BBA Nature of Management Study Material Notes
Table of Contents
BBA Nature of Management Study Material Notes: Concept of Management of Discipline Management as a group of People as a Process Features of Management and administration a terminological conflict administration of above management Difference Between administration and management Importance of management Science or art Management both science and art management as a profession professional approach in management Professional managed sector :
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Concept of Management
The study of a discipline should start with its definition delineating properly its contents and characteristics, defining its scope and boundary, and prescribing the objectives for which it stands. From this point of view, we can proceed only when we define management. However, a precise definition of management is not so simple because the term management is used in a variety of ways. Being a new discipline, it has drawn concepts and principles from a number of disciplines such as economics, sociology, psychology, anthropology, statistics, and so on. The result is that each group of contributors has treated management differently. For example, economists have treated management as a factor of production; sociologists have treated it as a class or group of persons; practitioners have treated it as a process comprising different activities. Naturally, all these divergent groups view the nature and scope of management from their own points of view. Thus, taking all these points of view together, it becomes difficult to define management in a comprehensive way. In the present context, the term management is used in three alternative ways:
1 Management as a discipline,
2. Management as a group of people, and
3. Management as a process.
Nature of Management
Management as a
Discipline refers to a field of study having well-defined concepts and principles. When we refer to management as a discipline, we include in it the various relevant concepts and principles, the knowledge of which aids in managing. From this point of view, management can be treated either as an art or science, the two basic and broad disciplines. However, since management prescribes various principles and how these principles can be applied in managing an organisation, it has the orientation of both, science and art, a phenomenon which will be discussed later in this chapter.
Management as a Group of People Sometimes, we refer to management as a group of people in which we include all those personnel who perform managerial functions in organisations. For example, when we talk about relationship between management and labour in an organisation, we refer to two distinct classes or groups of personnel in the organisation. In the first category, we include all those persons who are responsible for managerial functions and in the second category. we include non-managerial personnel. This approach of using management is quite popular: however, it does not serve our purpose of defining the term management.
Nature of Management
Management as a Process
In studying management discipline, we generally refer to management as a process. A need can simply be defined as systematic method of handling activities. However, the management process can be treated as a complex one which can be referred to as an identifiable flow of Information through interrelated stages of analysis directed towards the achievement of an objective or set of objectives. It is a concept of dynamic rather than static existence in which events and relationships must be seen as dynamic, continuous, and flexible, and as such, must be considered as a whole. Thus, management as a process includes various activities and subactivities. However, what these activities are must be defined precisely to understand the exact nature and scope of management. In a simple way, we can define management as what managers do. However, this definition, though simple, suffers from two limitations:
1 There is a problem in identifying the people in the organization who can be called managers because there is no uniformity in the titles given to the people. For example, people may be called as president, chief executive or managing director at the top level. Similarly at the middle level, they can be called as executive or accountant, and at lower level as supervisor. Therefore, it becomes difficult to identify who is a manager and who is not; whose activities should be treated as managerial and whose activities as non-managerial. Thus, what should be studied is not clear.
2. Even if the problem of identifying people as managers is solved, the problem of identifying managerial activities still exists because people known as managers may perform different kinds of activities, some of which may not really be managerial. Therefore, unless some yardsticks are prescribed to distinguish between managerial and non-managerial activities, managerial activities cannot be identified.
In order to overcome these limitations, the total activities of an organisation can be divided into two groups: operational and managerial. Those activities which are of operative nature through which actual work is accomplished such as handling a machine by workers, putting the materials into godown, etc., are called operational activities. As against this, some activities are performed to get things done like a supervisor instructing a worker to do a particular job, or marketing manager instructing his salesmen to contact the customers to sell the product, etc. Such activities are different from the first group and are known as managerial activities. Thus, management can be defined as the process of getting things done by others. Management is invariably defined as the process of getting things done through the efforts of others’, ‘getting from where we are to where we want to be with the least expenditure of time, money, and efforts’, or ‘coordinating individual and group efforts toward superordinate goals’. Though these definitions of management as process use different terms, all of them convey the same set of meanings in their final analysis. However, the problem of defining management as a process is not over because of the existence of different approaches in this context too. Historically, four such orientations have been adopted in defining management process:
1 Production-or efficiency-oriented,
2. Decision-oriented,
3. People-oriented, and
4. Function-oriented.
Nature of Management
Production-or Efficiency-oriented Definition. Those who have put forward the concept of management as a source of efficiency in organisations have viewed that management is concerned with generating efficiency in organisational settings. For example, in an early stage of development of management, Taylor has defined management as follows: Management is the art of knowing what you want to do and then seeing that it is done in the best and cheapest way.”
