Chpater ii management

CHAPTER II

WRITER:

SYED AQEEL RAZA Master of Commerce & Arts

TABLE OF CONTENTS: PAGE NO: The function of management 2.1 Principle 2.2

The function of the manager 2.3 The function of the higher management 2.4 - Planning 2.5 - Organizing 2.6

- Staffing 2.7 - Directing 2.8 - Controlling 2.9

- Coordination 2.10-2.11 The Management and its characters 2.12 - Management 2.13 - Owner 2.13

- Principle 2.14 - Partner 2.15 - Director 2.15

- Manager 2.16 - Authorized Manager 2.17 - Working Manager 2.17 - Staff 2.17

Authority and responsibil ity - Authority 2.18 The Source of Authority - The formal authority theory 2.19

- Acceptance theory 2.20 - Competence theory 2.21 Limits of Authority 2.22

Delegation of Authority 2.23 – 2.24 Responsibil ity 2.25 Delegation of responsibil ity 2.26 Accountability for responsibil ity 2.27 – 2.28

Principle of delegation 2.29 - Scalar Principle 2.30 - Authority level principle 2.31 - Principle of unity of command 2.32

- Principle of delegation by result expected 2.33 - Principle of absoluteness of responsibil ity 2.34 - Principle of parity of authority and responsibility 2.34 – 2.35

- Authority, manager, and leader 2.36 – 2.37 - Writers’ view 2.38 – 2.39

THE SYSTEM OF MANAGEMENT-2.1

THE FUNCTION OF MANAGEMENT

In management, the five elements such as planning, organizing, staffing, directing and controlling are in function every time and are considered the basis of management. The functions of management make principles which enable functions to achieve the goal.

Management is an unforeseen force to increase efficiency.

PLANNING

CONTROLLING

DIRECTINGSTAFFING

ORGANIZING


PRINCIPLE:

The principles are not the invention of today but were known by men before centuries. The work of any kind is to perform called principles. A principle can be defined as a fundamental statement or general truth providing a guide to thought. The desired results are obtained by using principles and by which a manager can remove mistakes and can do forecast the result during the action.

The principles have a close relationship with management and without principles, the concept of management and existence is impossible. Because of principles, the capability of a man and the best results for an organization is obtained and when a man is able to reach on any result to manage his ways and methods then the management comes into existence which is possible because of principles.

The bodily, physically and mentally characteristics are limited to a cultured man then he has to participate others in order to get his objectives. In fact, every man wants to get satisfactory and profitable results in less and less time and expenditure so that he has to face minimum uncertain losses than under this theory, man thinks suitable to include others in every department of life either socially or commercial or governmental.

When all men under an organization intend to get a particular object then, in this case, the existence of management occurs.

Principles separate man and animal.

The system of management/[email protected]/slideshare.net


THE FUNCTIONS OF THE MANAGER

The responsibilities of manager differ with the nature and span of organizations. If the organization is very large then the separate manager will be for every unit or department and like this in an organization, there can be one or more managers such as manager production belongs to the production, manager sale belongs to the sale and like this manager factory looks after other managerial works. In a small and medium organization, these functions are performed by only one manager.

- The first and foremost responsibility of a manager will be that he creates the environment in the organization by which the desired objectives are obtained.

- The manager is responsible for making a good environment for workers in the organization or creates such environment for good work.

- The manager does planning for his working subordinates. - The manager selects suitable staff for the nature of work. - The manager educates for work and then directs to his subordinates. - The manager keeps on eye on results of the work because all works are

performed for results.

Universally, the function of managers are equal either they are in any organization or in a peculiar place in the organization. Their particular responsibility is that they prove themselves a ruler that their subordinates work with unity and establish coordination with other units.

The peaceful functioning of an enterprise should be the objective of a manager.



THE FUNCTION OF HIGHER MANAGEMENT

The principals or higher management work for the functions of management; planning, organizing, staffing, directing and controlling; and deliver to managers for getting desired results, managers following the functions of management and work on principles.

The function of management is just like a cycle which has no end.

