Unit 1 1. Concepts of Management? Ans) • • • • According to 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. According to Robert L. Trewelly and M. Gene Newport, Management is defined as the process of planning, organising, actuating and controlling an organisation’s operations in order to achieve coordination of the human and material resources essential in the effective and efficient attainment of objectives. According to Kreitner, “Management is the process of working with and through others to effectively achieve organisational objectives by efficiently using limited resources in the changing environment. According to George R Terry, Management consists of planning, organising, actuating and controlling, performed to determine and accomplish the objectives by the use of people and resources. 2. Functions of management Ans) Management is defined as the procedure of organising, directing, planning and controlling the efforts of organisational members and of managing organisational sources to accomplish particular goals. • 1.Planning is the purpose of ascertaining in advance what is supposed to be done and who has to do it. This signifies establishing goals in advance and promoting a way of delivering them effectively and efficiently. In an establishment, the aim is the obtainment and sale of conventional Indian handloom and workmanship articles. They trade furnishings, readymades, household items and fabrics made out of classical Indian textiles. • 2.Organising is the administrative operation of specifying grouping tasks, duties, authorising power and designating resources needed to carry out a particular system. Once a definite plan has been set for the completion of an organisational intent, the organising party reviews the actions and resources expected to execute the program. It ascertains what actions and resources are needed. It determines who will do a distinct job, where and when it will be done. • 3.Staffing is obtaining the best resources for the right job. A significant perspective of management is to make certain that the appropriate people with the apt skills are obtainable in the proper places and times to achieve the goals of the company. This is also called the human resource operations and it includes activities such as selection, placement, recruitment and coaching of employees. • 4.Directing involves directing, leading and encouraging the employees to complete the tasks allocated to them. This entails building an environment that inspires employees to do their best. Motivation and leadership are 2 chief elements of direction. Directing also includes communicating efficiently as well as managing employees at the workplace. Motivating workers means simply building an atmosphere that urges them to want to work. Leadership is inspiring others to do what the manager wants them to do. • 5.Controlling is the management operation of controlling organisational achievement towards the accomplishment of organisational intentions. The job of controlling comprises ascertaining criteria of performance, computing the current performance, comparing this with organised rules and taking remedial action where any divergence is observed. Here management should ascertain what activities and outputs are important to progress, how and where they can be regulated and who should have the power to take remedial response. 3. what is scope of Management? Ans)The definition of the scope of management comes from the business ideas, theories, principles and responsibilities that a business uses for managing its various functions. The scope of management can cover: 1. Financial management Financial management is a top priority for companies as the effective and proper managing of finances enables them to stay in business and remain competitive. It is necessary for companies to plan, organise, direct and control their financial activities to increase profit and reduce wastage of resources. By applying management principles to their financial resources, companies can keep track of how they procure revenues and how they utilise them. They can make informed decisions for making investments, estimating capital requirements, financing projects and deciding on share dividend policies. Additionally, they can prepare and examine financial statements, expand the business and negotiate with external stakeholders. Financial management also allows businesses to remain compliant with regulations, maintain records and plan ahead. 2. Marketing management Marketing management usually covers the different marketing activities undertaken by the company's marketing department. These may include identifying consumer trends and creating appropriate business solutions to respond to them. Implementing marketing plans, directing their implementation and controlling the work activities are also usually part of marketing management. The different functions of marketing management typically include market research, financing, risk-taking, campaign planning, customer outreach, loyalty programmes, lead generation and customer relationship management. Aside from traditional, offline marketing, marketers may undertake digital marketing, content marketing, video marketing, social media marketing, search engine marketing, inbound marketing and outbound marketing. To succeed in their marketing efforts, it may be necessary for marketing managers to be aware of the features of the goods and services they are selling. It can also help understand how to utilise available resources to achieve desired outcomes effectively. Additionally, it is essential to know how to capture and retain the target group's attention and convert them to customers. 