Principles of Management | Importance and Six M’s of Management

Definition of Management

Definition of Management according to Henry Fayol is “To manage is to forecast, plan, organize, command, coordinate, and control.”

Definition According to Harold Koontz, “Management is the art of getting things done through and with people in formally organized groups.”

Features / Characteristics of management are

  1. Goal-oriented
  2. Group activity
  3. Continuous process
  4. Universal in nature
  5. Intangible

Management is important for the following reasons

  • Achievement of goal – In a firm, groups of people perform various activities to achieve common organizational goals.
  • Optimum resource utilization – Effective management involves proper utilization of available resources in the organization
  • Motivation – Division of labour leads to specialization of work. Specialization enhances employees’ efficiency, leading to more output.
  • Fulfilment of social obligations – A firm is a part of society and uses the physical human resources of society.
  • Survival and growth – A firm is a part of society and is affected by social, legal, political, and economical issues.

Six M’s of management

  1. Manpower – managerial and non-managerial personnel constitute manpower
  2. Machines – They are commonly used to convert raw materials into semi-finished and finished products.
  3. Materials – They consists of raw materials and semi-finished goods that are either converted or assembled into finished products through the production process.
  4. Methods – They refer to systems and procedures used for performing various operations
  5. Money – It is the means for conducting all business activities, and a strong financial base is essential to a successful business
  6. Markets – both products and services need marketing, and successful marketing increases a firm’s financial returns.

Roles of a Manager

a) Interpersonal Roles

These roles involve people and other ceremonial duties. They can be further classified as follows:

  • Leader – Responsible for staffing, training, and associated duties.
  • Figurehead – Symbolic head of the organization.
  • Liaison – Maintains communication between all contacts in the organizational network.

b) Informational Role

These roles involve collecting, receiving, and disseminating information.

  • Monitor – Personally seeks and receives information to be able to understand the organization.
  • Disseminator – Transmits all import information received from outsiders to the members of the organization.
  • Spokesperson – Transmits the organization’s plans, policies, and actions to outsiders.

c) Decisional Roles

These roles involve decision making.

  • Entrepreneur – Seeks opportunities. Basically they search for change, respond to it, and exploit it.
  • Negotiator – Represents the organization at major negotiations.
  • Resource Allocator – Makes or approves all significant decisions related to the allocation of resources.
  • Disturbance Handler – Responsible for corrective action when the organization faces disturbances.

Management as art, science, and profession

Management is an art

1. Several authorities on management studies have called management the art of getting things done through people.

2. Different people behave differently in different situations.

 3. Mangers have to come up with new ideas or measures to handle situations and must therefore be innovative.

4. Like an artist, every manager has a distinct way of performing work according to his/her skills, ability, understanding, initiatives, judgement, tactfulness, and experience.

5. Result oriented: Like an artist, every good manger is result oriented. Managerial activities aim at achieving a definite goal, i.e., reduction in wastage, achieving a sales target, maximization of revenues etc

Management is a profession

A person is called a professional when he/she has undergone certain training to develop certain required skills with a view to providing services to community at large. The main features of a professional are as follows:

1. Formal education: Minimum formal education from a recognized institution is essential.

2. Expertise knowledge: Professionals must have expert knowledge and skills in their concerned field or discipline.

3. Fees: Professionals charge fees for their service depending on the nature of the service and financial status of the client.

4. Specialization: Professionals can specialize themselves in a particular field. For example, doctors specialize in child care, ENT, etc.

5. Specialization: Professionals can specialize themselves in a particular field. For example, doctors specialize in child care, ENT, etc.

Management is a science

Science is a systematized and organized body based on observed findings, facts, and events, and it comprises exact principles that can be verified and are universally acceptable.

1. Systematic body of knowledge

Management is similar to science in that it is an organized and systematized body of knowledge that consists of certain rules and principles

2. Universally accepted principles

Management as a subject has fundamental theories and concepts that are applicable in real business situations.

3. Cause-effect relationship

Management principles clearly show a cause-effect relationship. Example: the relationship between motivation and efficiency is proved when management finds that a motivated employee has higher output than an unmotivated one.

4. Identical results may not be obtained

Management is a social science, and human behaviour is unpredictable. While management principles are universally accepted, identical results may not be obtained under different situations.

Managerial Skills

Managers are expected to possess four main skills:

1. Technical skills

 They reflect both an understanding of and a proficiency in a specialized field. For example, a manager may have technical skills in accounting, finance, engineering, manufacturing, or computer science.

2. Human Skills

They are skills associated with a manager’s ability to work well with others, both as a member of a group and as a leader who gets things done through others.

3. Conceptual Skills

They are related to the ability to visualize the organization as a whole, discern interrelationships among organizational parts, and understand how the organization fits into the wider context of the industry, community, and world.

4. Design Skill

Managers must have the ability to solve problems in ways that will benefit the enterprise.

The skills required vary at different levels: Top management requires concept and design skills. Middle management requires human skills. Supervisors require technical skills.

The three levels of management are as follow

1. Top Management

It consists of the board of directors, chief executive officer, and managing director. It devotes more time to planning and coordinating functions.

The roles of top management can be summarized as follows

a. Top management defines an organization’s objectives and broad policies.

b. It prepares strategic plans and policies for the organization.

c. It appoints middle-level executives, i.e., departmental managers.

 d. It controls and coordinates the activities of all departments.

e. It provides guidance and direction.

2. Middle-Level Management

It consists of branch managers and departmental managers. Their roles can be summarized as follows

a. They make plans for organizational sub-units.

b. They participate in the employment and training of lower-level management.

c. They interpret and explain policies from the top management to the lower level.

d. They are responsible for coordinating the activities within the division or department.

e. They evaluate the performance of junior managers.

3. Lower-Level Management

Lower-level management is also called the supervisory/operative level of management. It consists of supervisors, foremen, section officers, superintendents, etc. Their activities include the following:

  • Assigning jobs and tasks to various workers.
  • Helping to solve employee grievances.
  • Supervising and guiding subordinates.
  • Ensuring discipline in the organization.
  • Motivating employees.

Example of Management – Apple Inc.’s organizational structure is divided into three parts

Spoke-and-Wheel Hierarchy

A bird’s-eye view of Apple’s organizational structure shows considerable hierarchy. There is more collaboration among different parts of the company, such as software teams and hardware teams. Apple’s vice presidents have more autonomy, which was almost absent under Steve Jobs.

Function-Based Grouping

The upper tier of Apple’s organizational structure has function-based grouping, which is an element derived from the functional type of organizational structure. For example, Apple has SVPs for industrial design, marketing, and retail.

Product-Based Grouping

The lower tier of Apple’s organizational structure has product-based grouping, which is an element derived from the divisional type of organizational structure. For example, Apple has VPs for iOS apps, the iPad, and consumer apps.