THE CLASSIFICATION OF FUNCTIONS

It is essential to classify the responsibilities of manager that the nature of work must be understood for instance sale, industrialization, accountancy, engineering and purchasing which have different nature from one enterprise to other enterprise but principles for working with them are same.

For planning of responsibilities, it is an easy way that they must be taken in the limitation of planning, organizing, staffing and controlling.



PLANNING

The planning selects objective firstly and this objective is obtained by the policy, procedures and the way of working of an organization. Actually, the meaning of planning is to select one objective among many possible objectives means one objective is determined by planning. In fact, the planning and the responsibility of making it cannot be separated by principals because it is necessary for principals to make planning either belong to the top place of an organization or in a small unit but planning are very necessary on every step.

The planning works in every place of work.



ORGANIZING

The action or the discipline of work is called organizing so that the desired objectives of an organization could be obtained. However, the organization is the summary of attaching with all works and authorities.

The organizing cannot be in a private company because the owner pays the responsibility of manager himself and he does not deliver the authority to other. Hence, there must be two principals who do work in a place or under each other.

The organizing is the source of reaching the desired goal.



STAFFING

Actually, the meaning of staffing is to provide workers and kept suitable staff in the enterprise. The nature of staff depends on the nature of work and suitable person or staff is selected according to work. In staffing, suitable education and training are essential so that they complete their work with full efficiency. The watching of staff, their upgrading, remuneration, etc., come understaffing and like this, it is a very necessary duty of manager.

The staffing in management is like a soul in the body.



DIRECTION

Direction tells work to a subordinate, keeps on eye their work and issue order to them. A good manager, by his directions, explains the policies, objectives, and nature of his enterprise to his subordinate.

It is the continuing duty of a manager to inform his subordinates relating to their work and provides guidelines to them so that the methods of their work could be better.

The direction is the source of training.



CONTROLLING

The control creates such opportunities that are according to planning. Hence, the works are scaled, the mistakes are improved and the work is completed according to planning. The control creates the ability to do decided work.

The control on all works is the result of workers in control.



CO-ORDINATION

Most of the writers are in the opinion that the co-ordination is the separate duty or function of a manager but it is seen that the co-ordination is the part of management which includes five functions of management and because of the reason that every function of management exercises of coordination.

The coordination explains the procedure of getting decided objectives and joints departments with each other. The coordination is established at the time of planning and policy making.

It is the particular responsibility of a manager that he establishes coordination. His most first responsibility is that he establishes an environment in organization that the co-ordination can be possible to;

- establish reasonable system structure - select skilled subordinates and educate - keep in control subordinate work effectively - make out subordinates the necessary timing and work schedules - provide such sources by which the subordinates can perform decided

work - make out subordinates the principles and the importance of co-

ordination



The coordination is the essence of manager ship.



THE MANAGEMENT AND ITS CHARACTERS The management is a body and the following characters are soul which move it functions; - Management - Owner - Principal - Partner - Director - Manager - Staff

CHARACTERS OF MANAGEMENT


MANAGEMENT

OWNER

PARTNER

STAFFMANAGER

PRINCIPAL


MANAGEMENT Management is a plate form of managers where their areas of working to one objective are assembled and on joining all efforts of managers, the result comes is called the

result of management. The decision of manager in his area is considered the decision of the management. The term” management” may refer to the person who manages an organization. OWNER

The owner is who that applies finances in specific business aiming end target to generator profit from his investment then he makes planning to start business and to organize it he keeps employees and distribute authorities and obligations in them as he

cannot do everything in business because of having therein many departments as like administration, production, procurement, sales etcetera.

The owner is responsible for good and bad in business and his staff will use his given

authority only to get the desired result and in case of failure they will not be responsible and the owner will have to suffer the cause of failure so that he keeps on eye on all

activities working under his authority. The owner has right to cancel or does low and high the authority of his staff.

The owner makes planning, organizing, staffing, directing and controlling himself and operating departments he keeps working manager like Manager Administration,

Manager Production, Manager Procurement, Manager Sales etcetera according to the nature of his business.

We can say manager to the owner; the manager who has the authority of doing

anything in business and is responsible for every type of good and bad in business. The owner is himself a planner, organizer, director, controller and even employee in working

according to the nature of business.