3. Personnel management Personnel management is about managing the personnel or staff in an organisation and maintaining a positive and productive business environment. It includes establishing effective communication with the organisation's personnel, publishing company policies, implementing health and safety practices, responding to grievances and taking disciplinary action when necessary. Personnel management also involves determining the compensation and benefits packages that the employees can receive from the organisation. The three main types of personnel management are strategic management, tactical management and operational management. Strategic personnel management includes recruiting qualified personnel to meet the organisation's staffing needs, training new recruits, assigning departments and work, providing work tools and resources and determining compensation. Tactical personnel management involves shifting personnel to different departments when necessary, determining work schedules and monitoring work performances. In operational personnel management, the focus is usually on ensuring employee welfare and salary payments. 4. Production management Production management is the application of management principles to the different production activities in a company's production department. It usually involves handling the entire manufacturing process and planning, organising, overseeing and monitoring the production of goods and services. In production management, the production manager is responsible for procuring raw materials, hiring and assigning labour for different work activities, maintaining equipment and creating production budgets. They also supervise work performance, oversee research and development, ensure quality control and monitor delivery and storage of finished products. The main types of production management are job production, batch production and mass production. Job production involves making a single product in the manufacturing process. It may be as per customer order and involves gathering the necessary raw materials, components, tools and equipment and qualified personnel to make the products and fulfil the commission. The company plans to produce a set quantity of products in batch production and divides the production operation into different and repetitive work batches. It completes one operation before proceeding to the next. Mass production involves large-scale production to ensure a continuous supply 5. Office management Office management concerns the planning, coordinating and controlling the different work activities in an office environment. The aim of office management is to ensure the smooth and efficient functioning of all office departments to get the necessary work done and achieve the organisation's work targets and business goals. The primary functions of office management are planning projects, hiring qualified employees, organising and assigning work tasks, directing and guiding project work and monitoring and controlling the work processes. When planning projects, the office manager considers the organisation's goals and objectives and creates plans to meet these. This can include determining which projects to undertake, their completion time frames and the expected work standards. It also usually covers creating project budgets, listing the necessary materials and resources and adjusting the project plans to suit business requirements. The organising stage covers selecting the right employees for the project, delegating work responsibilities, creating work schedules and procuring materials. The office manager is also typically responsible for leading the projects, reviewing work performances and ensuring quality control. 4. What are the levels of Management? Ans) The 3 Different Levels of Management Levels of Management The term Levels of Management refers to the line of division that exists between various managerial positions in an organization. As the size of the company and workforce increases, the number of levels in management increases along with it, and vice versa. The different Levels of Management can determine the chain of command within an organization, as well as the amount of authority and typically decision-making influence accrued by all managerial positions. Levels of Management can be generally classified into three principal categories, all of which direct managers to perform different functions. In this article, we will explore the specific definition of these levels, as well as the roles and responsibilities of the managers that fall into these categories. 1. Administrative, Managerial, or Top Level of Management This level of management consists of an organization’s board of directors and the chief executive or managing director. It is the ultimate source of power and authority, since it oversees the goals, policies, and procedures of a company. Their main priority is on the strategic planning and execution of the overall business success. The roles and responsibilities of the top level of management can be summarized as follows: • • • • • • • Laying down the objectives and broad policies of the business enterprise. Issuing necessary instructions for the preparation of department-specific budgets, schedules, procedures, etc. Preparing strategic plans and policies for the organization. Appointing the executives for middle-level management, i.e. departmental managers. Establishing controls of all organizational departments. Since it consists of the Board of Directors, the top management level is also responsible for communicating with the outside world and is held accountable towards an organization’s shareholders for the performance of the enterprise. Providing overall guidance, direction, and encouraging harmony and collaboration. 