46. General Management: Concept, Skills, Levels, Functions, MBO, Decision Making

CORE Key Points at a Glance

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   Management is the process of planning, organizing, staffing, directing, and controlling organizational resources (men, money, material, machines, methods) to achieve stated objectives efficiently and effectively; F.W. Taylor (Scientific Management) and Henri Fayol (Administrative Management, 14 Principles) are the two foundational theorists.

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   Robert Katz's Three Skills of Management (1955): (1) Technical skills — knowledge of specific work processes (most important at lower level); (2) Human/Interpersonal skills — ability to work with people (important at all levels); (3) Conceptual skills — ability to see the organisation as a whole and its relationship with environment (most important at top level).

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   Three Levels of Management: (1) Top-level (Board, CEO, MD) — policy formulation, strategic decisions; (2) Middle-level (Department heads, General Managers) — implementing top-level policies, coordinating departments; (3) Lower/Operational level (Supervisors, Foremen) — direct supervision of workers, day-to-day operations.

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   Five Functions of Management (Fayol/Koontz): (1) Planning — setting objectives and courses of action; (2) Organizing — establishing structure, assigning tasks; (3) Staffing — human resource acquisition and development; (4) Directing/Leading — guiding, motivating, communicating; (5) Controlling — measuring performance against standards and taking corrective action.

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   Management By Objectives (MBO) — introduced by Peter Drucker (1954) in The Practice of Management; a systematic process where managers and subordinates jointly set measurable objectives for a period, then review performance against those objectives; cycle: Set objectives → Plan action → Implement → Review performance → Reset objectives.

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   Decision Making is the process of identifying problems, generating alternatives, evaluating them, and selecting the best course of action; Herbert Simon's Bounded Rationality model (1955) — managers are satisficers (seeking satisfactory solution under constraints of time, information, and cognitive ability) rather than optimisers.

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   Fayol's 14 Principles of Management (1916): Key ones — (1) Division of Work (specialisation); (2) Authority and Responsibility (must be equal); (3) Unity of Command (one boss); (4) Unity of Direction (one plan per activity); (5) Scalar Chain (formal chain of authority from top to bottom); (6) Esprit de Corps (team spirit); (7) Equity (fair treatment); (8) Initiative (encourage employee initiative).

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   Types of Planning: (1) Strategic planning — long-term (5–10 years), done by top management; (2) Tactical/Functional planning — medium-term (1–5 years), done by middle management; (3) Operational planning — short-term (< 1 year), done by lower management; MBO fits into tactical/operational planning by linking individual targets to organisational objectives.

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   Span of Control — number of subordinates a manager can effectively supervise; Graicunas (1933) showed relationships increase geometrically with each additional subordinate; Narrow span (few subordinates) → tall organisation; Wide span (many subordinates) → flat organisation; optimal span: 5–8 for complex tasks, up to 15–20 for routine tasks.

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    Delegation and Decentralisation: Delegation = transfer of authority from one person to another within an organisation (responsibility cannot be delegated); Decentralisation = systematic delegation throughout the organisation; Centralisation is better when decisions need uniformity; Decentralisation when local adaptations are needed — e.g., India's Panchayati Raj decentralises to local self-government.

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    Scientific Management (F.W. Taylor, 1911): Four principles: (1) Replace rule-of-thumb with science for each job; (2) Scientific selection and training of workers; (3) Cooperation between management and workers; (4) Division of work and responsibility between management and workers; introduced Time and Motion Study, differential piece-rate system, functional foremanship.

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    Controlling process steps: (1) Set performance standards (quantitative/qualitative); (2) Measure actual performance; (3) Compare actual with standards; (4) Identify deviations; (5) Take corrective action. Management by Exception (MBE): Manager focuses only on significant deviations from standards, not routine performance.