PRINCIPAL

The Principal means the owner or authorized person from owner to operate a business. The owner applies finances and gives objectives to principal and principal works for obtaining the objective for the owner. The owner brings finance and does planning for business and the principal walks on the planning of the owner and does planning the objective how to get it and for this purpose, he organizes works, keeps employees and give them authorities and obligations. The principal is answerable to the financer for his authorities and responsibilities and his responsibility and authority is less than one step to owner hence he keeps on eye on all the activities of his sub-authorized persons. We can say that the principal in case of authority is an employee of the owner for which he pays against his goal although he has fully right for using authority but under owner’s right the principal works.



PARTNER Two or more persons do business investing finances equally or not equally under profit and loss sharing ratio are called partners. The partner has the same right as owner according to investment. In partnership, one man character in business becomes meaningless now one man cannot do himself planning, organizing, directing, staff and controlling and for doing them the consultations of partners are needed.

The objectives of partners in business are common and they are responsible equally or

partially according to agreement.

DIRECTOR

The director can be the owner, partner or an employee of the owner and who is assigned to get the desired result for the company in case of an employee. He leads or

supervises the particular area of the company or company’s program or project like technical director, production director, finance direct, the director or human resources

etcetera. He is responsible for smooth working and reporting the activities to Chief Executive Officer or owner/owners of the company.

If the director is the owner, he may be chairman, managing director, executive director and nonexecutive director depends on the size of company they gathered at the plate

form called the board of directors.

The director is a manager in his area of working so he makes planning, organizing, staffing, directing and controlling and authorized and responsible for desired results of the company.



MANAGER

The owner or principal appoint managers in different areas of the company to control activities and give them authorities to get the work done by their subordinates and the manager gives sub authority to his subordinates to take work. The manager applies the five principal of management; planning, organizing, staffing, directing and controlling his area of working.

Every authorized person either owner of employee is a manager who works for obtaining the desired result of the company but the difference of the employee and owner will remain in its place. We can divide manager into two categories; 1- Authorized manager 2- Working manager



Authorized Manager The person who has authority of doing anything in business and who can be the owner because the owner has the same right so we can say him the authorized manager for the business who makes planning, organizing, staffing, directing and controlling in every area of business, gives or takes the authority and takes every kind of decision in business. Working Manager The person who has been given authority by authorized manager to take the assigned works for getting the desired result. The working manager is hired and can be fired by authorized manager or for the purpose of particular work. The working manager does planning, organizing, staffing, directing and controlling in his given area and he can subdivide his authority to his subordinates but cannot separate from his given authority and responsibility. STAFF The employee is the person who may be a director, manager, supervisor and workers controlled by the principal authorities and they work under the scalar chain. The staff is the source of getting the desired result of the company for which they are given authorities and obligations.



AUTHORITY AND RESPONSIBILITY AUTHORITY The meaning of authority in the management is that the authority could become the cause of success for the organization by ways and methods of the authorized persons or the authority is given like this that by the way of taking work of authorized person, the progress could lighten in the work of enterprise or in the department of the enterprise. The authority and responsibility have close relationship with each other in every

enterprise where are officers and subordinates.

The authority generates responsibility automatically who has authority, he will be responsible definitely. If it is seen that the authority is the way of examining the capability of the manager and when the authority is being given to manager its means

that he is being given responsibilities.

The authority takes work.



THE SOURCE OF AUTHORITY

The source of authority differs in experts under theories;

Formal Authority theory:

In a commercial enterprise, the source of authority depends on the ownership of an enterprise or the theory of authority in meaning power in private enterprise is obtained to the owner, given by law under social rules and regulations to officials or to the chief manager and chief manager to managers. In a public organization, the ultimate authority is vested in the shareholders who delegate the authority to a board of directors who delegate its powers to the chief executive who delegates it to the Mangers and so on. Hence, the authority flows in the scalar chain from the highest level to the lower level.

The existence of authority is because of the elements of group behaviour when these elements are changed then the change in enterprise occurs. In present time, the change in the nature of an enterprise is because of today’s wishes, objectives, and common action.