2. Executive or Middle Level of Management The branch and departmental managers form this middle management level. These people are directly accountable to top management for the functioning of their respective departments, devoting more time to organizational and directional functions. For smaller organizations, there is often only one layer of middle management, but larger enterprises can see senior and junior levels within this middle section. The roles and responsibilities of the middle level of management can be summarized as follows: • • • • • • • Executing the plans of the organization in accordance with the policies and directives laid out by the top management level. Forming plans for the sub-units of the organization that they supervise. Participating in the hiring and training processes of lower-level management. Interpreting and explaining the policies from top-level management to lower-level management. Sending reports and data to top management in a timely and efficient manner. Evaluating the performance of junior managers. Inspiring lower level managers towards improving their performance. 3. Supervisory, Operative, or Lower Level of Management This level of management consists of supervisors, foremen, section officers, superintendents, and all other executives whose work must do largely with HR oversight and the direction of operative employees. Simply put, managers at the lower level are primarily concerned with the execution and coordination of day-to-day workflow that ensure completion of projects and that deliverables are met. The roles and responsibilities of the lower level of management can be summarized as follows: • • • • • • • • • • • • Assigning jobs and tasks to various workers. Guiding and instructing workers in day-to-day activities. Overseeing both the quality and quantity of production. Maintaining good relations within lower levels of the organization. Acting as mediators by communicating the problems, suggestions, and recommendatory appeals, etc. of workers to the higher level of management, and in turn elucidating higher-level goals and objectives to workers. Helping to address and resolve the grievances of workers. Supervising and guiding their subordinates. Taking part in the hiring and training processes of their workers. Arranging the necessary materials, machines, tools, and resources, etc. necessary for accomplishing organizational tasks. Preparing periodical reports regarding the performance of the workers. Upholding discipline, decorum, and harmony within the workplace. Improving the enterprise’s image as a whole, due to their direct contact with the workers. 5. Concept of Business/Managerial Economics? Ans) Concept of Business Business is an economic activity that involves the exchange, purchase, sale or production of goods and services with a motive to earn profits and satisfy customers' needs. Businesses can be profit or nonprofit organizations that function to gain profits or achieve a social cause. Managerial Economics What is Managerial Economics? Managerial economics is a stream of management studies that emphasizes primarily on solving business problems and decision-making by applying the theories and principles of microeconomics and macroeconomics. It is a specialized stream dealing with an organization’s internal issues using various economic tools. Economics is an indispensable part of any business. This single concept derives all the business assumptions, forecasting, and investments. Nature of Managerial Economics You need to know about the various characteristics of managerial economics to get more knowledge about it. Let’s read about the nature of managerial economics. 1. Art and Science Management theory requires a lot of critical and logical thinking and analytical skills to make decisions or solve problems. Many economists also find it a source of research, saying it includes applying different economic concepts, techniques, and methods to solve business problems. 2. Microeconomics Managers typically deal with the problems relevant to a single entity rather than the economy as a whole. It is therefore considered an integral part of microeconomics. 3. Uses of Macro Economics A corporation works in an external world, i.e., it serves the consumer, which is an important part of the economy. For this purpose, managers must evaluate the various macroeconomic factors such as market dynamics, economic changes, government policies, etc., and their effect on the company. 4. Multidisciplinary Managerial economics uses many tools and principles that belong to different disciplines, such as accounting, finance, statistics, mathematics, production, operational research, human resources, marketing, etc. 5. Prescriptive or Normative Discipline By introducing corrective steps managerial economics aims at achieving the objective and solves specific issues or problems. 6. Management Oriented This serves as an instrument in managers’ hands to deal effectively with business-related problems and uncertainties. This also allows for setting priorities, formulating policies, and making successful decisions. 7. Pragmatic The solution to day-to-day business challenges is realistic and rational. Different individuals take different views of the principles of managerial economics. Others may concentrate more on customer service and prioritize efficient production. 