Management: Concept, Principles, Roles and Skills

Two chai stalls stand side by side with the same tea, the same prices and the same passing crowd. One makes money every month; the other runs out of milk by noon and loses its regulars. The difference is not the tea but how each owner runs the stall.

Two words carry the idea. Effectiveness is doing the right things, so the goal is met. Efficiency is doing things right, with the least waste of time, money and effort. Good management needs both.

An illustration. A college fest committee sells all 2,000 tickets it planned to sell, so it is effective. But it spends ₹6 lakh against a budget of ₹4 lakh, 50% over, so it is not efficient. A committee that saved money but sold only half the tickets would be efficient on paper and still fail its goal.

Writers have defined management in different words. Exams often ask who said which.

Nature. Management is:

• goal-oriented, working toward set aims;
• a continuous process, never finished;
• universal: its principles apply to every kind of organisation, from a kirana store to a ministry;
• a group activity, done through people;
• intangible, seen only in its results;
• multidisciplinary, drawing on economics, psychology, sociology and statistics;
• both an art (skilled personal practice) and a science (a systematic body of knowledge).

It has many marks of a profession, such as a body of knowledge and formal training. Unlike medicine or law, though, entry to it is not restricted by a licence.

Levels. In a public-sector bank, the chairman and board sit at the top, zonal and regional heads in the middle, and the officers who supervise counter staff at a branch on the first line.

Why it matters. Management reaches goals and uses resources with less waste. It coordinates departments and levels, avoids duplicated work, places competent people in each position, and prepares the organisation for a changing environment.

Don't confuse effectiveness with efficiency. Effectiveness asks whether the goal was reached; efficiency asks what it cost to reach it. Nor management with administration: some older writers, such as Oliver Sheldon, used administration for policy-making at the top and management for carrying it out. Others, such as E. F. L. Brech, treated management as the wider term, with administration as one part of it. Most modern textbooks treat the two words as one.

Where it breaks. "Universal" means the principles apply widely, not that a method can be copied unchanged. A practice that works in a Pune auto-parts plant may fail in a hospital or a cooperative. And management is an inexact science: its principles are guides that depend on people and circumstances, not laws like those of physics.

For exams. Match each definition to its writer. Know effective (right things) against efficient (things right), the features of management's nature, and the work of each level.

Right things (effective), done right (efficient), through people.

A new assistant at a bank branch gets one instruction from the branch manager and the opposite one from the operations head. She cannot obey both, and whichever she picks, someone is annoyed. A century ago Henri Fayol wrote a principle for exactly this.

Fayol was a French mining engineer who ran a large mining company. He wrote from the top of the organisation downward: his administrative principles describe how a whole enterprise should be arranged and run. He stressed that they are flexible, to be applied with a sense of proportion. They fall into four groups.

Back to the bank branch. The assistant's problem breaks principle 4, unity of command. The fix is to agree who gives her orders, and to have the other manager route requests through that person.

The scalar chain and the gang plank. The scalar chain keeps every message on the line of authority. When that is too slow, Fayol's gang plank lets two people at the same level deal with each other directly, with their superiors' knowledge.

Fayol also divided an enterprise's activities into six groups: technical, commercial, financial, security, accounting and managerial. The last is the one he analysed.

Don't confuse unity of command with unity of direction. Unity of command is about a person: one boss each. Unity of direction is about an activity: one plan and one head for each group of activities with the same objective. A firm that makes both scooters and tractors keeps each line under its own head and its own plan.

Where it breaks. The principles are general and sometimes pull against each other. Division of work can make jobs dull, which undercuts initiative. Matrix organisations deliberately give people two bosses, breaking unity of command. Herbert Simon, in "The Proverbs of Administration" (1946), argued that such principles come in contradictory pairs, like proverbs, and do not say which to apply when.

In practice. Use the list to diagnose. Two bosses giving clashing orders points to unity of command. Slow approvals point to the scalar chain, and a gang plank may help. High staff turnover points to stability of tenure.

For exams. Expect to match principle numbers to descriptions, and to tell unity of command from unity of direction. Know the gang plank and the six groups of activities.

Go deeper for practitioners

A decision. Your sales team in Pune needs a credit approval from finance before every large order. The request goes up to the sales head, across to the finance head and down to a credit officer, and takes three days. A gang plank would let the sales executive call the credit officer directly. The condition is the one Fayol set: both heads agree in advance and are kept informed. What will you do if the credit officer refuses an order the sales head wanted?

Centralisation is a dial, not a switch. Fayol's principle 8 asks where decisions should sit for this situation. A chain of pharmacies may centralise buying to get better prices and decentralise staff rosters to each store. The Organisation structure chapter in this unit takes this further.

Links. Theories of management (this unit) places Fayol in the classical school, beside Taylor and Weber.

Two workers in a Pune auto-parts plant do the same job. One finishes 40 pieces a shift and the other 25, each taught by a different senior, and nobody knows which method is better. F. W. Taylor's answer was to stop guessing and measure.

Taylor was an American engineer who worked in steel companies. He set out his approach in The Principles of Scientific Management (1911). He worked from the shop floor upward, replacing rule of thumb with measurement. His approach rests on seven elements:

• Science, not rule of thumb: find the best method by study.
• Harmony, not discord: managers and workers cooperate.
• Scientific selection and training: the right person trained for the task.
• Functional foremanship: several specialist foremen supervise each worker, one per kind of task, instead of one generalist supervisor. Taylor proposed eight: four in the planning department (route clerk, instruction card clerk, time and cost clerk, disciplinarian) and four on the shop floor (gang boss, speed boss, repair boss, inspector).
• Differential piece-rate: a higher rate per piece for meeting the standard output, a lower rate for falling short.
• Standardisation and simplification: uniform tools, methods and processes.
• Time and motion study: break a job into steps, remove wasted movement, set an output standard.