This definition emphasizes the relationship between efforts and results as the objectives of management but do not specify how these objectives can be achieved. To that extent, this definition does not offer exact explanation of the nature of management.
Decision-oriented Definition. A decision-oriented definition of management has been provided by decision theorists who have seen the management process in terms of decision making. For example, Peter Drucker, a noted management thinker, has viewed that the life of a manager is a perpetual decision-making activity. Whatever a manager does, he does only through decision making. Decision-making power provides a dynamic force for managers to transform the resources of business organisations into a productive, cooperative concern. These decision theorists have emphasised the role of decision making in management to such an extent that one of them has viewed that “management means decision making. A more formal decision oriented definition of management has been provided by Stanley Vance as follows:
“Management is simply the process of decision making and control over the action of human beings for the expressed purpose of attaining pre-determined goals.”
The decision-oriented definition of management indicates that the basic activity of a manager is to make decisions and enforce these decisions. However, this does not provide the processes in which context decision making is applied.
People-oriented Definition. In this group of definition, management is defined as a process of coordinative efforts of people in organizations. Various authors have emphasised the role of people in the organisations. They have viewed that management is the direction of people and not of things: management is personnel management; and so on. Lawrence Appley has called management as personnel management and has defined it as follows:
“Management is the accomplishment of results through the efforts of other people.” Koontz has defined management in similar way when he says that:
“Management is the art of getting things done through and with people in formally organized groups.”
These definitions, no doubt, offer better explanations of the nature of management though these do not specify the functions or activities involved in the process of getting things done by or with the cooperation of other people.
Function-oriented Definition. This definition puts emphasis on the various functions performed by managers in organisations though there is no uniformity in these functions in different definitions. For example, McFarland states that:
These definitions, no doubt, offer better explanations of the nature of management though these do not specify the functions or activities involved in the process of getting things done by or with the cooperation of other people. Function-oriented Definition. This definition puts emphasis on the various functions performed by managers in organizations though there is no uniformity in these functions in different definitions. For example, McFarland states that:
The basic approach of these authors is that administration determines the basic framework of the organisation within which managerial functions are undertaken. Since these sets of functions are different, different types of persons with different sets of qualities are required. Based on this approach, various authors have suggested the difference between administration and management as shown in Table 1.1.
The classical authors on management appear to be influenced by the fact that administrative process in non-business activities was well developed as compared to management. It can be seen in the next chapter that most of the early contributors to management thought studied managerial process in the business organisations comparatively at lower levels whose primary responsibility was to execute what was decided by higher level management. Therefore, they could perceive the functions of management as limited to lower levels only. The only exception came from Henry Fayol who studied the entire management functions and never distinguished between management and administration “William R. Spriegal, Principles of Business Organization and Operation, London: Sir Issac Pitman, 1957 p. 548.
Nature of Management
The administration is a part of Management
There is another school another school of thought which treats management as more comprehensive ancion which includes administration also. For example, brech nas viewed and administration in the following way:
Management is a generic name for the total process of executive control in Industry or commerce. It is a social process entailing responsibility for the effective and economical planning and regulation of the operation of an enterprise, in the fulfilment of a given purpose or task. Administration is that part of management which is concerned with the installation and carrying out of the procedures by which it is laid down and communicated, and the process of activities regulated and checked against plans.”
If this view is accepted, administration becomes a subordinate function to overall management functions. From this point of view, administration is concerned with day-today function and is a part of management. According to this approach, the previous analysis, that is, administration is above management, stands completely reversed.
Nature of Management
Management and Administration are Same
According to the third approach which is the most popular and practical one, management and administration are same. Both involve the same functions, principles, and objectives. For example, while speaking at the Second International Congress of Administrative Science, Fayol, one of the most important early thinkers on management thought, has said, “all undertakings require planning, organisation, command, coordination, and control, and in order to function properly, all must observe the same general principles. We are no longer confronted with several administrative sciences but with one which can be applied equally well to public and private affairs.” Thus, there is no difference between management and administration. For example, McFarland, who made distinction between management and administration in an earlier edition of his book, revised his stand and viewed that it is difficult to make distinction between management and administration; both are similar to each other.11 Thus, management and administration are synonymous; the difference between the two terms lies mostly in their usage in different countries or different fields of human organisations. For example, Lepawsky has made observation that:
“The British conception seems to be the general European usage in which management is given a broader meaning than administration. In American usage, administration includes management and organisation.”
