Management: meaning, nature, scope and importance

1. Definitions

No single definition is accepted by everyone, so quote three and draw the common features out of them.

• Mary Parker Follett: management is “the art of getting things done through people”. Short and easy to quote, but it says nothing about the functions a manager performs.
• F.W. Taylor: management is “the art of knowing what you want to do and then seeing that it is done in the best and cheapest way”. It stresses efficiency.
• Henri Fayol: “To manage is to forecast and to plan, to organise, to command, to co-ordinate and to control.” This is the functional definition.
• Harold Koontz and Heinz Weihrich: management is “the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims”. This is the definition in Essentials of Management, the first reference book on the syllabus.

From these, management can be described as a continuous process of planning, organising, staffing, directing and controlling the efforts of people and the use of other resources so that the goals of an organisation are reached effectively (doing the right things) and efficiently (doing them with the least waste).

2. Nature and characteristics

1. Goal-oriented. Management exists to achieve objectives; its success is measured by how far they are reached.
2. Universal. The same basic functions are needed in a firm, a hospital, a university, a government department or a law office.
3. A continuous process. Planning, organising, staffing, directing and controlling repeat in a cycle.
4. Group activity. It works through people, and co-ordinates individual effort towards common goals.
5. Integrative. It combines men, money, materials, machines and methods (the “5 Ms”).
6. Intangible. It cannot be seen; its presence is felt through results.
7. Dynamic. It adapts to changes in the economic, social, legal and technological environment.
8. Multi-disciplinary. It draws on economics, psychology, sociology, statistics and law.
9. Distinct from ownership. In a company, shareholders own and professional managers manage.

Management as a science

Management has a systematic body of knowledge, principles derived from observation and experiment (Taylor’s time and motion studies are the classic example), and cause-and-effect relationships. But it is an inexact or behavioural science: it deals with human beings, whose behaviour cannot be predicted with the precision of physics or chemistry, so its principles are guidelines, not laws.

Management as an art

Art is the skilful application of knowledge to get a desired result. Management needs practical know-how, creativity and personal skill; two managers applying the same principles get different results. It improves with practice.

Management as a profession

A profession has a specialised body of knowledge, formal education and training, a representative association, a code of conduct, and service motive. Management satisfies the first two (business schools, MBA programmes) and partly the others (the All India Management Association exists), but there is no compulsory licence to practise and no binding code enforced by a statutory body, as there is for advocates under the Advocates Act, 1961 or for chartered accountants. So the usual conclusion is that management is an emerging profession.

3. Scope

Scope can be described in two ways, and the examiner accepts either.

• By functional area: production management, marketing management, financial management, human resource (personnel) management, office management, and research and development.
• By managerial function: planning, organising, staffing, directing and controlling, with co-ordination running through all of them.

4. Objectives of management

• Organisational (economic): survival, profit and growth.
• Social: quality goods at fair prices, employment, fair dealing with suppliers and the community, protection of the environment. Corporate social responsibility under section 135 of the Companies Act, 2013 is the statutory form of this for larger companies.
• Personal (human): fair wages, working conditions, recognition and growth for employees.

5. Importance

1. Achieves group goals by directing individual effort towards them.
2. Makes optimum use of scarce resources and reduces waste.
3. Increases efficiency, meaning more output from the same input.
4. Establishes a sound organisation with clear authority and responsibility.
5. Helps the enterprise adapt to change and face competition.
6. Creates employment and raises standards of living, so it contributes to national development.
7. Provides stability and continuity: the business survives the departure of any one person.

6. Levels of management

Robert Katz’s skills model is a good addition: technical skill matters most at the lower level, human skill at every level, and conceptual skill most at the top.

7. Management and administration

There are three views. One (Oliver Sheldon, Ordway Tead) treats administration as the higher function, determining policy, and management as executing it. A second (E.F.L. Brech) treats management as the wider term, of which administration is a part. The third (Koontz, Newman) says the two words are used interchangeably, and the difference is one of usage: “administration” in government and non-profit bodies, “management” in business.

How this is examined

The 80-mark papers put this in Unit I, question 1(a), for 10 marks: “What is management? Explain the significance of management” (June 2025), “the scope and importance of management” (January 2025), with “Distinguish between management and administration” as the alternative both times. The 6-mark part has asked for the levels of management (June 2025) and the objectives of management (January 2025).

For 10 marks: two definitions, five or six features of the nature, the art-science conclusion, and six points of importance. For the distinction, state the three views first, then give a table; a table alone loses marks because it does not show that the distinction is disputed.