6. what are the Nature and Characteristics of Management ? Ans: Nature of Management Let us discuss the nature of management in depth. Management is the process of planning, organizing, directing, and controlling human and material resources to achieve the objectives of an organization. Management includes all functions ensuring an organization stays within its budget, including finance, accounting, marketing, personnel, and production management. Universal Process Management is a universal process based on the principle of human nature. Management is not just a system of thought and action but also a social science and profession. It is concerned with the dynamic function of human beings in an organization to achieve goals through planned efforts. The characteristics of management are: 1.Goal-oriented 2.Pervasive 3.Multi-dimensional 4.Continuous process 5.Group activity 6.Dynamic function 7.Intangible force 1.Goal-oriented process An essential aspect of management is to combine individual efforts and direct them towards achieving organisational goals. These goals differ from organisation to organisation. For example, an organisation can have a profit motive whereas a social work organisation might have a goal of eradicating illiteracy among children. Management recognises these goals and aims to fulfil them. 2.Pervasive Management is a requirement and essential for the functioning of all kinds of organisationssocial, economic or political. Without management, the processes of an organisation would be chaotic and unordered. Further, it is equally essential for organisations across all countries. However, the only difference lies in the how management is implemented within an organisation. 3.Multidimensional Management has three dimensions: i. Work management: Every organisation exists for completion of some work. This work varies from producing clothes in clothing sector to treating patients in hospitals. Management looks at this work as goals to be achieved and works towards these goals. Further, this is done in terms of problems to be solved, decisions to be made, plans to be established, budgets to be prepared, responsibilities to be assigned and authority to be delegated. ii. Management of people: Another dimension of management is concerned with getting work done from people, by assigning work to worthy employees who can work effectively towards the realisation of organisational goals. This is achieved by ensuring that the strength is highlighted and the weakness is driven out of the equation. It further has two dimensions- a) dealing with people as individuals with diverse needs and behaviours and b) dealing with individuals perceiving them as a part of a wider group of people. iii. Management of operations: As every organisation aims at the completion of work, they also have a particular product or service to provide with respect to their domain of operation. Note that this is met with the help of a production process. Management also looks after a production process of an organisation that transforms the input with the help of technology required into the output for consumption. Interestingly, this is linked to both management of work and people. 4.Continuous Process We now know that there are various functions of management. These are- planning, organising, directing, staffing and controlling. As a matter of fact, a manager performs all these functions simultaneously. Although these functions are separate, management is concerned with performing all of them simultaneously all the time. Consequently, management is a dynamic and continuous process. 5.Group Activity An organisation consists of a large number of individuals having different reasons and purposes to join. Again these individual differ based on their needs and behaviours. However, it is important to realise that these diverse individuals work together towards the achievement of the organisational goals. Management diverts the individual efforts towards the right direction. Further, effective management enables all the individuals to grow and develop as their needs and opportunities change. 6.Dynamic Function An organisation has to adapt to the environment in order to succeed. Thus management is dynamic in nature and adapts to the ever-changing social, economic and political conditions. A famous example of this is how McDonald’s had to change its menu to serve and emerge as a major fast food giant in the Indian market. 7.Intangible Force Management cannot be touched or it isn’t tangible. However effective management can be easily felt. Evidently, if there is order instead of chaos within an organisation, the employees are happy and the organisational goals are being organised it can be easily said that there exists good management. 