The distinction between the two terms may be drawn by analysing the origin of the word administration. Its origin is found in the bureaucratic structure of government or in regulation of some laws. The government often uses the word administrator, instead of manager, to handle and manage its affairs. In law also, administrators are appointed to look after the estate of a deceased person. While handling the government affairs, administrators are to execute the broad policies laid down by the government, though they may also participate in policy formulation. Similarly, the estate administrators keep intact the property and manage the estate according to some specific mandates of law. On the other hand, management is normally used in business sphere. However, whether administration is used in non-business fields and management is used in business field does not make a fundamental distinction between the two because of similarity of the process involved in these. In fact, even this distinction is also disappearing. For example, many authors have written books under the title “Business Administration” which implies that these books would be used by persons acquiring knowledge to be utilised in handling business affairs. Similarly, many institutions offering management courses offer M.B.A. degrees for their management graduates while others offer M.B.M. degrees for the similar type of students. Thus, in practice, the difference between the two is disappearing fast.
The basic point of controversy between management and administration lies in terms of coverage of activities. The controversy arises because people call the various level management functions differently. For example, the contents of management functions in terms of policy formulation and execution can be presented as follows. Some call the formulation function as administration, others call it management. However, both are management functions, as shown in Figure 1.2.
It may be suggested that two sets of people may not be required to perform two sets of management functions. Everyone performs all managerial functions, only relative importance of these functions varies. The content of policy formulation is higher at higher levels, it is lower at lower levels while execution is otherwise. Therefore, it becomes unimportant whether policy formulation function is known as administration or management. This is the reason why most of contemporary authors try to avoid this age-old controversy.
Nature of Management
IMPORTANCE OF MANAGEMENT
Management has been important to the daily lives of people in groups since long. Therefore, a question is raised that if the management has been so important for human lives, why it has assumed added importance in the present-day society. The possible answer of this question can be traced in the context of emergence of large-sized organisations. The management of these organisations has become much more complex than what it used to be earlier. Along with the size, another dimension which has added to the complexity on managing is the changing nature of society and its various constituents. Therefore, the issue before the present-day managers is how to take care of these changes so that organisations achieve their objectives. Thus, management has become crucial not only for the organisations but for the society too. Even classical writers on management have ecognised its importance long back. For example, Urwick has commented that:
Principles and Practice of Management INO ideology, no ism, or political theory can win greater output with les given complex of human and material resources, only sound management. And it is on suen greater output that a higher standard of life, more leisure, more amenice must necessarily be found.”13
The importance of management may be traced in the following contexts:
1 Effective Utilisation of Resources. Management tries to make effective insa on various resources. The resources are scarce in nature and to meet the demand of the society, their contribution should be maximum for the general interests of the society. Management not only decides in which particular alternative a particular resource should be used, but also takes actions to utilise it in that particular alternative in the best way.
2. Development of Resources. Management develops various resources. This is true with human as well as non-human factors. Lawrence Appley has emphasised that management is the development of people. 14 However, most of the researches for resource development are carried on in an organised way and management is involved in these organised activities. Thus, through the development of resources, management improves the quality of lives of people in the society.
3. To Incorporate Innovations. Today, changes are occurring at a very fast rate in both technology and social process and structure. These changes need to be incorporated to keep the organisations alive and efficient. Business organisations are moving from primitive to sophistication. Therefore, they require high degree of specialization, high level of competence, and complex technology. All these require efficient management so that organisations work in the most efficient way.
3. Integrating Various Interest Groups. In the organised efforts, there are various interest groups and they put pressure over other groups for maximum share in the combined output. For example, in the case of a business organisation, there are various pressure groups such as shareholders, employees, government, etc. These interest groups have pressure on an organisation. In a more advanced and complex society, more such pressure is on the organisation. Management has to balance these pressures from various interest groups.
4. Stability in the Society. Management provides stability in the society by changing and modifying the resources in accordance with the changing environment of the society. In the modern age, more emphasis is on new inventions for the betterment of human beings. These inventions make old systems and factors mostly obsolete and inefficient. Management provides integration between traditions and new inventions, and safeguards society from the unfavourable impact of these inventions so that continuity in social process is maintained.