Differential piece-rate, worked. Suppose the standard is 10 pieces a day, paid at ₹50 a piece for workers who meet it and ₹40 a piece for those who fall short. These figures are illustrative.

One piece fewer than standard costs Arjun ₹140 against Meena, far more than the ₹50 that piece would have earned. Taylor meant that gap to be a strong pull toward the standard.

Fayol and Taylor worked at the same time but started from opposite ends.

Don't confuse time study with motion study. Motion study removes needless movements from a job. Time study then times the improved job to set the standard output. Also note the clash exams like: functional foremanship gives a worker eight bosses, which breaks Fayol's unity of command.

Where it breaks. Taylor treated workers mainly as people who respond to pay, and ignored their social needs. The Hawthorne studies, described in Theories of management (this unit), later showed how much those needs matter. Workers and unions resisted being speeded up. Repetitive, closely timed work can be dull and tiring. Functional foremanship was rarely adopted in full.

In practice. Taylor's tools live on in industrial engineering, standard work on assembly lines, and target handling times in call centres. Use them where the task is repetitive and measurable; use them carefully where judgement and goodwill matter more.

For exams. List the seven elements, name the eight functional foremen, work a differential piece-rate, and compare Taylor with Fayol.

The best salesperson in a branch is promoted to branch manager and struggles. She still sells better than anyone, but the new job asks for different skills. Robert Katz explained why.

An illustration. In an auto-parts plant, a shift supervisor needs to know how each machine runs and how to fix a jam (technical). The plant head needs to settle a row between the production and quality teams and keep both motivated (human). The managing director needs to judge whether the shift of customers to electric vehicles will make some parts obsolete (conceptual).

Emphasis shifts with rank. Lower management leans on technical skill, middle management on human skill with a balance of all three, and top management on conceptual skill. Managers also draw on related skills: communication, decision-making, delegation, planning, problem-solving and time management. Skills, unlike talent, can be learnt and improved with practice.

Don't add a fourth skill to Katz's list. Design skill is not one of Katz's three. Koontz and Weihrich later added it: the ability to solve problems in ways that benefit the enterprise. Katz's three are technical, human and conceptual.

Where it breaks. The level pattern is a broad tendency, not a rule. The owner of a small firm needs all three skills at once. In technology and knowledge firms, senior managers often still need deep technical skill. The three skills also overlap: resolving a conflict between two departments uses both human and conceptual skill.

In practice. Use the model to plan someone's development. A new supervisor promoted from the shop floor usually has technical skill and must build human skill. A middle manager moving up needs conceptual skill, which job rotation and cross-department projects help to build.

For exams. Know the three skills, which level each weighs most at, and that human skill matters at every level. A common trap lists design skill as one of Katz's.

Ask a manager to describe her job and she will say planning, organising and controlling. Watch her for a day and you see phone calls, short meetings, interruptions and quick choices. Henry Mintzberg studied that gap.

Mintzberg watched five chief executives at work, one week each: at a consulting firm, a school system, a technology firm, a consumer-goods maker and a hospital. He reported in The Nature of Managerial Work (1973). Instead of orderly planning he found brief, varied and fragmented activity.

One day at a bank branch, an illustration. The branch manager opens a new ATM (figurehead) and coaches a new clerk (leader). She meets the local traders' association (liaison) and reads a circular from the regional office (monitor). At the morning huddle she shares it with staff (disseminator). Later she answers a local reporter's questions (spokesperson). She starts a doorstep-banking trial for elderly customers (entrepreneur) and settles a customer's complaint about a failed transfer (disturbance handler). She decides which officer handles the loan queue (resource allocator) and agrees the renewal of the branch's lease with the landlord (negotiator).

The groups connect. Formal authority and status give rise to the interpersonal roles. These give the manager access to information (the informational roles), which the manager then uses to decide (the decisional roles).

Don't mix up the three informational roles. Direction tells them apart: the monitor brings information in, the disseminator passes it around inside, and the spokesperson sends it outside. Likewise, the leader role faces subordinates, while the liaison role faces people outside one's own chain of command.

Where it breaks. Five chief executives over five weeks is a small sample. Later studies broadly support the picture of fragmented work, but the time spent in each role varies with level and organisation. In practice the roles overlap; one meeting can involve several at once.

For exams. Expect "which role?" questions built on a short description, and the three groups with their members. Remember the ten as 3, 3 and 4.

Go deeper for practitioners

Folklore and fact. In a 1975 Harvard Business Review article, "The Manager's Job: Folklore and Fact", Mintzberg reported that half of the chief executives' activities lasted less than nine minutes. He argued that managers prefer live, spoken information to written reports. The picture of the calm planner, he said, was folklore.

Roles or functions? Mintzberg offered his roles as a challenge to the classical functions of planning, organising and controlling. Many textbooks now treat the two as compatible: the functions say what managers are trying to achieve, and the roles describe how they actually spend their time.

Roles and skills. The interpersonal roles draw mostly on Katz's human skill. The entrepreneur and resource allocator roles draw on conceptual skill. A manager weak in one skill will struggle in the matching roles.

A decision. A new store manager finds her days eaten by interruptions and has no time for the plan to cut wastage. Mintzberg would say the interruptions are the job. Which of them could a deputy handle, and which, such as the disturbance handler role, should stay with her?