7. Law of Consumption? Ans) The Keynesian concept of consumption function stems from the fundamental psychological law of consumption which states that there is a common tendency for people to spend more on consumption when income increases, but not to the same extent as the rise in income because a part of the income is also saved. The community, as a rule, consumes as well as saves a larger amount with a rise in income. Thus, Keynes’ psychological law of consumption is based on the following propositions: i. When the total income of a community increases, the consumption expenditure of the community will also increase, but less proportionately. ii. It follows from this that an increase in income is always bifurcated into spending and saving. iii. An increase in income will, thus, lead to an increase in both consumption and savings. This means that with an increase in income in the community, we cannot normally expect a reduction in total consumption or a reduction in total savings. A rising income will often be accompanied by increased savings and a falling income by decreased savings. The rate of increase or decrease in savings will be greater in the initial stages of increase or decrease of income than in the later stages. The gist of Keynes’ law is that consumption mainly depends on income and that income recipients always do not tend to spend all of the increased income on consumption. This is the fundamental maxim upon which Keynes’ concept of consumption function is based. Keynes’ law is limited by the following assumptions: 1. Constancy of Psychological and Institutional Factors: Propensity to consume will remain stable owing to the constancy of the existing psychological and institutional complexities influencing consumption expenditure. 2. Normal Economic Conditions: General economic conditions are normal and there are no abnormal and extraordinary circumstances such as war, revolution, inflation, etc. 3. Laissez-faire Policy: It is assumed that there exists a free capitalist economy, in which there is no government restriction on consumption when income increases. Implications of the Psychological Law of Consumption: A more detailed analysis of Keynes’ law shows that it has the following important implications: 1. Highlighting the crucial importance of investment in an economy: A vital point in the law is the tendency of people not to spend on consumption the full amount of an increase in their income. There is thus a “gap” between aggregate income and aggregate consumption. Assuming the consumption function to be stable during a short-run period, the “gap” will widen with an increase in income. This gives rise to the problem of investment. Investment should be increased to fill the gap between income and consumption. Keynes, therefore, stresses that investment is the crucial and initiating determinant of levels of income and employment. 2. Refuting Say’s Law: It refutes Say’s Law of market by indicating the demand deficiency and possibility of over-production. 3. Explanation to the Business Cycle: An explanation of the turning points of a business cycle is also provided by this law. The upper turning point from a boom is caused by a collapse of the marginal efficiency of capital owing to the fact that consumption expenditure does not keep pace with increase in income during the prosperity phase. Similarly, the law explains the revival of the marginal efficiency of capital and the turning point of recovery from a depression, on the basis of the fact that when income is reduced consumption expenditure does not decrease in the same proportion. 8. Demand and Supply? Ans) supply and demand, in economics, relationship between the quantity of a commodity that producers wish to sell at various prices and the quantity that consumers wish to buy. It is the main model of price determination used in economic theory. The price of a commodity is determined by the interaction of supply and demand in a market. The resulting price is referred to as the equilibrium price and represents an agreement between producers and consumers of the good. In equilibrium the quantity of a good supplied by producers equals the quantity demanded by consumers. Demand curve increase in demand The quantity of a commodity demanded depends on the price of that commodity and potentially on many other factors, such as the prices of other commodities, the incomes and preferences of consumers, and seasonal effects. In basic economic analysis, all factors except the price of the commodity are often held constant; the analysis then involves examining the relationship between various price levels and the maximum quantity that would potentially be purchased by consumers at each of those prices. The price-quantity combinations may be plotted on a curve, known as a demand curve, with price represented on the vertical axis and quantity represented on the horizontal axis. A demand curve is almost always downward-sloping, reflecting the willingness of consumers to purchase more of the commodity at lower price levels. Any change in non-price factors would cause a shift in the demand curve, whereas changes in the price of the commodity can be traced along a fixed demand curve. Supply curve decrease in supply The quantity of a commodity that is supplied in the market depends not only on the price obtainable for the commodity but also on potentially many other factors, such as the prices of substitute products, the production technology, and the availability and cost of labour and other factors of production. In basic economic analysis, analyzing supply involves looking at the relationship between various prices and the quantity potentially offered by producers at each price, again holding constant all other factors that could influence the price. Those price-quantity combinations may be plotted on a curve, known as a supply curve, with price represented on the vertical axis and quantity represented on the horizontal axis. A supply curve is usually upward-sloping, reflecting the willingness of producers to sell more of the commodity they produce in a market with higher prices. Any change in non-price factors would cause a shift in the supply curve, whereas changes in the price of the commodity can be traced along a fixed supply curve.