Nature of Management
Nature of Management
The study and application of management techniques in managing the affairs of the organisation have changed its nature over the period of time. Though management as a practice came long ago, in fact, with the existence of human groups themselves, its impact as a formal body of knowledge has been felt much later, particularly during the last five-six decades. Various contributions to the field of management have changed its nature, for example, from merely a practice to science also. Similarly, other changes have also occurred. Thus, the nature of management can be described as follows:
1 Multidisciplinary. Management is basically multidisciplinary. This implies that, although management has been developed as a separate discipline, it draws knowledge and concepts from various disciplines. It freely draws ideas and concepts from such disciplines as psychology, sociology, anthropology, economics, ecology, statistics, operations research, history, etc. Management Integrates the ideas and concepts taken from these disciplines and presents newer concepts which can be put into practice for managing the organisations. In fact, the integration of knowledge of various disciplines is the major contribution of management and this integrated discipline is known as management. Therefore, the contributions in the field can be expected from any discipline which deals with some aspects of human beings.
2. Dynamic Nature of Principles. Principle is a fundamental truth which establishes cause and effect relationships of a function. Based on integration and supported by practical evidences, management has framed certain principles. However, these principles are flexible in nature and change with the changes in the environment in which an organisation exists. Because of the continuous development in the field, many older principles are being changed by new principles. Continuous researches are being carried on to establish principles in changing society and no principle can be regarded as a final truth. In fact, there is nothing permanent in the landslide of management.
3. Relative, not Absolute Principles. Management principles are relative, not absolute. and they should be applied according to the need of the organisation. Each organisation may be different from others. The difference may exist because of time, place, socio-cultural factors, etc. However, individuals working within the same organisation may also differ: Thus, a particular management principle has different strengths in different conditions. Therefore, principles of management should be applied in the light of prevailing conditions. Allowance must be made for different changing environment.
4. Management: Science or Art. There is a controversy whether management is science or art. However, management is both a science and an art. This will be elaborated later in this chapter.
5. Management as Profession. Management has been regarded as a profession by many while many have suggested that it has not achieved the status of a profession. This aspect will be discussed later in this chapter.
6. Universality of Management. Management is a universal phenomenon. However, management principles are not universally applicable but are to be modified according to the needs of the situation. Universality of management will be discussed later is this chapter.
The nature of management suggests that it is a multidisciplinary phenomenon; its principles are flexible, relative and not absolute. It is both science and art; it can be taken as a profession and finally it is universal. However, the last three aspects need further elaboration because of differing views over these aspects of management.
Nature of Management
MANAGEMENT: SCIENCE OR ART
The controversy with regard to the nature of management, as to whether it is a science or an art, is very old. This controversy, however, is not very much in the air though the controversy is yet to be settled. Specification of exact nature of management as science or Art or both is necessary to specify the process of learning of management. It is to be noted what the learning process in science differs from that of art. Learning of science basically involves the assimilation of principles while learning of art involves its continuous practice.
Much of the controversy of management as science or art is on account of the fact that the earlier captains of industry and managers have used intuition, hunches, commonsense, and experience in managing organisations. They were not trained professional managers, although they were very brilliant and had developed commonsense through which they managed well. Commonsense and science differ in the following ways:
1 Commonsense is vague as compared to scientific knowledge.
2. Flagrant inconsistency often appears in commonsense whereas logical consistency is the basic of science.
3. Science systematically seeks to explain the events with which it deals; commonsense Ignores the need for explanation.
4. The scientific method deliberately exposes claims to the critical evaluation of experimental analysis; commonsense method fails to test conclusions in any
scientific fashion. Science is based on logical consistency, systematic explanation, critical evaluation and experimental analysis. Thus, science can be defined as follows:
“Science is a body of systematised knowledge accumulated and accepted with reference to the understanding of general truths concerning a particular phenomenon, subject, or= object of study.”
Thus, science is a systematised body of knowledge. The process of scientific theory construction and confirmation can be viewed as involving the following steps:
1 The formulation of a problem or complex of problems based on observation;
2. The construction of theory to provide answers to the problem or problems based on Inductions from observations:
3. The deduction of specific hypotheses from the theory:
4. The recasting of the hypotheses in terms of specific measures and the operations required to test the hypotheses:
5. The devising of actual situation to test the theorem; and
6. The actual testing in which confirmation does or does not occur.
Nature of Management
Management as Science
Judging from the above features of formulation of theory in science, management cannot be regarded as science because it is only halfway. It may be called ‘inexact science’ or ‘pseudo-science’. Perhaps this is true for all social sciences of which management is a branch. Management is not as exact as natural or physical sciences are. This phenomenon can be explained as follows:
1 Science may be viewed in terms of its structure, its goals, and its methods. In terms of its structure, it is a number of scientific disciplines: physics, biology, psychology. economics, management and many others. Each of these sciences attempts to provide a set of internally consistent hypotheses, principles, laws, and theories dealing with an aspect of total knowledge. To the extent a science is mature, such internal consistency may be attained but there are many young sciences like management that only approximate this state.