The power creates authority.



ACCEPTANCE THEORY

The authority of the superior has no meaning unless it is accepted by the subordinates. If the subordinates do not accept the orders of a superior there will be no use of exercising authority.

The authority has two ways; subjective and objective wherein subjective accepts the given authority and in an objective, the authority may accept.

According to Bernard a subordinate will accept the authority of his manager if he understands that;

- The authority is necessary for the organization. - He feels the authority is joined with his personal interest. - It is fit mentally and physically to comply with it.

The authority depends on acceptance.



COMPETENCE THEORY:

According to this theory, the authority comes to manager on the basis of technical competence or personal characteristics. The manager, according to this theory, has no authority but his directions and advice are accepted and needed to an

organization.

The authority on competency is because of personal.



LIMITS OF AUTHORITY

The authority of order in an organization from upper level to lower level decreases

gradually under limits of authority.

There may be many reasons for limits of authority as;

On biological basis, the authorities are to be limited because a man has no ability to do every work.

The limit of authority is because of physicals such as air and water, geography or

physical law.

The limit of authority is determined technically for example on the basis of authority, a factory is not ordered to install on the moon.

The economical limits and many others complex limits also retard on authority.

Every manager has separate authority limit, for example, a manager is authorized to spend up to 1000 rupees but has no right to strike out an employee.

The limit in authority separates work.



DELEGATION OF AUTHORITY

The delegation of authority is a key for an enterprise which opens doors to distribute duties among small units. Actually, the theory of the delegation of authority creates the existence of an enterprise because a single man can not do every work of the enterprise and has to delegate authority and then subordinate can have the work completed according to given obligations in his area.

The delegation of authority is the first step for the art of management. In fact, this art tells us how and when they should be used.

The responsibility is explained on delegation of authority wherein the explanation of work with clean and visible is an important factor.

The authority is splintered in case of not solving any problem without other managers. In this case, more than one managers

gather their authorities and decide.

All given authorities can be returned because of changes in enterprise, changing in policy, deputation of workers and improvement in the enterprise.





RESPONSIBILITY

Actually, the meaning of responsibility, in general, is to work efficiently and normally it connects to authority and authority to obligation. The responsibility belongs to a person not to a building, machine or animal.

The responsibility can be subdivided to subordinates for getting work done but not to separate it with manager.



THE DELEGATION OF RESPONSIBILITY

The responsibility cannot be delegated but a manager can delegate the authority to his subordinate to have the work completed because the responsibility is an obligation of a ruler. Hence, the president of an organization cannot be separated by his responsibility even though the authority is handed over and obligations are delegated but no one can leave his responsibility.

The delegation is an art.



ACCOUNTABILITY FOR RESPONSIBILITY

In the field of management, accountability is attached with responsibility which means that subordinates can perform to their obligations quickly and effectively so that the correct work is performed and drawbacks in their work may be removed.

The accountability supports responsibility.



Authority is the legal right of a person or superior to command his subordinates while accountability is the obligation of individual to carry out his duties as per rules and regulations. Authority flows from the superiors to subordinates wherein orders and instructions are given to subordinates to complete the task. It is only through authority, a manager exercises control and in a way, the superior demands accountability from subordinates. For instance, a marketing manager gives target for 100 units of products to be sold in a month and if the target is not accomplished, the marketing manager will be accountable to his superior.

Therefore, we can say that the authority flows from top to bottom and responsibility from bottom to top and accountability is the result of responsibility and responsibility is the result of authority means every authority is attached with equal accountability.



PRINCIPLES OF DELEGATION

The following principles for the delegation of authority are the candle in way;

1- Principles of functional delegation

The clarification of work is very necessary to complete ay work with delegated authority. If the superior does not know that what he should do then he cannot clarify the work. The authority is delegated to managers of different unit after knowing it and breaking down it in different units so that subordinate can also complete the work to understand it.

The clarification of duties is the first step of delegation.



2- Scalar Principle

Actually, the scalar principle establishes the permanent relationship between superior to lower and at last the authority ends on a limit. The scalar authority between superior to lower is very necessary for operating the work of an enterprise. Every subordinate should know that he is authorized by whom and the matters which are beyond his limit whom to submit.

