need/Importance of management:

1. Accomplishment of Goals: It is the management which determines the goals of the organization and of various departments and functional groups. The goals are communicated to the employees to seek their cooperation. All organization activities are directed towards the organizational objectives.
2. Effective/Optimum utilization of resources: Management ensures optimum utilization of resources. Through planning and organization, management eliminates all types of wastages and achieves efficiency in all business operations.
3. Sound Organization: Management establishes sound organization for the accomplishment of the desired objectives. It clarifies authority responsibility relationships among various positions in the organization. It fills various positions with persons having the right qualification & training.
4. Providing vision & foresight: Management keeps itself in touch with the external environment so that it can meet the demands of the changing environment and supplies vision and foresight to the enterprise. It helps in predicting what is going to happen in future which will influence the working of the enterprise.
5. Development of society and nation: Management plays a pivotal and crucial role in economic and social development of a country. The development of a country lies on the quality of management and available resources. Management can help increase the national income and standard of living of the people.

Levels of management:

Management levels determine the authority relationship in an organization. There are three levels of management in view of authority and responsibility relationship:

1. Top Management: Top management is the head of an organization. It consists of the Board of Directors and Chief Executives or the Managing Directors. In the operation of an organization, top management is the final source of authority. It establishes policies, plans and objectives. 
2. Middle Management: It generally consists of heads of functional departments. It is concerned with the task of implementing the policies and plans laid down by top management. It is also a link between the top management and the lower level management.
3. Lower Management (Supervisory Level): It consists of supervisors, foremen, account officers, sales officers etc. They are directly concerned with the control of the performance of the operative employees. They assign specific jobs to the workers, evaluate their performance and report to the middle level management.

Characteristics of a manager:

1. Managers spend major portion of their time in achieving coordination between human and non-human resources.
2. Managers do much work at an unrelenting pace.
3. Managerial tasks are characterized by brevity, variety and fragmentation.
4. Managers prefer live action i.e. brief, specific, well-defined activities that are current, non-routine and non-reflective.
5. Managers prefer oral to written communication.
6. Managers maintain a vast number of contacts, spending most time with subordinates with subordinates, linking them with superiors and others in a complex network.

MANAGEMENT BY OBJECTIVES

• The process of setting objectives in the organization to give a sense of direction to the employees is called as Management by Objectives.
• The concept of MBO was introduced by Peter Drucker in 1954 as a means of using goals to improve people rather than to control them. Thus this concept of MBO is also known as Goal management.
• According to George S. Ordiorne, MBO is a process whereby the superior and subordinate managers of an organization jointly identify its common goals, define each individual major areas of responsibility in terms of results expected of him, and use these measures as guides for operating the unit and assessing the contribution of each of the members.
• According to Koontz and Weihrich, “Management by objectives is a comprehensive managerial system that integrates many key managerial activities in a systematic manner and that is consciously directed toward the effective and efficient achievement of organizational and individual objectives.”

Need/Features of MBO:

1. Superior-subordinate participation: MBO requires the superior and the subordinate to recognize that the development of objectives is a joint project/activity. They must be jointly agree and write out their duties and areas of responsibility in their respective jobs.
2. Joint goal-setting: MBO emphasizes joint goal-setting that are tangible, verifiable and measurable. The subordinate in consultation with his superior sets his own short-term goals. However, it is examined both by the superior and the subordinate that goals are realistic and attainable. In brief, the goals are to be decided jointly through the participation of all.
3. Joint decision on methodology: MBO focuses special attention on what must be accomplished (goals) rather than how it is to be accomplished (methods). The superior and the subordinate mutually devise methodology to be followed in the attainment of objectives. They also mutually set standards and establish norms for evaluating performance.
4. Makes way to attain maximum result: MBO is a systematic and rational technique that allows management to attain maximum results from available resources by focussing on atainable goals. It permits lot of freedom to subordinate to make creative decisions on his own. This motivates subordinates and ensures good performance from them.
5. Support from superior: When the subordinate makes efforts to achieve his goals, superior’s helping hand is always available. The superior acts as a coach and provides his valuable advice and guidance to the subordinate. This is how MBO facilitates effective communication between superior and subordinates for achieving the objectives/targets set.