2. One of the most important rules of science is that concepts have to be defined Clearly in terms of the procedures involved in their measurement. One has to know exactly what one is talking about while using a particular term. Meanings have to be clear and unambiguous to avoid confusion and erroneous classification. However, in management, various terms are not used in the same way and giving same meaning. Even the major terms like management and organisation are used in different ways. The reason for this phenomenon is quite simple. Since the second decade of the last century, a number of disciplines have claimed to contribute to human knowledge of managing. These disciplines have been immature to be a science. The consequence has been almost unfathomable confusion over the various terms, a confusion in which ambivalence in using the various terms has played a conspicuous part.
3. In science, observations must be controlled so that causation may be imputed correctly. The most common method of eliminating a given factor as possible cause of an event is to hold it constant-to keep it from varying so that it cannot operate as a source of change. This is a difficult rule to follow, specially in studying organisational phenomena. Various research studies in management have suffered because of the bias of researchers. In many studies, for example, a variable that was thought to be irrelevant was found to exert a causal influence. However, the effort to identify factors that must be controlled and to develop procedures to accomplish this is a continuing one. To the extent that this effort is successful, reliability of perception and reasoning, and hence valid explanation, is possible.
4. Theories in science are in terms that permit empirical confirmation. Scientific statements are testable and the tests are capable of repetition with same result. Furthermore, explanatory statements are logically consistent with other explanatory statements ihat have been frequently confirmed. Thus, rationality of total scientific system is maintained. However, this does not happen in management exactly. Many of the management principles lack empirical evidences and are not testable. Further, these principles do not give similar results under varying conditions and, therefore, lack universal application. No doubt, attempts are being made to evolve principles in management on the basis of scientific observations which may have universal application, but still the process is in an evolutionary stage. Until such principles are not evolved, management cannot be called a science in its true sense.
The various factors analysed above suggest that management is not a pure science but it can be simply called ‘inexact science’. This is so because management also makes use of scientific methods in evolving principles. Therefore, it bears partial characteristics of science. In fact, many people have suggested that with greater use of mathematics and statistics in management, the direction is towards more and more use of true science in management. This is true but it must be remembered that management is not becoming mathematics, rather mathematics is being used to explain, codify, and help to decide issues in management. Mathematics is a basic abstract science. It is fundamental to other sciences. For example, it is basic to the study of physics. But it is not the mathematics that is the science of management but the use of mathematics helps in relating and understanding the activity of management. The knowledge consists in how and where to use mathematics in solving issues of managerial difficulty. Science may contribute to the solution of managerial problems in two ways: (( existing research and theory relevant to the problem may be brought to bear on its solution and to where sufficient time is available research may be conducted to provide information not previously available and to guide solution accordingly. As the body of scientific knowledge bearing on the management process increases, the first approach may receive wider application. However, second approach may have limited application because of the widespread time pressure on decision-making for problem solution.
Nature of Management
Management as Art
Management can be regarded as art also. The meaning of art is related with the bringing of a desired result through the application of skills. Whereas under science, one learns the ‘why’ of a phenomenon, under art, one learns the ‘how’ of it. Art is ‘thus’ concerned with the understanding of how particular work can be accomplished, that is, art has to do with applying knowledge or science or expertness in performance. This is specially important in management because in many instances, much creativity and adroitness in applying the managerial efforts are necessary to achieve the desired results. Furthermore, the adequate consideration of people involved in managerial action is vital and adds to the concept of the art of managing.
Science and art are complementary fields of endeavour; they are not mutually exclusive. The medical doctor requires the knowledge of science of chemistry, biology, and anatomy. But excellence in absorbing these funds of knowledge does not make him an excellent physician. He has to apply his wealth of knowledge expertly, and his skill in perceiving how and when to use his knowledge is essential to his success in preventing and controlling diseases of mankind. Therefore, knowledge is not the sole qualification. Similarly, in management, if one student scores A grade and another scores B grade, it does not mean that the former would be a better manager than the latter. This is so because management is an art and a better manager is one who knows how to apply the knowledge in solving a particular problem. Management is an art can be seen from the following facts:
1 The process of management does involve the use of know-how and skills like any other art such as music, painting, sculpture, etc.
2. The process of management is directed to achieve certain concrete results as other fields of art do.
3. Management is creative like any other art. Creativity is a major dimension in managerial success. It creates new situations for further improvement.
4. Management is personalised meaning thereby that there is no one best way of managing’. Every person in his profession has individual approach and technique in solving the problems. The success of managerial task is related with the personality of the person apart from the character and quality of general body of knowledge.