The Scalar chain is just like a ladder step by step.



3- Authority Level Principle

The level of authority comes into existence because of the clarification of work and scalar chain. Every manager decides on authority level keeping in view of his authority and that matters which will be out from his authority, he represents them to his superior. If manager wants to do effective delegation of authority then he should clarify the delegation of authority and subordinate may understand it at home. The manager gives often decidable authorities to his subordinate for which he experienced.

The Authority requires level for working.



4- Principle of unity of command

This is the basic principle of the principle of management that every subordinate informs to his superior about his work. The delegation of authority on determined work must be given by only a superior to a subordinate. The principle of unity of command explains to the connection between authority and responsibility.

The information about work to relative superior is the basic principle.



5- Principle of delegation by result expected

The authority must be delegated in view of the nature of work and span of work. In fact, the objective of an enterprise is decided at first and after making plan, the authorities are delegated. The authority should be delegated at the limit and like this that goods results may obtain later.

The authority is delegated on the basis of result expected.



6- Principle of absoluteness of responsibility

On the basis of the delegation of authority, no superior cannot be separated by his responsibility because the superior is who that delegates the authority to his subordinate and gives him obligations when the subordinate accepts one time the authority then the absoluteness of responsibility of subordinate on superior is made.

The responsibility of subordinate is on superior.



7- Principle of parity of authority and responsibility

As the authority is a power which is essential for delegated work and responsibility is an obligation which assists to complete this work then it appears clearly that authority is essential which is with responsibility. This status of parity is not accountability but is in balance because both belong to responsibility then the status of the manager becomes responsible by the principle of parity of authority and responsibility. According to this fact, this is his obligation that he takes work with his subordinate and has authority to himself work. The responsibility and authority have equal position.

The parity in authority and responsibility are in balance.





8- Authority, manager, and leader

The authority enables manager to direct his subordinate according to work so that the particular objective of the enterprise may be obtained. The existence of manager is with authority and the ability of a manager depends on influence on his subordinates for getting work done by them. A leader gets authority from peoples because of his effective ability and rules over peoples to use that authority when the authority is obtained or delegated to manager.

The manager must have the ability like a leader when the characteristics of leaders gather in a manger then he can make a good manager.

The manager is a leader.



The manpower plays an important role in management and without it, the desired objective of an organization is just like a dream and to control it is an art of management. We must consider that the employee belongs to the category of services business which applied in all businesses and without it the concept of business is just like a dream wherein no investment is applied but physical and mental forces are the sources in this type of business. The employee provides services mentally or physically to businessmen involving all kind of businesses then he is a service provider and his client is who that hired his services. Everyone who is hiring employee wants to keep him on rules and regulations which he makes besides this government makes rules for the betterment of employees so there will be two rules are applied person and state, the state rules are common in every business which has to adapt to every businessman. But unfortunately, our here the employee is not considered the services provider but he is considered the hired person like things which are obtained on rent because of the reason the word employee changed to hiring staff and the word fire is used to let him off. Every person who will give something for something wants to have it according to his desire and the end result of work which he keeps in mind he requires it from the man to whom he acquired services of his own planning then he makes plan and give it to the man who will complete it. The same is applied to business; the business man who is not investor but also planner in business and delivered his plan to others can say manager, supervisor, and labors.



The persons who are the player carry his ball to goal. It is separate talk that they have been given something for their struggles in reaching the goal but cannot be overlooked them in the sharing of success because nobody is nothing for nothing.

The nature of man is to live free in thinking, talking, working and showing him super in all conditions. Sometimes these things move him wrong side because everything has it opposite like good thinking and bad thinking, good talking and bad talking, good working and bad working then to control opposites, the rules and regulations are formed and cannot be freed to think, talk and work against them but freedom in thinking, talking and working is a separate matter discussable. The democracy is a good practice in staff but in the limit of rules and regulations.


Writer’s view

HELP FOR EDUCATION AND NEED AQEEL RAZA A/C # “PK60SONE0002302010046285” SONERI BANK LTD. Email: [email protected]

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Chpater ii management