Nature of Management
Management: Both Science and Art
Thus, to be a successful manager, a person requires the knowledge of management principles and also the skills of how the knowledge can be utilised. Absence of either will result in inefficiency. A comparison between science and art is presented in Table 1.2 which suggests that a manager requires both aspects of management to be successful.
It can be seen that management uses both scientific knowledge and art in managing an organization. As the science of management increases so should the art of management, A balance between the two is needed. Neither should be overweighed or slighted. Some feel that further gains in science of management will restrict art more and more. This is true to a limited extent only. The fact remains that to be useful, knowledge of science must be applied, that is, art must be present. Therefore, the old saying that knowledge is power’ is partially true. The correct saying should be ‘applied knowledge is power’. People having abundant knowledge may have little use if they do not know how to use knowledge. This is particularly true for management which is a situational phenomenon.
Nature of Management
Management as Profession
Management is regarded as profession by many, although it does not possess all the features of a profession. Therefore, it is desirable to find out whether management is a profession. Profession is an occupation for which specialised knowledge, skills, and training are required and the use of these skills is not meant for self-satisfaction but these are used for larger interests of the society and the success of the use of these skills is measured not in terms of money alone.
Thus, all professions are occupations in the sense that they provide means of livelihood; however, all occupations are not professions because some of them lack certain characteristics of a profession. The various characteristics of profession may be: (1) existence of an organised and systematised body of knowledge: (1) formal method of acquisition of knowledge; (iii) existence of an association with professionalisation as its goals; (iv) formulation of ethical codes; and () service motives. Let us discuss the extent to which all these characteristics are found in management to determine whether management is profession or not.
1 Existence of Knowledge. A profession emerges from the establishment of fact that there is a body of knowledge which cannot be skirted around but has to be studied for being a successful professional. This is true for all professions including management Management has been developed as a distinct body of knowledge over the last five-six decades. The development of knowledge in management field has been due to the need for managing complex and large organisations in a better way. Thus, management satisfies the requirement of a profession in the form of existence of knowledge. However, the concept of management is still evolving and continuously new principles are being developed though this does not affect its status as being a profession.
2. Acquisition of Knowledge. An individual can enter a profession only after acquiring knowledge and skills through formal training. For example, only law graduates can enter the profession of legal practice. A professional is one who practises a profession and is regarded as an expert since he has mastery of a specific branch of learning upon which his Occupation is based so that he may offer service to his client. However, the emphasis is put on the initial acquisition of knowledge through some formal method. From this point of view, management cannot be regarded as a profession because the entry to the managerial cadre in an organisation is not limited to management graduates only, though it can be said that management graduates can put in better performance in the organisation because of their familiarity with the various techniques of management.
3. Professional Association. An occupation, which claims to be a profession, should have an association. A professional association consists of firms and individual membership is based on common professional, scientific, or technical amb representative body of professionals is needed to regulate and develop the professional activites. The body may also prescribe the criteria for individuals who want to proression. In the field of management, there are associations at various leves example, in India, there Is All India Management Association with its local chapters most of the cities. Similarly in foreign countries also, there are associations of managers, However, manager However, managers do not belong to a single, unified professional group like Indian vicdical council for medical practitioners or Bar Council of India for legal practitioners. Instead,
dividuals and firms affiliate with a variety of interest groups falling into two categories: the trade associations and the professional. occupational, scientific, or technical interest. This is true throughout the world. From this point of view, management cannot be termed as true profession.
4. Ethical Codes. For every profession, some ethical standards are provided and every Individual of the profession is expected to maintain conformity with these standards. The need for ethical codes arises because of the fact that occupations whose practitioners have mastery over an area of knowledge have a degree of power by virtue of their expertise and this power can be used for the benefit of the professionals at the cost of the society. This has resulted in many occupations issuing a code of ethics of professional practice so that clients may know the standard and commitment that they should receive from a professional. In management also, a code of conduct has been formulated to suggest the behavioural pattern for professional managers. Though there is a lack of universally accepted ethical codes for managers throughout the world, in most of the countries, managers are supposed to be socially responsible, and it is their duty to protect the interest of all parties associated with an organisation. These parties may be customers, suppliers, employees, financiers, creditors, government, and the general public. However, the practice of ethical codes in management is not much prevalent in the absence of any controlling body as the management association is not fully representative of the professional managers. In fact, in India, many professional managers are not even aware of the code of conduct formulated by All India Management Association.
5. Service Motive. While ethical code provides the behavioural pattern for professionals, service motive concept suggests that professionals should keep social interest in their mind while charging fees for their professional services. It is essential because the monetary value of professional service cannot be measured easily in the absence of market mechanism except the competition among the professionals themselves. Since the professionals are in a position to charge higher fees by virtue of their expert knowledge, hence associating high monetary value for their service, the success of any profession is measured not in terms of money it earns but by the amount of social service it provides. This is true for management also. Management is an integrating agency and its contribution in the society by way of integrating various resources into productive units is very important for the stability of the society. This important contribution of management cannot be measured in terms of money alone because without the integrating effort of management, resources worth millions of rupees may be useless..
Nature of Management
Management as Emerging Profession
The above discussion shows that management possesses certain characteristics of nrofession while others are missing. Therefore, it cannot be said to be a profession, though it is emerging as a profession and the move is towards management as profession. For example. Reiss has classified profession into five categories and has suggested management as a would-be profession. According to him, five different types of professions in contemporary industrial society are as follows:
1 Old established professions founded upon the study of a branch of learning, e.g. medicine.
2. New professions founded upon new disciplines, e.g.. chemists, social scientists.
3. Semi-professions based upon technical knowledge and practice, e.g.. nurses, teachers, social workers.
4. Would-be professions-familiarity with modern practices in business, etc. and aspiring to achieve professional status, e.g. personnel directors, sales directors, engineers, etc.
5. Marginal professions based upon technical skill, e.g., technicians, draughtsmen Management is being professionalized. The concept of professionalization may be used to refer to the dynamic process whereby many occupations can be observed to change crucial characteristics in the direction of a profession even though these may not move very far in this direction. There are certain stages in the transition of occupation into profession. Caplow has suggested that the first stage in this transition is the establishment of a professional association, followed by a change in occupational title. A code of ethics is published which portrays the social utility of the occupation, which is followed by legislation restricting specific practices to the occupation. He points out that concurrently with this go the development of training facilities and the control of admission to training and entry into the profession. Thus, the occupation controls every aspect of training and practice through various sub-committees of its professional association. 16 From this point of view, management is fast moving towards professional status. The main implications of professionalization in management are found in five areas of development: (1) the growth of organised, systematized body of knowledge; (ii) the evolution of professional schools of management; (iii) a growing emphasis on the ethical behavior of managers; (iv) the increasing number and use of management consultants; and (c) the large number of management associations.
Management, however, does not control entry in the manner as many of the old-established professions do but the educational requirement of future managers may provide a similar consequence. Moreover, the professional status of management should not be viewed in the context of controlled entry. This may be against the development of management itself. For example, Drucker has observed, “No greater damage could be done to our economy or to our society than to attempt to professionalize management by licensing managers or by limiting access to management to people with a special academic degree. Any serious attempt to make management scientific or a profession is bound to lead to the attempt to eliminate those disturbing nuisances, the unpredictability of business life-its risks, its ups and downs, its wasteful competition, the irrational choices of consumerand, in the process, the economy’s freedom and its ability to grow.17 Drucker believes that economic performance and achievement are the proper aims of management and since a manager’s primary responsibility is to manage, he should not devote time to activities such As Professionalisation which lie outside, rather than within the organisation. While this * certain merit, Drucker has used the concept of management as profession e sunct sense. At the centre of professional aspect of management are the attitudes of managers toward their work.
Professional Approach in Management. Management as a profession should not be defined in terms of the characteristics of a well-established profession like medicine or law which entry is regulated based on qualifications, but in terms of the approach that is adopted by managers in managing the organisations. From this point of view, the key considerations in professional management are as follows:
1 Commitment to professionally defined knowledge and techniques,
2. Application of relevant modern management tools and techniques.
3. Team approach in managing rather than emphasis on personal styles, whims, and prejudices.
4. Preparedness to accept change and to apply the principles of change management.
5. Preference for competence rather than birth as the basis for movement in the organizational ladder.
6. Optimisation-oriented decision making expected to optimise the benefits to the organization and its constituents.
7. Responsiveness to the society and respect for national policies.
Nature of Management
PROFESSIONALISATION OF MANAGEMENT IN INDIA
The term “professional management’ has become a glamorous expression in corporate management in India. There is so much fascination that every company takes pride of pleasure in decorating itself as professionally managed even though sometimes in total disregard to its professional attainment. The concept of professional management has become synonym of progressive and efficient management and since no one likes to be called backward and inefficient, there is obvious craze for the adoption of professional management title. However, the question arises: to what extent has Indian management been professionalized? To assess the present status of professionalization of Indian management, not many studies have been conducted. The research is required to find out the extent to which Indian management has been professionalized. The basic characteristics of management as a profession are found in Indian management in varying degrees. Facilities of formal education in management, the establishment of All India Management Association, growing divorce of ownership and management, and formulation of a code of conduct by All India Management Association suggest that there is professionalization of management in India. However, this is not the total picture of Indian management. At the same time, it is labelled as traditional management. These two contrasting views need further elaboration. From this point of view, Indian management can be divided into two parts: traditionally managed sector and professionally managed sector.
Nature of Management
Traditionally-managed Sector
In common parlance, Indian management is described as ‘family management with ‘traditional values’. The two distinguished features of family management are: (0 both ownership and control of the organisation are in the hands of the members of the family, and in organisational objective is to maximise profit even if it necessitates exploitation of the weaker sections of the society. This type of management maintains the control of the organisation by value system of the family and, often, there is great variation between the management styles of two organisations controlled by two different families. Organisational and managerial style has been retained by the family structure at the peak of the organisational pyramid and relative organisational positions of the family members are determined in accordance with their positions in the family. In majority of cases, power is personalised in a close-knit group tied with familiar relationship. Even in the areas where professionals manage to percolate, the managers are allowed to play only secondary role because of the limitations posed by the decision-making process.
The claim of some organisations that they have professionalised their management is not true because the mere appointment of some persons with professional degrees will not necessarily lead to professionalisation of management unless there is a change in management process. Professionalisation does not come automatically by employment of people with professional degrees, unless the professionals have the necessary authority and use their professionalism in decision making.
In a recent comment, Sumantra Ghoshal, considered to be management guru, has observed as follows:
“Entrepreneurs have enjoyed the fastest growth so far but this is not sustainable because much of this growth has come at the cost of destroying value …. The Indian private sector, largely dominated by family capitalism, must change and overhaul its governance structure. From feudal lordships, they must change to adopt the governance mechanisms of modern corporations.”18
In many public sector organisations, the situation is no better. It is an accepted fact that managers in many public sector organisations, particularly at higher levels, often greatly borrow the traits of bureaucracy, just as the top level private sector managers carry a family or business house traits, even though they have the facade of professionalisation. Many top level public sector managers have worked, lived, and imbibed the government way of working. This seriously comes in the way of initiative, innovativeness, and flexibility so essential for public sector organisations. Sometimes, civil servants, military personnel, and politicians who do not have commensurate professional competence are appointed to head public sector organisations. In such a case, one hardly expects any professionalisation at the lower levels also. Therefore, it can be suggested that in many private sector and public sector organisations, there is lack of professionalisation of management Management, being a key factor in the economic development of the country and development of individual organisations, lack of professional content in it has been one of the main reasons for the unsatisfactory performance of these organisations. The technology which has been so frequently imported could not be put to the best possible use in the absence of commensurate professional management support. The basic reasons for lack of professional management are as follows:
1 There appears to be attitudinal conservatism which checks the emergence of professional management. The popular belief that business is a matter of commonsense and luck reflects this attitude. This attitude has paid good dividends in the past because of controlled economy and lack of competition, and profit, a major yardstick of business success, has been assured. However, the situation last with increasing size of organisations, complexity of managing business u more competitive environment. But very few business owners have realised mis fact and others are clinging to the old concept of managing business
Nature of Management
2. Most of the organisations in the private sector are generally one-man show. Often the owner also performs the functions of a manager. This is true not only for the small-scale organisations but also for the large ones even though they might have been organised as joint stock company form of organisations. Generally, the board is constituted to fulfill the legal requirement but real control lles in a single person. The owner who is an entrepreneur conceives the enterprise and builds it brick by brick. When he performs managerial functions, his perspective is quite different from the professional manager. Owner-manager’s style of functioning is normally centralised and he believes in more direct control and often discourages professionalisation of management.
3. The emergence and development of public sector enterprises have put pressure on the government to find out suitable managers for these enterprises. These managers were originally deputed from the civil services who had altogether different perspective and style of functioning. This style percolated throughout the organisation and public sector could not develop right type of managerial culture. This has also worked against the professionalisation of management in public sector. The situation in this respect is changing because the government has now realised the need for a suitable management cadre for this sector.
4. Business in India has not yet reached the level of sophistication as in the developed countries requiring the use of sophisticated tools and techniques. By Western standard, the Indian business is still in its Infancy. In the absence of proper development of business, the management pattern has also not developed. In fact, many sectors are still undermanaged. In such a case, there is very little scope for professionalisation of management in these sectors.
